Exhibit 4.3
SANTANDER BANCORP
US$75,000,000
6.30% Subordinated Notes due
June 2032
NOTE PURCHASE AGREEMENT
Dated October 6, 2004
TABLE OF CONTENTS
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Section
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Page
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1.
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AUTHORIZATION
OF NOTES
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1
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2.
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SALE AND
PURCHASE OF NOTES
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1
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3.
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CLOSING
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2
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4.
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CONDITIONS TO
CLOSING
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2
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4.1.
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Representations
and Warranties
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2
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4.2.
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Compliance
Certificates
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2
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4.3.
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Opinions of
Counsel
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2
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4.4.
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Purchase
Permitted by Applicable Law, etc
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3
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4.5.
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Proceedings and
Documents; Good Standing Certificates
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3
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5.
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REPRESENTATIONS
AND WARRANTIES OF THE COMPANY
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3
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5.1.
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Organization;
Power and Authority
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3
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5.2.
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Authorization,
etc
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3
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5.3.
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Financial
Statements
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4
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5.4.
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No Legal or
Contractual Bar
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4
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5.5.
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No Registration
Under the Securities Act
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4
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5.6.
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No Material
Litigation
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4
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5.7.
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Taxes
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5
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5.8.
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Compliance with
ERISA
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5
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5.9.
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Use of
Proceeds
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6
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5.10.
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Investment
Company Act
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6
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5.11.
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Changes in
Condition
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6
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6.
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REPRESENTATIONS
OF THE PURCHASER
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6
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6.1.
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Purchase for
Investment; Qualified Institutional Buyer
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6
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6.2.
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Source of
Funds
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9
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6.3.
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Anti-Money
Laundering
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10
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6.4.
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Transferee
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10
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7.
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PAYMENT OF
INTEREST
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11
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8.
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REDEMPTION OF
THE NOTES PRIOR TO MATURITY
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11
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8.1.
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Optional
Redemption
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11
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8.2.
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Allocation of
Partial Redemptions
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12
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8.3.
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Maturity;
Surrender, etc
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12
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8.4.
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Purchase of
Notes
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12
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9.
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DELIVERY OF
REPORTS
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12
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9.1.
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SEC
Reports
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12
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Section
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Page
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9.2.
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Officer’s
Certificate
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13
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10.
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CONSOLIDATION,
MERGER AND SALE OF ASSETS
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13
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11.
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EVENTS OF
DEFAULT
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13
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12.
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REMEDIES ON
DEFAULT, ETC
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14
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12.1.
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Acceleration
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14
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12.2.
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Other
Remedies
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14
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12.3.
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Rescission
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15
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12.4.
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No Waivers or
Election of Remedies, Expenses, etc
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15
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12.5.
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Limitation on
Suits
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15
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13.
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REGISTRATION;
EXCHANGE; SUBSTITUTION OF NOTES
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15
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13.1.
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Registration of
Notes
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15
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13.2.
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Transfer and
Exchange of Notes
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16
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13.3.
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Replacement of
Notes
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16
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14.
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PAYMENTS ON
NOTES
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17
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14.1.
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Place of
Payment
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17
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14.2.
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Home Office
Payment
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17
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15.
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SUBORDINATION
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17
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15.1.
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Agreement to
Subordinate
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17
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15.2.
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Liquidation,
Dissolution, Bankruptcy, Etc
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17
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15.3.
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Prior to
Payment to Senior Debt Upon Acceleration of Notes
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18
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15.4.
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No Payment When
Senior Debt Default
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19
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15.5.
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When
Distribution Must Be Paid Over
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19
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15.6.
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Subrogation
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19
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15.7.
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Relative
Rights
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19
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15.8.
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Reliance by
Holders of Senior Debt on Subordination Provisions
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20
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15.9.
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No Waiver of
Subordination Provisions
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20
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15.10.
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Reliance on
Judicial Order or Certificate of Liquidating Agent
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20
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15.11.
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Payment of
Proceeds in Certain Cases
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21
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16.
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SURVIVAL OF
REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT
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22
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17.
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AMENDMENT AND
WAIVER
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23
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17.1.
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Requirements
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17.2.
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Solicitation of
Holders of Notes
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17.3.
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Binding Effect,
etc
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23
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17.4.
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Notes held by
Company, etc
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24
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18.
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NOTICES
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19.
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MISCELLANEOUS
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24
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19.1.
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Successors and
Assigns
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24
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ii
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Section
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Page
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19.2.
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Payments Due on
Non-Business Days
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25
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19.3.
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Severability
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25
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19.4.
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Construction
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25
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19.5.
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Counterparts
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25
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19.6.
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Governing
Law
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26
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—
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DEFINED
TERMS
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—
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Form of 6.30%
Subordinated Note due June 2032
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—
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Opinions of
Pietrantoni Mendez & Alvarez LLP
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iii
SANTANDER BANCORP
6.30% Subordinated Notes due
June 2032
October 6, 2004
PUERTO RICO CONSERVATION
TRUST FUND
San Juan, Puerto Rico
Ladies and Gentlemen:
Santander BanCorp
(the “Company” ), a corporation organized under
the laws of the Commonwealth of Puerto Rico (the
“Commonwealth” ), agrees with you as
follows:
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1.
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AUTHORIZATION OF
NOTES.
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The
Company has authorized the issuance and sale of an aggregate
principal amount of Seventy-Five Million United States Dollars
(US$75,000,000) of its 6.30% Subordinated Notes due June 2032 (the
“Notes,” such term to include the Note delivered
pursuant to this Agreement on the Closing Date to the Purchaser and
each Note delivered in substitution or exchange for such Note
pursuant to Section 13 of this Agreement). The Notes shall be
substantially in the form of Exhibit 1 hereto and shall
have the terms as herein and therein provided. Certain capitalized
terms used in this Agreement are defined in Schedule A
hereto; references to a “Schedule” or an
“Exhibit” are, unless otherwise specified, to a
Schedule or an Exhibit attached to this Agreement and all Schedules
and Exhibits are deemed to be a part of this Agreement. References
herein to this “Agreement” mean this Agreement
as from time to time amended or supplemented or as the terms hereof
may be waived, in accordance with Section 17
hereof.
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2.
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SALE AND PURCHASE OF
NOTES.
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Subject to the
terms and conditions of this Agreement, the Company agrees to issue
and sell to you and you agree to purchase from the Company, at the
Closing provided for in Section 3, a Note in the aggregate
principal amount of Seventy-Five Million United States Dollars
(US$75,000,000) at the purchase price of one-hundred percent (100%)
of the principal amount thereof.
The
closing (the “Closing” ) of the sale and
purchase of the Notes to be purchased by you shall occur at the
offices of Pietrantoni Méndez & Alvarez LLP, 209
Muñoz Rivera Avenue, Hato Rey, Puerto Rico 00918, at
10:00 a.m., local time, on October 7, 2004 (the
“Closing Date” ). At the Closing, the Company
will deliver to you the Note to be purchased by you and registered
in your name dated the Closing Date, against delivery by you to the
Company of immediately available funds in the amount of the
purchase price therefor by wire transfer to the account number
04-201-408 maintained at Deutsche Bank New York, ABA Number 201
0010 33 (Beneficiary: Banco Santander Puerto Rico) for the further
credit of Account Number 300 349 2809 of the Company.
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4.
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CONDITIONS TO
CLOSING.
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Your obligation to
purchase and pay for the Notes to be delivered to you at the
Closing is subject to the fulfillment, prior to or at the Closing,
of the following conditions:
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4.1.
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Representations and
Warranties.
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The
representations and warranties of the Company contained in
Section 5 of this Agreement shall have been true and correct
as of the date of this Agreement and be true and correct at the
time of the Closing as if made on and as of such time.
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4.2.
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Compliance
Certificates.
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(a)
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Officer’s
Certificate .
The Company shall have delivered to you an Officer’s
Certificate, dated as of the Closing Date, certifying on behalf of
the Company, that the conditions specified in Sections 4.1 have
been fulfilled.
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(b)
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Secretary’s
Certificates . The Company shall have delivered
to you a certificate in form and substance reasonably satisfactory
to you executed on behalf of the Company by its Secretary or
Assistant Secretary certifying as to the resolutions attached
thereto and other corporate proceedings relating to the
authorization, execution, delivery and performance of this
Agreement and the Notes. Such certificate shall state that the
resolutions thereby certified have not been amended, modified,
revoked or rescinded. The Secretary’s certificate also shall
confirm the incumbency and signature of the officers of the Company
executing this Agreement and the Note, and any certificate or
document to be delivered to you pursuant hereto, together with
evidence of the incumbency of such Secretary or Assistant
Secretary.
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4.3.
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Opinions of Counsel.
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You
shall have received opinions from Pietrantoni Mendez & Alvarez
LLP, as counsel for the Company, dated as of the Closing Date, on
the matters described in Exhibit 2 .
2
This Section 4.3 shall
constitute direction by the Company to such counsel to deliver the
opinions specified to you at the Closing.
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4.4.
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Purchase Permitted by Applicable
Law, etc.
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On
the Closing Date, the consummation of the transactions contemplated
hereby shall (i) be permitted by the laws and regulations of
each jurisdiction to which you are subject, (ii) not violate
any applicable law or regulation, (iii) not subject you to any
tax, penalty or liability under or pursuant to any applicable law
or regulation, which law or regulation was not in effect on the
date hereof, and (iv) all necessary consents, approvals and
authorizations of any Governmental Authority or any Person to or of
such consummation, including any authorizations required to be
obtained from the Puerto Rico Treasury Department under that
certain ruling issued to you initially on January 22, 2001 (as
amended on September 28, 2004), shall have been obtained and
shall be in full force and effect.
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4.5.
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Proceedings and Documents; Good
Standing Certificates.
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All
corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments
incident to such transactions, including, but not limited to, the
certificate of incorporation and by-laws of the Company, shall be
reasonably satisfactory to you and your special counsel, and you
and your special counsel shall have received all such counterpart
originals or certified or other copies of such documents as you or
they may reasonably request. You shall have received also, copies
of certificates dated as of a recent date from the Secretary of
State of Puerto Rico and the Commissioner of Financial
Institutions, as applicable, evidencing the good standing of the
Company and its Subsidiaries, in Puerto Rico.
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5.
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REPRESENTATIONS AND WARRANTIES OF
THE COMPANY.
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The
Company represents and warrants to you as follows:
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5.1.
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Organization; Power and
Authority.
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The
Company is a corporation duly organized, validly existing and in
good standing under the laws of the Commonwealth of Puerto Rico,
and is duly qualified as a foreign corporation and is in good
standing in each jurisdiction in which such qualification is
required by law, except where the failure to be so qualified or in
good standing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The
Company has all requisite corporate power and authority to own,
lease and operate its properties and conduct its business as
described on its filings with the SEC under the Exchange Act and to
execute, deliver and perform its obligations under this Agreement
and the Notes.
The
execution, delivery and performance of this Agreement and the Notes
have been duly authorized by all necessary corporate action on the
part of the Company. This Agreement and the Notes, when issued,
constitute or will constitute, a legal, valid and binding
obligation of the Company, enforceable against the Company in
accordance with their respective
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terms, except as such
enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors’ rights generally from
time to time in effect and (ii) the application of equitable
principles and the availability of equitable remedies.
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5.3.
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Financial Statements.
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(a)
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The
consolidated balance sheet of the Company and its consolidated
Subsidiaries as at December 31, 2003 and the related
consolidated statements of income, retained earnings and cash flows
for the fiscal year then ended, including in each case the related
schedules and notes, fairly present in all material respects the
consolidated financial condition of the Company and its
consolidated Subsidiaries as at the date thereof and the
consolidated results of operations and cash flows for such period,
in accordance with GAAP consistently applied.
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(b)
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The
unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries as at June 30, 2004 and the related
unaudited consolidated statements of income, retained earnings and
cash flows for the three-month and six-month periods then ended,
including in each case the related schedules and notes, fairly
present in all material respects the unaudited consolidated
financial condition of the Company and its consolidated
Subsidiaries as at the date thereof and the unaudited consolidated
results of operations and cash flows for such periods, in
accordance with GAAP applied on a basis consistent with the
financial statements referred to in subsection (a) of this Section,
subject to normal year-end adjustments.
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5.4.
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No Legal or Contractual
Bar.
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The
execution, delivery and performance by the Company of this
Agreement and the Notes, do not and will not (i) violate any
Requirement of Law or any Contractual Obligation of the Company or
any of its Significant Subsidiaries, (ii) require any license,
consent, authorization, approval or any other action by, or any
notice to or filing or registration with, any Governmental
Authority or any other Person, except for such licenses, consents,
authorizations or approvals that have been obtained or made, or
(iii) result in the creation or imposition of any Lien on any
asset of the Company or any of its Significant
Subsidiaries.
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5.5.
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No Registration Under the Securities
Act.
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Assuming
compliance by you with your representations hereunder, it is not
necessary in connection with the sale of the Notes to you to
register the Notes under the Securities Act.
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5.6.
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No Material
Litigation.
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No
actions, suits or proceedings of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the
Company, threatened against or affecting the
4
Company or any of its Significant
Subsidiaries, or against any property of the Company or of any such
Significant Subsidiary that, if determined adversely to the Company
and its Subsidiaries, taken as a whole, would reasonably be
expected to have a Material Adverse Effect.
The
Company has filed or caused to be filed all tax returns that are
required to have been filed, and have paid all taxes shown to be
due and payable on such returns and all other taxes payable by it,
except for any taxes (i) the amount of which would not
individually or in the aggregate reasonably be expected to have a
Material Adverse Effect or (ii) the amount, applicability or
validity of which is currently being contested in good faith by
appropriate proceedings and with respect to which the Company or
each Subsidiary, has established adequate reserves in accordance
with GAAP.
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5.8.
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Compliance with
ERISA.
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(a)
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Each of the Company and its ERISA
Affiliates has operated and administered each Plan in material
compliance with all applicable laws except for such instances of
noncompliance as have not resulted in and would not reasonably be
expected to result in a Material Adverse Effect. None of the
Company or any of its ERISA Affiliates has incurred any liability
pursuant to Title I or IV of ERISA or applicable penalty or excise
tax provisions of the Code and the PRIRC relating to employee
benefit plans (as defined in section 3 of ERISA), and no event,
transaction or condition has occurred or exists that would
reasonably be expected to result in the incurrence of any such
liability by the Company or any of its ERISA Affiliates, or in the
imposition of any Lien on any of the rights, properties or assets
of the Company or any of its ERISA Affiliates, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to section 401(a)(29) or 412 of the Code or to any
comparable provisions of the PRIRC, other than in any of such
cases, such liabilities or Liens as would not reasonably be
expected to result, individually or in the aggregate, in a Material
Adverse Effect.
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(b)
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None of the Company or any of its
ERISA Affiliates has incurred withdrawal liabilities (and are not
subject to contingent withdrawal liabilities) under section 4201 or
4204 of ERISA in respect of Multiemployer Plans that individually
or in the aggregate would reasonably be expected to result in a
Material Adverse Effect.
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(c)
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The
execution and delivery of this Agreement and the issuance and sale
of the Notes hereunder will not involve any transaction that is
subject to the prohibitions of section 406 of ERISA or in
connection with which a tax could be imposed pursuant to section
4975(c)(1)(A)-(D) of the Code or comparable provisions of the
PRIRC. The representation by the Company in the first sentence of
this Section 5.9(c) is made in reliance upon and subject to
(i) the accuracy of your representation in Section 6.2 as
to the
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5
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sources of the funds to be used to
pay the purchase price of the Notes to be purchased by you and
(ii) the assumption, made solely for the purpose of making
such representation, that Department of Labor Interpretive Bulletin
75-2 with respect to prohibited transactions remains valid in the
circumstances of the transactions contemplated herein.
|
The
Company will apply the proceeds from the sale of the Notes
exclusively in its Commonwealth trade or business within a period
no longer than twenty four (24) months from the date of the
issuance of the Notes and will notify the Puerto Rico Treasury
Department of such use as required by the PRIRC so that the
interest in the Notes will be qualified interest for purposes of
the preferential 10% income tax rate provided for under
Section 1013A of the PRIRC.
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5.10.
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Investment Company
Act.
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The
Company is not an “investment company” under the
Investment Company Act of 1940, as amended, and is not controlled
by any “investment company.”
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5.11.
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Changes in Condition.
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Since
June 30, 2004, no material adverse change has occurred in the
business, financial condition or results of operations of the
Company and its Subsidiaries, taken as a whole.
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6.
|
REPRESENTATIONS OF THE
PURCHASER.
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You
hereby represent and warrant to the Company as follows:
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|
6.1.
|
Purchase for Investment; Qualified
Institutional Buyer.
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|
(a)
|
You
are purchasing the Notes for your own account and not with a view
to, or for sale in connection with, the distribution thereof within
the meaning of the Securities Act, provided that you have
the right to dispose of the Notes, or any part thereof, if you deem
it advisable to do so, either pursuant to a registration of the
Notes under the Securities Act or pursuant to an applicable
exemption from the registration requirements of the Securities Act.
You understand that the Notes have not been registered under the
Securities Act or the Puerto Rico Uniform Securities Act
(“PRUSA”) and you understand and agree that the Notes
may be resold only if registered pursuant to the provisions of the
Securities Act or if an exemption from registration is available
thereunder.
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(b)
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You
are an “qualified institutional buyer” as
defined in Rule 144A under the Securities Act.
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6
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(c)
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You
understand and agree that the Notes are being offered only in a
transaction not involving any public offering within the meaning of
the Securities Act, and that (A) if you decide to resell,
pledge or otherwise transfer any Notes on which the legend set
forth below appears, such Notes may be resold, pledged or
transferred only (i) to the Company, (ii) in a
transaction entitled to an exemption from registration provided by
Rule 144 under the Securities Act (if available),
(iii) so long as the Notes are eligible for resale pursuant to
Rule 144A, to a person whom you reasonably believe is a
qualified institutional buyer that purchases for its own account or
for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in
reliance on Rule 144A (as indicated by the box checked by the
transferor on the Certificate of Transfer on the reverse of the
Note), (iv) pursuant to another available exemption from
registration under the Securities Act, subject, in the case of
clauses (ii) or (iv), to the receipt by the Company of an
opinion of counsel or such other evidence acceptable to the Company
that such resale, pledge or transfer is exempt from the
registration requirements of the Securities Act, or (v) pursuant to
an effective registration statement, and that (B) you will,
and each subsequent purchaser of the Notes is required to, notify
any purchaser of any Notes of the resale restrictions referred to
in (2) above and to deliver to the transferee (other than a
qualified institutional buyer) prior to sale a copy of the transfer
restrictions hereinafter set forth (copies of which may be obtained
from the Company). You understand that transfers of the Notes will
be registered only if the Notes are transferred in accordance with
such transfer restrictions;
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(d)
|
You
understand that the certificates evidencing Notes sold in reliance
on Rule 144A will, unless otherwise agreed by the Company,
bear a legend substantially to the following effect:
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“THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“SECURITIES ACT”), OR UNDER THE PUERTO RICO UNIFORM
SECURITIES ACT OR ANY OTHER STATE SECURITIES LAWS. NEITHER THIS
NOTE NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED,
SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE
DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH
TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO,
REGISTRATION.
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THE
HOLDER HEREOF, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF
SANTANDER BANCORP THAT (a) THIS NOTE MAY NOT BE RESOLD,
PLEDGED OR OTHERWISE TRANSFERRED OTHER THAN (1) TO SANTANDER
BANCORP OR A SUBSIDIARY THEREOF, (2) IN A TRANSACTION ENTITLED TO
AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
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7
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UNDER THE SECURITIES ACT (IF
AVAILABLE), (3) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE
PURSUANT TO RULE 144A UNDER THE SECURITIES ACT (“RULE
144A”), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE
OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A (AS
INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE
OF TRANSFER ON THE REVERSE OF THIS NOTE), (4) PURSUANT TO
ANOTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT, SUBJECT, IN THE CASE OF CLAUSES (2) OR (4), TO THE
RECEIPT BY SANTANDER BANCORP OF AN OPINION OF COUNSEL OR SUCH OTHER
EVIDENCE ACCEPTABLE TO SANTANDER BANCORP THAT SUCH RESALE, PLEDGE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT OR (5) PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT AND THAT (b) THE HOLDER WILL, AND EACH SUBSEQUENT
HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS NOTE OF THE
RESALE RESTRICTIONS REFERRED TO HEREIN AND DELIVER TO THE
TRANSFEREE (OTHER THAN A QUALIFIED INSTITUTIONAL BUYER) PRIOR TO
THE SALE A COPY OF THE TRANSFER RESTRICTIONS APPLICABLE HERETO
(COPIES OFWHICH MAY BE OBTAINED FROM SANTANDER
BANCORP).”
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(e)
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You
(i) are able to fend for yourself in the transactions
contemplated by this Agreement; (ii) have such knowledge and
experience in financial and business matters as to be capable of
evaluating the merits and risks of its prospective investment in
the Notes; (iii) have the ability to bear the economic risks
of its prospective investment and can afford the complete loss of
such investment; and (iv) may be required to bear the
financial risks of this investment for an indefinite period of
time; and
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(f)
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It
is understood that, in making the representations set out in
Sections 5.4, 5.5 and 5.10 hereof, the Company is relying, to
the extent applicable, upon your representations set forth in this
Section 6.1.
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(g)
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(a) You have consulted with
your own legal, regulatory, tax, business, investment, financial
and accounting advisers in connection herewith to the extent you
have deemed necessary, (b) you have had a reasonable
opportunity to ask questions of and receive answers from officers
and representatives of the Company concerning its financial
condition and results of operations and any other matter relevant
to the purchase of the Notes, and any such questions have been
answered to your satisfaction,
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8
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(c)you have had the opportunity to
review all publicly available records and filings concerning the
Company and its Subsidiaries and you have carefully reviewed such
records and filings as you considered relevant to making an
investment decision, and (d) you have made your own investment
decisions based upon your own judgment, due diligence and advice
from such advisers as you have deemed necessary and not upon any
view expressed by the Company.
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At
least one of the following statements is an accurate representation
as to each source of funds (a “Source” ) to be
used by you to pay the purchase price of the Notes to be purchased
by you hereunder:
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(a)
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all
or part of the Source constitutes assets of a bank collective
investment fund, as contemplated by PTE 91-38, maintained by you,
and you have disclosed to the Company the names of such employee
benefit plans whose assets in such bank collective investment fund
exceed ten percent (10%) of the total assets or are expected to
exceed ten percent (10%) of the total assets of such fund as of the
date of such purchase (for the purpose of this clause (a), all
employee benefit plans maintained by the same employer or employee
organization are deemed to be a single plan); or
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(b)
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all
or part of the Source constitutes assets of one or more employee
benefit plans, each of which has been identified to the Company in
writing; or
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(c)
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you
are acquiring the Notes for the account of one or more pension
funds, trust funds or agency accounts, each of which is a
“governmental plan” (as defined in section 3(32)
of ERISA) and the investment does not give rise to any violation of
any federal, state or local law which is substantially similar to
Title I of ERISA, section 4975 of the Code or comparable provisions
of the PRIRC; or
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(d)
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the
Source is an “investment fund” managed by a
“qualified professional asset manager” or
“QPAM” (as defined in Part V of PTE 84-14,
issued March 13, 1984), provided that (i) no other party
to the transaction described in this Agreement and no
“affiliate” of such party (as defined in
Part V(c) of PTE 84-14) has at this time, and during the
immediately preceding one year none has exercised, the authority to
appoint or terminate said QPAM as manager of the assets of any plan
identified in writing pursuant to this clause (f) or to
negotiate the terms of said QPAM’s management agreement on
behalf of any such identified plans, (ii) the conditions set
forth in paragraphs (c), (d), (e), (f) and (g) of
Part I of PTE 84-14 are satisfied; and (iii) you have
disclosed to the Company the name of the QPAM and of all employee
benefit plans whose assets are included in such investment
fund;
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9
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(e)
|
the
Source is a “plan” managed by an
“in-house asset manager” or
“INHAM” (as defined in Part IV of PTE
96-23, issued April 10, 1996), provided that the conditions
set forth in paragraphs (a), (c), (d), (e), (f), (g) and
(h) of Part I of PTE 96-23 are satisfied; or
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(f)
|
none of such funds consists of
assets of any “employee benefit plan” as defined
in ERISA or any “plan” as defined in section
4975 of the Code or comparable provisions of the PRIRC, other than
an employee benefit plan or plan exempt from the coverage of ERISA
and section 4975 of the Code.
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As used in this Section 6.2,
the terms “employee benefit plan” ,
“governmental plan” , “party in
interest” and “separate account” shall
have the respective meanings assigned to such terms in section 3 of
ERISA. If you breach any representation made by you under this
Section 6.2, your purchase of the Notes shall be void ab
initio .
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6.3.
|
Anti-Money
Laundering.
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(a)
|
to
the best of your knowledge, the funds that you are using to
purchase the Notes were not directly or indirectly derived from
activities that may contravene federal, state and international
laws and regulations, including Anti-Money Laundering Laws;
and
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(b)
|
to
the best of your knowledge, neither:
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(i)
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you, nor
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(ii)
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any
person controlling, controlled by, or under common control with,
you,
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(1)is a country, territory,
individual or entity named on an Office of Foreign Assets Control
(“ OFAC ”) list, or is an individual or entity
that resides or has a place of business in a country or territory
named on such lists, (2) is a “senior foreign political
figure,” or any “immediate family member” or
“close associate” (as such terms are defined in the
Patriot Act) of a senior foreign political figure or (3) is a
“foreign shell bank” (as defined in the Patriot Act) or
transacts business with a foreign shell bank.
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You
understand that the Company may not accept any payments for the
Notes from you if you cannot make the representations set forth
above.
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|
6.4.
|
Transferee.
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Any
transferee of a Note shall, by its acceptance of such Note, be
deemed to have made the same representations regarding the purchase
of the Notes as the original holder thereof made pursuant to
Sections 6.1, 6.2 and 6.3 above.
10
The
Company shall pay interest (computed on the basis of a 360-day year
of twelve 30-day months) (a) on the unpaid balance of the
Notes at the rate of six and three tenths percent (6.30%) per annum
from the date of the Notes, payable semiannually, on the first
(1 st
) day of June and the first
(1 st
) day of December of each year (the
“Interest Payment Date” ), commencing on
December 1, 2004, until the principal hereof shall have become
due and payable.
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8.
|
REDEMPTION OF THE NOTES PRIOR TO
MATURITY.
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|
8.1.
|
Optional Redemption.
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The
Company may, at its option, upon notice as provided below, redeem
and prepay prior to maturity, all or any part of the Notes on
December 1 or June 1 of each year; provided , however, that
the Company may not redeem and prepay all or any part of the Notes
pursuant to this Section 8.1 prior to December 1, 2009.
On and after December 1, 2009, the Notes shall be redeemable
at a price equal to the percentage of the principal amount of the
Notes to be redeemed specified for the periods listed below (the
“Redemption Price” ), together with accrued and
unpaid interest, if any, to the date of redemption specified by the
Company (the “Redemption Date” ).
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Redemption Period
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Percentage of Principal
Amount
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December 1, 2009 to May 31,
2010
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103.00
|
%
|
June 1,
2010 to November 30, 2010
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102.70
|
%
|
December 1, 2010 to May 31,
2011
|
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102.40
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%
|
June 1,
2011 to November 30, 2011
|
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102.10
|
%
|
December 1, 2011 to May 31,
2012
|
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101.80
|
%
|
June 1,
2012 to November 30, 2012
|
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101.50
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%
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December 1, 2012 to May 31,
2013
|
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101.20
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%
|
June 1,
2013 to November 30, 2013
|
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100.90
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%
|
December 1, 2013 to May 31,
2014
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100.60
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%
|
June 10,
2014 to November 30, 2014
|
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100.30
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%
|
December 1, 2014 and thereafter
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100.00
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%
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11
The
Company will give each holder of Notes written notice of any
redemption under this Section 8.1 not less than forty-five
(45) days and not more than sixty (60) days prior to any
Redemption Date. Each such notice shall specify the Redemption
Date, the aggregate principal amount of the Notes to be redeemed on
such Redemption Date, which shall not be in an amount less than One
Million United States Dollars (US$1,000,000) and increments of
US$500,000, the principal amount of each Note held by such holder
to be redeemed (determined in accordance with Section 8.2),
and the interest to be paid on such Redemption Date with respect to
such principal amount being redeemed.
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8.2.
|
Allocation of Partial
Redemptions.
|
In
the case of each partial redemption of the Notes, the principal
amount of the Notes to be redeemed shall be allocated among all of
the Notes at the time outstanding in proportion, as nearly as
practicable, to the respective unpaid principal amounts thereof not
theretofore called for redemption.
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8.3.
|
Maturity; Surrender,
etc.
|
In
the case of each redemption of Notes pursuant to this
Section 8, the principal amount of each Note to be redeemed
shall mature and become due and payable on the respective
Redemption Date, together with interest on such principal amount
accrued to such date. From and after such date, unless the Company
shall fail to pay such principal amount when so due and payable,
together with the interest thereon, interest on such principal
amount shall cease to accrue. Any Note paid or redeemed in full
shall be surrendered to the Company and cancelled and shall not be
reissued, and no Note shall be issued in lieu of any prepaid
principal amount of any Note.
The
Company will not, and will not permit any of its Affiliates to,
purchase, redeem, prepay or otherwise acquire, directly or
indirectly, any of the outstanding Notes except upon the payment or
redemption of the Notes in accordance with the terms of this
Agreement and the Notes. The Company will promptly cancel all Notes
acquired by it or any of its Affiliates pursuant to any payment,
redemption or purchase of Notes pursuant to any provision of this
Agreement and no Notes may be issued in substitution or exchange
for any such Notes.
The
Company covenants that so long as the Notes are
outstanding:
The
Company shall deliver to you and to any subsequent holder of Notes
that is an Institutional Investor for so long as the Company is
subject to reporting obligations under the Exchange Act with
respect to any of its securities, promptly, and in any event within
ten (10) days upon their becoming available, one copy of its
annual report and of the information, documents and other reports
which the Company is required to file with the SEC pursuant to
Section 13 or 15(d) of the Exchange Act; provided ,
however, that no such delivery shall be
12
required as to any of such
reports which have been required to be filed and are available in
electronic format from the EDGAR database of the SEC.
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9.2.
|
Officer’s
Certificate.
|
Within
one hundred twenty (120) days after the end of each fiscal
year of the Company, the Company shall deliver to the holders an
Officers’ Certificate stating whether interest paid on the
Notes constitutes income from sources within the Commonwealth under
the Code.
|
10.
|
CONSOLIDATION, MERGER AND SALE OF
ASSETS.
|
The
Company shall not consolidate with or merge into, or convey,
transfer or lease its properties and assets substantially as an
entirety to, any Person, unless:
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|
(a)
|
the
Company is the surviving or continuing entity, or the entity formed
by such consolidation or into which the Company is merged or to
which the Company has conveyed, transferred or leased its
properties and assets substantially as an entirety is an entity
organized and validly existing under the laws of the United States
of America, any province or state thereof or the District of
Columbia or the Commonwealth, and such entity expressly assumes the
Company’s obligations under the Notes and this
Agreement;
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(b)
|
immediately after giving effect to
the transaction, no Event of Default shall have occurred and be
continuing; and
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|
(c)
|
the
Company shall have delivered to each holder an Officer’s
Certificate and an opinion of counsel, each stating that such
consolidation, merger or transfer and such supplemental agreement,
comply with this Agreement.
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|
|
An
“Event of Default” wherever used herein with
respect to the Notes means any of the following events (whatever
the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law,
pursuant to any judgment, decree or order of any court or any
order, rule or regulation of any administrative or governmental
body):
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|
(a)
|
the
entry of a decree or order for relief in respect of the Company by
a court having jurisdiction in the premises in an involuntary case
under the United States federal bankruptcy laws, as now or
hereafter constituted, or any other applicable United States
federal, state or Commonwealth bankruptcy, insolvency or other
similar law, or a decree or order adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in
respect of the Company under applicable United
|
13
|
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States federal, state or
Commonwealth law, or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or other similar official) of the
Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60
consecutive days; or
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|
(b)
|
the
commencement by the Company of a voluntary case under the United
States federal bankruptcy laws, as now or hereafter constituted, or
any other applicable United States federal, state or Commonwealth
bankruptcy, insolvency or other similar law, or the consent by it
to the entry of an order for relief in an involuntary case under
any such law or to the appointment of a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its
property, or the making by it of an assignment for the benefit of
its creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of
corporate action by the Company in furtherance of any such
action.
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|
|
12.
|
REMEDIES ON DEFAULT,
ETC.
|
If
an Event of Default described in Section 11 has occurred and
is continuing, the holders of not less than 25% in principal amount
of outstanding Notes may, at their option, by notice given to the
Company as provided for herein, declare the principal amount of the
Notes to be immediately due and payable.
Upon
any Notes becoming due and payable under this Section 12.1,
such Notes will forthwith mature and the entire unpaid principal
amount of such Notes, plus all accrued and unpaid interest thereon
(to the full extent permitted by applicable law), shall all be
immediately due and payable, in each and every case without
presentment, demand, protest or further notice, all of which are
hereby waived.
If
a default is made by the Company in the payment of any installment
of interest, or principal of (or premium, if any, on) any Notes and
such default is continuing, and irrespective of whether the Notes
have been declared immediately due and payable under
Section 12.1, each holder may proceed to protect and enforce
its rights by an action at law, suit in equity or other appropriate
proceeding, whether for the specific performance of any agreement
contained herein or in the Notes, or for an injunction against a
violation of any of the terms hereof or thereof, or in aid of the
exercise of any power granted hereby or thereby or by law or
otherwise.
Notwithstanding
any other provision in this Agreement, the right of any holder to
receive payment of principal of and interest on the Notes, on or
after the respective due dates
14
expressed in such Notes, or to
institute suit for enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the
consent of such holder.
At
any time after the Notes have been declared due and payable
pursuant to Section 12.1, and before a judgment or decree for
payment of the money due under the Notes has been obtained by the
holders, by written notice to the Company, the Majority Holders may
rescind and annul any such declaration and its consequences if:
(i) the Company has paid all overdue interest on the Notes,
all principal of (and premium, if any, on) the Notes that are due
and payable and are unpaid other than by reason of such declaration
of acceleration, and (ii) all Events of Default, other than
non-payment of amounts that have become due solely by reason of
such declaration, have been cured or waived pursuant to
Section 17. No rescission and annulment under this
Section 12.3 will extend to or affect any subsequent Event of
Default or impair any right consequent thereon.
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|
12.4.
|
No Waivers or Election of Remedies,
Expenses, etc.
|
No
course of dealing and no delay in exercising any right, power or
remedy shall operate as a waiver thereof or otherwise prejudice a
holder’s rights, powers or remedies. No right, power or
remedy conferred by this Agreement or by the Notes shall be
exclusive of any other right, power or remedy referred to herein or
therein or now or hereafter available at law, in equity, by statute
or otherwise. All available remedies are cumulative. Without
limiting the obligations of the Company under Section 14, the
Company will pay on demand such further amount as shall be
sufficient to cover all reasonable out-of-pocket costs and expenses
incurred in any enforcement or collection under this
Section 12, including, without limitation, reasonable
attorneys’ fees, expenses and disbursements.
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|
12.5.
|
Limitation on Suits.
|
No
holder of any Notes shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Agreement,
or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless such holder has previously given written
notice to the Company of a continuing Event of Default with respect
to the Notes; provided , that no one or more of such holders
shall have any right in any manner whatever by virtue of, or by
availing of, any provision of this Agreement to affect, disturb or
prejudice the rights of any other of such holders, or to obtain or
to seek to obtain priority or preference over any other of such
holders or to enforce any right under this Agreement, except in the
manner herein provided and for the equal and ratable benefit of all
of such holders.
|
13.
|
REGISTRATION; EXCHANGE; SUBSTITUTION
OF NOTES.
|
|
|
13.1.
|
Registration of
Notes.
|
The
Company shall keep at its principal executive office a register
(the “Note Register” ) for the registration and
registration of transfers of the Notes. The name and address of
each holder of one or more Notes, each transfer thereof and the
name and address of each transferee of one or more Notes shall be
registered in such register. Prior to due presentment
for
15
registration of transfer, the
Person in whose name any Note shall be registered shall be deemed
and treated as the owner and holder thereof for all purposes
hereof, and the Company shall not be affected by any notice or
knowledge to the contrary. If and as applicable, the Company shall
give to any holder of a Note that is an Institutional Investor
promptly upon request therefor, a complete and correct copy of the
names and addresses of all registered holders of Notes.
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|
13.2.
|
Transfer and Exchange of
Notes.
|
Upon
surrender of any Note at the principal executive office of the
Company for registration of transfer or exch
|
