EXHIBIT 10.54
AMENDED AND RESTATED PROMISSORY NOTE
U.S. $60,000,000 City of New York
October 15, 2002 State of New York, U.S.A.
FOR VALUE RECEIVED as a loan (the "Loan"), the undersigned, PANAMERICAN
BEVERAGES, INC., a Panamanian corporation (the "Borrower"), unconditionally
promises to pay to the order of ING BANK N.V., ACTING THROUGH ITS CURACAO BRANCH
(the "Bank"), at the time and in the manner set forth in Section 2 below, the
principal sum of SIXTY MILLION UNITED STATES DOLLARS (U.S. $60,000,000) on April
1, 2003 (the "Maturity Date").
The Borrower promises to pay interest on the unpaid balance of the
Loan from and including the date hereof until the Loan is paid in full, at
a rate per annum equal to the sum of the Eurodollar Rate (as defined below)
for the applicable Interest Period (as defined below) plus the Applicable
Margin (as defined below), subject to the provisions of Section 2(c) and
Section 4(c) and (d) hereof. Accrued interest shall be payable on each
Interest Payment Date (as defined below), provided that interest payable
pursuant to Section 2(c) hereof shall be payable upon demand.
All payments hereunder shall be made in U.S. Dollars and in
immediately available funds, without deduction, set-off or counterclaim.
The Bank shall maintain on its books records setting forth the amounts of
principal, interest and other sums paid or payable by the Borrower from
time to time hereunder. In the event of any dispute, action or proceeding
relating to this Note, such records shall be conclusive in the absence of
manifest error.
This Note consolidates, renews, amends and restates the Promissory
Note in the principal amount of Sixty Million United States Dollars (U.S.
$60,000,000), dated October 1, 2002, made by the Borrower in favor of the
Bank (the "Original Note"). Without any further action on the part of any
party, as of the date hereof, the entire outstanding principal amount of
said Original Note, together with all accrued and unpaid interest thereon,
shall be deemed to be outstanding under this Note with the same allocation
between principal and interest as under said Original Note. Nothing herein
shall be deemed or construed as a novation, satisfaction or refinancing of
all or any portion of the indebtedness evidenced by the Original Note, all
of such indebtedness shall be deemed to be outstanding under this Note as
full as under said Original Note.
1. Certain Defined Terms. As used in this Note, the following terms
shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
(a) "Affiliate" means, as to any Person, any other Person that,
directly or indirectly, controls, is controlled by or is under common
control with such Person or is a director or officer of such Person. For
purposes of this definition, the term "control" (including the terms
"controlling," "controlled by" and "under common control with") of a Person
means the possession, direct or indirect, of the power to vote 5% or more
of the Voting Stock of such Person or to direct or cause the direction of
the management and policies of such Person, whether through the ownership
of Voting Stock, by contract or otherwise; provided, however,
that neither TCCC nor any of its direct or indirect Subsidiaries shall be
considered an Affiliate of the Borrower or any of its Subsidiaries.
(b) "Alternate Base Rate" means, on any date, a fluctuating rate of
interest per annum equal to the higher of
(i) the Base Rate; and
(ii) the Federal Funds Rate plus1/2of 1%.
The Alternate Base Rate is not necessarily intended to be the lowest rate
of interest determined by the Bank in connection with extensions of credit.
Changes in the rate of interest on the Loan bearing interest at the
Alternate Base Rate will take effect simultaneously with each change in the
Alternate Base Rate.
(c) "Applicable Margin" means (i) for the period from the date hereof
to January 1, 2003, 0.60% per annum; (ii) for the period from January 1,
2003 to February 1, 2003, 0.80% per annum; (iii) for the period from
February 1, 2003 to March 1, 2003, 1.00% per annum; and (iv) from March 1,
2003 to (and including) the Maturity Date, 1.10% per annum; provided,
however, that (A) if at any time from the date hereof to the Maturity Date
the Borrower's BBB-/Baa3 credit rating category is increased by one or more
gradations by any two of the three Credit Rating Agencies which currently
maintain an investment grade credit rating for the Borrower, the then
Applicable Margin shall decrease by a margin of 0.125% for each such
gradation increase; and (B) if at any time from the date hereof to the
Maturity Date the Borrower's BBB-/Baa3 rating category is decreased by one
or more gradations by any two of the three Credit Rating Agencies which
currently maintain an investment grade credit rating for the Borrower, a
supplemental margin of 0.375% per gradation will be added to the then
Applicable Margin.
(d) "Back-to-Back Loan" means Debt of any Subsidiary owed to a third
party that is fully collateralized by the proceeds of Debt incurred by the
Borrower.
(e) "Bank's Account" shall mean account No. 001-1-067634 maintained at
Chase Manhattan Bank, N.A., New York, USA (ABA No. 021-0000-21), for credit
to ING Bank N.V., Curacao Branch, or such other account at such other bank
in New York City as the Bank shall specify from time to time to the
Borrower.
(f) "Base Rate" means the rate of interest from time to time announced
by the Bank at its principal office in New York City as its prime
commercial lending rate; provided that if the Bank shall cease to announce
a prime commercial lending rate, then "Base Rate" shall mean the arithmetic
average of the rates of interest publicly announced by The Chase Manhattan
Bank and Citibank, N.A. (or their respective successors) as their
respective prime commercial lending rates (or, as to any such bank that
does not announce such a rate, such bank's "base" or other rate determined
by the Bank to be the equivalent rate announced by such bank), except that,
if any such bank shall, for any period, cease to announce publicly its
prime commercial lending (or equivalent) rate, the Bank shall, during such
period, determine the "Base Rate" based upon the prime commercial lending
(or equivalent) rates announced publicly by the other such banks.
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(g) "Business Day" means a day of the year on which banks are not
required or authorized to close in New York City and on which dealings are
carried on in the London interbank market.
(h) "Capitalized Leases" has the meaning specified in clause (v) of
the definition of Debt.
(i) "Change in Control" means:
(i) the failure of the Shareholders (as defined in the Voting
Trust Agreement) parties to the Voting Trust Agreement collectively
to:
(A) own, directly or indirectly, on the date hereof and
until all Obligations owing under this Note are paid in full, at
least a majority of the outstanding Voting Stock of the Borrower
on a fully diluted basis, free and clear of all Liens; or
(B) control, directly or indirectly, whether by the
percentage of ownership of Voting Stock imposed by any applicable
law, the possession of voting power or otherwise, the power to
direct the affairs or control the composition of at least a
majority of the board of directors, management committee, or
other equivalent body, of the Borrower; or
(C) dissolution or termination of the Voting Trust
Agreement; or
(D) the failure of TCCC to own (as a result of a sale by
TCCC of such Common Stock described below), directly or
indirectly, on the date hereof and until all Obligations owing
under this Note are paid in full, at least 25% of the outstanding
Class B Common Stock of the Borrower, 22.6% of the outstanding
Class A Common Stock of the Borrower and 100% of the outstanding
Class C Preferred Stock of the Borrower, in each case, on a fully
diluted basis, free and clear of all Liens (it being understood
that such percentage will be reduced on a proportionate basis in
the event of any issuance or sale of Class A Common Stock or
Class B Common Stock in which TCCC does not acquire its
proportionate share); or
(E) any reduction in the number of directors nominated by
TCCC to the Borrower's Board of Directors as compared to the
number of such directors nominated by TCCC as of the date of this
Note.
(j) "Coca-Cola Entity" means TCCC and any Wholly-Owned Subsidiary of
TCCC.
(k) "Coca-Cola Facility" means the facility provided by The Coca-Cola
Financial Corporation dated December 23, 1998.
(l) "Compensation Plan" of the Borrower or any Subsidiary thereof
means any program, plan or similar arrangement (other than employment
contracts) relating generally to
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compensation, pension, employment or similar arrangements to which the
Borrower or such Subsidiary (individually or in connection with any other
Person) may have any liability.
(m) "Confidential Information" means information furnished by or on
behalf of the Borrower or an Affiliate of the Borrower to the Bank in a
writing designated as confidential, but does not include any such
information that (i) is or becomes generally available to the public or
(ii) is or becomes available to the Bank from a source other than the
Borrower or an Affiliate of the Borrower other than as a result of a breach
by the Bank of its obligations hereunder.
(n) "Consolidated" refers to the consolidation of accounts in
accordance with GAAP.
(o) "Consolidated Debt" means the outstanding principal amount of all
Debt of the Borrower and its Consolidated Subsidiaries; provided, however,
that Debt of the Borrower's Consolidated Subsidiaries shall not include any
Debt of any Subsidiary to the extent, but only to the extent, that such
Debt, (i) is held by the Borrower, whether in the form of a loan,
participating interest or other instrument evidencing indebtedness or other
Obligation of the Subsidiary so long as material enforcement, waiver or
amendment decision regarding such Debt may be taken only by the Borrower,
or (ii) represents a Back-to-Back Loan.
(p) "Consolidated EBITDA" means, for any period, the sum, without
duplication, of
(i) Consolidated Operating Income for such period,
plus
(ii) all depreciation and amortization of assets (including
Intangible Assets) of the Borrower and its Subsidiaries deducted in
determining Consolidated Operating Income for such period.
(q) "Consolidated Operating Income" means, with respect to the
Borrower and its Subsidiaries for any period, the Consolidated operating
income (or loss), before interest, taxes and extraordinary items, of the
Borrower and its Subsidiaries for such period.
(r) "Consolidated Tangible Net Assets" means as of any date, the total
amount of assets of the Borrower and its Subsidiaries, less (i) Intangible
Assets and (ii) appropriate adjustments on account of minority interests of
other Persons holding equity investments in Subsidiaries, all as reflected
on the consolidated balance sheet of the Borrower and its Subsidiaries as
of the end of the fiscal quarter immediately preceding such date.
(s) "Credit Rating Agencies" means Fitch, Moody's and Standard &
Poor's.
(t) "Debt" of any Person means, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all Obligations of
such Person for the deferred purchase price of property or services, (iii)
all Obligations of such Person evidenced by notes, bonds, debentures or
other similar instruments, (iv) all indebtedness created or arising under
any conditional sale or other title retention agreement with respect to
property acquired by such Person (even though the rights and remedies of
the seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (v) all Obligations of
such Person as lessee
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under leases that have been or should be, in accordance with GAAP, recorded
as capital leases ("Capitalized Leases"), (vi) all Obligations, contingent
or otherwise, of such Person under acceptance, letter of credit or similar
facilities, (vii) all Obligations of such Person to purchase, redeem,
retire, defease or otherwise make any payment in respect of any capital
stock of or other ownership or profit interest in such Person or any of its
Affiliates or any warrants, rights or options to acquire such capital
stock, (viii) all Obligations of such Person in respect of Hedge
Agreements, (ix) all Debt of others referred to in clauses (i) through
(viii) above guaranteed directly or indirectly in any manner by such
Person, or in effect guaranteed directly or indirectly by such Person
through an agreement (A) to pay or purchase such Debt or to advance or
supply funds for the payment or purchase of such Debt, (B) to purchase,
sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling the debtor to make payment
of such Debt or to assure the holder of such Debt against loss, (C) to
supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such
property is received or such services are rendered) or (D) otherwise to
assure a creditor against loss, and (x) all Debt referred to in clauses (i)
through (viii) above secured by (or for which the holder of such Debt has
an existing right, contingent or otherwise, to be secured by) any Lien on
property (including, without limitation, accounts and contracts rights)
owned by such Person, even though such Person has not assumed or become
liable for the payment of such Debt; provided, however, that Debt shall not
include trade accounts payable arising in the ordinary course of business.
(u) "Default" means any Event of Default or any event that would
constitute an Event of Default but for the requirement that notice be given
or time elapse or both.
(v) "Disclosure Schedule" means the Disclosure Schedule set forth as
Annex I hereto.
(w) "Eligible Assignee" means (i) a commercial bank, finance company,
insurance company or other financial institution or fund (whether a
corporation, partnership, trust or other entity) having total assets in
excess of U.S. $250,000,000 and (ii) any Affiliate or branch of the Bank.
(x) "Environmental Action" means means any administrative, regulatory
or judicial action, suit, demand, demand letter, notice of non-compliance
or violation, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law or any Environmental Permit,
including without limitation (i) any claim by any Governmental Authority
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any Environmental Law and (ii) any claim by any third
party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or
arising from alleged injury or threat of injury to health, safety or the
environment.
(y) "Environmental Law" means any supranational, federal, national,
state, provincial, tribal, local or municipal law, rule, regulation, order,
writ, judgment, injunction, decree, determination or award of any
Governmental Authority within or outside the United States relating to or
imposing standards of conduct concerning the environment, health, safety or
Hazardous Materials.
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(z) "Environmental Permits" means any permit, approval, identification
number, license or other authorization required under any Environmental
Law.
(aa) "Eurocurrency Liabilities" has the meaning specified in
Regulation D of the Board of Governors of the Federal Reserve System, as in
effect from time to time.
(bb) "Eurodollar Rate" means, with respect to any Interest Period for
the Loan, an interest rate per annum equal to the rate per annum obtained
by dividing (i) the rate per annum determined by the Bank based on the
rate(s) quoted on the Reuters Screen LIBO Page at approximately 11:00 A.M.
(London time) two Business Days before the first day of such Interest
Period for a period equal to such Interest Period by (ii) a percentage
equal to 100% minus the Eurodollar Rate Reserve Percentage for such
Interest Period. If only one rate appears on the Reuters Screen LIBO Page,
the rate in clause (i) above will be such rate, and if two or more rates
appear on the Reuters Screen LIBO Page, the rate in clause (i) above will
be the arithmetic mean of such rates. The Eurodollar Rate for each Interest
Period for the Loan shall be determined by the Bank.
(cc) "Eurodollar Rate Reserve Percentage" for any Interest Period for
the Loan means the reserve percentage applicable two Business Days before
the first day of such Interest Period, under regulations issued from time
to time by the Board of Governors of the Federal Reserve System (or any
successor) for determining the maximum reserve requirement (including,
without limitation, any emergency, supplemental or other marginal reserve
requirement) for a member bank of the Federal Reserve System in New York
City with respect to liabilities or assets consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate
on the Loan is determined) having a term equal to such Interest Period.
(dd) "Events of Default" has the meaning specified in Section 8.
(ee) "Existing Debt" means Debt of the Borrower and its Subsidiaries
outstanding on the date hereof.
(ff) "Existing Debt Agreement" means any agreement or instrument
pursuant to which any Existing Debt has been issued or incurred.
(gg) "Federal Bankruptcy Code" means the United Stated Bankruptcy Code
of 1978, as amended from time to time.
(hh) "Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the
average of the quotations for such day for such transactions received by
the Bank from three Federal funds brokers of recognized standing selected
by it.
(ii) "Fitch" means Fitch IBCA, Duff & Phelps.
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(jj) "GAAP" means, in the case of the Borrower and its Consolidated
Subsidiaries, generally accepted accounting principles in the United States
consistent with those applied in the preparation of the financial
statements of the Borrower and Consolidated Subsidiaries furnished to the
Bank prior to the date of this Note.
(kk) "Governmental Authority" means any federation, nation, state,
sovereign, or government, any federal, supranational, regional, state,
tribal, local or political subdivision, any governmental or administrative
body, instrumentality, department or agency or any court, tribunal,
administrative hearing body, arbitration panel, commission or any other
similar dispute-resolving panel or body, and any other entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government.
(ll) "Hazardous Materials" means (i) petroleum or petroleum products,
natural or synthetic gas, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation and radon gas, (ii) any
substances defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," "restricted hazardous wastes," "toxic substances,"
"toxic pollutants," "contaminants" or "pollutants," or words of similar
import, under any Environmental Law, and (iii) any other substance,
exposure to which is regulated under any Environmental Law.
(mm) "Hedge Agreements" means interest rate swap, cap or collar
agreements, interest rate future or option contracts, currency swap
agreements, currency future or option contracts and other similar
agreements designed to hedge against fluctuations in interest rates or
foreign exchange rates.
(nn) "Indemnified Party" has the meaning specified in Section
9(d)(ii).
(oo) "Intangible Assets" means all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, write-ups of assets over their
carrying value at the end of the last fiscal quarter ended prior to the
date hereof or the date of acquisition, if acquired subsequent to the date
hereof, and all other items which would be treated as intangibles on the
Consolidated balance sheet of the Borrower and its Subsidiaries.
(pp) "Interest Payment Date" means (i) the last day of each Interest
Period, including the Maturity Date and (ii) the date of any prepayment or
repayment of principal of the Loan.
(qq) "Interest Period" means the period commencing on (i) in the case
of the initial Interest Period, October 1, 2002, or (ii) in the case of any
subsequent Interest Period, the date immediately succeeding the last day of
the immediately preceding Interest Period, and ending on the numerically
corresponding date in the calendar month that is one month thereafter;
provided, that (A) if any Interest Period would end on a day other than a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day unless such next succeeding Business Day would fall in the
next calendar month, in which case such Interest Period shall end on the
next preceding Business Day, (B) any Interest Period that commences on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the last calendar month of such Interest
Period) shall end on the last Business Day of the last calendar month of
such Interest Period, and (C) notwithstanding the foregoing, if any
Interest
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Period would otherwise end after the Maturity Date, such Interest
Period shall end on the Maturity Date.
(rr) "Investment" in any Person means any loan or advance to such
Person, any purchase or other acquisition of any capital stock, warrants,
rights, options, obligations or other securities of such Person, any
capital contribution to such Person or any other investment in such Person,
including, without limitation, any arrangement pursuant to which the
investor incurs Debt of the types referred to in clauses (ix) and (x) of
the definition of "Debt" in respect of such Person and, in the case of any
permitted Investment in which the company in which such Investment is made
becomes a Subsidiary of the Borrower, the amount of such Investment shall
include the amount of any Debt of such Subsidiary at such time; provided
that the "cash amount" of any Investment shall not be deemed to include
such Debt.
(ss) "Lending Office" means Zeelandia Office Park, Kaya W.F.G. (Jombi)
Mensing 14, Curacao, Netherlands Antilles.
(tt) "Lien" means any lien, security interest or other charge or
encumbrance of any kind, or any other type of preferential arrangement,
including, without limitation, the lien or retained security title of a
conditional vendor and any easement, right of way or other encumbrance on
title to real property.
(uu) "Loan Documents" means this Note and each other instrument,
agreement, certificate, notice or other document executed and/or delivered
pursuant hereto or thereto or in connection herewith or therewith.
(vv) "Margin Stock" means any "margin stock" or "margin security" as
defined in Regulations T, U and X of the Board of Governors of the Federal
Reserve System.
(ww) "Material Adverse Change" means a material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties, assets or prospects of the Borrower and its Subsidiaries taken
as a whole.
(xx) "Material Adverse Effect" means a material adverse effect on (i)
the business, condition (financial or otherwise), operations, performance,
properties, assets or prospects of the Borrower and its Subsidiaries taken
as a whole or (ii) the rights and remedies of the Bank under this Note.
(yy) "Moody's" means Moody's Investors Service, Inc.
(zz) "Net Issuance Proceeds" means, with respect to any issuance, sale
or incurrence of any Debt in the international financial markets by any
Person, the aggregate amount of cash received from time to time by or on
behalf of such Person after deducting therefrom only (i) placement agents'
or underwriters' commissions, and (ii) other reasonable and customary fees
and expenses (including, without limitation, fees and expenses of counsel
and bankers) payable by or on behalf of such Person in connection with such
issuance, sale or incurrence, in each case to the extent, but only to the
extent, that the amounts so deducted are, at the time of receipt of such
cash, actually paid or payable to a Person that is not an Affiliate and are
properly attributable to such transaction or to the issuance, sale or
incurrence that is the subject thereof.
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(aaa) "Note" means this Amended and Restated Promissory Note.
(bbb) "Obligation" means, with respect to any Person, any obligation
of such Person of any kind, including, without limitation, any liability of
such Person on any claim, whether or not the right of any creditor to
payment in respect to such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is
discharged, stayed or otherwise affected by any proceeding referred to in
Section 8(f). Without limiting the generality of the foregoing, the
Obligations of the Borrower under this Note include (i) the obligation to
pay principal, interest, charges, expenses, fees, reasonable attorneys'
fees and disbursements, indemnities and other amounts payable by the
Borrower under this Note and (ii) the obligation to reimburse any amount in
respect of any of the foregoing that the Bank, in its sole discretion, may
elect to pay or advance on behalf of the Borrower in accordance with this
Note.
(ccc) "Other Currency" has the meaning specified in Section 9(i)(i).
(ddd) "Other Taxes" has the meaning specified in Section 5(b).
(eee) "Permitted Lien" means, with respect to any Person:
(i) pledges or deposits by such Person under worker's
compensation laws, unemployment insurance laws or similar legislation,
or good faith deposits in connection with bids, tenders, contracts
(other than for the payment of Debt) or leases to which such Person is
a party, or deposits to secure public or statutory obligations of such
Person or deposits of cash or government bonds to secure performance,
surety or appeal bonds to which such Person is a party or which are
otherwise required of such Person, or deposits as security for
contested taxes or import duties or for the payment of rent or other
obligations of like nature, in each case incurred in the ordinary
course of business;
(ii) Liens imposed by law, such as carriers', warehousemen's,
laborers', materialmen's, landlords', vendors', workmen's, operators',
producers' and mechanics' Liens, in each case for sums not yet due or
being contested in good faith by appropriate proceedings or other
Liens arising out of judgments or awards against such Person with
respect to which such Person shall then be proceeding with an appeal
or other proceedings of review;
(iii) Liens for taxes, assessments and other governmental charges
or levies not yet delinquent or subject to penalties for non-payment
or which are being contested in good faith by appropriate proceedings;
(iv) minor survey exceptions, minor encumbrances, easements or
reservations of or with respect to, or rights of others for or with
respect to, licenses, rights-of-way, sewers, electric and other
utility lines and usages, telegraph and telephone lines, pipelines,
surface use, operation of equipment, permits, servitudes and other
similar matters, or zoning or other restrictions as to the use of real
property or Liens incidental to the conduct of the business of such
Person or to the ownership of its properties which were not incurred
in connection with Debt and which do not in the aggregate materially
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adversely affect the value of said properties or materially impair
their use in the operation of the business of such Person;
(v) Liens existing on or provided for under the terms of
agreements existing on the date hereof and described in Item 7(b)(i)
of the Disclosure Schedule;
(vi) Liens on property at the time the Borrower or any of its
Subsidiaries acquired the property or the entity owning such property,
including any acquisition by means of a merger or consolidation with
or into the Borrower; provided, however, that any such Lien may not
extend to any other property owned by the Borrower or any of its
Subsidiaries;
(vii) Liens securing Hedge Agreements so long as (A) such Hedge
Agreements are of the type customarily entered into in connection
with, and are entered into for, the bona fide purpose of reducing
financial risk relating to interest rate or foreign exchange
fluctuations, and (B) the collateral securing obligations in respect
of such Hedge Agreements (1) consists only of cash or cash
equivalents, and (2) does not exceed in market value on any date an
amount equal to 1.5% of Consolidated Tangible Net Assets (calculated
as of the end-date of the last quarter for which Consolidated
financial statements have been distributed);
(viii) Liens on accounts receivable, inventory or bottles and
cases to secure working capital or revolving credit Debt incurred by
any Subsidiary in the ordinary course of business;
(ix) Purchase Money Liens;
(x) Liens securing only Debt of a Wholly-Owned Subsidiary of the
Borrower to the Borrower or one or more Wholly-Owned Subsidiaries of
the Borrower;
(xi) Liens on any property to secure Debt incurred in connection
with the construction, installation or financing of bottling
facilities financed through Debt issued by a Coca-Cola Entity or any
subsidiary of it;
(xii) Liens resulting from the deposit funds or evidences of Debt
in trust for the purpose of defeasing Debt of the Borrower or any of
its Subsidiaries;
(xiii) legal or equitable encumbrances deemed to exist by reason
of negative pledges or the existence of any litigation or other legal
proceeding and any related lis pendens filing (excluding any
attachment prior to judgment, judgment lien or attachment lien in aid
of execution on a judgment);
(xiv) rights of a common owner of any interest in property held
by such Person;
(xv) Liens on property or shares of stock of another Person at
the time such other Person becomes a Subsidiary of such Person;
provided, however, that such Liens are not created, incurred or
assumed in connection with, or in contemplation of, such other Person
becoming such a Subsidiary of such Person; provided further, however,
that
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such Lien may not extend to any other property owned by such Person or
any of its Subsidiaries;
(xvi) any defects, irregularities or deficiencies in title to
easements, rights-of-way or other properties which do not in the
aggregate materially adversely affect the value of such properties or
materially impair their use in the operation of the business of such
Person;
(xvii) Liens in favor of the issuers of surety bonds or letters
of credit issued pursuant to the request of and for the account of
such Person in the ordinary course of business; provided, however,
that the obligations in respect of such letters of credit do not
constitute Debt;
(xviii) Liens arising in connection with Capitalized Leases in an
aggregate principal amount not to exceed U.S. $75,000,000 at any time
outstanding; and
(xix) Liens to secure any refinancing, refunding, extension,
renewal or replacement (or successive refinancings, refundings,
extensions, renewals or replacements), as a whole, or in part, of any
Debt secured by any Lien referred to in the foregoing clauses (v)
through (xii); provided, however, that (A) such new Lien shall be
limited to all or part of the same property that secured the original
Lien (plus improvements on or to such property) and (B) the Debt
secured by such Lien at such time is not increased to any amount
greater than the sum of (1) the outstanding principal amount or, if
greater, committed amount of the Debt described under clauses (v)
through (xii) at the time the original Lien became a Permitted Lien
under this Note and (2) any amount necessary to pay any fees and
expenses, including premiums, related to such refinancing, refunding,
extension, renewal or replacement.
(fff) "Person" means an individual, partnership, corporation
(including a business trust), joint stock company, trust, unincorporated
association, joint venture or other entity, or a government or any
political subdivision or agency thereof.
(ggg) "Process Agent" has the meaning specified in Section 9(j)(i).
(hhh) "Purchase Money Lien" means a Lien on property securing Debt
incurred by the Borrower or any of its Subsidiaries to provide funds for
all or any portion of the cost of acquiring, constructing, altering,
expanding, improving or repairing such property or assets used in
connection with such property.
(iii) "Reuters Screen LIBO Page" means the display of London interbank
offered rates (commonly known as "LIBOR") of major banks for Eurodollar
deposits designated as page "LIBO" on the Reuters Monitor Money Rates
Service (or such other page as may replace the LIBO page for the purpose of
displaying such London interbank offered rates for Eurodollar deposits).
(jjj) "Significant Subsidiary" has the meaning specified for a
"significant subsidiary" as defined in Rule 405 under the Securities Act of
1933, as amended.
-11-
(kkk) "Solvent" and "Solvency" mean, with respect to any Person on a
particular date, that on such date (i) the fair value of the property of
such Person is greater than the total amount of its liabilities, including,
without limitation, contingent liabilities, (ii) the present fair salable
value of the assets of such Person is not less than the amount that will be
required to pay the probable liability of such Person on its debts as they
become absolute and matured, (iii) such Person does not intend to, and does
not believe that it will, incur debts or liabilities beyond its ability to
pay as such debts and liabilities mature, and (iv) such Person is not
engaged in business or a transaction, and is not about to engage in
business or a transaction, for which its property would constitute an
unreasonably small capital.
(lll) "Standard & Poor's" means Standard & Poor's Rating Services, a
division of the McGraw-Hill Companies, Inc.
(mmm) "Subsidiary" of any Person means any corporation, partnership,
joint venture, trust or estate of which (or in which), directly or
indirectly, more than 50% of (i) the issued and outstanding capital stock
having ordinary voting power to elect a majority of the Board of Directors
of such corporation (irrespective of whether at the time capital stock of
any other class or classes of such corporation shall or might have voting
power upon the occurrence of any contingency), (ii) the interest in the
capital or profits of such partnership or joint venture, or (iii) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or
more of its other Subsidiaries or by one or more of such Person's other
Subsidiaries. References to Subsidiary, unless otherwise specifically
stated, or the context otherwise requires, shall be a reference to a
Subsidiary of the Borrower.
(nnn) "Taxes" has the meaning specified in Section 5(a).
(ooo) "TCCC" means The Coca-Cola Company, a Delaware corporation, or
any successor thereto.
(ppp) "United States" and "U.S." each means United States of America.
(qqq) "Voting Stock" means capital stock issued by a corporation, or
equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the
election of directors (or persons performing similar functions) of such
Person, even though the right so to vote has been suspended by the
happening of such a contingency.
(rrr) "Voting Trust Agreement" means the Voting Trust Agreement for
certain shares of Panamerican Beverages, Inc., amended and restated as of
April 20, 1993, and as further amended on July 15, 1993, among the
Shareholders parties thereto and the Voting Trustees parties thereto.
(sss) "Wholly-Owned Subsidiary" means, with respect to any Person, any
Subsidiary of such Person if all of the common stock or other similar
equity ownership interests (but not including preferred stock) in such
Subsidiary (other than any directors' qualifying shares or shares issued to
Persons to comply with local laws) is owned directly or indirectly by such
Person.
2. Payments; Prepayments.
(a) Place and Time of Payment. All payments of principal of and
interest on this Note and all other amounts payable hereunder shall be made
by deposit to the Bank's Account not later than 12:00 p.m. (New York time)
on the dates due, or to such other account as the Bank may designate in
writing to the Borrower.
(b) Payments to be on Business Days. Whenever any payment hereunder
shall be stated to be due on a day other than a Business Day such payment
shall be made on the next succeeding Business Day (unless such next
succeeding Business Day would fall in the succeeding calendar month, in
which case such payment shall be made on the next preceding Business Day),
and any such extension or reduction of time shall in such case be reflected
in the computation of payment of interest.
(c) Default Interest. Upon the occurrence and during the continuance
of any Event of Default, the Borrower shall pay interest on the unpaid
principal amount of this Note and on the unpaid amount of all interest,
fees and other amounts payable hereunder that is not paid when due, from
the date such amount becomes due until the date the same is paid in full,
at a rate per annum equal at all times to 2% above the rate of interest
applicable to principal hereof (including the Applicable Margin).
(d) Optional Prepayments. The Borrower may, upon at least five
Business Days' notice to the Bank at any time after 30 days from the date
hereof stating the proposed date and aggregate principal amount of the
prepayment, and, if such notice is given, the Borrower shall, prepay the
outstanding principal amount of this Note in whole or in part, together
with accrued interest to the date of such prepayment on the principal
amount prepaid, without premium or penalty but subject to breakage costs
pursuant to Section 4(e); provided, however, that each partial prepayment
shall be in a minimum aggregate principal amount of U.S. $5,000,000 or an
integral multiple of U.S. $1,000,000 in excess thereof. Any amount prepaid
under this Section 2(d) may not be reborrowed.
(e) Mandatory Prepayments. The Borrower shall prepay the outstanding
principal amount of this Note in an aggregate amount equal to the amount by
which the Net Issuance Proceeds of any public or private issuance, sale or
incurrence of any additional Debt (other than short-term Debt incurred in
the ordinary course of business) in the international financial markets by
the Borrower and/or its Subsidiaries exceeds U.S. $30,000,000 during the
term of this Note. Any prepayment pursuant to this clause (e) shall be made
on the second Business Day (or sooner if elected by the Borrower) following
the date of receipt by the Borrower of such Net Issuance Proceeds. Any
prepayment under this clause (e) shall be made together with accrued
interest to the date of such prepayment on the principal amount prepaid.
Any prepayment subject to this clause (e) shall be subject to Section 4(e).
3. Interest. All computations of interest hereon shall be made on the
basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which
such interest is payable.
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4. Increased Costs, Etc.; Funding Losses.
(a) If, due to either (i) the introduction of or any change in, or in
the interpretation of, any law or regulation or (ii) the need to comply
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law) adopted or made after
the date of this Note (except, with respect to both subclauses (i) and
(ii), any law, regulation, guideline or request addressed in Section 5),
there shall be any increase in the cost to the Bank or any Person
controlling the Bank of agreeing to make or making, funding or maintaining
the Loan, then the Borrower shall from time to time, upon demand by the
Bank, pay to the Bank additional amounts sufficient to compensate the Bank
for such increased cost; provided, however, that, before making any such
demand, the Bank agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Lending Office if the making of such a designation would avoid
the need for, or reduce the amount of, such increased cost and would not,
in the reasonable judgment of the Bank, be otherwise disadvantageous to the
Bank. The Bank shall promptly notify the Borrower in writing of the
occurrence of any such event, such notice to state, in reasonable detail,
the reasons therefor and the additional amounts required fully to
compensate the Bank for such increased cost or reduced amount; provided,
however, that notice in respect of any additional amounts payable hereunder
in respect of any Interest Period shall not be effective, and no such
additional amounts shall be payable hereunder in respect of such Interest
Period, unless such notice is given not later than the 360th day following
the Maturity Date. No such additional amounts shall be payable hereunder
for increased costs incurred in respect of any period from 90 days after
the date on which the Bank becomes actually aware of such increased cost to
the date on which the Bank delivers notice of such increased cost, except
for additional amounts for increased costs incurred as a result of the
retroactive application of any law, rule or regulation. A certificate as to
the amount of such increased cost, submitted to the Borrower by the Bank,
shall be conclusive and binding for all purposes, absent manifest error.
(b) If the Bank determines that (i) the introduction of or any change
in, or in the interpretation of, any law or regulation or (ii) the need to
comply with any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law) adopted or
made after the date hereof affects or would affect the amount of capital
required or expected to be maintained by the Bank or any Person controlling
the Bank and the Bank determines that the amount of such capital is
increased as a result of the transactions contemplated hereby and other
commitments of this type, then, upon demand by the Bank, the Borrower shall
pay to the Bank, from time to time as specified by the Bank, additional
amounts sufficient to compensate the Bank in light of such circumstances,
to the extent that the Bank reasonably determines such increase in capital
to be allocable to the existence of Loan made hereunder; provided, however,
that, before making any such demand, the Bank agrees to use reasonable
efforts (consistent with its internal policy and legal and regulatory
restrictions) to designate a different Lending Office if the making of such
a designation would avoid the need for, or reduce the amount of, such
increase in capital and would not, in the reasonable judgment of the Bank,
be otherwise disadvantageous to the Bank. The Bank shall promptly notify
the Borrower in writing of the occurrence of any such event, such notice to
state, in reasonable detail, the reasons therefor and the additional
amounts required fully to compensate the Bank for such increased cost or
reduced amount; provided, however, that notice in respect of any additional
amounts payable hereunder in respect of any Interest Period shall not be
effective, and
-14-
no such additional amounts shall be payable hereunder in respect of such
Interest Period, unless such notice is given not later than the 360th day
following the Maturity Date. No such additional amounts shall be payable
hereunder for increased capital requirements for any period from 90 days
after the date on which the Bank becomes actually aware of such increased
capital requirements to the date on which the Bank delivers notice of such
increased capital requirements, except for additional amounts for increased
capital requirements as a result of the retroactive application of any law,
rule or regulation. A certificate as to such amounts submitted to the
Borrower by the Bank, shall be conclusive and binding for all purposes,
absent manifest error.
(c) If the Bank determines that the Eurodollar Rate for any Interest
Period for the Loan will not adequately reflect the cost to the Bank of
making, funding or maintaining the Loan for such Interest Period, the Bank
shall forth-with so notify the Borrower, whereupon the Loan will
automatically, on the last day of the then-existing Interest Period, bear
interest by reference to the Alternate Base Rate.
(d) Notwithstanding any other provision of this Note, if the
introduction of or any change in or in the interpretation of any law or
regulation shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for the Bank or
its Lending Office to perform its obligations hereunder, then, on notice
thereof and demand therefor by the Bank to the Borrower, the Loan will
automatically, upon such demand, bear interest, at the end of the current
Interest Period therefor (or sooner if required by law), by reference to
the Alternate Base Rate; provided, however, that, before making any such
demand, the Bank agrees to use reasonable efforts (consistent with its
internal policy and legal and regulatory restrictions) to designate a
different Lending Office if the making of such a designation would allow
the Bank or its Lending Office to continue to perform its obligation to
maintain the Loan and would not, in the judgment of the Bank, be otherwise
disadvantageous to the Bank.
(e) In the event the Bank shall incur any loss, cost, or expense
(including any loss, cost, or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by the Bank to make,
continue, or maintain any portion of the principal amount of the Loan), but
excluding any loss of any margin above the Eurodollar Rate, as a result of
any repayment or prepayment of the principal amount of the Loan on a date
other than the scheduled last day of the Interest Period applicable thereto
then, upon the written notice of the Bank to the Borrower, the Borrower
shall, within five days of its receipt thereof, pay directly to the Bank
such amount as will (in the reasonable determination of the Bank) reimburse
the Bank for such loss, cost or expense. Such written notice (which shall
include all calculations in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower.
5. Taxes.
(a) Any and all payments to be made by the Borrower hereunder shall be
made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding franchise taxes, taxes, levies,
imposts, deductions, charges or withholdings (and all liabilities with
respect thereto) imposed on or measured by reference to net income which
are imposed on the Bank by (i) the United States of America, (ii) any
political subdivision of the United States or (iii) any foreign
jurisdiction or political subdivision thereof under the laws of which the
Bank is
-15-
organized, or in which the Bank has qualified to do or in fact does
business (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to as
"Taxes"). If the Borrower shall be required by law to deduct any Taxes from
or in respect of any sum payable hereunder to the Bank, (x) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable
under this Section) the Bank receives an amount equal to the sum it would
have received had no such deductions been made, (y) the Borrower shall make
such deductions and (z) the Borrower shall pay the full amount required to
be deducted to the relevant taxing authority or other authority in
accordance with applicable law. The Bank shall provide to the Borrower such
forms and certifications as are reasonably necessary to avoid or reduce the
Borrower's obligation to deduct Taxes from any payment hereunder; provided
that the Bank shall not be required to furnish any such form or
certification to the extent such Person reasonably determines (consistent
with its internal policy and legal and regulatory restrictions) that such
action would be disadvantageous to such Person.
(b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any excise or property taxes or any other
charges or similar levies that arise from any payment made hereunder or
from the execution, delivery or registration of, or otherwise with respect
to, this Note (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify the Bank for the full amount of Taxes
or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section) paid by
the Bank and any liability (including penalties, additions to tax, interest
and expenses) arising therefrom or with respect thereto whether or not such
Taxes or Other Taxes were correctly or legally asserted. This
indemnification shall be made within 30 days from the date the Bank makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes by the
Borrower, the Borrower will furnish to the Bank, at its address referred to
in Section 9(b), the original or a certified copy of a receipt evidencing
payment thereof (or, if a receipt cannot be obtained in the applicable
jurisdiction, other appropriate evidence of payment thereof).
(e) Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section shall survive the payment in full of principal
and interest hereunder.
6. Representations and Warranties. The Borrower represents and
warrants to the Bank as follows:
(a) The Borrower and each of its Subsidiaries (i) is a corporation
duly organized and validly existing (and, in the case of any such
Subsidiary incorporated under the laws of one of the States comprising the
United States, in good standing) under the laws of its jurisdiction of
formation, (ii) is duly qualified as a foreign corporation in each other
jurisdiction in which it owns or leases property or in which the conduct of
its business requires it to so qualify or be licensed except where failure
to so qualify would not have a Material Adverse Effect, and (iii) has all
requisite corporate power and authority to own or lease and operate its
properties and to carry on its business as now conducted and as proposed to
be conducted except where the failure
-16-
to do so would be reasonably likely not to result in a Material Adverse
Effect on the Borrower and its Subsidiaries taken as a whole.
(b) Set forth on Item 6(b) of the Disclosure Schedule is a complete
and accurate organizational chart for the Borrower and its Subsidiaries
showing as of the date hereof (as to each such Subsidiary) (x) the
jurisdiction of its incorporation and (y) the percentage of the outstanding
shares of each such class owned (directly or indirectly) by the Borrower
and the number of shares covered by all outstanding options, warrants,
rights of conversion or purchase and similar rights as at the date hereof;
and the information set forth therein is correct in all material respects.
All of the shares of the Borrower and each of its Subsidiaries have been
validly issued, fully paid, are non-assessable and are owned by the
Borrower or one or more of its Subsidiaries and such stock ownership is
shown on the stock registry of the relevant Subsidiary issuing such shares
free and clear of all Liens. Except as disclosed in such Item 6(b) of the
Disclosure Schedule, all the shares of outstanding capital stock of all of
such Subsidiaries that the Borrower purports to own as set forth in Item
6(b) of the Disclosure Schedule have been validly issued, are fully paid
and non-assessable and are owned by the Borrower or one or more of its
Subsidiaries free and clear of all Liens.
(c) The execution, delivery and performance by the Borrower of this
Note and each other Loan Document to which it is or is to be a party, and
the consummation of the transactions contemplated hereby and thereby, are
within the Borrower's corporate powers, have been duly authorized by all
necessary corporate action, and do not (i) contravene the Borrower's
constitutional documents, (ii) violate any law, rule, regulation
(including, without limitation, Regulation X of the Board of Governors of
the Federal Reserve System), order, writ, judgment, injunction, decree,
determination or award, (iii) except as set forth on Item 6(c) of the
Disclosure Schedule, conflict with or result in the breach of, constitute a
default under, or cause or permit any mandatory prepayment or acceleration
of the maturity of, any material contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting
the Borrower, any of its Subsidiaries or any of their properties or assets,
or (iv) result in or require the creation or imposition of any Lien upon or
with respect to any of the properties or assets of the Borrower or any of
its Subsidiaries. Neither the Borrower nor any of its Subsidiaries is in
violation of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument,
the violation or breach of which would be reasonably likely to result in a
Material Adverse Effect.
(d) No authorization or approval or other action by, and no notice to
or filing with, any Governmental Authority or any other third party is
required for (i) the due execution, delivery, recordation, filing or
performance by the Borrower of this Note or any other Loan Document to
which it is or is to be a party, or for the consummation of the
transactions contemplated hereby or thereby, or (ii) the exercise by the
Bank of its rights under this Note or any other Loan Document to which the
Borrower is a party or the remedies provided hereunder or thereunder.
(e) This Note has been, and each other Loan Document to which the
Borrower is or is to be a party when delivered hereunder will have been,
duly executed and delivered by the Borrower. This Note is, and each other
Loan Document to which the Borrower is or is to be a party when delivered
hereunder will be, the legal, valid and binding obligation of the Borrower,
-17-
enforceable against the Borrower in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization and similar laws
affecting creditors generally and general principles of equity.
(f) The Borrower and each of its Subsidiaries is in compliance in all
material respects with all applicable laws, rules, regulations and orders,
except where the failure to so comply would not be reasonably likely to
result in a Material Adverse Effect on the Borrower and its Subsidiaries
taken as a whole.
(g) The audited Consolidated balance sheet of the Borrower and its
Subsidiaries as at December 31, 2001, and the related Consolidated
statements of income and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, accompanied (in the case of such
Consolidated financial statements) by an opinion of Arthur Andersen & Co.,
independent public accountants, copies of which have been furnished to the
Bank, fairly present in all material respects the Consolidated financial
condition of the Borrower and its Subsidiaries as at such dates and the
Consolidated results of the operations of the Borrower and its Subsidiaries
for the periods ended on such dates, all in accordance with GAAP applied on
a consistent basis.
(h) Since December 31, 2001, there has been no Material Adverse
Change.
(i) All written information (other than projections with respect to
the future financial performance of the Borrower and its Subsidiaries)
heretofore or contemporaneously herewith furnished by or on behalf of the
Borrower or any of its Subsidiaries to the Bank for purposes of or in
connection with this Note, any other Loan Document and the transactions
contemplated hereby and thereby is, and all written information (other than
projections with respect to the future financial performance of the
Borrower and its Subsidiaries) hereafter furnished by or on behalf of the
Borrower or any of its Subsidiaries to the Bank pursuant hereto or in
connection herewith will be, true and accurate in every material respect on
the date as of which such information is dated or certified, and none of
such information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading. All projections
with respect to the future financial performance of the Borrower and its
Subsidiaries heretofore or contemporaneously furnished by or on behalf of
the Borrower or any of its Subsidiaries to the Bank have been, and all such
projections hereafter furnished by or on behalf of the Borrower or any of
its Subsidiaries to the Bank will be, prepared in good faith and represent
or will represent the Borrower's realistic views as to such performance at
the time such projections were prepared.
(j) Except as set forth in Item 6(j) of the Disclosure Schedule, there
is no action, suit, investigation, litigation or proceeding affecting the
Borrower or any of its Subsidiaries (and, with respect to unasserted
claims, to the knowledge of the Borrower) (including, but not limited to,
any Environmental Action) pending or threatened before any court,
Governmental Authority or arbitrator that (i) if adversely determined,
would be reasonably likely to result in a Material Adverse Effect or (ii)
would be reasonably likely to adversely affect the legality, validity or
enforceability of this Note, any other Loan Document, or the consummation
of the transactions contemplated hereby or thereby.
(k) (i) Neither the Borrower nor any of its Subsidiaries has taken any
action (including any steps to terminate any Compensation Plan), nor made
any omission (including
-18-
any failure to make any required contribution to any Compensation Plan),
with respect to any Compensation Plan, in either case which (A) would
result in a liability to the Borrower or any Subsidiary in excess of U.S.
$1,000,000 (or the equivalent in any other currency), (B) would give rise
to a Lien over any of its properties, assets, or revenues, or (C) would be
reasonably likely to result in a Material Adverse Effect; and
(ii) the Borrower and each of its Subsidiaries is in compliance
in all material respects with the regulatory requirements of
applicable law relating to pensions, employee retirement benefits and
social security and has made all payments required to be made pursuant
thereto. Except as set forth in Item 6(k) of the Disclosure Schedule,
neither the Borrower nor any of its Subsidiaries sponsors, or is
required to contribute to, any Compensation Plan, except such
Compensation Plans that do not require funding and that may be
terminated by the Borrower or the applicable Subsidiary, as the case
may be, without its incurring any liability.
(l) Except as set forth in Item 6(l) of the Disclosure Schedule, each
of the Borrower and its Subsidiaries has filed all material tax returns and
reports required to be filed, and have paid all material taxes,
assessments, fees and other governmental charges levied or imposed upon
them or their properties, income or assets otherwise due and payable,
except (i) those which are being contested in good faith by appropriate
proceedings and for which adequate reserves have been provided in
accordance with GAAP or (ii) where the failure to do so could not
reasonably be expected to have a Material Adverse Effect. There is no
proposed tax assessment against the Borrower or any Subsidiary that could
reasonably be expected to have a Material Adverse Effect.
(m) (i) Except as set forth in Item 6(m) of the Disclosure Schedule,
the operations and properties of the Borrower and each of its Subsidiaries
comply in all material respects with all Environmental Laws, all materially
necessary Environmental Permits have been obtained and are in effect for
the operations and properties of the Borrower and its Subsidiaries, the
Borrower and its Subsidiaries are in compliance in all material respects
with all such Environmental Permits, except where the failure to comply
with or obtain such Environmental Permits would not be reasonably likely to
result in a Material Adverse Effect and no circumstances exist that could
(A) form the basis of an Environmental Action against the Borrower or any
of its Subsidiaries or any of their properties that would be reasonably
likely to result in a Material Adverse Effect or (B) cause any such
property to be subject to any material restrictions on ownership,
occupancy, use or transferability under any Environmental Law; and
(ii) Hazardous Materials have not been generated, used, treated,
handled, stored or disposed of on, or released or transported to or
from, any property of the Borrower or any of its Subsidiaries, except
in compliance with all Environmental Laws and Environmental Permits,
and all other wastes generated at any such properties have been
disposed of in compliance with all Environmental Laws and
Environmental Permits and except where the failure to comply with
Environmental Laws or obtain such Environmental Permits would not be
reasonably likely to result in a Material Adverse Effect.
(n) Neither the Borrower nor any of its Subsidiaries is a party to any
Existing Debt Agreement, indenture, loan or credit agreement or any lease or
other agreement or instrument or
-19-
subject to any charter or corporate restriction that materially inhibits
the conduct of its business, as currently operated or as planned.
(o) Neither the Borrower nor any of its Subsidiaries is an "investment
company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company" required to be registered as such
within the meaning of the United States Investment Company Act of 1940, as
amended. Neither the making of the Loan, nor the application of the
proceeds of repayment thereof by the Borrower, nor the consummation of the
other transactions contemplated hereby, will violate any provision of such
Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.
(p) Set forth in Item 6(p) of the Disclosure Schedule is a complete
and accurate list of all material Existing Debt, as of September 30, 2002,
showing as of such date the outstanding principal amount thereof. No other
material Debt has been incurred since such date. Except as shown in Item
6(p) of the Disclosure Schedule, on the date hereof, there is no Debt owing
from the Borrower to any of its Subsidiaries. The Obligations of the
Borrower under this Note rank at least pari passu with all other senior,
unsecured Debt of the Borrower.
(q) Neither the Borrower nor any of its property or assets has any
immunity from jurisdiction of any court or from set-off or any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) under the laws of
the jurisdiction of its incorporation.
(r) The Borrower is not engaged principally, or as one of its
important activities, in the business of extending credit for the purpose
of purchasing or carrying Margin Stock. None of the proceeds of the Loan
will be used for the purpose of, or be made available by the Borrower or
any of its Subsidiaries in any manner to any other Person to enable or
assist such Person in, purchasing or carrying Margin Stock.
(s) The Borrower, individually and on a Consolidated basis with its
Subsidiaries, is, after giving effect to the Loan, Solvent.
(t) The Borrower used the proceeds of the Loan made by the Bank to
finance the acquisition of certain assets in Panama.
(u) The Board of Directors of the Borrower adopted by resolution a
dividend policy whereby an amount equal to between 15% and 25% of the
Borrower's Consolidated net income from the previous year will be paid to
shareholders each year, in quarterly distributions, as determined by the
Board of Directors. Such dividend policy remains in effect as of the date
hereof. Pursuant to the Certificate of Designations in effect as of the
date of this Agreement for the Series C Preferred Stock of the Borrower,
any change in the Borrower's policy with respect to dividends or
distributions to shareholders of the Borrower requires the approval of the
holder of the two outstanding shares of Series C Preferred Stock. As of the
date of this Agreement, the Borrower does not anticipate any change in its
dividend policy or in the terms of the Certificate of Designations of the
Series C Preferred Stock.
-20-
7. Covenants.
(a) Affirmative Covenants. So long as any Obligations under this Note
shall remain unpaid, the Borrower shall, unless the Bank shall otherwise
consent in writing:
(i) Compliance with Laws, Etc. Except when the failure to do so
would not be reasonably likely to result in a Material Adverse Effect,
comply, and cause each of its Subsidiaries to comply, in all material
respects, with all applicable laws, rules, regulations and orders.
(ii) Payment of Taxes, Etc. Pay and discharge, and cause each of
its Subsidiaries to pay and discharge, before the same shall become
delinquent, (A) all taxes, assessments and governmental charges or
levies imposed upon it or upon its property or assets and (B) all
lawful claims that, if unpaid, might by law become a Lien upon its
property; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to pay or discharge any such tax,
assessment, charge or claim that is being contested in good faith and
by proper proceedings and as to which appropriate reserves are being
maintained (if required by GAAP), unless and until any Lien resulting
therefrom attaches to its property or assets and becomes enforceable
against its other creditors.
(iii) Compliance with Environmental Laws. Except when the failure
to do so would not be reasonably likely to result in a Material
Adverse Effect, comply, and cause each of its Subsidiaries and all
lessees and other Persons occupying its properties to comply, in all
material respects, with all Environmental Laws and Environmental
Permits applicable to its operations and properties; obtain and renew
all Environmental Permits necessary for its operations and properties;
and conduct, and cause each of its Subsidiaries to conduct, any
reasonable investigation, study, sampling and testing, and undertake
any reasonable cleanup, removal, remedial or other action necessary to
remove and clean up all Hazardous Materials from any of its
properties, in accordance with the requirements of all Environmental
Laws; provided, however, that neither the Borrower nor any of its
Subsidiaries shall be required to undertake any such cleanup, removal,
remedial or other action to the extent that its obligation to do so is
being contested in good faith and by proper proceedings and
appropriate reserves are being maintained with respect to such
circumstances.
(iv) Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible insurance
companies or associations in such amounts and covering such risks as
is usually carried by companies engaged in similar businesses and
owning similar properties in the same general areas in which the
Borrower or such Subsidiary operates.
(v) Preservation of Corporate Existence, Etc. Except as permitted
under Section 7(b)(ii), preserve and maintain, and cause each of its
Subsidiaries to preserve and maintain, its corporate existence, rights
(charter and statutory) and franchises (including, without limitation,
any franchise agreement of the Borrower or any Subsidiary with TCCC or
any Affiliate thereof, which agreements shall be preserved and
maintained in a manner consistent in all material respects with past
practice); provided, however, that
-21-
neither the Borrower nor any of its Subsidiaries shall be required to
preserve any right or franchise, nor shall the Borrower be required to
maintain the corporate existence of any Subsidiary if the preservation
or maintenance thereof is no longer desirable in the conduct of the
business of the Borrower or such Subsidiary, as the case may be, and
the failure to preserve any such right or franchise or maintain the
corporate existence of such Subsidiary would not be reasonably likely
to result in a Material Adverse Effect on the Borrower and its
Subsidiaries taken as a whole.
(vi) Visitation Rights. At any time during regular business hours
upon prior written notice to and approval of the Borrower (which
approval shall not be unreasonably withheld or delayed) permit the
Bank, or any agents or representatives thereof, to examine and make
notes with respect to records and books of account of, and visit the
properties of, the Borrower and any of its Subsidiaries, and to
discuss the affairs, finances and accounts of the Borrower and any of
its Subsidiaries with any of their executive officers or directors and
with their independent certified public accountants.
(vii) Keeping of Books. Keep, and cause each of its Subsidiaries
to keep, proper books of record and account, in which full and correct
entries shall be made of all financial transactions and the assets and
business of the Borrower and each such Subsidiary in accordance with
GAAP.
(viii) Maintenance of Properties, Etc. Except where the failure
to do so would not be reasonably likely to result in a Material
Adverse Effect, maintain and preserve, and cause each of its
Subsidiaries to maintain and preserve, all of its properties and
assets that are material to the conduct of its business in good
working order and condition, ordinary wear and tear excepted.
(ix) Transactions with Affiliates.
(A) Conduct, and cause each of its Subsidiaries to conduct,
all transactions otherwise permitted hereunder with any of its
Subsidiaries (x) in the ordinary course of business in accordance
with past practices or (y) on terms that are fair and reasonable
and no less favorable to the Borrower or such Subsidiary than it
would obtain in a comparable arm's-length transaction with a
Person not an Affiliate.
(B) Conduct, and cause each of its Subsidiaries to conduct,
all transactions otherwise permitted hereunder with any of their
Affiliates (other than their Subsidiaries) on terms that are fair
and reasonable and no less favorable to the Borrower or such
Subsidiary than it would obtain in a comparable arm's length
transaction with a Person not an Affiliate.
(C) Prior to the Borrower becoming indebted to any Affiliate
of the Borrower, cause such Affiliate to execute a subordination
agreement in form and substance satisfactory to the Bank,
subordinating such Debt to be owed to such Affiliate to all
Obligations of the Borrower hereunder, and thereafter deliver to
the Bank a copy thereof certified by a duly authorized officer or
agent to be a true and correct copy of the original.
-22-
(x) Compliance with Terms of Leaseholds. Except where the failure
to do so would not be reasonably likely to result in a Material
Adverse Effect, make all payments and otherwise perform in all
material respects all obligations in respect of all material leases of
real property and cause all of its Subsidiaries to do so, and, to the
extent material to the business of the Borrower, keep such leases in
full force and effect and not allow such leases to lapse or be
terminated or rights to renew such leases to be forfeited or canceled.
(xi) Sales of Assets. Cause any assets that are, in the aggregate
during the term of this Note, material to the Consolidated financial
position of the Borrower, to be sold or otherwise transferred by the
Borrower or any of its Subsidiaries to be so sold or transferred at a
value that shall reasonably approximate their fair market value (it
being understood that "material," for purposes of this clause (xi)
only, shall mean an amount equal to, for all assets during the term of
this Note, 5.5% of Consolidated Tangible Net Assets (calculated as of
the end-date of the last quarter for which Consolidated financial
statements have been distributed)).
(b) Negative Covenants. So long as any Obligation under this Note
shall remain unpaid, the Borrower shall not, without the written consent of
the Bank:
(i) Liens, Etc. Create, incur, assume or suffer to exist, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist, any Lien on or with respect to any of its properties and assets
of any character (including, without limitation, accounts and capital
stock) whether now owned or hereafter acquired, or assign, or permit
any of its Subsidiaries to assign, any accounts or other rights to
receive revenues, excluding, however, from the operation of the
foregoing restrictions:
(A) Permitted Liens; and
(B) Liens securing Debt if, after giving pro forma effect to
the incurrence of such Debt (and the receipt and application of
the proceeds thereof) or the securing of outstanding Debt, the
sum of (without duplication) all Debt of the Borrower and its
Subsidiaries secured by Liens (other than Permitted Liens), at
the time of determination would not exceed 10% of Consolidated
Tangible Net Assets.
(ii) Mergers, Etc. Merge with or into or consolidate with or into
any Person, or permit any of its Subsidiaries to do so, unless: (A)
either (1) such merger or consolidation is between any of the
Borrower's Subsidiaries and any of the Borrower's other Subsidiaries,
(2) the Borrower shall be the continuing Person in the case of a
merger or (3) the resulting or surviving Person if other than the
Borrower (the "Successor Company") shall expressly assume, by a
written agreement, executed and delivered to the Bank, in form
satisfactory to the Bank, all the Obligations of the Borrower under
this Note; (B) immediately after giving effect to such transaction
(and treating any Debt which becomes an obligation of the Successor
Company or any Subsidiary of the Borrower or the Successor Company as
a result of such transaction as having been incurred by the Successor
Company or such Subsidiary at the time of such transaction), no
Default would occur or be continuing and the Borrower shall have
delivered to the
-23-
Bank an officer's certificate to that effect; and (C) except in the
case of any merger or consolidation under subclause (A)(1) above: (1)
the Borrower shall have delivered to the Bank an officer's certificate
and an opinion of counsel, each stating that such consolidation or
merger and such written agreement comply with this Note and, if such
consolidation or merger results in a Successor Company, that such
written agreement constitutes the legal, valid and binding obligation
of the Successor Company, enforceable against such entity in
accordance with its terms, subject to customary exceptions, and (2) at
least two of Standard & Poor's, Moody's or Fitch shall have notified
the Bank in writing that the proposed merger or consolidation will not
result in a withdrawal or reduction of its credit rating of the
Borrower below the lower of the then existing rating thereof.
(iii) Change in Nature of Business. Make, or permit any of its
Subsidiaries to make, any material change in the nature and conduct of
the business of the Borrower and its Subsidiaries taken as a whole as
carried on at the date hereof.
(iv) Accounting Changes. Make or permit, or permit any of its
Subsidiaries to make or permit, any change in accounting policies or
reporting practices, except as required by GAAP or requested by any
Governmental Authority (and in each case the Borrower will promptly
notify the Bank of any such change).
(v) Constitutional Documents. Amend, modify or change in any
manner any material term or condition of any constitutional document
(including, without limitation, the Voting Trust Agreement, any other
shareholders agreement or any similar agreement) of the Borrower or
any Subsidiary or take any other action in connection with any
constitutional document that would reasonably be likely to result in a
Material Adverse Effect, except as permitted by Section 7(b)(ii).
(vi) Shareholders' Agreements. Enter into, or permit any of its
Subsidiaries to enter into, any shareholders' agreement (or similar
agreement or arrangement) with any holder of Voting Stock of the
Borrower (other than with TCCC or any Subsidiary thereof or with
Venbottling Holdings, Inc. or with the voting trustees under the
Voting Trust Agreement).
(vii) Change in Control. Suffer, or allow its Subsidiaries to
suffer, a Change in Control.
(viii) Sales, Etc. of Assets. Sell, lease, transfer or otherwise
dispose of, or permit any of its Subsidiaries to sell, lease, transfer
or otherwise dispose of, any of its assets, including (without
limitation) any shares of capital stock of Subsidiaries and any
manufacturing plant or substantially all assets constituting the
business of a division, branch or other unit operation, except
(A) sales of inventory, scrap and by-products in the
ordinary course of business;
-24-
(B) sales of equipment and vehicles in the ordinary course
of business, provided that the proceeds thereof are promptly
reinvested in comparable equipment or vehicles;
(C) sales of assets (including, but not limited to, shares
of capital stock of Subsidiaries) of the Borrower or any of its
Subsidiaries, provided that at the time of such sale and after
giving effect thereto no Event of Default shall have occurred and
be continuing; and
(D) sales of assets to Affiliates permitted under Section
7(a)(ix).
(ix) Debt. Create, incur, assume or suffer to exist any Debt, or
permit any of its Subsidiaries to create, incur, assume or suffer to
exist any Debt other than:
(A) in the case of the Borrower,
(1) Debt under this Note;
(2) the Existing Debt identified in Item 6(p) of the
Disclosure Schedule;
(3) endorsement of negotiable instruments for deposit
or collection or similar transactions in the ordinary course
of business consistent in all material respects with past
practices;
(4) any Debt owed by the Borrower to any Subsidiary
incurred in the ordinary course of business consistent in
all material respects with past practices; provided that all
such Debt owed by the Borrower to any Affiliate of the
Borrower shall be subordinated to all Obligations of the
Borrower under this Note pursuant to a subordination
agreement in form and substance satisfactory to the Bank;
(5) any Debt not otherwise permitted hereunder,
provided that (I) an amount equal to the amount by which the
Net Issuance Proceeds from the issuance thereof (other than
short-term Debt incurred in the ordinary course of business)
exceeds U.S. $30,000,000 is promptly applied to prepay the
Loan, in accordance with Section 2(e) hereof; and (II) at
the time such Debt is incurred and after giving effect
thereto (and to the repayment required hereunder) no Event
of Default shall have occurred and be continuing;
(6) any replacement, extension or renewal of any Debt
permitted by subclause (2), (4) or (5) above;
(B) in the case of any Subsidiary of the Borrower,
-25-
(1) the Existing Debt identified in Item 6(p) of the
Disclosure Schedule; and
(2) any Debt of any Subsidiary not otherwise permitted
hereunder; provided that at the time such Debt is incurred
and after giving effect thereto, no Event of Default shall
have occurred and be continuing.
For purposes of determining compliance with the foregoing covenant,
(i) in the event that an item of Debt meets the criteria of more than one
of the types of Debt described above, the Borrower, in its reasonable
discretion, will classify such item of Debt and only be required to include
the amount and type of such Debt in one of the above clauses and (ii) an
item of Debt may be split between more than one of the applicable types of
Debt described above.
(c) Reporting Requirements. So long as any Obligation under this Note
shall remain unpaid, the Borrower shall, unless the Bank shall otherwise
consent in writing, furnish to the Bank:
(i) Default Notice. As soon as possible and in any event within
two days after the occurrence of each Default continuing on the date
of such statement, a statement of the chief financial officer of the
Borrower setting forth details of such Default and the action that the
Borrower has taken and proposes to take with respect thereto.
(ii) Quarterly Financials. As soon as available and in any event
within 60 days after the end of each quarter of each fiscal year of
the Borrower, a consolidated balance sheet of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated statements
of income and cash flows of the Borrower and its Subsidiaries for the
period commencing at the end of the previous fiscal year and ending
with the end of such quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding
period of the preceding fiscal year, all in reasonable detail and duly
certified (subject to year-end audit adjustments) by the chief
financial officer of the Borrower as having been prepared (with
respect to such Consolidated financial statements) in accordance with
GAAP, together with a certificate of such officer stating that no
Default has occurred and is continuing or, if a Default has occurred
and is continuing, a statement as to the nature thereof and the action
that the Borrower has taken and proposes to take with respect thereto.
(iii) Annual Financials. As soon as available and in any event
within 120 days after the end of each fiscal year of the Borrower, a
copy of the annual audit report for such year for the Borrower and its
Subsidiaries, including therein a Consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of such fiscal year, and
Consolidated statements of income and cash flows of the Borrower and
its Subsidiaries for such fiscal year, in each case (with respect to
such Consolidated financial statements) accompanied by an opinion of
Deloitte & Touche LLP or other independent public accountants of
recognized standing acceptable to the Bank, together with (A) a
certificate of such
-26-
accounting firm to the Lenders stating that in the course of the
regular audit of the business of the Borrower and its Subsidiaries,
which audit was conducted by such accounting firm in accordance with
generally accepted auditing standards, such accounting firm has
obtained no knowledge that a Default has occurred and is continuing,
or if, in the opinion of such accounting firm, a Default has occurred
and is continuing, a statement as to the nature thereof, and (B) a
certificate of the chief financial officer of the Borrower stating
that no Default has occurred and is continuing or, if a default has
occurred and is continuing, a statement as to the nature thereof and
the action that the Borrower has taken and proposes to take with
respect thereto.
(iv) Compensation Plans. As soon as possible and in any event
within five days after the Borrower knows or has reason to know of any
action (including any steps to terminate any Compensation Plan), or
any omission (including any failure to make any required contribution
to any Compensation Plan), with respect to any Compensation Plan, in
either case the result of which (A) could result in the incurrence by
the Borrower of any material liability, fine or penalty, or any
material increase in the contingent liability of the Borrower with
respect to any Compensation Plan, (B) could give rise to a Lien over
any of its properties, assets, or revenues, or (C) would be reasonably
likely to result in a Material Adverse Effect, notice thereof and
copies of all documentation relating thereto.
(v) Material Adverse Change. As soon as possible and in any event
within five days after the Borrower knows or has reason to know of any
Material Adverse Change, or any event or circumstance which might
result in a Material Adverse Change, notice thereof and copies of all
documentation relating thereto.
(vi) Litigation. Promptly after the commencement thereof, notice
of all actions, suits, investigations, litigation and proceedings
before any court or governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, by or against
the Borrower or any of its Subsidiaries or Affiliates of the type
described in Section 6(j).
(vii) Securities Reports. Promptly after the sending or filing
thereof, copies of all proxy statements, financial statements and
reports that the Borrower sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration
statements, that the Borrower or any of its Subsidiaries files with
any securities commission or similar Governmental Authority or with
any national securities exchange.
(viii) Creditor Reports. Promptly after the furnishing thereof,
copies of any statement or report furnished to any other holder of the
securities of the Borrower or of any of its Subsidiaries pursuant to
the terms of any indenture, loan or credit or similar agreement and
not otherwise required to be furnished to the Lenders pursuant to any
other clause of this Section 7(c).
(ix) Environmental Conditions. Promptly after the occurrence
thereof, notice of any condition or occurrence on any property of the
Borrower or any of its Subsidiaries that results in a material
noncompliance by the Borrower or any of its Subsidiaries with any
Environmental Law or Environmental Permit or could form the basis of
an Environmental Action against the Borrower or any of its
Subsidiaries that would be reasonably likely to result in a Material
Adverse Effect.
-27-
(x) Other Information. Such other information respecting the
business, financial condition, operations, performance, properties,
assets or prospects of the Borrower or any of its Subsidiaries as the
Bank may from time to time reasonably request.
(d) Financial Condition. So long as any Obligation under this Note
shall remain unpaid, the Borrower shall, unless the Bank otherwise consents
in writing:
(i) Interest Coverage Ratio. Maintain an Interest Coverage Ratio
(calculated as of the last day of each fiscal quarter or year, as
reflected in the quarterly or annual financial statements for such
fiscal quarter or year, for the twelve-month period ending on the
relevant date of determination) of not less than 4.00 to 1.
(ii) Debt to EBITDA Ratio. Maintain a ratio of Consolidated Debt
to Consolidated EBITDA (calculated as of the last day of each fiscal
quarter or year, as reflected in the quarterly or annual financial
statements for such fiscal quarter or year, for the twelve-month
period ending on the relevant date of determination) of not more than
2.30 to 1.
8. Events of Default. If any of the following events ("Events of
Default") shall occur and be continuing:
(a) The Borrower fails to pay any principal, interest, or other amount
hereunder as and when such amount becomes payable (whether at stated
maturity or otherwise); or
(b) any representation or warranty made by the Borrower (or any of its
officers) under or in connection with this Note or any other Loan Document
shall prove to have been incorrect in any material respect when made or
deemed made; or
(c) the Borrower shall fail to perform or observe any term, covenant
or agreement contained in (i) Section 7(a)(v), Section 7(a)(xi), Section
7(b), Section 7(c)(i) or (v), Section 7(d) or (ii) Section 7(c)(ii)-(iv) or
(vi)-(x) if such failure shall remain unremedied for five (5) days after
the Borrower has knowledge thereof or written notice thereof shall have
been given to the Borrower by the Bank; or
(d) the Borrower shall fail to perform any other term, covenant or
agreement contained in any Loan Document on its part to be performed or
observed if such failure shall remain unremedied for 20 days after the
Borrower has knowledge thereof or written notice thereof shall have been
given to the Borrower by the Bank; or
(e) (i) the Borrower or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on any other amount payable in respect of
any Debt that is outstanding in an aggregate principal or notional amount
of at least U.S. $20,000,000 (or the equivalent in another currency) in the
aggregate (but excluding Debt outstanding hereunder) of the Borrower or
such Subsidiary (as the case may be), when the same becomes due and payable
(whether by scheduled maturity, required prepayment, acceleration, demand
or otherwise), and such failure shall continue after the applicable grace
period, if any, specified in the agreement or instrument relating to such
Debt; or (ii) any other event shall occur or condition shall exist under
any
-28-
agreement or instrument relating to any such Debt, if the effect of such
event or condition is to accelerate the maturity of such Debt or otherwise
to cause, or to permit the holder thereof to cause, such Debt to mature; or
(iii) any such Debt shall be declared to be due and payable or required to
be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay,
redeem, purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof (other than, in the case of
subclauses (ii) and (iii) above, any such Debt that has become due and
payable as a result solely of any sale of assets by the Borrower or its
Subsidiaries, provided that such Debt is paid when due from the proceeds of
such sale); or
(f) the Borrower or any Significant Subsidiary shall generally not pay
its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the
benefit of creditors; or any proceeding shall be instituted by or against
the Borrower or any of its Significant Subsidiaries seeking to adjudicate
it as a bankrupt or insolvent, or seeking liquidation, winding up,
reorganization, arrangement, adjustment, protection, relief, or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, or other similar official
for it or for any substantial part of its property and, in respect of an
involuntary proceeding instituted against such Person, the same shall
remain unstayed or undismissed for 60 days; or the Borrower or any
Significant Subsidiary shall take any corporate action to authorize any of
the actions set forth above in this clause; or
(g) any judgment or order for the payment of money in excess of U.S.
$20,000,000 (or the equivalent in another currency) which is not covered by
insurance shall be rendered against the Borrower or any of its Subsidiaries
and either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order or (ii) there shall be any period of
30 consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(h) any non-monetary judgment or order shall be rendered against the
Borrower or any of its Subsidiaries that is reasonably likely to result in
a Material Adverse Effect, and there shall be any period of 30 consecutive
days during which a stay of enforcement of such judgment or order, by
reason of a pending appeal or otherwise, shall not be in effect; or
(i) the Borrower shall have taken any action (including any steps to
terminate any Compensation Plan), or shall have made any omission
(including any failure to make any required contribution to any
Compensation Plan), with respect to any Compensation Plan, which in either
case would (i) result in a liability to the Borrower in excess of U.S.
$1,000,000 (or the equivalent in any other currency), or (ii) be reasonably
likely to result in a Material Adverse Effect; or
(j) a Change in Control shall occur; or
(k) any Governmental Authority shall condemn, seize, compulsorily
purchase or expropriate all or a substantial part of the assets and
properties of the Borrower or its Subsidiaries; or
- -29-
(l) by reason of any material interference by any Governmental
Authority, or otherwise, this Note, in whole or in part, shall become
invalid, or shall fail to be in full force and effect in accordance with
its terms or the binding effect or enforceability thereof shall be
contested by the Borrower;
then, and in any such event, the Bank may, by notice to the Borrower,
declare this Note, all interest hereon and all other amounts payable under
this Note to be forthwith due and payable, whereupon the Note, all such
interest and all such amounts shall become and be forthwith due and
payable, without presentment, demand, protest or further notice of any
kind, all of which are hereby expressly waived by the Borrower; provided,
however, that in the event of an actual or deemed entry of an order for
relief with respect to the Borrower under the Federal Bankruptcy Code or
any similar order or adjudication under applicable law that would impose a
moratorium on or stay of creditor efforts to collect debts to become
effective, the Note, all such interest and all such amounts shall
automatically become and be due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby expressly waived
by the Borrower.
9. Miscellaneous.
(a) Amendments, Etc. No amendment or waiver of any provision of this
Note or any other Loan Document, nor consent to any departure by the
Borrower therefor, shall in any event be effective unless the same shall be
in writing and signed by the Bank, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for
which given.
(b) Notices, Etc. All notices and other communications provided for
hereunder shall be in writing (including telegraphic, facsimile or telex
communication) and faxed, telexed or delivered, if to the Borrower, at
Torre Dresdner Bank, 7th Floor, Calle 50, Panama City, Republic of Panama,
Attention: Chief Financial Officer, Facsimile: (507) 223-8308, Telephone:
(507) 223-8723, with a copy to Panamco L.L.C., 701 Waterford Way, 8th
Floor, Miami, Florida, Attention: General Counsel, Facsimile: (786)
388-8191, Telephone: (305) 929-0800; and if to the Bank, at its Lending
Office, with a copy to Monica Saynez/Javier Bernus, Bosque de Alisos #45-B,
Col. Bosques de las Lomas, 05120 Mexico D.F., Facsimile: (5255) 5259-3218,
Telephone: (5255) 5258-2127; or at such other address as shall be
designated by any party in a written notice to the other party. All such
notices and communications shall, when faxed or telexed, be effective when
transmitted by facsimile or confirmed by telex answerback, respectively,
except that notices and communications to the Bank pursuant to Sections 2
and 8 shall not be effective until received by the Bank. All such notices
and other communications, if not in English, shall be accompanied by an
English translation.
(c) No Waiver, Remedies. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder or under any
other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any such right preclude any other or further
exercise thereof or the exercise of any other right. The remedies herein
and therein provided are cumulative and not exclusive of any remedies
provided by law.
-30-
- -
(d) Costs, Expenses and Indemnification.
(i) The Borrower agrees to pay on demand (A) all reasonable costs
and expenses of the Bank in connection with the preparation,
execution, delivery, administration, syndication, modification and
amendment of this Note and any other Loan Document, including, without
limitation, (1) all reasonable out-of-pocket due diligence,
transportation, computer, printing, bank meeting, duplication,
appraisal, audit, search, filing and recording fees and expenses and,
with the prior approval of the Borrower, insurance and consultant
fees, and (2) the reasonable fees and expenses of counsel with respect
thereto, with respect to advising them as to their rights and
responsibilities, or the perfection, protection or preservation of
rights, or interests, under this Note and any other Loan Document,
with respect to negotiations with the Borrower or with other creditors
of the Borrower or any of its Subsidiaries arising out of any Default
or any events or circumstances that may give rise to a Default and
with respect to presenting, claims in or otherwise participating in or
monitoring any bankruptcy, insolvency or other similar proceeding
involving creditors' rights generally and any proceeding ancillary
thereto and (B) all costs and expenses of the Bank in connection with
the enforcement of this Note and any other Loan Document, whether in
any action, suit or litigation, any bankruptcy, insolvency or other
similar proceeding affecting creditors' rights generally or otherwise
(including, without limitation, the reasonable fees and expenses of
counsel for the Bank with respect thereto).
(ii) The Borrower agrees to indemnify and hold harmless the Bank
and each of its Affiliates and their officers, directors, employees,
agents and advisors (each, an "Indemnified Party") from and against
any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of
counsel) that are actually incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection
with or by reason of, or in connection with the preparation for a
defense of, any investigation, litigation or proceeding arising out
of, related to or in connection with (i) the Borrower's use of the
proceeds of the Loan, (ii) the actual or alleged presence of Hazardous
Materials on any property of the Borrower or any of its Subsidiaries
or any Environmental Action relating in any way to the Borrower or any
of its Subsidiaries or (iii) this Note or any other Loan Document or
any Indemnified Person's role in connection therewith, in each case
whether or not such investigation, litigation or proceeding is brought
by the Borrower or any of its Subsidiaries, directors, shareholders or
creditors or an Indemnified Party, whether or not any Indemnified
Party is otherwise a party thereto, except to the extent such claim,
damage, loss, liability or expense is found in a final, non-appealable
judgment by a court of competent jurisdiction to have resulted from
such Indemnified Party's gross negligence or willful misconduct.
(iii) If the Borrower fails to pay when due any costs, expenses
or other amounts payable by it under this Note, including, without
limitation, fees and expenses of counsel (including the allocated cost
of in-house counsel) and indemnities, such amount may be paid on
behalf of the Borrower by the Bank, in its sole discretion, and such
amount shall be reimbursed by the Borrower.
(e) Right of Set-off. Upon the occurrence and during the continuance
of any payment Event of Default, the Bank is hereby authorized at any time
and from time to time, to the fullest
-31-
extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by the Bank to or for
the credit or the account of the Borrower against any and all of the
Obligations of the Borrower now or hereafter existing hereunder,
irrespective of whether the Bank shall have made any demand hereunder and
although such Obligations may be unmatured. The Bank agrees promptly to
notify the Borrower after any such set-off and application; provided,
however, that the failure to give such notice shall not affect the validity
of such set-off and application. The rights of the Bank under this Section
9(e) are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that the Bank may have.
(f) Binding Effect; Assignments and Participations. This Note shall be
binding upon the Borrower and its successors and assigns and shall inure to
the benefit of the Bank and its successors and assigns, except that the
Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of the Bank. The Bank may
at any time assign or otherwise transfer or sell participations in this
Note or any of its rights with respect hereto to an Eligible Assignee.
(g) Governing Law. This Note shall be governed by, and construed in
accordance with, the internal laws of the State of New York.
(h) Confidentiality. The Bank shall not disclose any Confidential
Information to any Person without the consent of the Borrower, other than
(i) to the Bank's officers, directors, employees, agents and advisors to
the extent necessary and to actual or prospective Eligible Assignees and
participants, and then only so long as such Person agrees to keep
confidential such information, (ii) as required by any, law, rule or
regulation or judicial process and (iii) as requested or required by any
state, federal or foreign authority or examiner regulating banks or
banking.
(i) Judgment.
(i) If, for the purposes of obtaining judgment in any court, it
is necessary to convert a sum due hereunder in U.S. Dollars into
another currency (the "Other Currency"), the Borrower agrees, to the
fullest extent that it may effectively do so, that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Bank could purchase U.S. Dollars in New York City on
the Business Day preceding that on which final judgment is given.
(ii) The obligation of the Borrower in respect of any sum due in
U.S. Dollars from it to the Bank hereunder shall, notwithstanding any
judgment in any Other Currency, be discharged only to the extent that,
on the Business Day following receipt by the Bank of any sum adjudged
to be so due in such Other Currency the Bank may, in accordance with
normal banking procedures, purchase U.S. Dollars with such Other
Currency; if the amount of the U.S. Dollars so purchased is less than
the sum originally due to the Bank in U.S. Dollars, the Borrower
agrees, as a separate obligation and notwithstanding such judgment, to
indemnify the Bank against such loss, and if the amount of the U.S.
Dollars so purchased exceeds the sum originally due to the Bank in
U.S. Dollars, the Bank agrees to remit to the Borrower such excess.
-32-
(j) Consent to Jurisdiction.
(i) The Borrower hereby irrevocably submits to the jurisdiction
of any New York State or Federal court sitting in the borough of
Manhattan in New York City and any appellate court from any thereof
and to the courts of its own corporate domicile with respect to
actions brought against it as a defendant in any action or proceeding
arising out of or relating to this Note or any other Loan Document,
and the Borrower hereby irrevocably agrees that all claims in respect
of any such action or proceeding may be heard and determined in such
New York State court or in such Federal court. The Borrower hereby
irrevocably waives, to the fullest extent it may effectively do so,
any objection it may now or hereafter have as to the venue of any such
action or proceeding brought in any such court or that such court is
an inconvenient forum. The Borrower hereby irrevocably appoints CT
Corporation System, Inc. (the "Process Agent"), with an office on the
date hereof at 111 Eighth Avenue, New York, NY 10011, United States,
as its agent to receive on behalf of the Borrower and its property
service of copies of the summons and complaint and any other process
which may be served in any such action or proceeding. Such service may
be made by delivering a copy of such process to the Borrower in care
of the Process Agent at the Process Agent's above address, and the
Borrower hereby irrevocably authorizes and directs the Process Agent
to accept such service on its behalf. As an alternative method of
service, the Borrower also irrevocably consents to the service of any
and all process in any such action or proceeding by the mailing of
copies of such process to the Borrower at its address specified in
Section 9(b). The Borrower agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided
by law.
(ii) Nothing in this clause (j) shall affect the right of the
Bank to serve legal process in any other manner permitted by law or
affect the right of the Bank to bring any action or proceeding against
the Borrower or its property in the courts of other jurisdictions.
(iii) To the extent that the Borrower has or hereafter may
acquire any immunity from jurisdiction of any court or from any legal
process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with
respect to itself or its property, the Borrower hereby irrevocably
waives such immunity in respect of its Obligations under this Note.
(iv) Any judicial proceeding by the Borrower against the Bank
involving, directly or indirectly, any matter in any way arising out
of, related to, or connected to this Note or any Loan Document shall
be brought only in court in New York, New York, to the extent that
jurisdiction may be effected against the Bank in New York, New York.
(k) WAIVER OF JURY TRIAL. THE BORROWER HEREBY IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
-33
(l) Limitation on Liability. The Borrower hereby waives, releases and
agrees not to sue the Bank upon any claim for any special, indirect,
consequential or punitive damages suffered by the Borrower in connection
with, arising out of, or in any way related to this Note or the
relationship established by this Note, or any act, omission or event
occurring in connection therewith, unless it is determined by a judgment of
a court that is binding on the Bank, and is final and not subject to review
on appeal, that such damages were the result of acts or omissions on the
part of the Bank constituting gross negligence or willful misconduct.
-34-
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
PANAMERICAN BEVERAGES, INC.
By:
/s/ Annette Franqui
------------------------------------
Name: Annette Franqui
Title: Vice President, Chief Financial
Officer & Treasurer
ANNEX A
DISCLOSURE SCHEDULE
Item 6(b)
---------
Organizational Chart
--------------------
PANAMCO BRAZIL - ORGANIZATIONAL CHART
[Graphic Omitted}
CORPORATE STRUCTURE
PANAMCO COLOMBIA, S.A.
[Graphic Omitted]
Panamco Costa Rica Corporate Structure
[Graphic Omitted]
PANAMCO GUATEMALA CORPORATE
STRUCTURE
[Graphic Omitted]
CORPORATE STRUCTURE OF PANAMCO MEXICO
[Graphic Omitted]
Panamco Nicaragua Corporate Structure
[Graphic Omitted]
PANAMERICAN BEVERAGES, INC.
NON-OPERATING CORPORATE STRUCTURE
[Graphic Omitted]
PANAMCO DE VENEZUELA
CORPORATE STRUCTURE
[Graphic Omitted]
[Graphic Omitted]
Item 6(c)
--------
Conflicts
---------
None.
Item 6(j)
---------
Litigation
----------
None, except as described in the Borrower's public filings with the
Securities & Exchange Commission and in the footnotes to the Borrower's
Consolidated financial statements dated as of December 31, 2001, and the
lawsuit filed by Refrescos Nacionales, S.A. on September 10, 2002 and
further amended, against Coca-Cola de Panama Compania Embotelladora, S.A.
and certain of its Subsidiaries for alleged antitrust actions in the
Republic of Panama for the total amount of US$ 97,622,676.00. This lawsuit
is in the process of being admitted by the competent court in Panama.
Coca-Cola de Panama Compania Embotelladora, S.A. has not been formally
served with the summons of this lawsuit. As of the date hereof the Borrower
has had access only to limited information on regards to this case. Based
on the preliminary and non-official information that the Borrower has
reviewed the Borrower believes that Coca-Cola de Panama Compania
Embotelladora, S.A. will have sufficient legal arguments to vigorously
challenge this lawsuit.
Item 6(k)
---------
Compensation Plan
-----------------
Neither the Borrower nor any of its Subsidiaries sponsors, nor is required
to fund any Compensation Plans, except those described in the public
filings with the Securities & Exchange Commission and in the notes to the
Consolidated financial statements dated as of December 31, 2001.
Item 6(l)
---------
Tax Returns
-----------
None, except as described in the Borrower's filings with the Securities &
Exchange Commission and in the notes to the Borrower's Consolidated
financial statements dated as of December 31, 2001.
Item 6(m)
---------
Environmental Laws
------------------
None, except that the Borrower's Subsidiaries has spent approximately US$
6.5 million during 2002 on plant upgrades to meet environmental objectives,
including formal compliance with federal and local regulations in certain
of the countries in which they operate. In particular to continue the
process of bringing certain Subsidiaries into compliance, as permitted by
applicable Environmental Laws in the countries in which they operate.
Item 6(p)
---------
Material Existing Debt as of September 30, 2002
-----------------------------------------------
(1) Material Existing Debt of the Borrower
Creditor Amount US$ (000) Maturity Date
- -------- ---------------- -------------
Public Senior Notes 150,000 04/01/03
Public Senior Notes 290,000 07/01/09
ING Baring (US) Capital LLC 130,000 11/22/04
BBVA 10,000 10/24/02
Wachovia 10,000 07/03/03
Total: 590,000
(2) Material Existing Debt of the Mexican Subsidiaries
Creditor Amount US$ (000) Maturity Date
- -------- ---------------- -------------
BankBoston 3,244 09/01/05
Public Notes (UDI Denominated) 118,245 11/13/06
ING/BBVA 61,169 12/16/03
Rabobank 18,000 07/21/03
Total: 200,658
(3) Material Exiting Debt of the Brazilian subsidiaries
Creditor Amount US$ (000) Maturity Date
- -------- ---------------- -------------
Coca Cola 405 07/2003
Banco Itau 60 03/2003
Banco Sudameris 122 01/2003
Total: 587
(4) Material Existing Debt of the Colombian Subsidiaries
Creditor Amount US$ (000) Maturity Date
- -------- ---------------- -------------
Public Notes (Peso Denominated) 12,111 08/2007
Public Notes (Peso Denominated) 23,249 08/2005
Public Notes (Peso Denominated) 5,912 08/2006
Citibank 7,496 10/2002
Total: 58,768
(5) Material Existing Debt of the Venezuelan Subsidiary
Creditor Amount US$ (000) Maturity Date
- -------- ---------------- -------------
Santander Central Hispano 10,000 08/2003
Comerica 10,000 06/2003
Citibank 33,000 12/2002
Total: 53,000
(6) Material Existing Debt of the Costa Rican Subsidiary
No Debt
(7) Material Existing Debt of the Nicaraguan Subsidiary
Creditor Amount US$ (000) Maturity Date
- -------- ---------------- -------------
Citibank 5,500 09/2003
Total: 5,500
(8) Material Existing Debt of the Guatemalan Subsidiary
Creditor Amount US$ (000) Maturity Date
- -------- ---------------- -------------
Banco Granai & Towson 86 12/2002
Banco Granai & Towson 2,318 10/2005
Banco Industrial 104 06/2003
Banco Industrial 223 08/2003
Banco Industrial 809 10/2002
Total: 3,540
Item 7(b)(i)
------------
Existing Liens
--------------
As of September 30, 2002, the Existing Liens of the Borrower and its
Subsidiaries are the following:
Panamerican Beverages, Inc.: None
Spal Industria Brasileira de Bebidas S/A (Brazilian Operation):
Bank Lien Amount US$(000)
- ---- ---- ---------------
Banco Itau Pledge on Machinery 60
Total: US$60,000
Panamco Mexico (Mexican Operation):
Bank Lien Amount US$(000)
- ---- ---- ---------------
BankBoston Pledge on Machinery 4,153
Total: US$4,153,000
Panamco Colombia (Colombian Operation): None
Embotelladora Panamco Tica (Costa Rican Operation): None
(m) Panamco Venezuela (Venezuelan Operation): None
Panamco Nicaragua (Nicaraguan Operation): None
Embotelladora Central (Guatemalan Operations):
Bank Lien Amount US$(000)
- ---- ---- ---------------
Banco Industrial Pledge on Machinery 104
Total: US$104,000