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EXHIBIT 10.12.2
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement (the "Amendment"), dated as
of the st day of June, 1993, is among BanPonce Corporation, a Puerto Rico
corporation ("BanPonce"), BanPonce Financial Corp., a Delaware corporation
("Financial"), Vehicle Equipment Leasing Company, Inc. ("VELCO"), a Puerto Rico
corporation, (BanPonce, Financial and VELCO are sometimes collectively referred
to herein as the "Companies" and individually as a "Company"), Chemical Bank
(the "Lender"), and is to a certain Credit Agreement dated April 1st, 1993 (the
"Credit Agreement") among the Companies and the Lender. Capitalized terms used
herein and not otherwise defined shall have the meanings given to such terms in
the Credit Agreement.
WHEREAS, pursuant to the Credit Agreement, the Lender has agreed to
provide certain financing to the Companies upon the terms and conditions set
forth in the Credit Agreement;
WHEREAS, the Companies and the Lender have agreed to an amendment of
the terms and provisions of the Credit Agreement in the manner hereinafter set
forth.
NOW, THEREFORE, in consideration of the foregoing premises, the
following provisions and for other good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
1. Amendment to Credit Agreement.
1.1 Section 2 of the Credit Agreement is hereby amended to include at
the end of the tenth line of the definition of "Indebtedness" the following
language "excluding liabilities of Banco Popular de Puerto Rico which are
defined as deposits pursuant to Section 3(1) of the Federal Deposit Insurance
Act, as amended, 12 U.S.C. Section 1813 (1), and to include at the end of the
definition of "Long-Term Indebtedness" "for purposes of this definition current
liabilities shall mean such Indebtedness with a maturity date of one year or
less."
2. Representations and Warranties.
2.1 The Companies hereby represent and warrant to the Lender that
each representation and warranty as set forth in the Credit Agreement is true
and correct as if made as of the date of this Amendment.
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2.2 Each of the Companies hereby represent that this Amendment
constitutes a legal, valid and binding obligation of such Company enforceable
against such Company in accordance with its terms.
2.3 No event has occurred and is continuing which constitutes an
Event of Default or would constitute an Event of Default, but for the
requirement that notice be given or time elapse or both.
3. References to and Effect Upon the Credit Agreement. Upon the
effectiveness of this Amendment, each reference in the Credit Agreement to
"this Credit Agreement", "this Agreement", "hereunder", "hereof", "herein", or
words of like import referring to the Credit Agreement, and each reference in
the other Loan Documents to the "Credit Agreement", "thereunder", "thereof", or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended hereby, and each reference in the
other Loan Documents to "the Note", "thereunder", "thereof" or words of like
import referring to the Note, shall mean and be a reference to the Note, as
amended by the Allonge referred to below. All of the terms, covenants and
conditions of the Credit Agreement shall remain in full force and effect. As
amended and modified by this Amendment, the Credit Agreement is hereby ratified
and confirmed in all respects. The execution, delivery and effectiveness of
this Amendment shall not operate as a waiver of any right, power or remedy of
the Lender, nor constitute a waiver of any provision of the Credit Agreement,
or any other documents, instruments and agreements executed and/or delivered in
connection therewith.
4. Counterparts. This Amendment may be executed by one or more of the
parties to this Amendment in any number of separate counterparts and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument.
5. Paragraph Titles. The paragraph titles contained in this Amendment
are used for convenience only and shall be without substance, meaning or
content of any kind whatsoever and are not a part of this agreement between the
parties hereto.
IN WITNESS WHEREOF, this Amendment has been duly executed and
delivered by proper and duly authorized officers of the respective party as of
the date and year first above written.
BANPONCE CORPORATION
By: /s/ Jose L. Lopez Calderon
--------------------------
Title: Senior Vice President
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By: /s/ David H. Chafey, Jr.
----------------------------
Title: Executive Vice President
BANPONCE FINANCIAL CORPORATION
By: /s/ Jose L. Lopez Calderon
--------------------------
Title: Senior Vice President
VEHICLE EQUIPMENT LEASING COMPANY,
INC.
By: /s/ David H. Chafey, Jr.
----------------------------
Title: Executive Vice President
CHEMICAL BANK
By: /s/ Charles R. Le Febure
------------------------
Title: Vice President
Affidavit No. __________
Acknowledged and subscribed to before me by
___________________________________
Notary Public
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BANPONCE CORPORATION
By: ________________________________
Title:______________________________
By: ________________________________
Title:______________________________
BANPONCE FINANCIAL CORPORATION
By: _________________________________
Title:_______________________________
VEHICLE EQUIPMENT LEASING COMPANY,
INC.
By: __________________________________
Title:________________________________
THE FIRST NATIONAL BANK OF CHICAGO
By: __________________________________
Title:________________________________
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EXHIBIT 10.12.2
CREDIT AGREEMENT
This Credit Agreement, dated as of April 1, 1993 (the "Agreement"), is
among BanPonce Corporation, a Puerto Rico corporation ("BanPonce"), BanPonce
Financial Corp., a Delaware corporation ("Financial"), Vehicle Equipment
Leasing Company, Inc., a Puerto Rico corporation ("VELCO"), (BanPonce,
Financial and VELCO are sometimes collectively referred to herein as the
"Companies" and, singly, as a "Company"), and Chemical Bank, acting through its
New York head office (the "Lender").
1. COMMITMENT
Subject to the terms of this Agreement, the Lender agrees to make
loans (the "Loans") to each of the Companies from the date hereof to and
including March 31, 1994 (the "Termination Date"). Each Company may borrow,
repay and reborrow from time to time prior to the Termination Date, provided
that the principal amount of all Loans outstanding at any one time shall not
exceed U.S. $25,000,000 (the "Aggregate Commitment") for all of the Companies.
The Loans shall be evidenced by notes (each, a "Note") duly executed and
delivered by each Company to the Lender in the form attached hereto as Exhibit
"A." This Agreement, the Notes and the Guaranty (as defined below) are herein
called the "Loan Documents."
2. DEFINITIONS
As used in this Agreement, the following capitalized terms shall have
the meanings ascribed to them below:
"BASE RATE" means the higher of (i) the rate designated by the
Lender from time to time as its prime rate in the United States, and (ii) .50%
(1/2%) plus the overnight federal funds rate as published by the Federal
Reserve Bank of New York. The Base Rate is a variable rate which will change
as and when such rates change.
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"BUSINESS DAY" means a day other than a Saturday or Sunday on
which commercial banks are open for the conduct of general banking business in
New York and San Juan, Puerto Rico.
"CONSOLIDATED TANGIBLE NEW WORTH" shall mean as at any date the
sum of the capital stock and paid-in surplus, plus preferred stock plus
retained earnings (or minus accumulated deficit) of BanPonce and its
Subsidiaries (as defined in Section 6.1 below) on a consolidated basis minus
intangible assets (including, without limitation, franchises, goodwill,
trademarks, unamortized debt discount and expenses and all write-ups in book
value of any asset).
"INDEBTEDNESS" means each Company's and each Subsidiary's: (i)
obligations for borrowed money; (ii) obligations representing the deferred
purchase price of property other than accounts payable arising in connection
with the purchase of inventory on terms customary in the trade; (iii)
obligations, whether or not assumed, secured by liens or encumbrances on, or
payable out of the proceeds or production from, property now or hereafter owned
or acquired by the Companies or any Subsidiary; (iv) obligations which are
evidenced by notes, acceptances, or other instruments; and (v) capitalized
lease obligations.
"LONG-TERM INDEBTEDNESS" as of any date shall mean all
Indebtedness which is not a current liability as of such date.
"MAXIMUM DOUBLE LEVERAGE" shall mean BanPonce's equity
investments in its Subsidiaries plus intangibles divided by the difference
between BanPonce's equity and goodwill.
"NON-PERFORMING ASSETS" shall consist of the sum of: (i) loans
which are ninety (90) days past due as to interest or principal; (ii) loans
which have been placed on non-accrual status by the primary regulator of the
relevant Company; (iii) loans that bear a rate of interest that has been
reduced below market rates due to the deteriorating financial condition of the
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borrower; and (iv) assets that either have been acquired in satisfaction of
debt or have been classified as "in-substance foreclosures".
"TOTAL CAPITALIZATION" shall mean the sum of BanPonce's total
Equity Capital plus Long-Term Indebtedness.
"TOTAL EQUITY CAPITAL" means BanPonce's total equity capital
determined in a manner consistent with that used in preparing BanPonce's
consolidated financial statements as of December 31, 1992 plus any other
securities or forms of capital that is included as Tier 1 Capital of BanPonce
on a consolidated basis.
3. INTEREST, PRINCIPAL AND FEES
3.1 Interest Rate. Loans with a scheduled maturity of 30 days or
less will bear interest at a rate equal to the Base Rate plus 1/2% (.50%) per
annum. Loans with a scheduled maturity of 31 days or more will bear interest
at a rate equal to the Base Rate plus 1% per annum.
3.2 Principal and Interest Payment Dates. Any Loan made hereunder
shall be made with maturities of up to ninety (90) days from the date when made
or less, as notified to the Lender in writing by the borrowing Company at the
time a Loan is made. Each Loan shall be payable in full on its scheduled
maturity date. Interest on a Loan shall accrue daily and shall be calculated
on the basis of a 360-day year and the actual number of days elapsed and shall
be payable monthly on the last day of each month and on the date of maturity of
such Loan.
3.3 Payments. All payments of principal of, and interest and fees
on, the Loans hereunder shall be made at the New York Office of the Lender,
free and clear of any set-offs, counterclaim, deduction or withholding for any
reason whatsoever, in immediately available funds. If any payment of principal
of or interest on a Loan shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day. Payments
received under the Loan Documents shall be applied against principal, interest
and
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other amounts then due from a Company in the order determined by the Lender..
A borrowing Company may, at any time when no Default shall exist hereunder,
upon not less than two (2) Business-Days' prior written notice to the Lender,
prepay all or any portion of a Loan in a minimum amount of U.S. $2 million;
provided, however, that any such prepayment must be accompanied by interest to
date on the Loan being prepaid.
3.4 Facility Fee. The Companies, jointly and severally, agree to pay
to the Lender a facility fee of 0.30% per annum on the daily unused portion of
the Aggregate Commitment from the date hereof to the Termination Date. The
facility fee shall be calculated on the basis of a year of 360 days and shall
be payable in arrears on the last Business Day of June, September, December and
March, and on the Termination Date.
3.5 Default Interest. From and after the occurrence of a default (as
defined in Section 8 below), each Loan shall bear interest at the rate equal to
the Base Rate plus 2% until such default shall be cured; provided, however,
that after judgment, the Loan shall bear interest at the higher of such rate or
the rate provided by applicable law. Interest on any Loan past due shall be
payable on demand.
4. CHANGE IN CIRCUMSTANCES
The Companies agree to pay to the Lender such amounts as will
compensate the Lender for any increase in the cost to the Lender of making or
maintaining any Loan hereunder or of maintaining its Commitment to make Loans
hereunder, by reason of a change in any reserve, tax, capital guidelines,
special deposits, or similar requirement with respect to assets of, deposits
with or for the account of, or credit extended by, or commitments extended by,
the Lender which are imposed on, or deemed applicable by, the Lender under any
law, treaty, rule, regulation (including, without limitation, Regulation D of
the Board of Governors of the Federal Reserve System), any interpretation
thereof by any governmental fiscal, monetary or other authority charged with
the administration thereof or having jurisdiction over such Loan or the
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Lender, or any requirement imposed by any such authority, whether or not having
the force of law. Such additional amounts shall be payable on demand.
5. CONDITIONS TO LENDING
5.1 The Initial Loan. The Lender's obligation to make the initial
Loan hereunder shall be conditioned upon the receipt by it of copies, in form
and substance satisfactory to the Lender and its counsel, of the following:
(a) an opinion of counsel for each of the Companies in the
form of Exhibit "B" hereto;
(b) resolutions authorizing the borrowings hereunder of
each of the Company's board of directors along with specimen signatures of each
Company's authorized signatories certified by each Company's Secretary;
(c) a Note made by each of the Companies in favor of Lender
in the amount of the Aggregate Commitment;
(d) a Guaranty and appropriate resolutions authorizing the
guaranty by BanPonce of the obligations of Financial and VELCO hereunder,
substantially in the form attached hereto as Exhibit "C" (the "Guaranty"), and
(e) such other documents as the Lender shall reasonably
request.
5.2 Each Loan. The Lender shall not be obligated to make hereunder
unless:
(a) there exists no Default or event which, with giving of
notice, or lapse of time, or both, would be a Default hereunder;
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(b) the representations and warranties set forth in Section
6 hereof are true and correct on the borrowing date; and
(c) all legal matters incident to making such Loan shall be
satisfactory to the Lender and its counsel.
(d) the Lender shall be satisfied that no material adverse
change has occurred since the execution of this Agreement in the financial
condition, results of operations or prospects of BanPonce or the Companies.
Each request for a Loan shall constitute a representation that the
conditions set forth in Sections 5.2 (a) and (b) have been satisfied.
6. REPRESENTATIONS
Each Company represents and warrants to the Lender that:
6.1 Corporate Existence and Standing. Such Company and each of its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation, and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted. As used in this Agreement, "Subsidiary" means (i) any
corporation more than 50% of the outstanding securities having ordinary voting
power of which shall at the time be owned or controlled, directly or
indirectly, by the Company or by one or more of its Subsidiaries; or (ii) any
partnership, association, joint venture or similar business organization more
than 50% of the ownership interests having ordinary voting power of which shall
at the time be so owned or controlled.
6.2 Authorization and Validity. Such Company has the corporate power
and authority and legal right to execute and deliver the Loan Documents to
which it is a party and to perform its obligations thereunder. The execution
and delivery by such Company of such Loan
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Documents and the performance of its obligations thereunder have been duly
authorized by proper corporate proceedings, and such Loan Documents constitute
legal, valid and binding obligations of such Company enforceable against such
Company in accordance with their terms.
6.3 No Conflict; Government Consent. Neither the execution and
delivery by such Company of the Loan Documents to which it is a party, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof, will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on such Company or any of its
Subsidiaries or such Company's or any Subsidiary's articles of incorporation or
by-laws or the provisions of any indenture, instrument or agreement to which
such Company or any of its Subsidiaries is a party or is subject, or by which
it, or its property, is bound, or conflict with or constitute a default
thereunder, or result in the creation or imposition of any lien or encumbrance
on the property of such Company or a Subsidiary pursuant to the terms of any
such indenture, instrument or agreement. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with the
execution, delivery and performance of, or the legality, validity, binding
effect or enforceability of, such Loan Documents.
6.4 Financial Statements. The December 31, 1992 consolidated
financial statements of such Company and its Subsidiaries heretofore delivered
to the Lender were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of such Company and
its Subsidiaries at such date and the consolidated results of their operations
for the period then ended.
6.5 Material Adverse Change. Since December 31, 1992, there has been
no material adverse change in the business, properties, condition, prospects
(financial or otherwise) or results of operations of such Company and its
Subsidiaries.
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6.6 Litigation and Contingent Obligations. Except as set forth on
Schedule "1" hereto, there is no litigation, arbitration, governmental
investigation, proceeding or inquiry pending or, to the knowledge of any of
their officers, threatened against or affecting such Company or any Subsidiary
which might have a material adverse effect. Other than any liability incident
to such litigation, arbitration or proceedings,:such Company has no material
contingent obligations not provided for or disclosed in the financial
statements referred to in Section 6.4.
6.7 Compliance with Laws. Such Company and its Subsidiaries have
complied in all material respects with all applicable statutes, rules,
regulations, orders and restrictions of any domestic or foreign government or
any instrumentality or agency thereof having jurisdiction over the conduct of
their respective businesses or the ownership of their respective properties.
6.8 Compliance with Agreements. Such Company and its Subsidiaries
are in material compliance with all agreements, contracts and undertakings
which are binding upon them and their respective properties.
6.9 Taxes. Such Company and its Subsidiaries have duly prepared and
filed all tax returns applicable to them or their properties through December
31, 1992, and have paid on a timely basis all taxes, charges, levies and
assessments shown thereon, except for such items as they may be contesting in
good faith, adequate reserves having been set aside therefor.
6.10 Excise Duties. There are no excise or stamp taxes or duties
applied in Puerto Rico in connection with the execution, delivery or
enforcement of the Loan Documents.
7. COVENANTS
During the term of this Agreement, unless the Lender shall otherwise
consent in writing:
7.1 Financial Reporting. BanPonce will maintain, for itself and each
of its Subsidiaries, proper books and financial records including a system of
accounting established and administered
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in accordance with generally accepted accounting principles consistently
applied, and furnish to the Lender:
(a) Within ninety (90) days after the close of each of its
fiscal years, an unqualified audit report certified by independent certified
public accountants, acceptable to the Lender, prepared in accordance with
generally accepted accounting principles on a consolidated and consolidating
basis (consolidating statements need not be certified by such accountants) for
itself and the Subsidiaries (including Financial and VELCO), including balance
sheets as of the end of such period, related profit and loss and reconciliation
of surplus statements, and a statement of cash flows, accompanied by any
management letter prepared by such accountants; and
(b) Within forty-five (45) days after the close of the
first three (3) quarterly periods of each of its fiscal years, for itself and
each of its Subsidiaries, consolidated and consolidating unaudited balance
sheets as at the close of each such period and consolidated and consolidating
profit and loss and reconciliation of surplus statements for the period from
the beginning of such fiscal year to the end of such quarter, including a
comparison with the similar period of the previous fiscal year, all certified
by its chief financial officer as true and correct.
All financial statements provided by the Companies shall be
prepared in accordance with generally accepted accounting principles applied
consistently with the financial statements referred to in Section 6.4.
7.2 Each of the Companies will use the proceeds of the Loans solely
to pay on a short term basis amounts then coming due in respect of commercial
paper to be issued under certain private placements. Therefore, the Companies
shall use this facility only as a short-term facility for commercial paper
backup purposes.
7.3 Each of the Companies from time to time will provide the Lender
with such information and documents with respect to its financial condition and
business operations, and
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that of its Subsidiaries, as the Lender may reasonably request, and will notify
the Lender of the occurrence of any Default or any event which, with giving of
notice, or lapse of time, or both,' would be a Default.
7.4 Each Company will, and will cause its Subsidiaries to, conduct
their business in substantially the same fields and manner as it is presently
conducted, and in material compliance with all applicable laws of any nature
whatsoever.
7.5 Banponce shall maintain at all times a minimum Consolidated
Tangible Net Worth equal to or greater than 5% of total assets.
7.6 BanPonce shall maintain at all times a ratio of its Long-Term
Indebtedness to Total Capitalization equal to or less than 0.50 to 1.0.
7.7 Banponce shall not permit its aggregate Non-Performing Assets at
the end of any fixed quarter or year to be more than 4.5% of its total (gross)
loans, leases and other owned real estate at the end of such period, as such
items are reported in its financial statements for the relevant period(s).
7.8 BanPonce will maintain at all times its Maximum Double Leverage
at less than 115%.
7.9 All payments to the Lender hereunder shall be made free and clear
of any deduction, withholding, stamp, or other tax applicable in Puerto Rico,
all of which shall be for the account of the Company making such payment. In
the event that any such deduction, withholding or other tax shall be
applicable, the amount payable to the Lender shall be increased so that the
Lender shall receive the same amount as if such deduction, withholding or other
tax had not applied. In addition, to the extent that any deduction,
withholding or other tax shall apply in Puerto Rico, the Company making a
payment subject to such tax shall promptly obtain and remit to the Lender
original tax receipts evidencing the payment of such tax.
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8. DEFAULT
The occurrence of any one or more of the following events shall
constitute a Default:
8.1 Any Company shall fail to pay any principal, interest, tax, fee
or other amount payable hereunder when due;
8.2 Any Company shall breach the terms of any covenant or
provision hereof or any representation or warranty made in connection with this
Agreement shall prove to have been false or misleading when made;
8.3 Any Company fails to pay any Indebtedness when due or a default
shall occur under any agreement governing any Indebtedness of any Company which
would permit the holder of such Indebtedness to accelerate the maturity
thereof;
8.4 Any Company or Subsidiary shall: (i) have an order for relief
entered with respect to it under the federal Bankruptcy Code; (ii) not pay, or
admit in writing its inability to pay, its debts generally as they become due;
(iii) institute any proceeding seeking an order for relief under the federal
Bankruptcy Code or take any corporate action to authorize or effect any of the
foregoing actions set forth in this Section 8.4; (iv) fail to contest in good
faith any appointment or proceeding described in Section 8.5; or (v) become or
be declared insolvent, however evidenced.
8.5 A receiver, trustee, examiner, liquidator or similar official
shall be appointed for any Company or any Subsidiary, or any substantial part
of any Company's or Subsidiary's property, or a proceeding described in Section
8.4(iii) shall be instituted against a Company or any Subsidiary and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of thirty (30) consecutive days.
9 ACCELERATION
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9.1 Acceleration. If any Default under Section 8.4 or 8.5 occurs,
the commitment of the Lender to make Loans hereunder shall automatically
terminate and the principal of and interest on the Loans and all fees, expenses
and other amounts payable under this Agreement (the "Obligations") shall
immediately become due and payable without any election or action on the part
of the Lender. If any other Default occurs, the Lender may, upon notice (as
prescribed in Section 13 hereof) to BanPonce at any time during the
continuation of such Default, terminate or suspend the commitment of the Lender
to make Loans hereunder, or declare the Obligations to be due and payable, or
both, whereupon the Obligations shall become immediately due and payable,
without presentment, demand, protest or notice of any other kind, all of which
each Company hereby expressly waives.
9.2 Amendments. Subject to the provisions of this Section 9.2, the
Lender and the Companies may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lender or the Companies hereunder or waiving
any Default hereunder.
9.3 Preservation of Rights. No delay or omission of the Lender to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
any Company to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence.
10. GENERAL PROVISIONS
10.1 Governing Law. This Agreement and the Notes shall be governed by
the law (and not the law of conflicts) of the State of New York, United States.
For any action or proceeding relating to the Loan Documents, BanPonce and the
Companies submit to the non-exclusive jurisdiction of the federal and state
courts in New York, N.Y., waiving any claim that the same are an inconvenient
forum. Process in any such action or proceeding may be served, in addition to
any other manner permitted by applicable law, by mailing the summons and
complaint in the
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English language, by any form of registered or certified mail,
to the party to be served at the address of such party set forth below its
signature line on this Agreement, as such address may be changed by such party
by written notice delivered to the other parties to this Agreement. Process
served as provided above shall be effective 10 days after posting. The
foregoing provisions shall not affect the right of the Lender to commence an
action or proceeding in any other jurisdiction. In connection with any action
or proceeding relating to the Loan Documents, the Lender and the Companies
knowingly and voluntarily waive trial by jury.
10.2 Indemnification. The Companies, jointly and severally, shall
reimburse the Lender for all reasonable out-of-pocket expenses, including
without limitation, reasonable attorneys' fees and expenses in an amount not in
excess of U.S. $3,000, paid or incurred by the Lender in connection with the
preparation, review, execution and delivery of the Loan Documents. In addition
to the foregoing, whether or not the transactions contemplated hereby shall be
consummated, the Companies, jointly and severally, agree to indemnify and hold
the Lender, and its officers, directors, employees and agents harmless, to the
fullest extent permitted by applicable law, from and against, and to indemnify
the Lender for, any and all claims, liabilities, losses, damages costs and
expenses, including without limitation, reasonable attorneys' fees, arising out
of or related to any litigation or proceeding (whether or not the Lender is a
party thereto) in regard to the Loan Documents (including any such action to
collect or enforce the Loans) or the actual or proposed use of the proceeds of
Loans hereunder. The agreements contained in this Section shall survive the
termination of this Agreement and the payment of the Notes.
10.3 Accounting. Compliance with Sections of this Agreement
(including Sections 7.5, 7.6, 7.7 and 7.8 above) shall be determined on a
consolidated basis for each Company and its Subsidiaries, in accordance with
generally accepted accounting principles applied consistently with the
financial statements referred to in Section 6.4 above.
11 SET-OFF
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In addition to, and without limitation of, any rights of the Lender
under applicable law, if any Company becomes insolvent, however evidenced, or
any Default, or event which, with giving of notice, or lapse of time, or both,
would be a Default, occurs, any indebtedness from the Lender to any Company
(including any account balances, whether provisional or final, matured or
unmatured) may, at any time while such circumstances shall continue, be offset
and applied toward the payment of the Obligations owing to the Lender. The
Lender will give BanPonce notice of any such offset promptly after effecting
it.
12. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Companies and
the Lender and their respective successors and assigns, except that none of the
Companies shall have the right to assign rights or obligations under the Loan
Documents.
12.2 Participations; Permitted Participants; Effect. The Lender may,
in the ordinary course of its business and in accordance with applicable law,
at any time sell to one or more banks or other entities ("Participants")
participating interests in the Loans, the Aggregate Commitment or any other
interest of the Lender under the Loan Documents. In the event of any such
sale, the Lender's obligations under the Loan Documents shall remain unchanged,
the Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, the Lender shall remain the holder of the
Notes for all purposes under the Loan Documents, all amounts payable by the
Companies under this Agreement shall be determined as if the Lender had not
sold such participating interest, and the Companies shall continue to deal
solely and directly with the Lender in connection with the Lender's rights and
obligations under the Loan Documents. In connection with a proposed sale of a
participation, the Lender may disclose to any prospective purchaser any
information concerning the Loans, the Companies and the Subsidiaries.
13. NOTICES
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Any notice required or permitted to be given under this Agreement may
be, and shall be deemed, given when deposited in the United States mail,
postage prepaid, when sent by telecopier or by telex (with confirmed
answer-back) to each Company or the Lender at the addresses and telecopier
numbers indicated below their signatures to the Agreement. Notices relating to
borrowings pursuant to Section 2.2 may be made orally, confirmed by telecopier.
14. COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which, taken together, shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Lender and the
Companies and.transmitted to each other by telecopier, with original executed
counterparts to be exchanged thereafter by mail.
BANPONCE CORPORATION
By:______________________________
Its:______________________________
By:______________________________
Its:______________________________
Address:______________________________
Telex No.:______________________________
Telecopier No.:______________________________
BANPONCE FINANCIAL CORPORATION
By:______________________________
Its:______________________________
By:______________________________
Its:______________________________
Address:______________________________
Telex No.:______________________________
Telecopier No.:______________________________
20
16
CHEMICAL BANK
By:______________________________
Its:______________________________
By:______________________________
Its:______________________________
Address:______________________________
Telex No.:______________________________
Telecopier No.:______________________________
21
EXHIBIT "A"
NOTE
U.S. $25,000,000 April 1, 1993
_____________________________, a ________________ corporation (the
"Company"), promises to pay to the order of Chemical Bank (the "Lender") the
principal sum of U.S. $25,000,000, or the aggregate unpaid principal amount of
all Loans made by the Bank to the Company pursuant to Section l of the Credit
Agreement dated as of April 1, 1993, among BanPonce Corporation, a Puerto Rico
corporation, Vehicle Equipment Leasing Company, Inc., a Puerto Rico
corporation, BanPonce Financial Corp., a Delaware corporation, and the Lender
(the "Agreement"), whichever is less, in immediately available funds at the New
York Office of the Lender, currently located at 270 Park Avenue, New York, New
York 10017, together with interest on the unpaid principal amount hereof, free
and clear of any set-off, counterclaim, deduction or withholding for any reason
whatsoever. Interest and principal shall be payable at the rates and on the
dates set forth in the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment.
This Note is issued pursuant to the provisions of the Agreement, to
which Agreement, as it may be amended from time to time, reference is hereby
made for the definitions of capitalized terms used herein which are not
otherwise defined and for a statement of the terms and conditions under which
this Note may be prepaid or its maturity date accelerated.
Presentment, demand, protest and notice, other than as provided in
Section 9.1 of the Agreement, are hereby waived.
This Note is governed by laws of the State of New York.
[NAME OF COMPANY]
By:______________________________
Title:______________________________
22
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF __________________________
DATED ________________, 1993
Principal Principal
Amount of Amount Unpaid
Date Loan Maturity Paid Balance
23
EXHIBIT "B"
FORM OF COMPANY COUNSEL OPINION
April 1, 1993
Gentlemen:
We are counsel for each of BanPonce Corporation, a Puerto Rico
corporation ("BanPonce"); BanPonce Financial Corp., a Delaware corporation
("Financial"); and Vehicle Equipment Leasing Company, Inc., a Puerto Rico
corporation ("VELCO", each of BanPonce, Financial and VELCO, a "Company") and
have represented the Companies in connection with their execution and delivery
of a Credit Agreement (the "Agreement") between the Companies and Chemical Bank
(the "Lender") providing for Loans in an aggregate principal amount not
exceeding U.S. $25,000,000 at any one time outstanding and dated as of April 1,
1993. All capitalized terms used in this opinion shall have the meanings
attributed to them in the Agreement.
We have examined the Companies' articles of incorporation, by-laws,
resolutions, the Agreement and such other matters of fact and law which we
deemed necessary in order to render this opinion. Based upon the foregoing, it
is our opinion that:
1. Each Company is a corporation duly incorporated, validly existing
and in good standing under the laws of its respective jurisdiction of
incorporation and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted.
2. The execution and delivery of the Agreement and the Note by
BanPonce, Financial and VELCO; the execution and delivery of the Guaranty by
BanPonce; and the performance by each Company of its obligations under its Loan
Documents to which it is a party, have been duly authorized by all necessary
corporate action and proceedings on the part of such Company, and will not:
(a) require any consent of the Company's shareholders;
(b) violate any applicable law, rule, regulation, order,
writ, judgment, injunction, decree or award binding on such Company, or any
indenture, instrument or agreement binding upon such Company; or
(c) result in, or require, the creation or imposition of
any lien or encumbrance pursuant to the provisions of any indenture, instrument
or agreement binding upon such Company.
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3. Each of the Agreement, the Note and the Guaranty has been duly
executed and delivered by the Companies which are parties thereto, and
constitutes the legal, valid and binding obligation of such Company enforceable
in accordance with its terms, except to the extent the enforcement thereof may
be limited by bankruptcy, insolvency or similar laws affecting the enforcement
of creditors' rights generally and subject also to the availability of
equitable remedies if equitable remedies are sought.
4. To the best of our knowledge after due inquiry, there is no
litigation or proceeding against any Company or any Subsidiary which, if
adversely determined, would materially adversely affect the business or
condition of such Company or Subsidiary.
5. No approval, authorization, consent, adjudication, registration
or order of any governmental authority which has not been obtained by the
Companies, is required to be obtained by the Companies in connection with the
execution and delivery of the Agreement, the Note and the Guaranty, the
borrowings under the Agreement, or the performance by the Companies of their
respective obligations under the Loan Documents.
[6. Discussion of applicable taxes in Puerto Rico.]
Very truly yours,
__________________________
25
EXHIBIT "C"
GUARANTY
The undersigned, BanPonce Corporation, a Puerto Rico corporation,
hereby requests the Lender (as hereinafter defined) through any of its
branches, offices, subsidiaries or affiliates, to extend credit or to permit
credit to remain outstanding to BanPonce Financial Corp., a Delaware
corporation, and/or Vehicle Equipment Leasing Company, a Puerto Rico
corporation (each, a "Company" and, collectively, the "Companies"), as the
Companies may desire and as the Lender may extend or permit from time to time
in its sole discretion, whether to a Company alone, to the Companies
collectively, or to either Company or the Companies and others, and, in
consideration of any credit granted or continued, the undersigned hereby
absolutely, unconditionally and irrevocably guarantees (as primary obligor and
not as surety merely) prompt payment when due, whether at stated maturity, upon
acceleration or otherwise, and at all times thereafter, of any and all existing
and future indebtedness and liability of every kind, nature and character,
direct or indirect, absolute or contingent (including all renewals, extensions
and modifications thereof and all attorneys' fees incurred by the Lender in
connection with the collection or enforcement hereof or thereof), of the
Companies to the Lender, arising, evidenced or acquired pursuant to that
certain Credit Agreement, as defined below (the "Guaranteed Debt"); provided,
however, that the maximum aggregate principal amount extended under the Credit
Agreement for which the undersigned shall be liable hereunder, is
US$25,000,000; provided, furthermore, that the foregoing limitation shall not
apply to interest or other non-principal amounts which may become due under the
Credit Agreement.
The undersigned waives notice of the acceptance of this Guaranty and
of the extension or continuation of the Guaranteed Debt or any part thereof.
The undersigned further waives presentment, protest, notice, the benefit of any
statutes of limitations, demand or action or delinquency in respect of the
Guaranteed Debt or any part thereof, including any right to require the Lender
to sue the Company and any other guarantor or any person obligated with respect
to the Guaranteed Debt or any part thereof, or otherwise to enforce payment
thereof against any collateral securing the Guaranteed Debt or any part
thereof.
This Guaranty is a guaranty of payment and not of collection merely,
and shall be a continuing guaranty and as such, shall remain operative and in
full force and effect until all the Guaranteed Debt shall have been paid and
actually received in full by the Lender.
The validity and enforceability of this Guaranty shall not be impaired
or affected by any of the following: (a) any extension, modification or renewal
of, or indulgence with respect to, or substitutions for, the Guaranteed Debt or
any part thereof or any agreement relating thereto at any time; (b) any failure
or omission to enforce any right, power or remedy with respect to the
Guaranteed Debt or any part thereof or any agreement relating thereto, or any
collateral securing the Guaranteed Debt or any part thereof; (c) any waiver of
any right, power or remedy or of any default with respect to the Guaranteed
Debt or any part thereof or any agreement relating thereto or with respect to
any collateral securing the Guaranteed Debt or any part
26
2
thereof; (d) any release, surrender, compromise, settlement, waiver,
subordination or modification, with or without consideration, of any collateral
securing the Guaranteed Debt or any part thereof, any other guaranties with
respect to the Guaranteed Debt or any part thereof, or any other obligation of
any person or entity with respect to the Guaranteed Debt or any part thereof;
(e) the enforceability or validity of the Guaranteed Debt or any part thereof
or the genuineness, enforceability or validity or any agreement relating
thereto or with respect to any collateral securing the Guaranteed Debt or any
part thereof; (f) the application of payments received from any source to the
payment of indebtedness other than the Guaranteed Debt, any part thereof or
amount which are not covered by this Guaranty even though the Lender might
lawfully have elected to apply such payments to any part or all of the
Guaranteed Debt or to amounts which are not covered by this Guaranty; (g) any
change of ownership of either Company or the insolvency, bankruptcy or any
other change in the legal status of either Company; (h) the change in or the
imposition of any law, decree, regulation or other governmental act which does
or might impair, delay or in any way affect the validity, enforceability or the
payment when due of the Guaranteed Debt; (i) the failure of either Company or
the undersigned to maintain in full force, validity or effect or to obtain or
renew when required all governmental and other approvals, licenses or consents
required in connection with the Guaranteed Debt or this Guaranty, or to take
any other action required in connection with the performance of all obligations
pursuant to the Guaranteed Debt or this Guaranty; or (j) the existence of any
claim, set off or other rights which the undersigned may have at any time
against either Company in connection herewith or an unrelated transaction, all
whether or not the undersigned shall have had notice of knowledge of any act or
omission referred to in the foregoing clauses (a) through (j) of this
paragraph. It is agreed that the undersigned's liability hereunder is several
and independent of any other guaranties or other obligations at any time in
effect with respect to the Guaranteed Debt or any part thereof and that the
undersigned's liability hereunder may be enforced regardless of the existence,
validity, enforcement or non-enforcement of any such other guaranties or other
obligations or any provisions of any applicable law or regulation purporting to
prohibit payment by either Company of the Guaranteed Debt in the manner agreed
upon between the Lender and the Companies.
Credit may be granted or continued from time to time by the Lender to
a Company without notice to or authorization from the undersigned regardless of
such Company's financial or other condition at the time of any such grant or
continuation. The Lender shall have no obligation to disclose or discuss with
the undersigned its assessment of the financial condition of the Companies.
Until the Guaranteed Debt is paid in full, the undersigned shall not
exercise any right of subrogation with respect to payments made by the
undersigned pursuant to this Guaranty. The undersigned hereby waives any
claim, as that term is defined in the federal Bankruptcy Code, that the
undersigned might now have or hereafter acquire against either Company that
arises from the existence or performance of the undersigned's obligations under
this Guaranty. In addition, the undersigned waives any benefit of the
collateral, if any, which may, from time to time, secure the Guaranteed Debt or
any part thereof and authorizes the Lender to take any action or exercise any
remedy with respect thereto, which the Lender, in its sole discretion, shall
27
3
determine, without notice to the undersigned. In the event the Lender, in its
sole discretion, elects to give notice of any action with respect to the
collateral, if any, securing the Guaranteed Debt or any part thereof, ten (10)
days' written notice mailed to the undersigned by ordinary mail at the address
shown hereon shall be deemed reasonable notice of any matters contained in such
notice.
In the event that acceleration of the time for payment of any of the
Guaranteed Debt is stayed, upon the insolvency, bankruptcy or reorganization of
either Company, or otherwise, all such amounts shall nonetheless be payable by
the undersigned forthwith upon demand by the Lender. In the event that any
payment made under this Guaranty or the other Loan Documents shall subsequently
be recovered by any trustee in bankruptcy, receiver or debtor in possession of
a Company or of the undersigned, whether pursuant to litigation or by voluntary
payment by the Lender, the amount so recovered shall become immediately due and
payable under this Guaranty which, to the extent it may otherwise have
terminated, shall be reinstated.
No provision of this Guaranty may be amended, supplemented or
modified, or any of the terms and provisions hereof waived, except by a written
instrument executed by the Lender and the undersigned. No failure on the part
of the Lender to exercise, and no delay in exercising, any right hereunder,
shall operate as a waiver thereof; nor shall any single or partial exercise or
any right hereunder 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.
The undersigned shall pay all reasonable costs, fees and expenses
(including reasonable attorneys' fees and expenses) incurred by the Lender in
collecting or enforcing the undersigned's obligations under this Guaranty.
The provisions of this Guaranty are several, and 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, if the obligations of the undersigned hereunder would
otherwise be held or determined to be avoidable, invalid or unenforceable on
account of the amount of the undersigned's liability under this Guaranty, then,
notwithstanding any other provision of this Guaranty to the contrary, the
amount of such liability shall, without any further action by the undersigned
or the Lender be automatically limited and reduced to the highest amount which
is valid and enforceable as determined in such action or proceeding.
This Guaranty is a continuing guaranty and shall remain in full force
and effect until the payment in full (on or after the Termination Date) of the
Guaranteed Debt and all other amounts payable under this Guaranty. This
Guaranty shall bind the undersigned and the successors and assigns of the
undersigned. This Guaranty shall be binding upon the undersigned and shall
inure to the benefit of and be enforceable by the Lender, its successors and
assigns. All references herein shall be deemed to include its successors and
assigns. Such successors and assigns shall include, without limitation, a
receiver, trustee or debtor in possession of or for the Company or the
undersigned, as the case may be. Without limiting the generality of the third
sentence of this
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4
paragraph, the Lender may assign or otherwise transfer any portion of
the Guaranteed Debt to any other person or entity, and such other person or
entity shall thereupon become vested with all the rights in respect thereof
granted to the Lender herein or otherwise. This Guaranty shall be governed by
the laws of the State of New York The provisions of the Credit Agreement
pertaining to jurisdiction, service of process and payments pursuant to Section
7.9 thereof shall apply, mutatis mutandis, to this Guaranty.
This Guaranty is delivered pursuant to the terms of that certain
Credit Agreement dated as of April 1, 1993, (the "Credit Agreement") by and
among BanPonce Corporation, a Rico corporation, BanPonce Financial Corp., a
Delaware corporation, and Vehicle Equipment Leasing Company, Inc., a Puerto
Rico corporation, and the Lender. Capitalized terms used herein and not
otherwise defined shall have the meanings given to such terms in the Credit
Agreement.
BANPONCE CORPORATION
By:______________________________
Title:______________________________
By:______________________________
Title:______________________________
April 1, 1993
29
SCHEDULE "1"
LITIGATION
[To Be Attached]