6-K
Sofgen Pharma S.A. (PROCF)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of April 2025
Commission File Number: 001-40851
Procaps Group, S.A.
(Translation of registrant’s name in English)
9 rue de Bitbourg, L-1273
Luxembourg
Grand Duchy of Luxembourg
R.C.S. Luxembourg: B253360
Tel: +356 7995-6138
(Address of Principal Executive Offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
INFORMATION CONTAINEDIN THIS REPORT ON FORM 6-K
Introductory ExplanatoryNote
On March 24, 2025, the Board of Directors (the “Board”) of Procaps Group, S.A. (the “Company”) approved (i) the issuance, through a private offering (the “Offering”) of ordinary shares of the Company (“Ordinary Shares”) to “accredited investors” in a series of transactions exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), in an aggregate subscription amount of up to US$90,000,000 (the “Equity Raise”); and (ii) the amendment to the previously announced Secured Convertible Note Subscription Agreement (the “Original NSA”) dated November 29, 2024, by and between the Company and Hoche Partners Pharma Holdings S.A., an entity controlled by Alejandro Weinstein (“Hoche”), pursuant to which the Company issued that certain Secured Convertible Note to Hoche on November 29, 2024, in the principal amount of US$20,000,000 (the “First Note”), and that certain Secured Convertible Note to Hoche on December 27, 2024, in the principal amount of US$20,000,000 (the “Second Note” and jointly with the First Note, the “Secured Convertible Notes”). For the avoidance of doubt, the Equity Raise does not include proceeds from the issuance of the Secured Convertible Notes.
On April 3, 2025, the Company entered into (i) Subscription Agreements (the “Subscription Agreements”) with certain investors, including new investors and certain existing shareholders of the Company, pursuant to which such investors subscribed for and purchased Ordinary Shares at a price per share of US$0.06313 (the “Purchase Price”), subject to the terms and conditions therein; and (ii) Amendment No. 1 to the Note Subscription Agreement (the “Amendment to the NSA”, and the Original NSA, as amended by the Amendment to the NSA, the “NSA”) with Hoche, pursuant to which, among other things, the Original NSA was amended to (a) amend the conversion price per Ordinary Share set forth in the Original NSA to a conversion price per Ordinary Share of US$0.06313 (the “Conversion Price”), (b) provide that upon conversion of the Secured Convertible Notes, the Company and the holders of the Secured Convertible Notes shall execute a subscription and conversion agreement (the “Subscription and Conversion Agreement”), providing such holders similar terms and conditions as those offered to the investors in the Equity Raise, and (c) amend and restate the form of warrant to be issued upon conversion of the Secured Convertible Notes (the “Warrant”) to amend the exercise price per Ordinary Share issued pursuant to the Warrant to an exercise price of US$0.06313 per Ordinary Share (the “Exercise Price”). The Subscription Agreements and the Amendment to the NSA are described further below.
Furthermore, on April 9, 2025 (the “Refinancing Date”), Procaps, S.A., a subsidiary of the Company (“Procaps Colombia”) entered into the Senior Secured Facilities (as defined below), consisting of amendments of each of its outstanding material debt facilities, with the Senior Secured Creditors (as defined below). A description of each Senior Secured Facility is set forth below. Each of the Senior Secured Facilities contains substantially identical affirmative and negative covenants and events of default, as described more fully below under “Senior Secured Facility Covenants”, are guaranteed by the Company and each of its material subsidiaries, and is secured, on a pari passu basis, by substantially all assets of the Company and each of its material subsidiaries.
On April 9, 2025 (the “Closing Date”), the closing conditions in connection with the Equity Raise described below and the conditions for conversion of the Secured Convertible Notes pursuant to the NSA, were satisfied, and the Company consummated the transactions contemplated by the Subscription Agreements, the NSA and the Senior Secured Credit Facilities (the “Closing”). In connection with the Closing, the Company issued (i) 1,425,629,643 Ordinary Shares to the investors in the Equity Raise, (ii) 633,613,175 Ordinary Shares to the holders of the Secured Convertible Notes upon conversion thereof, (iii) Warrants in an aggregate “face amount” of $10,000,000 to the holders of the Secured Convertible Notes upon conversion thereof, and (iv) 131,798,311 Ordinary Shares to certain of the Senior Secured Creditors. Additionally, in connection with the Closing, the Company entered into the Subscription and Conversion Agreements with each of the Anchor Investors (as defined below) and Hoche (as described below).
Additionally, the Company entered into various ancillary agreements, each of which is further described below.
The sale and issuance of the Ordinary Shares in connection with the Equity Raise, the conversion of the Secured Convertible Notes pursuant to the terms of the NSA and the Senior Secured Credit Facilities, have not been registered under the Securities Act or any state securities laws. The securities may not be offered or resold in the United States absent registration or an applicable exemption from registration requirements. Neither this Report on Form 6-K, nor the exhibits attached hereto, constitutes an offer to sell or the solicitation of an offer to buy any of the securities described herein.
1
Equity Raise
Subscription Agreements
On April 3, 2025, the Company entered into Subscription Agreements with the following investors: (i) Chemo Project SA (“Chemo”) and Becaril S.A.(“Becaril”), (ii) Flying Fish Ventures L.P. (“Flying Fish”), Saint Thomas Commercial S.A. (“ST Commercial”) and Santana S.A.(“Santana” and together with Chemo, Becaril, Flying Fish and ST Commercial, the “Anchor Investors”), (iii) Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A. (“Consorcio”), (iv) BTG Pactual Chile S.A. Corredores de Bolsa (“BTG”), (v) Regina International LP (“RILP”), and (vi) Corales, LLC (“Corales” and together with Consorcio, BTG and RILP, the “Other Investors” and together with the Anchor Investors, the “Investors”).
Pursuant to the Subscription Agreements, each Investor subscribed for and purchased Ordinary Shares at a price per share in the amount of the Purchase Price. Other key terms of the Subscription Agreements are the following:
Subscription Amounts
Pursuant to the Subscription Agreements, each the Investors agreed to subscribe for and purchase the number of Ordinary Shares equal to the quotient obtained by dividing the following subscription amounts by the Purchase Price: (i) an aggregate subscription amount of US$37,822,500 by Chemo and Becaril, collectively, (ii) an aggregate subscription amount of US$37,822,500 by Flying Fish, ST Commercial and Santana, collectively, (iii) a subscription amount of US$10,000,000 by Consorcio, (iv) a subscription amount of US$2,105,000 by BTG, (v) a subscription amount of US$1,500,000 by RILP, and (vi) a subscription amount of US$750,000 by Corales.
Representation andWarranties
The Company provided the Investors with customary representations and warranties relating to the Equity Raise and the Company. Additionally, the Company made representations and warranties concerning, among other matters, the previously-announced independent investigation initiated by the Company’s Audit Committee and restatement of the Company’s previously-issued audited financial statements.
Closing Conditions
With respect to the Subscription Agreements, the Closing was subject to customary condition precedents such as representations and warranties being true and correct in all material respects and the performance of covenants, as well as the following:
| ● | The<br>Company and its material subsidiaries having entered into the Senior Secured Credit Facilities. |
|---|---|
| ● | A<br>portion of the Senior Secured Creditors’ debt having been converted into Ordinary Shares, and that such conversion would not have<br>resulted in the Senior Secured Creditors holding in the aggregate more than (i) 9.23% of the Company’s issued and outstanding shares<br>of capital stock or, (ii) if the Warrants received upon conversion of the Secured Convertible Notes had been exercised in full, 8.65%<br>of the Company’s issued and outstanding shares of capital stock. |
| --- | --- |
| ● | The Company receive proceeds of US$90,000,000<br>from the Equity Raise. |
| --- | --- |
Additionally, the Subscription Agreements with the Anchor Investors provided for the following conditions precedent:
| ● | The Anchor Investors and Hoche having executed<br>a shareholder nomination and voting agreement among them as described below. |
|---|---|
| ● | A portion of the Secured Convertible Notes and<br>a portion of the rights to the receive the Warrant upon conversion of the Secured Convertible Notes having been assigned by Hoche to the<br>Anchor Investors. |
| --- | --- |
| ● | The Company having entered into indemnification<br>agreements with the directors to be nominated by the Anchor Investors. |
| --- | --- |
2
Covenants of the Company
The Subscription Agreements include customary covenants that the Company was required to comply with between signing and closing, including: (i) using commercially reasonable efforts to enter into the Senior Secured Credit Facilities, (ii) using commercially reasonable efforts to cause the consummation of the Equity Raise, and (iii) granting investors inspection rights.
Additionally, under the Subscription Agreements with the Anchor Investors, the Company agreed to maintain valid directors’ and officers’ insurance policies for no less than six years on terms no less favorable than its existing policy.
Indemnification
The Subscription Agreements include customary indemnification provisions for any breaches incurred by the Company or the Investors, with limitations on liabilities and caps on indemnifications commensurate with the subscription amounts invested by the Investors.
The foregoing descriptions of the Subscription Agreements are only summaries and are qualified in their entirety by reference to the full text of the Subscription Agreements, which are filed as Exhibits 10.1, 10.2, 10.3, 10.4, 10.5 and 10.6, respectively, to this Report on Form 6-K and incorporated herein by reference.
Amendment to the NoteSubscription Agreement
As disclosed above, on April 3, 2025, the Company and Hoche entered into the Amendment to the NSA, pursuant to which, among other things, the Original NSA was amended to (a) amend the conversion price per Ordinary Share set forth in the Original NSA to the Conversion Price, (b) provide that upon conversion of the Secured Convertible Notes, the Company and the holders of the Secured Convertible Notes shall execute a Subscription and Conversion Agreement, and (c) amend and restate the form of Warrant to amend the exercise price per Ordinary Share issued pursuant to the Warrant to the Exercise Price.
The foregoing descriptions of the Amendment to the NSA, the Secured Convertible Notes, and the Warrant are only summaries and are qualified in their entirety by (i) the descriptions of the Original NSA, the Secured Convertible Notes and the form of Warrant prior to its amendment pursuant to the Amendment to the NSA by reference to the Form 6-K, File No. 001-40851, filed with the SEC on December 3, 2024, and the full text of the of the Original NSA and the First Note, which were filed as Exhibits 99.1 and 99.2, respectively, thereto, (ii) the descriptions of the Second Note by reference to the Form 6-K, File No. 001-40851, filed with the SEC on December 31, 2024, and (iii) reference to the full text of the Amendment to the NSA, and the form of Warrant, which are filed as Exhibits 10.7 and 10.8, respectively, to this Report on Form 6-K and incorporated herein by reference.
Assignment of SecuredConvertible Notes and Rights to Warrant and Execution of Subscription and Conversion Agreements
Assignment of SecuredConvertible Notes and Rights to Warrant
In connection with the Equity Raise, on April 9, 2025, Hoche entered into (i) assignment and assumption agreements with each Anchor Investor and the Company, solely for the limited purpose of acknowledging the existence of such assignment and assumption, pursuant to which Hoche assigned its rights, title, and interest in and to an aggregate outstanding principal amount of the Secured Convertible Notes of $1,451,666.67, the interest accrued thereunder from the date of issuance, and the corresponding portion of the NSA to the Anchor Investors, and (ii) a warrants right assignment agreement with each Anchor Investor and the Company, solely for the limited purpose of acknowledging the existence of such assignment, pursuant to which Hoche assigned its rights, title, and interest in and to the its right to receive an aggregate “warrant amount” of $5,000,000 of the Warrant upon conversion of the Secured Convertible Notes pursuant to the terms of the NSA.
3
Subscription andConversion Agreements
Upon Closing, on April 9, 2025, the Company entered into Subscription and Conversion Agreements with each of (i) Hoche, (ii) Chemo and Becaril and (iii) Flying Fish, ST Commercial, and Santana, pursuant to which Hoche and the Anchor Investors elected to convert their respective rights under the Secured Convertible Notes into Ordinary Shares of the Company and a Warrant, pursuant to the terms of the NSA.
The Subscription and Conversion Agreements also include primarily the same representations and warranties by the Company and each of Hoche and the Anchor Investors as those set forth under the Subscription Agreements described above, and customary indemnification provisions for any breaches incurred by the Company or the Anchor Investors, with limitations on liabilities and caps on indemnifications commensurate with the amounts owed under the Secured Convertible Notes being converted by Hoche and the Anchor Investors.
The foregoing descriptions of the Subscription and Conversion Agreements are only summaries and are qualified in their entirety by reference to the full text of the Subscription and Conversion Agreements, which are filed as Exhibits 10.9, 10.10 and 10.11 to this Report on Form 6-K and incorporated herein by reference.
Additional Agreementsrelated to the Equity Raise
Amended and RestatedRegistration Rights Agreement
In connection with the Equity Raise, the Company entered into that certain Amended and Restated Registration Rights Agreement dated March 24, 2025 (the “A&R RRA”), with Hoche, Caoton Company, S.A., acting as trustee to the Sognatore Trust, (“Sognatore”), Commonwealth Trust Company, acting as trustee to the Simphony Trust (“Simphony”) and Commonwealth Trust Company, acting as trustee of the Deseja Trust (“Deseja” and together with Sognatore and Simphony, the “Minski Trusts”), to amend and restate that certain Registration Rights and Lock-Up Agreement dated September 29, 2021, entered into by and among the Company, Hoche, the Minski Trusts and the other shareholders of the Company parties thereto (the “Original RRA”). Upon Closing, on April 9, 2025, each of the Investors entered into that certain Joinder Agreement, with the Company’s acknowledgement and acceptance, pursuant to which the Investors became parties to the A&R RRA. Hoche, the Minski Trusts, the other shareholders of the Company party to the Original RRA, and the Investors, shall have
Pursuant to the A&R RRA, among other things, to the extent the Company remains subject to the reporting obligations of the Securities Exchange Act of 1934 (the “Exchange Act”) and the board of directors of the Company has not determined, in its sole discretion, to pursue termination of the registration under the Exchange Act, the Company shall within thirty (30) days after the Company has (i) filed its annual report on Form 20-F for the fiscal year ended December 31, 2025 with the SEC, and (ii) is otherwise current on all reports required to be filed by the Company pursuant to Sections 13(a) or 15(d) of the Exchange Act, to file a registration statement under the Securities Act to permit the public resale of all the Ordinary Shares subject to registration pursuant to the Original RRA and all Ordinary Shares issued to Hoche and the Investors in connection with the Equity Raise, the conversion of the Secured Convertible Notes and the Warrant, once exercised, on the terms and conditions specified therein.
Additionally, the A&R RRA provides for customary piggyback registration rights in connection with the Ordinary Shares subject to registration pursuant to the Original RRA and all Ordinary Shares issued to Hoche and the Investors in connection with the Equity Raise, the conversion of the Secured Convertible Notes and the Warrant, once exercised.
The foregoing description of the A&R RRA is only a summary and is qualified in its entirety by reference to the full text of the A&R RRA, which is filed as Exhibit 10.12 to this Report on Form 6-K and incorporated herein by reference.
4
Shareholder Nominationand Voting Agreement
In connection with the Closing, on April 9, 2025, Hoche and the Anchor Investors entered into a shareholder nomination and voting agreement (the “Shareholder Nomination and Voting Agreement”), pursuant to which, among other things, in connection with any general meeting of shareholders of the Company at which directors are to be elected, the parties thereto agreed to exercise reasonable best efforts including by voting their Ordinary Shares to propose for appointment or re-appointment three individuals designated by Hoche (the “Hoche Nominees”), who may continue to be: (i) Mr. Alejandro Weinstein, (ii) Mr. Nicolas Weinstein and (iii) Mr. Alberto Eguiguren Correa. Separately, the Anchor Investors (without Hoche) agreed among themselves to exercise reasonable best efforts including by voting their Ordinary Shares to propose for appointment one individual designated by Chemo (the “Chemo Nominee”), (ii) one individual designated by Becaril (the “Becaril Nominee” and, jointly with the Chemo Nominee, the “Chemo-Becaril Nominees”), and (iii) two individuals designated by Flying Fish, ST Commercial and Santana, collectively (the “Santana Investors’ Nominees”); provided that, the Shareholder Nomination and Voting Agreement contains additional provisions that, if and to the extent required for the board of directors of the Company to have a majority of its members qualify as independent directors, at least one Hoche Nominee shall be an independent director, at least one of the Chemo-Becaril Nominee shall be an independent director, and all of the Santana Investors’ Nominees shall be independent directors.
Additionally, the Shareholder Nomination and Voting Agreement provides that Hoche and the Anchor Investors shall use commercially reasonable efforts to pursue an exit transaction upon the earlier of the fifth anniversary of the Closing Date and the Company achieving certain annual consolidated EBITDA targets.
Debt Facility Refinancing
Note Purchase Agreement/SeniorSecured Notes
On the Refinancing Date, Procaps Colombia, the Company, all material subsidiaries of the Company and the purchasers party thereto entered into an Amended and Restated Note Purchase and Guarantee Agreement (the “A&R NPA”). The A&R NPA amends and restates that certain Note Purchase and Guarantee Agreement, dated November 12, 2021 (as amended, the “Original NPA”), by and among Procaps Colombia, the Company, certain subsidiaries of the Company party thereto, and the purchasers party thereto. In connection with the entry into the A&R NPA, Procaps Colombia issued US$116,488,204.60 of 6.75% guaranteed senior secured notes due December 31, 2029 (the “Notes”), to The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f.k.a. Prudential Annuities Life Assurance Corporation) and Cigna Health and Life Insurance Company Inc. (collectively, the “Noteholders”), replacing those previously issued under the Original NPA.
The Notes are the senior secured obligations of Procaps Colombia. and unconditionally guaranteed by the Company and all of its material subsidiaries. The Notes (and the other Senior Secured Facilities (as defined below)) are secured, on a pari passu basis, by substantially all assets of Company and all of its material subsidiaries (including Procaps Colombia).
The Notes bear no interest prior to January 1, 2027, and provide for an amortization schedule that commences on March 31, 2028, with amortization payments of approximately US$2 million per quarter in 2028, approximately US$4 million per quarter in 2029, and all other amounts due upon final maturity of the Notes on December 31, 2029. The Notes may be prepaid, in whole or in part, without premium or penalty. Procaps Colombia may be required, upon the occurrence of certain events, to make certain mandatory prepayments prior to the maturity date of the Notes.
In connection with the entry into the A&R NPA, the Noteholders received, collectively, an aggregate of 131,798,311 ordinary shares of the Company.
For a description of the covenants under the A&R NPA, see “Senior Secured Facility Covenants” below.
The foregoing description of the A&R NPA is only a summary and is qualified in its entirety by reference to the full text of the A&R NPA, which is filed as Exhibit 10.13 to this Report on Form 6-K and incorporated herein by reference.
5
Bancolombia/DaviviendaCredit Facility
On the Refinancing Date, Procaps Colombia, the Company, all material subsidiaries of the Company, Bancolombia, S.A. (“Bancolombia”) and Banco Davivienda, S.A. (“Davivienda”) entered into an Amended and Restated Credit Facility (Modificación Integralal Contrato de Crédito) (the “A&R Club Agreement”). The A&R Club Agreement amends and restates that certain Credit Agreement (Contrato de Crédito), dated November 12, 2021 (the “Original Club Agreement”), by and among Procaps Colombia, the Company, certain subsidiaries of the Company party thereto, Bancolombia and Davivienda, which provided for a loan of COP$247,817,751,759.49 (of which COP$244,100,485,482.10 was outstanding as of the Refinancing Date).
The obligations under the A&R Club Agreement are senior secured obligations of Procaps Colombia and unconditionally guaranteed by the Company and all of its material subsidiaries. The A&R Club Agreement (and the other Senior Secured Facilities) are secured, on a pari passu basis, by substantially all assets of Company and all of its material subsidiaries (including Procaps Colombia).
The loan under the A&R Club Agreement bears no interest prior to January 1, 2027, and provide for an amortization schedule that commences on March 31, 2028, with amortization payments of approximately US$2 million (equivalent) per quarter in 2028, approximately US$4 million (equivalent) per quarter in 2029, and all other amounts due upon final maturity of the loans on December 31, 2029. Interest shall accrue from January 1, 2027 at a rate equal to the Colombian Central Bank’s reference rate (for a three-month tenor) plus 4.00%. The loan under the A&R Club Agreement may be prepaid, in whole or in part, without premium or penalty. Procaps Colombia may be required, upon the occurrence of certain events, to make certain mandatory prepayments prior to the maturity date of the A&R Club Agreement.
In connection with the entry into the A&R Club Agreement, Bancolombia and Davivienda have the option to receive, collectively, an aggregate total of 67,900,322 ordinary shares of the Company, at their election prior to the expiration of the election period contained within the A&R Club Agreement.
For a description of the covenants under the A&R Club Agreement, see “Senior Secured Facility Covenants” below.
BTG Credit Facilities
On the Refinancing Date, Procaps Colombia, the Company and all material subsidiaries of the Company entered into (a) an Amended and Restated Credit Facility (ModificaciónIntegral al Contrato de Crédito) (the “A&R BTG Cayman Agreement”) with Banco BTG Pactual S.A. – Cayman Branch (“BTG Cayman”), amending and restating its existing credit line with BTG Cayman in an original maximum amount of US$19,000,000.00 (of which US$14,777,777.78 was outstanding as of the Refinancing Date), and (b) an Amended and Restated Credit Facility (Modificación Integral al Contrato de Crédito) (the “A&R BTG Colombia Agreement” and, together with the A&R NPA, the A&R Club Agreement and the A&R BTG Cayman Agreement, the “Senior Secured Facilities”) with Banco BTG Pactual Colombia S.A. (“BTG Colombia” and, together with the Noteholders, Bancolombia, Davivienda and BTG Cayman, the “Senior Secured Creditors”), amending and restating its existing credit line with BTG Colombia in an original maximum amount of COP$36,000,000,000.00 (of which COP$14,400,000,000.00 was outstanding as of the Refinancing Date).
The obligations under the A&R BTG Cayman Agreement and the A&R BTG Colombia Agreement are senior secured obligations of Procaps Colombia and unconditionally guaranteed by the Company and all of its material subsidiaries. The A&R BTG Cayman Agreement and the A&R BTG Colombia Agreement (and the other Senior Secured Facilities) are secured, on a pari passu basis, by substantially all assets of Company and all of its material subsidiaries (including Procaps Colombia).
6
The loans under the A&R BTG Cayman Agreement and the A&R BTG Colombia Agreement bear no interest prior to January 1, 2027, and provide for an amortization schedule that commences on March 31, 2028, with amortization payments of approximately US$2 million (or equivalent) per quarter in 2028, approximately US$4 million (or equivalent) per quarter in 2029, and all other amounts due upon final maturity of the loans on December 31, 2029. Interest shall accrue from January 1, 2027 at a rate equal to, in respect of the A&R BTG Colombia Agreement, the Colombian Central Bank’s reference rate (for a three-month tenor) plus 4.00%, and in respect of the A&R BTG Cayman Agreement, SOFR (for a three-month tenor) plus 3.50%.
The loans under the A&R BTG Cayman Agreement and the A&R BTG Colombia Agreement may be prepaid, in whole or in part, without premium or penalty. Procaps Colombia may be required, upon the occurrence of certain events, to make certain mandatory prepayments prior to the maturity date of the A&R BTG Cayman Agreement and the A&R BTG Colombia Agreement.
In connection with the entry into the A&R BTG Cayman Agreement, BTG Cayman has the option to receive an aggregate total of 16,936,401 ordinary shares of the Company, at its election prior to the expiration of the election period contained within the A&R BTG Cayman Agreement. In connection with the entry into the A&R BTG Colombia Agreement, BTG Colombia has the option to receive an aggregate total of 4,005,583 ordinary shares of the Company, at its election prior to the expiration of the election period contained within the A&R BTG Colombia Agreement.
For a description of the covenants under the A&R BTG Cayman Agreement and the A&R BTG Colombia Agreement, see “Senior Secured Facility Covenants” below.
Senior SecuredFacility Covenants
The Senior Secured Facilities contain covenants substantially similar to those set forth in the Original NPA and the Original Club Agreement, including change-of-control provisions and certain customary affirmative and negative covenants and events of default. In addition, the Senior Secured Facilities require the Company to comply with the following financial covenants: (i) consolidated EBITDA of the Company may be no less than US$25,000,000 for the twelve-month period ending March 31, 2026, US$30,000,000 for the twelve-month period ending June 30, 2026, US$35,000,000 for the twelve-month period ending September 30, 2026 and US$40,000,000 for the twelve-month period ending December 31, 2026; (ii) beginning with the quarter ending March 31, 2027, the ratio of consolidated total debt of the Company to consolidated EBITDA of the Company for the last twelve months as of each date below may not exceed the following:
| Fiscal Quarter Ending | Consolidated Total Indebtedness to Consolidated EBITDA |
|---|---|
| March 31, 2027 | 5.00:1 |
| June 30, 2027 | 5.00:1 |
| September 30, 2027 | 4.50:1 |
| December 31, 2027 | 4.50:1 |
| March 31, 2028 | 4.25:1 |
| June 30, 2028 | 4.25:1 |
| September 30, 2028 | 4.00:1 |
| December 31, 2028 | 4.00:1 |
| March 31, 2029 | 4.00:1 |
| June 30, 2029 | 3.75:1 |
| September 30, 2029 | 3.75:1 |
| December 31, 2029 | 3.50:1 |
7
and (iii) beginning with the quarter ending March 31, 2027, the ratio of consolidated EBITDA of the Company to consolidated interest expense of the Company for the last twelve months as of each date below may not be less than the following:
| Fiscal Quarter Ending | Consolidated EBITDA to Consolidated Interest Expense |
|---|---|
| March 31, 2027 | 2.00:1 |
| June 30, 2027 | 2.00:1 |
| September 30, 2027 | 2.25:1 |
| December 31, 2027 | 2.25:1 |
| March 31, 2028 | 2.25:1 |
| June 30, 2028 | 2.25:1 |
| September 30, 2028 and each fiscal quarter end thereafter | 2.50:1 |
The Senior Secured Facilities also contain covenants that, among other things, restrict, subject to certain exceptions, the ability of the Company, Procaps, S.A. and the other obligors thereunder to change lines of business; incur additional secured indebtedness; permit subsidiaries to incur additional indebtedness; sell or transfer title to operating assets; pay dividends and distributions; engage in mergers and consolidations; create liens on assets; guarantee, indemnify or assume the liabilities of third parties; change our fiscal year reporting; or engage in certain transactions with affiliates. In addition, the Senior Secured Facilities contain a covenant that incorporates into the each Senior Secured Facility any more restrictive financial, affirmative or negative covenants, information reporting requirements or events of default from any other Senior Secured Facility or any working capital facility permitted under the terms of the Senior Secured Facilities. For purposes of the Senior Secured Facilities, EBITDA is calculated consolidated net income for such period plus (i) consolidated net interest expense, (ii) provision for federal, state, local and foreign taxes, (iii) depreciation and amortization, (iv) extraordinary or non-recurring charges, expenses or losses, (v) other non-cash charges, expenses or losses, (vi) non-cash stock option and other equity-based compensation expenses, (vii) fees and expenses relating to the Senior Secured Facilities, (viii) any net loss for such period attributable to the early extinguishment of indebtedness or to hedging obligation or other derivative instruments, (ix) any net loss from disposed abandoned or discontinued operations, and (x) the amount of any fees and expenses incurred or any amortization thereof in connection with any acquisition, investment, recapitalization, disposition, issuance or repayment of indebtedness or issuance of equity interests, refinancing transaction or amendment or other modification of any debt instrument and any charges or non-recurring merger costs.
Pari Passu IntercreditorAgreement
Also on the Refinancing Date, Procaps Colombia, the Company and all material subsidiaries of the Company entered into that certain Pari Passu Intercreditor Agreement (the “Intercreditor Agreement”) with the Senior Secured Lenders and GLAS AMERICAS LLC, as collateral agent (the “Collateral Agent”). The Intercreditor Agreement governs the relative rights of the Senior Secured Creditors and, among other things, restricts the actions permitted to be taken by the Collateral Agent on behalf of the Senior Secured Creditors with respect to the collateral securing the Senior Secured Facilities.
The foregoing description of the Intercreditor Agreement is only a summary and is qualified in its entirety by reference to the full text of the Intercreditor Agreement, which is filed as Exhibit 10.14 to this Report on Form 6-K and incorporated herein by reference.
8
| Item 9.01. | FinancialStatements and Exhibits. |
|---|
(d) Exhibits
9
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| PROCAPS GROUP, S.A. | |
|---|---|
| By: | /s/ Melissa Angelini |
| Name: | Melissa Angelini |
| Title: | Interim Co-Chief Executive Officer |
| By: | /s/ Camilo Camacho |
| --- | --- |
| Name: | Camilo Camacho |
| Title: | Interim Co-Chief Executive Officer |
Dated: April 14, 2025
10
Exhibit 10.1
Execution version
PROCAPS GROUP, S.A.
SUBSCRIPTION AGREEMENT
by and between
Procaps Group, S.A.
and
Chemo Project SA
and
Becaril S.A.
as of April 3, 2025
Procaps Group, S.A.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is made as of April 3, 2025 (the “Effective Date”), by and among Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), Chemo Project SA, a Swiss corporation (società anonima) (“Chemo”), and Becaril S.A., a Uruguayan corporation (sociedad anónima) (“Becaril” and jointly with Chemo, the “Investors” and each, an “Investor”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
- Issuance, Subscriptions and Closing.
1.1 Issuance of Shares and Payment of Subscription Amount. Subject to the terms and conditions of this Agreement, each of the Investors agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investors, that number of Ordinary Shares of the Company (rounded down to the nearest whole Ordinary Share) (the “Shares”) equal to the quotient obtained by dividing US$37,822,500 (the “Subscription Amount”) by US$0.06313 per Ordinary Share (the “Price Per Share”). Each of the Investors agrees to pay to the Company on or prior to the Closing, in exchange for the issuance and sale of the Shares, fifty percent (50%) of the Subscription Amount.
1.2 Closing. The closing of the subscription and purchase, and the sale and issuance, of the Shares shall take place remotely via the exchange of documents and signatures on the date the conditions set forth in Section 5 and Section 6 (other than conditions that by their nature are to be satisfied at the Closing itself, but subject to the satisfaction or waiver of those conditions) are satisfied or waived in writing by the applicable party hereto, or at such other time and place as the Company and the Investors mutually agree upon in writing (which time and place are designated as the “Closing”). The Company shall notify the Investors no later than two (2) Business Days prior to the satisfaction of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing itself). All proceedings to be taken and all documents to be executed and delivered by the Company and the Investors at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
1.3 Deliveries.
(a) Deliveries by the Investors. Upon the satisfaction or waiver by the Investors of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Investors of those conditions at the Closing), the Investors shall jointly and severally deliver, or cause to be delivered, to the Company:
(i) no later than five (5) Business Days prior to the Closing, know your customer (KYC) forms and other information required (A) under Luxembourg Law for the issuance of the Shares to the Investors and (B) by the Company’s transfer agent to deliver the records evidencing ownership of the Shares by the Investors in the proportion described in Section 1.3(b)(vii) (the “Transfer Agent Records”);
2
(ii) no later than two (2) Business Days prior to the Closing, the name and address of each of the two (2) directors to be nominated by the Investors at the Closing under the terms of the Shareholders’ Agreement (“Investors’ Directors”);
(iii) prior to the Closing, a counterpart signature to each Indemnification Agreement between the Company and each of the Investors’ Directors, duly executed by each of the Investors’ Directors;
(iv) on or prior to the Closing, the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company, to be informed by the Company to the Investors in writing no later than two (2) Business Days prior to the Closing;
(v) on the Closing, a subscription form in the form attached hereto as Exhibit A, duly completed and executed by each Investor for fifty percent (50%) of the Shares being subscribed for by such Investor;
(vi) on the Closing, a counterpart signature to the joinder to the Investors’ Registration Rights Agreement, duly executed by each of the Investors;
(vii) on the Closing, a counterpart signature to the Shareholders’ Agreement, duly executed by each of the Investors;
(viii) on the Closing, a counterpart signature to the Hoche Secured Convertible Notes Assignment Agreements, duly executed by each of the Investors;
(ix) on the Closing, a counterpart signature to the Hoche Warrant Assignment Agreements, duly executed by each of the Investors;
(x) on the Closing, a counterpart signature to the Investor Subscription and Conversion Agreement, duly executed by each of the Investors for the Assigned Shares being subscribed for by the Investors; and
(xi) on the Closing, a certificate duly executed by an officer or authorized representative of each of the Investors as of the Closing Date, certifying that the conditions specified in Section 6.1 and Section 6.2 have been satisfied.
3
(b) Deliveries by the Company. Upon the satisfaction or waiver by the Company of the conditions set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Company of those conditions at the Closing), the Company shall deliver or cause to be delivered to the Investors:
(i) on the Closing, evidence reasonably satisfactory to the Investors that all amounts outstanding under the Hoche Secured Convertible Notes have been converted into Ordinary Shares;
(ii) on or prior to the Closing, a certified copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval;
(iii) on or prior to the Closing, a copy of the Board Resolutions;
(iv) on the Closing, after payment in full of the Subscription Amount by the Investors to the Company, evidence reasonably satisfactory to the Investors, of the issuance to each Investor of fifty percent (50%) of the Shares;
(v) on the Closing, upon the conversion of the Hoche Secured Convertible Notes and payment of all amounts owed by the Investors to Hoche under the Hoche Secured Convertible Notes Assignment Agreements, evidence reasonably satisfactory to the Investors of the issuance to each Investor of fifty percent (50%) of the aggregate Ordinary Shares of the Company issuable to the Investors under the Investor Subscription and Conversion Agreement (“Assigned Shares”);
(vi) on the Closing, a copy of the Transfer Agent Records;
(vii) on the Closing, evidence of registration of each Investor in the register of shareholders of the Company as the owner of fifty percent (50%) of the Shares and fifty percent (50%) of the Assigned Shares;
(viii) on the Closing, copies of the Binding Debt Restructuring Documents, duly executed by the Category Four Lenders and the Group Companies party thereto;
(ix) on the Closing, a counterpart signature to the joinder by each of the Investors to the Investors’ Registration Rights Agreement, duly executed by the Company;
4
(x) on the Closing, a counterpart signature to the Indemnification Agreements between the Company and each of the Investors’ Directors, duly executed by the Company;
(xi) on the Closing, a counterpart signature to the Hoche Secured Convertible Notes Assignment Agreements, duly executed by the Company;
(xii) on the Closing, a counterpart signature to the Hoche Warrant Assignment Agreements, duly executed by the Company;
(xiii) on the Closing, a counterpart signature to the Investor Subscription and Conversion Agreement, duly executed by the Company; and
(xiv) on the Closing, a certificate duly executed by an officer or authorized representative of the Company as of the Closing Date, certifying that the conditions specified in Section 5.1 and Section 5.2 have been satisfied.
1.4 Investor Questionnaire. Each Investor shall complete and deliver to the Company the Accredited Investor Status Questionnaire, the form of which is attached hereto as Exhibit B (“Investor Questionnaire”), together with the execution and delivery of this Agreement.
1.5 Use of Proceeds. The proceeds from the issuance and sale of the Shares shall be used (i) to fund the working capital needs of the Group Companies, (ii) for the payment of existing indebtedness of the Group Companies owed to the Category Four Lenders and other financial creditors as part of the Debt Restructuring, and (iii) to pay the Group Companies’ vendors, suppliers and third-party advisors, including the payment as soon as reasonably practicable of all debt owed to Affiliates of the Investors and other suppliers; provided, for the avoidance of doubt, that such proceeds will not be used to acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof.
- Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(b) “Board” means the board of directors of the Company.
5
(c) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares and the Assigned Shares on the Closing Date.
(d) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(e) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(f) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(f) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(g) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(h) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(i) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Hoche Secured Convertible Notes, (C) upon the exercise of the Hoche Warrant; and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
(j) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(k) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
(l) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US$90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Hoche Secured Convertible Notes).
(m) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
6
(n) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(o) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(p) “FlyingFish Ventures” means Flying Fish Ventures L.P., a Canadian limited partnership.
(q) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(r) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(s) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(t) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
(u) “HocheSecured Convertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended on the Effective Date and from time to time, and pursuant to which the Company issued the Hoche Secured Convertible Notes.
(v) “HocheSecured Convertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US$20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US$20,000,000.
(w) “HocheSecured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Investors, and acknowledged by the Company, substantially in the form of Exhibit C, pursuant to which Hoche shall assign to such Investor certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
(x) “HocheSubscription and Conversion Agreement” means that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain portion of the Hoche Warrant, upon the conversion of the Hoche Secured Convertible Notes.
(y) “HocheWarrant” means the warrant issuable to Hoche upon conversion of the Hoche Secured Convertible Notes, in a “warrant amount” of US$10,000,000.
7
(z) “HocheWarrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Investors, and acknowledged by the Company, substantially in the form of Exhibit D, pursuant to which Hoche shall assign to such Investor certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(aa) “IndemnificationAgreement” means each agreement pursuant to which the Company shall agree to indemnify and hold harmless each director of the Company, substantially in the form of Exhibit E.
(bb) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(cc) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(dd) “InvestorSubscription and Conversion Agreement” means that certain Subscription and Conversion Agreement to be entered into between the Company and the Investors on or about the Closing Date, substantially in the form of Exhibit F, pursuant to which the Investors will be issued the Assigned Shares and a certain portion of the Hoche Warrant, upon the conversion of the Hoche Secured Convertible Notes.
(ee) “Investors’Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement among the Company and certain shareholders of the Company, to be entered into substantially in the form of Exhibit G;
(ff) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
(gg) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(hh) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(ii) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(jj) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole, provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the Effective Date; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
8
(kk) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(ll) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
(mm) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US$0.01 per share.
(nn) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(oo) “OtherInvestor Hoche Secured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of Flying Ventures, ST Commercial and Santana, and acknowledged by the Company, pursuant to which Hoche shall assign to such Person certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
(pp) “OtherInvestor Hoche Warrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of Flying Ventures, ST Commercial and Santana, and acknowledged by the Company, pursuant to which Hoche shall assign to such Person certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(qq) “OtherInvestor Subscription and Conversion Agreement” means that certain Subscription and Conversion Agreement to be entered into between the Company and Santana, ST Commercial and Flying Fish Ventures on or about the Closing Date, pursuant to which Santana, ST Commercial and Flying Fish Ventures will be issued by the Company certain Ordinary Shares and a certain portion of the Hoche Warrant, upon the conversion of the Hoche Secured Convertible Notes.
(rr) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
9
(ss) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(tt) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(uu) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(vv) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US$0.01 per share.
(ww) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US$0.01 per share.
(xx) “RemediationPlan” means a plan to remediate and correct certain deficiencies and other issues identified as a result of the Internal Investigation, as set forth in Exhibit H.
(yy) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(zz) “Santana” means Santana S.A., a Chilean sociedad anónima.
(aaa) “SEC” means the Securities and Exchange Commission.
(bbb) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(ccc) “Shareholders’Agreement” means that certain Shareholder Nomination and Voting Agreement to be entered into by Hoche, Santana, ST Commercial, Flying Fish Ventures, and the Investors, substantially in the form of Exhibit I, for the purpose of setting forth their respective rights and obligations in connection with their investment in the Company;
(ddd) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(eee) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(fff) “STCommercial” means Saint Thomas Commercial S.A., a Panamanian sociedad anónima.
10
(ggg) “Subscriptionand Conversion Agreements” means, collectively, the Third-Party Subscription and Conversion Agreements and the Investor Subscription and Conversion Agreement.
(hhh) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(iii) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
(jjj) “Third-PartySubscription and Conversion Agreements” means, collectively, the Hoche Subscription and Conversion Agreement and the Other Investor Subscription and Conversion Agreement.
(kkk) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
- Representations and Warranties of the Group Companies. The Company hereby represents and warrants to each Investor, as of the Effective Date and as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
11
3.3 Capitalization.
(a) As of the Effective Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Effective Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US$11.50 per share; and (ii) the Hoche Secured Convertible Notes convertible into Ordinary Shares and the Hoche Warrant.
(b) Except as set forth in Section 3.3(a), as of the Effective Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Effective Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares and the Assigned Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Effective Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
12
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by each Investor in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
3.7 Private Placement. Assuming the accuracy of the representations made by each Investor in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Investors as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Investors and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares or the Assigned Shares as contemplated hereby or (ii) cause the offering of the Shares or the Assigned Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares or the Assigned Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US$500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
13
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Investors accurate and complete copies of all material correspondence through the Effective Date between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Effective Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Effective Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Effective Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Effective Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US$500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’ length dealings with a Person that is not an Affiliate, as of the Effective Date***,*** none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
14
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
15
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US$500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Effective Date (the “MaterialInsurance Policies”). As of the Effective Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Effective Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Effective Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US$500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
16
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
17
- Representations and Warranties of the Investors. Each Investor, severally but not jointly, hereby represents and warrants to the Company, as of the Effective Date and as of the Closing Date, as follows:
4.1 Organization. Such Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. Such Investor has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent such Investor is a legal entity, the execution and performance by such Investor of this Agreement, the performance by such Investor of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by such Investor, and constitutes legal, valid and binding obligations of such Investor, enforceable against such Investor in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
4.3 No Conflicts. The execution by such Investor of this Agreement, the performance by such Investor of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which such Investor is a party or by which such Investor’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which such Investor is a party or by which such Investor or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair such Investor’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. Such Investor understands that the Shares and the Assigned Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares and the Assigned Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or Assigned Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares or Assigned Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares or Assigned Shares in violation of the Securities Act or any applicable state securities law.
18
4.5 Restrictive Legend. Such Investor agrees that any certificates or book-entry positions representing the Shares and the Assigned Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares and the Assigned Shares.
4.6 Investor Status. The information in the Investor Questionnaire completed by such Investor is true and accurate in all respects. At the time such Investor was offered Shares, it was, and as of the Closing Date, such Investor is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
4.7 Experience of Investor. Such Investor, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares and the Assigned Shares, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Shares and the Assigned Shares and, at the present time, is able to afford a complete loss of such investment.
4.8 General Solicitation. Such Investor is not purchasing Shares and the Assigned Shares as a result of any advertisement, article, notice or other communication regarding the Shares and the Assigned Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. Such Investor has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as such Investor has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the Assigned Shares and the merits and risks of investing in the Shares and the Assigned Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including, the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Investor’s evaluation of its investment. Such Investor has consulted, to the extent deemed appropriate by such Investor, with such Investor’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and the Assigned Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares and the Assigned Shares, and believes that an investment in the Shares and the Assigned Shares is suitable and appropriate for such Investor in accordance with the terms of this Agreement.
19
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, such Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investors. Such Investor is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to such Investor in connection with any invitation to subscribe for the Shares and the Assigned Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of such Investor’s Shares and the Assigned Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of such Investor’s Shares and the Assigned Shares. Such Investor’s subscription and payment for and continued beneficial ownership of its Shares and the Assigned Shares will not violate any applicable securities or other laws of such Investor’s jurisdiction.
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Investor or any of its Affiliates.
4.13 Financial Wherewithal. The obligations of such Investor under this Agreement are not subject to any conditions regarding such Investor’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) Such Investor has conducted to such Investor’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. Such Investor has been represented by, and had the assistance of, counsel in the conduct of such Investor’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) SUCH INVESTOR ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO SUCH INVESTOR OR ANY OF SUCH INVESTOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
20
Conditions to the Investors’ Obligations at the Closing. The obligation of each of the Investors to subscribe for and purchase the Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Investors:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
5.2 Performance. The Company shall have performed and complied in all material respects with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing.
5.3 No Material Adverse Effect. From the Effective Date through the Closing Date, no Material Adverse Effect shall have occurred.
5.4 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
5.5 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.6 Shareholders’ Agreement. The Shareholders’ Agreement shall have been executed and delivered by Hoche, Santana, ST Commercial, Flying Fish Ventures and the Investors.
5.7 Qualifications. All authorizations, approvals (including the Company Shareholders’ Approval) or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
5.8 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements (the “Binding Debt RestructuringDocuments”) which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “DebtConversion”), and shall include the terms set forth in Schedule 5.8 attached hereto (the “Debt Restructuring”).
5.9 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investors under this Agreement.
5.10 Debt Conversion. The Debt Conversion shall not have resulted in the Category Four Lenders aggregately holding more than (i) 9.23% of the Company’s issued and outstanding shares of capital stock or, (ii) if the Hoche Warrant has been exercised in full, 8.65% of the Company’s issued and outstanding shares of capital stock.
5.11 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect following the Board Resolutions.
5.12 Issuance of the Shares. After payment in full of the Subscription Amount by the Investors to the Company, the Company shall have issued, sold and delivered the Shares to the Investors in accordance with Section 1.3(b)(iv).
5.13 Issuance of the Assigned Shares. Upon the conversion of the Hoche Secured Convertible Notes and payment of all amounts owed by the Investors to Hoche under the Hoche Secured Convertible Notes Assignment Agreements, the Company shall have issued, sold and delivered the Assigned Shares to the Investors in accordance with Section 1.3(b)(v).
5.14 Assigned Portion of Hoche Warrant. Upon the conversion of the Hoche Secured Convertible Notes and payment of all amounts owed by the Investors to Hoche under the Hoche Secured Convertible Notes Assignment Agreements, the Company shall have issued and delivered to each Investor the portion of the Hoche Warrant assigned to such Investor, pursuant to the terms of the Hoche Warrant Assignment Agreements.
5.15 Indemnification for Directors. The Company shall have executed a counterpart signature to the Indemnification Agreement with each of the Investors’ Directors.
21
Conditions to the Company’s Obligations at the Closing. The obligations of the Company to sell and issue the Shares to the Investors at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Company:
6.1 Representations and Warranties. The representations and warranties of the Investors contained in Section 4 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
6.2 Performance. Each of the Investors shall have performed and complied with all covenants and obligations contained in this Agreement that are required to be performed or complied with by such Investor on or before the Closing.
6.3 Qualifications. All authorizations, approvals or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
6.4 Payment in full of the Subscription Amount. The Investors shall have paid the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company in accordance with Section 1.3(a)(iv).
6.5 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investors under this Agreement.
6.6 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect, following the Board Resolutions.
6.7 Antitrust Representation Letter. The Company shall have received from each of the Investors an antitrust representation letter duly executed by such Investor in the form attached hereto as Exhibit J.
7. Company’s Covenants.
7.1 Debt Restructuring. Promptly after the Effective Date, the Company shall use commercially reasonable efforts to enter into, and cause the Group Companies party to the Category Four Loan Agreements to enter into, the Binding Debt Restructuring Documents that shall include the terms set forth in Schedule 5.8 attached hereto, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Debt Restructuring as soon as reasonably practicable, including, without limitation, obtaining all Permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities (and consents, approvals and agreements of Persons other than Governmental Authorities, including the Company Shareholders’ Approval) necessary for the consummation of the Debt Restructuring.
7.2 Equity Raise.
(a) The Company shall use commercially reasonable efforts to cause the consummation of the Equity Raise, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Equity Raise as soon as reasonably practicable, but no later than the Outside Date, including, without limitation, using its commercially reasonable efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of Governmental Authority (and consents, approvals and agreements of Persons other than Governmental Authority, including the Company Shareholders’ Approval) necessary for the consummation of the Equity Raise.
22
(b) Notwithstanding anything else set forth in this Agreement, the Company, upon (i) becoming aware of any termination (or purported termination) of any of the subscription agreements (including this Agreement), entered into by the Company with any Person in connection with the Equity Raise (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”), or (ii) not expecting to receive any portion of the full amount of the Equity Raise on the terms, in the manner or from the sources contemplated by the Subscription Agreements, shall have the right to amend one or more Subscription Agreements or enter into one or more new subscription agreements with any Person, as required to consummate, and obtain the full amount of, the Equity Raise; provided that such transactions shall (x) not be under terms less favorable to the Company than those contained in this Agreement, when considered as a whole, (y) be at a price of US$0.06313 per Ordinary Share of the Company, and (z) not cause the amount of the Equity Raise to exceed US$90,000,000, provided that the Company may not amend a Subscription Agreement entered into with any other party which has fully complied with the terms thereunder without the written consent of the Investors.
7.3 [Intentionally Omitted].
7.4 Inspection. Except for any information that is subject to attorney-client privilege (provided that, to the extent possible, the parties shall cooperate in good faith to permit disclosure of such information in a manner that preserves such privilege or compliance with such confidentiality obligations), and to the extent permitted by applicable Law, the Company shall, and shall cause its Subsidiaries to, afford to the Investors and their officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (“Representatives”) reasonable access during the period commencing on the Effective Date and ending on the Closing Date, during normal business hours and with reasonable advance notice, in such manner as to not materially interfere with the ordinary course of business of the Company and its Subsidiaries, to all of their respective properties, books, records and appropriate officers and employees of the Company and its Subsidiaries, and shall furnish such Representatives with all financial and operating data and other information that are in the possession or control of the Company or its Subsidiaries concerning the affairs of the Company or any of its Subsidiaries as such Representatives may reasonably request for the purposes of and in connection with the transactions contemplated hereby, including, without limitation, the status of the negotiations with the Category Four Lenders and drafts of the Binding Debt Restructuring Documents. All information obtained from the Company or its Subsidiaries by the Investors or their Representatives pursuant to this Section 7.4 shall be subject to the confidentiality and/or non-disclosure agreement entered into by the Investors and the Company in connection with the Equity Raise (the “Confidentiality Agreement”).
7.5 Directors’ and Officers’ Liability Insurance. For a period of no less than six (6) years from the Closing Date, except as otherwise consented in writing by the Investors, the Company shall maintain directors’ and officers’ (D&O) liability insurance with coverage for each director and officer of the Company and under terms no less favorable to the Group Companies (including the premium, coverage and exclusions) than those contained in the directors and officers (D&O) insurance policy listed in Schedule 3.21.
23
7.6 Conduct of Business. From the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall and shall cause the Group Companies to use their commercially reasonable efforts to preserve intact their respective business organizations and assets, and to maintain in effect all of its material Permits. Except (i) as required by applicable Law, (ii) as expressly contemplated or permitted by this Agreement, or (iii) as contemplated and in furtherance of the Equity Raise, the Debt Restructuring, Debt Conversion, the Hoche Secured Convertible Note Subscription Agreement, the Hoche Secured Convertible Notes, the Hoche Warrant, the Hoche Secured Convertible Notes Assignment Agreements, the Other Investor Hoche Secured Convertible Notes Assignment Agreements, the Hoche Warrant Assignment Agreements, the Other Investor Hoche Warrant Assignment Agreements, the Subscription and Conversion Agreements, each Indemnification Agreement, the Company Shareholders’ Approval, or the Board Resolution, from the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall not (and shall cause any other Group Company not to):
(a) issue (other than to any other Group Company) (A) any capital stock of any Group Company; or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any capital stock of any Group Company;
(b) transfer or Encumber any of the Group Companies’ material assets, other than as a result of a Permitted Encumbrance or any transfer or Encumbrance in the ordinary course of the Group Companies’ business;
(c) acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; or
(d) amend the Organizational Documents of the Company.
7.7 Remediation Plan. The Company shall continue adopting and implementing all reasonable measures, as needed to remediate and correct the deficiencies and other weaknesses identified under the Internal Investigation, including those measures in the Remediation Plan set forth in Exhibit H.
7.8 Appointment of Investors’ Nominees. Upon the Closing, the Company shall in good faith cooperate with, and exercise commercially reasonable efforts to assist, the Investors in the initial appointment of the Investors’ Directors to the Board on or promptly following the Closing Date and, to the extent that the Investors’ Directors have not been appointed to the Board following the Closing Date, the Company shall promptly call an extraordinary general meeting of shareholders for the purpose, inter alia, of the shareholders voting on the appointment of the Investors’ Directors into the Board.
24
- Termination.
8.1 Termination. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and all the transactions contemplated herein abandoned at any time prior to Closing only:
(a) by written consent of the Investors (acting jointly) and the Company;
(b) by the Investors, if no Investor is in material breach of its obligations under this Agreement and the Company breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 5, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Investors and (B) the Outside Date, and (iii) has not been waived by the Investors;
(c) by the Company, if the Company is not in material breach of its obligations under this Agreement and any Investor breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 6, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Company and (B) the Outside Date, and (iii) has not been waived by the Company;
(d) by either the Investors (acting jointly) or the Company, upon written notice to the other, if the Closing shall not have occurred on or before May 30, 2025 (the “Outside Date”); provided that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party hereto that is in material default or breach of any provision of this Agreement, which default or breach has been a cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; or
(e) by either the Investors (acting jointly) or the Company in the event that (i) there shall be any Law, rule or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Judgment restraining or enjoining the transactions contemplated hereby, and such Judgment shall have become final and non-appealable.
The party seeking to terminate this Agreement pursuant to this Section 8.1 shall give prompt written notice of such termination to the other parties.
8.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that (A) this Section 8 and Section 10 shall survive the termination of this Agreement as applicable and in accordance with their terms and (B) that nothing herein shall relieve any party hereto from any liability for Fraud or any willful breach of this Agreement or any agreement made as of the Effective Date or subsequent thereto pursuant to this Agreement.
25
- Survival and Limitation on Liability.
9.1 Survival of Representations and Warranties and Covenants.
(a) Subject to Section 8, (i) the representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
(b) Subject to Section 8, (i) the representations and warranties of the Investors contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Investor Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Investors contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
(d) Notwithstanding anything to the contrary in this Section 9.1, in the event a Claim Notice is properly delivered in good faith under Section 9.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 9.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
9.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Company shall indemnify, defend and hold harmless each of the Investors and their respective Representatives, employees, Affiliates, successors and assigns (each, an “Investors Indemnified Party” and collectively, the “Investors Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by any of the Investors, net of any Losses indemnified to such Investors under this Agreement and/or the Investor Subscription and Conversion Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) or Section 9.2(a)(iii) of any other Subscription Agreement (excluding, for the avoidance of doubt, this Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) or Section 7.2(a)(iii) of the Third-Party Subscription and Conversion Agreements and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
26
(b) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Investors shall severally but not jointly indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company IndemnifiedParties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by such Investor in Section 4, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by such Investor under this Agreement; or (iii) any breach or inaccuracy of any of the representations and warranties made by such Investor in the Antitrust Representation Letter executed and delivered by such Investor.
9.3 Indemnification Procedures
(a) In order for any Investors Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 9, the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 9.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 9, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 9.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
27
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 9 (including Section 9.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
28
9.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 9 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to the Investors Indemnified Parties for any Loss pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii) (any such Loss, an “Investors Applicable Loss”) if the sum total of (X) such Investors Applicable Loss and (Y) all other Losses that arise from the same or from one or more similar or related events, occurrences or circumstances as such Investors Applicable Loss, does not, in the aggregate, exceed an amount equal to US$100,000 (the “DeMinimis Exclusion”), and no claim for an Investors Applicable Loss that does not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(a)(i) or Section 9.2(a)(iii) unless the sum total of (A) such Investors Applicable Loss and (B) any other Losses arising from the same or from one or more similar or related events, occurrences or circumstances as such Investors Applicable Loss, shall exceed, in the aggregate, the De Minimis Exclusion; (ii) the Company shall not be liable to the Investors Indemnified Parties for any Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii) which do not exceed the De Minimis Exclusion) exceeds an amount equal to US$1,000,000, at which time the Company shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Company shall not be liable to the Investors Indemnified Parties for any Losses pursuant to Section 9.2(a)(i), other than in respect of Fraud or breach of any Company Fundamental Representation, in excess of US$4,000,000, subject to the other limitations herein; (iv) the Company shall not be liable to the Investors Indemnified Parties for any Losses pursuant to Section 9.2(a)(iii), other than in respect of Fraud, in excess of US$12,000,000, subject to the other limitations herein; and (v) the Company shall not be liable to the Investors Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US$38,548,333.33, subject to the other limitations herein.
(c) Notwithstanding anything herein to the contrary, (i) no Investor shall be liable to the Company Indemnified Parties for any Loss pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii) (any such Loss, a “Company Applicable Loss”) if the sum total of (X) such Company Applicable Loss and (Y) all other Losses that arise from the same or from one or more similar or related events, occurrences or circumstances as such Company Applicable Loss, does not, in the aggregate, exceed the De Minimis Exclusion and no claim for a Company Applicable Loss that does not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(b)(i) or Section 9.2(b)(iii) unless the sum total of (A) such Company Applicable Loss and (B) any other Losses arising from the same or from one or more similar or related events, occurrences or circumstances as such Company Applicable Loss, shall exceed, in the aggregate, the De Minimis Exclusion; (ii) no Investor shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii), other than in respect of Fraud or breach of any Investor Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii) which do not exceed the De Minimis Exclusion) exceeds an amount equal to US$1,000,000, at which time an Investor shall be severally but not jointly liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) no Investor shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii), other than in respect of Fraud or breach of any Investor Fundamental Representation, in excess of US$4,000,000, subject to the other limitations herein; and (iv) no Investor shall be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein. For the avoidance of doubt, any liability of an Investor under this Section 9 shall be several and not joint (in accordance with such Investor’s 50% percentage interest).
29
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Investors Indemnified Party for any Losses under this Section 9, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Investors Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 9.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Investors Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Investors Indemnified Party in the form attached hereto as Exhibit K (the “Indemnity Warrant”), that will entitle such Investors Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US$0.01.
(f) In the event that any Investor has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 9, such Investor shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by such Investor and such Company Indemnified Party) after such Losses have been finally determined and are owed by such Investor in accordance with Section 9.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 9 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
9.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 10.8, following the Closing Date, the indemnification obligations under this Section 9 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
- Miscellaneous.
10.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
30
10.2 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
10.3 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
10.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
10.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
10.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
31
(b) if to the Investors, to physical or e-mail address set forth on each Investor’s signature pages hereto with a copy to:
RC Law LLP.
1101 Brickell Ave, Suite N-1400
Miami, Florida 33131
Attention: Xavier Ruiz
Email: Xavier.ruiz@rclawus.com
10.7 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
10.8 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
10.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Investors.
10.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
10.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement and/or by Law or otherwise afforded to any party hereunder, shall be cumulative and not alternative.
10.12 Press Releases. The Company, on the one hand, and the Investors, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
10.13 Entire Agreement. This Agreement and the Confidentiality Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
[SignaturePages Follow]
32
Exhibit 10.2
Execution version
PROCAPS GROUP, S.A.
SUBSCRIPTION AGREEMENT
by and between
Procaps Group, S.A.
and
Flying Fish Ventures L.P.
Saint Thomas Commercial S.A.
and
Santana S.A.
as of April 3, 2025
Procaps Group, S.A.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is made as of April 3, 2025 (the “Effective Date”), by and among Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), Flying Fish Ventures L.P., a Canada limited partnership (“Flying Fish”), Saint Thomas Commercial S.A., a sociedad anónima organized under the laws of Panamá (“ST Commercial”), and Santana S.A., a sociedad anónima organized under the laws of Chile (“Santana” and jointly with Flying Fish and ST Commercial, the “Investors” and each, an “Investor”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
- Issuance, Subscriptions and Closing.
1.1 Issuance of Shares and Payment of Subscription Amount. Subject to the terms and conditions of this Agreement, each of the Investors agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investors, that number of Ordinary Shares of the Company (rounded down to the nearest whole Ordinary Share) (the “Shares”) equal to the quotient obtained by dividing US$37,822,500 (the “Subscription Amount”) by US$0.06313 per Ordinary Share (the “Price Per Share”). Each of the Investors agrees to pay to the Company on or prior to the Closing, in exchange for the issuance and sale of the Shares, their respective Percentage Allocation of the Subscription Amount.
1.2 Closing. The closing of the subscription and purchase, and the sale and issuance, of the Shares shall take place remotely via the exchange of documents and signatures on the date the conditions set forth in Section 5 and Section 6 (other than conditions that by their nature are to be satisfied at the Closing itself, but subject to the satisfaction or waiver of those conditions) are satisfied or waived in writing by the applicable party hereto, or at such other time and place as the Company and the Investors mutually agree upon in writing (which time and place are designated as the “Closing”). The Company shall notify the Investors no later than two (2) Business Days prior to the satisfaction of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing itself). All proceedings to be taken and all documents to be executed and delivered by the Company and the Investors at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
1.3 Deliveries.
(a) Deliveries by the Investors. Upon the satisfaction or waiver by the Investors of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Investors of those conditions at the Closing), the Investors shall jointly and severally deliver, or cause to be delivered, to the Company:
(i) no later than five (5) Business Days prior to the Closing, know your customer (KYC) forms and other information required (A) under Luxembourg Law for the issuance of the Shares to the Investors and (B) by the Company’s transfer agent to deliver the records evidencing ownership of the Shares by the Investors in the proportion described in Section 1.3(b)(vii) (the “Transfer Agent Records”);
2
(ii) no later than two (2) Business Days prior to the Closing, the name and address of each of the two (2) directors to be nominated by the Investors at the Closing under the terms of the Shareholders’ Agreement (“Investors’ Directors”);
(iii) prior to the Closing, a counterpart signature to each Indemnification Agreement between the Company and each of the Investors’ Directors, duly executed by each of the Investors’ Directors;
(iv) on or prior to the Closing, the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company, to be informed by the Company to the Investors in writing no later than two (2) Business Days prior to the Closing;
(v) on the Closing, a subscription form in the form attached hereto as Exhibit A, duly completed and executed by each Investor for its Percentage Allocation of the Shares being subscribed for by such Investor;
(vi) on the Closing, a counterpart signature to the joinder to the Investors’ Registration Rights Agreement, duly executed by each of the Investors;
(vii) on the Closing, a counterpart signature to the Shareholders’ Agreement, duly executed by each of the Investors;
(viii) on the Closing, a counterpart signature to the Hoche Secured Convertible Notes Assignment Agreements, duly executed by each of the Investors;
(ix) on the Closing, a counterpart signature to the Hoche Warrant Assignment Agreements, duly executed by each of the Investors;
(x) on the Closing, a counterpart signature to the Investor Subscription and Conversion Agreement, duly executed by each of the Investors for the Assigned Shares being subscribed for by the Investors; and
(xi) on the Closing, a certificate duly executed by an officer or authorized representative of each of the Investors as of the Closing Date, certifying that the conditions specified in Section 6.1 and Section 6.2 have been satisfied.
3
(b) Deliveries by the Company. Upon the satisfaction or waiver by the Company of the conditions set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Company of those conditions at the Closing), the Company shall deliver or cause to be delivered to the Investors:
(i) on the Closing, evidence reasonably satisfactory to the Investors that all amounts outstanding under the Hoche Secured Convertible Notes have been converted into Ordinary Shares;
(ii) on or prior to the Closing, a certified copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval;
(iii) on or prior to the Closing, a copy of the Board Resolutions;
(iv) on the Closing, after payment in full of the Subscription Amount by the Investors to the Company, evidence reasonably satisfactory to the Investors, of the issuance to each Investor of its Percentage Allocation of the Shares;
(v) on the Closing, upon the conversion of the Hoche Secured Convertible Notes and payment of all amounts owed by the Investors to Hoche under the Hoche Secured Convertible Notes Assignment Agreements, evidence reasonably satisfactory to the Investors of the issuance to each Investor of its Percentage Allocation of the aggregate Ordinary Shares of the Company issuable to the Investors under the Investor Subscription and Conversion Agreement (“Assigned Shares”);
(vi) on the Closing, a copy of the Transfer Agent Records;
(vii) on the Closing, evidence of registration of each Investor in the register of shareholders of the Company as the owner of its Percentage Allocation of the Shares and its Percentage Allocation of the Assigned Shares;
(viii) on the Closing, copies of the Binding Debt Restructuring Documents, duly executed by the Category Four Lenders and the Group Companies party thereto;
(ix) on the Closing, a counterpart signature to the joinder by each of the Investors to the Investors’ Registration Rights Agreement, duly executed by the Company;
4
(x) on the Closing, a counterpart signature to the Indemnification Agreements between the Company and each of the Investors’ Directors, duly executed by the Company;
(xi) on the Closing, a counterpart signature to the Hoche Secured Convertible Notes Assignment Agreements, duly executed by the Company;
(xii) on the Closing, a counterpart signature to the Hoche Warrant Assignment Agreements, duly executed by the Company;
(xiii) on the Closing, a counterpart signature to the Investor Subscription and Conversion Agreement, duly executed by the Company; and
(xiv) on the Closing, a certificate duly executed by an officer or authorized representative of the Company as of the Closing Date, certifying that the conditions specified in Section 5.1 and Section 5.2 have been satisfied.
1.4 Investor Questionnaire. Each Investor shall complete and deliver to the Company the Accredited Investor Status Questionnaire, the form of which is attached hereto as Exhibit B (“Investor Questionnaire”), together with the execution and delivery of this Agreement.
1.5 Use of Proceeds. The proceeds from the issuance and sale of the Shares shall be used (i) to fund the working capital needs of the Group Companies, (ii) for the payment of existing indebtedness of the Group Companies owed to the Category Four Lenders and other financial creditors as part of the Debt Restructuring, and (iii) to pay the Group Companies’ vendors, suppliers and third-party advisors, including the payment as soon as reasonably practicable of all debt owed to suppliers; provided, for the avoidance of doubt, that such proceeds will not be used to acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof.
- Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(b) “Becaril” means Becaril S.A., a Uruguayan corporation (sociedad anónima).
(c) “Board” means the board of directors of the Company.
5
(d) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares and the Assigned Shares on the Closing Date.
(e) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(f) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(g) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(g) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(h) “Chemo” means Chemo Project SA, a Swiss corporation (società anonima).
(i) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(j) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(k) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Hoche Secured Convertible Notes, (C) upon the exercise of the Hoche Warrant; and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
(l) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(m) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
(n) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US$90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Hoche Secured Convertible Notes).
6
(o) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(p) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(q) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(r) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(s) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(t) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(u) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
(v) “HocheSecured Convertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended on the Effective Date and from time to time, and pursuant to which the Company issued the Hoche Secured Convertible Notes.
(w) “HocheSecured Convertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US$20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US$20,000,000.
(x) “HocheSecured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Investors, and acknowledged by the Company, substantially in the form of Exhibit C, pursuant to which Hoche shall assign to such Investor certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
(y) “HocheSubscription and Conversion Agreement” means that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain portion of the Hoche Warrant, upon the conversion of the Hoche Secured Convertible Notes.
(z) “HocheWarrant” means the warrant issuable to Hoche upon conversion of the Hoche Secured Convertible Notes, in a “warrant amount” of US$10,000,000.
7
(aa) “HocheWarrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Investors, and acknowledged by the Company, substantially in the form of Exhibit D, pursuant to which Hoche shall assign to such Investor certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(bb) “IndemnificationAgreement” means each agreement pursuant to which the Company shall agree to indemnify and hold harmless each director of the Company, substantially in the form of Exhibit E.
(cc) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(dd) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(ee) “InvestorSubscription and Conversion Agreement” means that certain Subscription and Conversion Agreement to be entered into between the Company and the Investors on or about the Closing Date, substantially in the form of Exhibit F, pursuant to which the Investors will be issued the Assigned Shares and a certain portion of the Hoche Warrant, upon the conversion of the Hoche Secured Convertible Notes.
(ff) “Investors’Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement among the Company and certain shareholders of the Company, to be entered into substantially in the form of Exhibit G;
(gg) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
(hh) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(ii) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(jj) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(kk) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole, provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the Effective Date; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
8
(ll) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(mm) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
(nn) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US$0.01 per share.
(oo) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(pp) “OtherInvestor Hoche Secured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of Becaril and Chemo, and acknowledged by the Company, pursuant to which Hoche shall assign to such Person certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
(qq) “OtherInvestor Hoche Warrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of Becaril and Chemo, and acknowledged by the Company, pursuant to which Hoche shall assign to such Person certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(rr) “OtherInvestor Subscription and Conversion Agreement” means that certain Subscription and Conversion Agreement to be entered into between the Company and Becaril and Chemo on or about the Closing Date, pursuant to which Becaril and Chemo will be issued by the Company certain Ordinary Shares and a certain portion of the Hoche Warrant, upon the conversion of the Hoche Secured Convertible Notes.
(ss) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(tt) “PercentageAllocation” means 74.058541% with respect to Flying Fish, 12.970729% with respect to ST Commercial and 12.970729% with respect to Santana.
9
(uu) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(vv) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(ww) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(xx) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US$0.01 per share.
(yy) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US$0.01 per share.
(zz) “RemediationPlan” means a plan to remediate and correct certain deficiencies and other issues identified as a result of the Internal Investigation, as set forth in Exhibit H.
(aaa) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(bbb) “SEC” means the Securities and Exchange Commission.
(ccc) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(ddd) “Shareholders’Agreement” means that certain Shareholder Nomination and Voting Agreement to be entered into by Hoche, Becaril, Chemo, and the Investors, substantially in the form of Exhibit I, for the purpose of setting forth their respective rights and obligations in connection with their investment in the Company;
(eee) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(fff) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(ggg) “Subscriptionand Conversion Agreements” means, collectively, the Third-Party Subscription and Conversion Agreements and the Investor Subscription and Conversion Agreement.
10
(hhh) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(iii) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
(jjj) “Third-PartySubscription and Conversion Agreements” means, collectively, the Hoche Subscription and Conversion Agreement and the Other Investor Subscription and Conversion Agreement.
(kkk) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
3. Representations and Warranties of the Group Companies. The Company hereby represents and warrants to each Investor, as of the Effective Date and as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
11
3.3 Capitalization.
(a) As of the Effective Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Effective Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US$11.50 per share; and (ii) the Hoche Secured Convertible Notes convertible into Ordinary Shares and the Hoche Warrant.
(b) Except as set forth in Section 3.3(a), as of the Effective Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Effective Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares and the Assigned Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Effective Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by each Investor in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
12
3.7 Private Placement. Assuming the accuracy of the representations made by each Investor in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Investors as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Investors and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares or the Assigned Shares as contemplated hereby or (ii) cause the offering of the Shares or the Assigned Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares or the Assigned Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US$500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
13
3.13 SEC Matters; Internal Investigation. The Company has made available to the Investors accurate and complete copies of all material correspondence through the Effective Date between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Effective Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Effective Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Effective Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Effective Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US$500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’ length dealings with a Person that is not an Affiliate, as of the Effective Date***,*** none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
14
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
15
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US$500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Effective Date (the “MaterialInsurance Policies”). As of the Effective Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Effective Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Effective Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US$500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
16
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
- Representations and Warranties of the Investors. Each Investor, severally but not jointly, hereby represents and warrants to the Company, as of the Effective Date and as of the Closing Date, as follows:
4.1 Organization. Such Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. Such Investor has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent such Investor is a legal entity, the execution and performance by such Investor of this Agreement, the performance by such Investor of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by such Investor, and constitutes legal, valid and binding obligations of such Investor, enforceable against such Investor in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
4.3 No Conflicts. The execution by such Investor of this Agreement, the performance by such Investor of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which such Investor is a party or by which such Investor’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which such Investor is a party or by which such Investor or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair such Investor’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. Such Investor understands that the Shares and the Assigned Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares and the Assigned Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or Assigned Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares or Assigned Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares or Assigned Shares in violation of the Securities Act or any applicable state securities law.
17
4.5 Restrictive Legend. Such Investor agrees that any certificates or book-entry positions representing the Shares and the Assigned Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares and the Assigned Shares.
4.6 Investor Status. The information in the Investor Questionnaire completed by such Investor is true and accurate in all respects. At the time such Investor was offered Shares, it was, and as of the Closing Date, such Investor is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
4.7 Experience of Investor. Such Investor, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares and the Assigned Shares, and has so evaluated the merits and risks of such investment. Such Investor is able to bear the economic risk of an investment in the Shares and the Assigned Shares and, at the present time, is able to afford a complete loss of such investment.
4.8 General Solicitation. Such Investor is not purchasing Shares and the Assigned Shares as a result of any advertisement, article, notice or other communication regarding the Shares and the Assigned Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. Such Investor has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as such Investor has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the Assigned Shares and the merits and risks of investing in the Shares and the Assigned Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including, the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Investor’s evaluation of its investment. Such Investor has consulted, to the extent deemed appropriate by such Investor, with such Investor’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and the Assigned Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares and the Assigned Shares, and believes that an investment in the Shares and the Assigned Shares is suitable and appropriate for such Investor in accordance with the terms of this Agreement.
18
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, such Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with such Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investors. Such Investor is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to such Investor in connection with any invitation to subscribe for the Shares and the Assigned Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of such Investor’s Shares and the Assigned Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of such Investor’s Shares and the Assigned Shares. Such Investor’s subscription and payment for and continued beneficial ownership of its Shares and the Assigned Shares will not violate any applicable securities or other laws of such Investor’s jurisdiction.
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Investor or any of its Affiliates.
4.13 Financial Wherewithal. The obligations of such Investor under this Agreement are not subject to any conditions regarding such Investor’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) Such Investor has conducted to such Investor’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. Such Investor has been represented by, and had the assistance of, counsel in the conduct of such Investor’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) SUCH INVESTOR ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO SUCH INVESTOR OR ANY OF SUCH INVESTOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
19
Conditions to the Investors’ Obligations at the Closing. The obligation of each of the Investors to subscribe for and purchase the Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Investors:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
5.2 Performance. The Company shall have performed and complied in all material respects with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing.
5.3 No Material Adverse Effect. From the Effective Date through the Closing Date, no Material Adverse Effect shall have occurred.
5.4 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
5.5 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.6 Shareholders’ Agreement. The Shareholders’ Agreement shall have been executed and delivered by Hoche, Chemo, Becaril and the Investors.
5.7 Qualifications. All authorizations, approvals (including the Company Shareholders’ Approval) or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
5.8 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements (the “Binding Debt RestructuringDocuments”) which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “DebtConversion”), and shall include the terms set forth in Schedule 5.8 attached hereto (the “Debt Restructuring”).
5.9 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investors under this Agreement.
20
5.10 Debt Conversion. The Debt Conversion shall not have resulted in the Category Four Lenders aggregately holding more than (i) 9.23% of the Company’s issued and outstanding shares of capital stock or, (ii) if the Hoche Warrant has been exercised in full, 8.65% of the Company’s issued and outstanding shares of capital stock.
5.11 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect following the Board Resolutions.
5.12 Issuance of the Shares. After payment in full of the Subscription Amount by the Investors to the Company, the Company shall have issued, sold and delivered the Shares to the Investors in accordance with Section 1.3(b)(iv).
5.13 Issuance of the Assigned Shares. Upon the conversion of the Hoche Secured Convertible Notes and payment of all amounts owed by the Investors to Hoche under the Hoche Secured Convertible Notes Assignment Agreements, the Company shall have issued, sold and delivered the Assigned Shares to the Investors in accordance with Section 1.3(b)(v).
5.14 Assigned Portion of Hoche Warrant. Upon the conversion of the Hoche Secured Convertible Notes and payment of all amounts owed by the Investors to Hoche under the Hoche Secured Convertible Notes Assignment Agreements, the Company shall have issued and delivered to each Investor the portion of the Hoche Warrant assigned to such Investor, pursuant to the terms of the Hoche Warrant Assignment Agreements.
5.15 Indemnification for Directors. The Company shall have executed a counterpart signature to the Indemnification Agreement with each of the Investors’ Directors.
6. Conditions to the Company’s Obligations at the Closing. The obligations of the Company to sell and issue the Shares to the Investors at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Company:
6.1 Representations and Warranties. The representations and warranties of the Investors contained in Section 4 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
6.2 Performance. Each of the Investors shall have performed and complied with all covenants and obligations contained in this Agreement that are required to be performed or complied with by such Investor on or before the Closing.
21
6.3 Qualifications. All authorizations, approvals or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
6.4 Payment in full of the Subscription Amount. The Investors shall have paid the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company in accordance with Section 1.3(a)(iv).
6.5 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investors under this Agreement.
6.6 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect, following the Board Resolutions.
6.7 Antitrust Representation Letter. The Company shall have received from each of the Investors an antitrust representation letter duly executed by such Investor in the form attached hereto as Exhibit J.
- Company’s Covenants.
7.1 Debt Restructuring. Promptly after the Effective Date, the Company shall use commercially reasonable efforts to enter into, and cause the Group Companies party to the Category Four Loan Agreements to enter into, the Binding Debt Restructuring Documents that shall include the terms set forth in Schedule 5.8 attached hereto, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Debt Restructuring as soon as reasonably practicable, including, without limitation, obtaining all Permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities (and consents, approvals and agreements of Persons other than Governmental Authorities, including the Company Shareholders’ Approval) necessary for the consummation of the Debt Restructuring.
7.2 Equity Raise.
(a) The Company shall use commercially reasonable efforts to cause the consummation of the Equity Raise, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Equity Raise as soon as reasonably practicable, but no later than the Outside Date, including, without limitation, using its commercially reasonable efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of Governmental Authority (and consents, approvals and agreements of Persons other than Governmental Authority, including the Company Shareholders’ Approval) necessary for the consummation of the Equity Raise.
22
(b) Notwithstanding anything else set forth in this Agreement, the Company, upon (i) becoming aware of any termination (or purported termination) of any of the subscription agreements (including this Agreement), entered into by the Company with any Person in connection with the Equity Raise (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”), or (ii) not expecting to receive any portion of the full amount of the Equity Raise on the terms, in the manner or from the sources contemplated by the Subscription Agreements, shall have the right to amend one or more Subscription Agreements or enter into one or more new subscription agreements with any Person, as required to consummate, and obtain the full amount of, the Equity Raise; provided that such transactions shall (x) not be under terms less favorable to the Company than those contained in this Agreement, when considered as a whole, (y) be at a price of US$0.06313 per Ordinary Share of the Company, and (z) not cause the amount of the Equity Raise to exceed US$90,000,000, provided that the Company may not amend a Subscription Agreement entered into with any other party which has fully complied with the terms thereunder without the written consent of the Investors.
7.3 [Intentionally Omitted].
7.4 Inspection. Except for any information that is subject to attorney-client privilege (provided that, to the extent possible, the parties shall cooperate in good faith to permit disclosure of such information in a manner that preserves such privilege or compliance with such confidentiality obligations), and to the extent permitted by applicable Law, the Company shall, and shall cause its Subsidiaries to, afford to the Investors and their officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (“Representatives”) reasonable access during the period commencing on the Effective Date and ending on the Closing Date, during normal business hours and with reasonable advance notice, in such manner as to not materially interfere with the ordinary course of business of the Company and its Subsidiaries, to all of their respective properties, books, records and appropriate officers and employees of the Company and its Subsidiaries, and shall furnish such Representatives with all financial and operating data and other information that are in the possession or control of the Company or its Subsidiaries concerning the affairs of the Company or any of its Subsidiaries as such Representatives may reasonably request for the purposes of and in connection with the transactions contemplated hereby, including, without limitation, the status of the negotiations with the Category Four Lenders and drafts of the Binding Debt Restructuring Documents. All information obtained from the Company or its Subsidiaries by the Investors or their Representatives pursuant to this Section 7.4 shall be subject to the confidentiality and/or non-disclosure agreement entered into by the Investors and the Company in connection with the Equity Raise (the “Confidentiality Agreement”).
7.5 Directors’ and Officers’ Liability Insurance. For a period of no less than six (6) years from the Closing Date, except as otherwise consented in writing by the Investors, the Company shall maintain directors’ and officers’ (D&O) liability insurance with coverage for each director and officer of the Company and under terms no less favorable to the Group Companies (including the premium, coverage and exclusions) than those contained in the directors and officers (D&O) insurance policy listed in Schedule 3.21.
23
7.6 Conduct of Business. From the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall and shall cause the Group Companies to use their commercially reasonable efforts to preserve intact their respective business organizations and assets, and to maintain in effect all of its material Permits. Except (i) as required by applicable Law, (ii) as expressly contemplated or permitted by this Agreement, or (iii) as contemplated and in furtherance of the Equity Raise, the Debt Restructuring, Debt Conversion, the Hoche Secured Convertible Note Subscription Agreement, the Hoche Secured Convertible Notes, the Hoche Warrant, the Hoche Secured Convertible Notes Assignment Agreements, the Other Investor Hoche Secured Convertible Notes Assignment Agreements, the Hoche Warrant Assignment Agreements, the Other Investor Hoche Warrant Assignment Agreements, the Subscription and Conversion Agreements, each Indemnification Agreement, the Company Shareholders’ Approval, or the Board Resolution, from the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall not (and shall cause any other Group Company not to):
(a) issue (other than to any other Group Company) (A) any capital stock of any Group Company; or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any capital stock of any Group Company;
(b) transfer or Encumber any of the Group Companies’ material assets, other than as a result of a Permitted Encumbrance or any transfer or Encumbrance in the ordinary course of the Group Companies’ business;
(c) acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; or
(d) amend the Organizational Documents of the Company.
7.7 Remediation Plan. The Company shall continue adopting and implementing all reasonable measures, as needed to remediate and correct the deficiencies and other weaknesses identified under the Internal Investigation, including those measures in the Remediation Plan set forth in Exhibit H.
7.8 Appointment of Investors’ Nominees. Upon the Closing, the Company shall in good faith cooperate with, and exercise commercially reasonable efforts to assist, the Investors in the initial appointment of the Investors’ Directors to the Board on or promptly following the Closing Date and, to the extent that the Investors’ Directors have not been appointed to the Board following the Closing Date, the Company shall promptly call an extraordinary general meeting of shareholders for the purpose, inter alia, of the shareholders voting on the appointment of the Investors’ Directors into the Board.
- Termination.
8.1 Termination. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and all the transactions contemplated herein abandoned at any time prior to Closing only:
(a) by written consent of the Investors (acting jointly) and the Company;
24
(b) by the Investors, if no Investor is in material breach of its obligations under this Agreement and the Company breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 5, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Investors and (B) the Outside Date, and (iii) has not been waived by the Investors;
(c) by the Company, if the Company is not in material breach of its obligations under this Agreement and any Investor breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 6, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Company and (B) the Outside Date, and (iii) has not been waived by the Company;
(d) by either the Investors (acting jointly) or the Company, upon written notice to the other, if the Closing shall not have occurred on or before May 30, 2025 (the “Outside Date”); provided that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party hereto that is in material default or breach of any provision of this Agreement, which default or breach has been a cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; or
(e) by either the Investors (acting jointly) or the Company in the event that (i) there shall be any Law, rule or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Judgment restraining or enjoining the transactions contemplated hereby, and such Judgment shall have become final and non-appealable.
The party seeking to terminate this Agreement pursuant to this Section 8.1 shall give prompt written notice of such termination to the other parties.
8.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that (A) this Section 8 and Section 10 shall survive the termination of this Agreement as applicable and in accordance with their terms and (B) that nothing herein shall relieve any party hereto from any liability for Fraud or any willful breach of this Agreement or any agreement made as of the Effective Date or subsequent thereto pursuant to this Agreement.
25
- Survival and Limitation on Liability.
9.1 Survival of Representations and Warranties and Covenants.
(a) Subject to Section 8, (i) the representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
(b) Subject to Section 8, (i) the representations and warranties of the Investors contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Investor Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Investors contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
(d) Notwithstanding anything to the contrary in this Section 9.1, in the event a Claim Notice is properly delivered in good faith under Section 9.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 9.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
9.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Company shall indemnify, defend and hold harmless each of the Investors and their respective Representatives, employees, Affiliates, successors and assigns (each, an “Investors Indemnified Party” and collectively, the “Investors Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by any of the Investors, net of any Losses indemnified to such Investors under this Agreement and/or the Investor Subscription and Conversion Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) or Section 9.2(a)(iii) of any other Subscription Agreement (excluding, for the avoidance of doubt, this Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) or Section 7.2(a)(iii) of the Third-Party Subscription and Conversion Agreements and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
26
(b) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Investors shall severally but not jointly indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company IndemnifiedParties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by such Investor in Section 4, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by such Investor under this Agreement; or (iii) any breach or inaccuracy of any of the representations and warranties made by such Investor in the Antitrust Representation Letter executed and delivered by such Investor.
9.3 Indemnification Procedures
(a) In order for any Investors Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 9, the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 9.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 9, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 9.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
27
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 9 (including Section 9.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
28
9.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 9 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to the Investors Indemnified Parties for any Loss pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii) (any such Loss, an “Investors Applicable Loss”) if the sum total of (X) such Investors Applicable Loss and (Y) all other Losses that arise from the same or from one or more similar or related events, occurrences or circumstances as such Investors Applicable Loss, does not, in the aggregate, exceed an amount equal to US$100,000 (the “DeMinimis Exclusion”), and no claim for an Investors Applicable Loss that does not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(a)(i) or Section 9.2(a)(iii) unless the sum total of (A) such Investors Applicable Loss and (B) any other Losses arising from the same or from one or more similar or related events, occurrences or circumstances as such Investors Applicable Loss, shall exceed, in the aggregate, the De Minimis Exclusion; (ii) the Company shall not be liable to the Investors Indemnified Parties for any Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii) which do not exceed the De Minimis Exclusion) exceeds an amount equal to US$1,000,000, at which time the Company shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Company shall not be liable to the Investors Indemnified Parties for any Losses pursuant to Section 9.2(a)(i), other than in respect of Fraud or breach of any Company Fundamental Representation, in excess of US$4,000,000, subject to the other limitations herein; (iv) the Company shall not be liable to the Investors Indemnified Parties for any Losses pursuant to Section 9.2(a)(iii), other than in respect of Fraud, in excess of US$12,000,000, subject to the other limitations herein; and (v) the Company shall not be liable to the Investors Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US$38,548,333.33, subject to the other limitations herein.
(c) Notwithstanding anything herein to the contrary, (i) no Investor shall be liable to the Company Indemnified Parties for any Loss pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii) (any such Loss, a “Company Applicable Loss”) if the sum total of (X) such Company Applicable Loss and (Y) all other Losses that arise from the same or from one or more similar or related events, occurrences or circumstances as such Company Applicable Loss, does not, in the aggregate, exceed the De Minimis Exclusion and no claim for a Company Applicable Loss that does not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(b)(i) or Section 9.2(b)(iii) unless the sum total of (A) such Company Applicable Loss and (B) any other Losses arising from the same or from one or more similar or related events, occurrences or circumstances as such Company Applicable Loss, shall exceed, in the aggregate, the De Minimis Exclusion; (ii) no Investor shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii), other than in respect of Fraud or breach of any Investor Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii) which do not exceed the De Minimis Exclusion) exceeds an amount equal to US$1,000,000, at which time an Investor shall be severally but not jointly liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) no Investor shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i) or Section 9.2(b)(iii), other than in respect of Fraud or breach of any Investor Fundamental Representation, in excess of US$4,000,000, subject to the other limitations herein; and (iv) no Investor shall be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein. For the avoidance of doubt, any liability of an Investor under this Section 9 shall be several and not joint (in accordance with such Investor’s Percentage Allocation).
29
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Investors Indemnified Party for any Losses under this Section 9, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Investors Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 9.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Investors Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Investors Indemnified Party in the form attached hereto as Exhibit K (the “Indemnity Warrant”), that will entitle such Investors Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US$0.01.
(f) In the event that any Investor has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 9, such Investor shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by such Investor and such Company Indemnified Party) after such Losses have been finally determined and are owed by such Investor in accordance with Section 9.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 9 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
9.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 10.9, following the Closing Date, the indemnification obligations under this Section 9 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
30
- Miscellaneous.
10.1 Release. Each of the Investors, on behalf of itself and on behalf of its respective Representatives, Affiliates (excluding the Company and its Subsidiaries), assigns and successors and any and all persons or entities claiming by or through any of the foregoing (collectively, the “Investors Releasing Parties”), hereby irrevocably and unconditionally releases, waives and forever discharges fully and finally to the fullest extent permitted by Law, the Company, its Subsidiaries and each of their respective current Representatives, assigns and successors (collectively, the “Company Released Parties”), from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity (collectively, “Claims”) that such Investors Releasing Party has or may have in the future for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Claims arising under (i) this Agreement or any other agreement entered into on the Effective Date between one or more Investors, on the one hand, and any of the Company and/or any of its Subsidiaries, on the other hand, and any of the transactions contemplated hereunder or thereunder and/or (ii) matters not disclosed in writing (which for these written disclosure purposes, shall include any filing on or furnishing to the United States Securities & Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system) by any of the Group Companies to any of the Investors prior to the date hereof ((i) and (ii), collectively, the “ExcludedClaims”). Each of the Investors shall not, and shall cause each of the Investors Releasing Parties not to, commence or institute any Claims, including any legal actions, litigation, arbitration or any other legal proceedings of any kind whatsoever, in law or equity, or assert any Claim, demand, action or cause of action against any of the Company Released Parties, arising under or in connection with any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Excluded Claims.
10.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
10.3 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
10.4 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
10.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
31
10.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
10.7 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
(b) if to the Investors, to physical or e-mail address set forth on each Investor’s signature pages hereto with a copy to:
Fox Horan & Camerini LLP.
885 3rd Avenue
17th Floor
New York, NY 10022
Attention: Ezequiel A. Camerini
Email: eacamerini@foxlex.com
10.8 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
32
10.9 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Investors and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
10.10 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Investors.
10.11 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
10.12 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement and/or by Law or otherwise afforded to any party hereunder, shall be cumulative and not alternative.
10.13 Press Releases. The Company, on the one hand, and the Investors, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
10.14 Entire Agreement. This Agreement and the Confidentiality Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
[SignaturePages Follow]
33
Exhibit 10.3
PROCAPS GROUP, S.A.
SUBSCRIPTION AGREEMENT
by and between
Procaps Group, S.A.
and
Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A.
as of April 3, 2025
Procaps Group, S.A.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is made as of April 3, 2025 (the “Effective Date”), by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), and Compañía de Seguros de Vida Consorcio Nacional de Seguros S.A., a sociedad anónima incorporated and existing under the laws of the Republic of Chile (the “Investor”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
1. Issuance, Subscriptions and Closing.
1.1 Issuance of Shares and Payment of Subscription Amount. Subject to the terms and conditions of this Agreement, the Investor agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investor, that number of Ordinary Shares of the Company (rounded down to the nearest whole Ordinary Share) (the “Shares”) equal to the quotient obtained by dividing US$10,000,000 (the “Subscription Amount”) by US$0.06313 per Ordinary Share (the “Price PerShare”). The Investor agrees to pay to the Company on or prior to the Closing, in exchange for the issuance and sale of the Shares, the Subscription Amount.
1.2 Closing. The closing of the subscription and purchase, and the sale and issuance, of the Shares shall take place remotely via the exchange of documents and signatures on the date the conditions set forth in Section 5 and Section 6 (other than conditions that by their nature are to be satisfied at the Closing itself, but subject to the satisfaction or waiver of those conditions) are satisfied or waived in writing by the applicable party hereto, or at such other time and place as the Company and the Investor mutually agree upon in writing (which time and place are designated as the “Closing”). The Company shall notify the Investor no later than two (2) Business Days prior to the satisfaction of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing itself). All proceedings to be taken and all documents to be executed and delivered by the Company and the Investor at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
2
1.3 Deliveries.
(a) Deliveries by the Investor. Upon the satisfaction or waiver by the Investor of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Investor of those conditions at the Closing), the Investor shall deliver, or cause to be delivered, to the Company:
(i) no later than five (5) Business Days prior to the Closing, know your customer (KYC) forms and other information required (A) under Luxembourg Law for the issuance of the Shares to the Investor and (B) by the Company’s transfer agent to deliver the records evidencing ownership of the Shares by the Investor (the “Transfer Agent Records”);
(ii) on the Closing, a subscription form in the form attached hereto as Exhibit A, duly completed and executed by the Investor for the Shares being subscribed for by the Investor;
(iii) on or prior to the Closing, the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company, to be informed by the Company to the Investor in writing no later than two (2) Business Days prior to the Closing;
(iv) on the Closing, a counterpart signature to the joinder to the Investors’ Registration Rights Agreement, duly executed by the Investor; and
(v) on the Closing, a certificate duly executed by an officer or authorized representative of the Investor as of the Closing Date, certifying that the conditions specified in Section 6.1 and Section 6.2 have been satisfied.
(b) Deliveries by the Company. Upon the satisfaction or waiver by the Company of the conditions set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Company of those conditions at the Closing), the Company shall deliver or cause to be delivered to the Investor:
(i) on the Closing, after payment in full of the Subscription Amount by the Investor to the Company, evidence reasonably satisfactory to the Investor of the issuance to the Investor of the Shares;
(ii) on or prior to the Closing, a certified copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval;
(iii) on or prior to the Closing, a copy of the Board Resolutions;
(iv) on the Closing, a copy of the Transfer Agent Records;
(v) on the Closing, evidence of registration of the Investor in the register of shareholders of the Company as the owner of the Shares;
3
(vi) on the Closing, copies of the Binding Debt Restructuring Documents, duly executed by the Category Four Lenders and the Group Companies party thereto;
(vii) on the Closing, evidence that all amounts outstanding under the Hoche Secured Convertible Notes have been converted into Ordinary Shares;
(viii) on the Closing, a counterpart signature to the joinder by the Investor to the Investors’ Registration Rights Agreement, duly executed by the Company; and
(ix) on the Closing, a certificate duly executed by an officer or authorized representative of the Company as of the Closing Date, certifying that the conditions specified in Section 5.1 and Section 5.2 have been satisfied.
1.4 Investor Questionnaire. The Investor shall complete and deliver to the Company the Accredited Investor Status Questionnaire, the form of which is attached hereto as Exhibit B (“Investor Questionnaire”), together with the execution and delivery of this Agreement.
1.5 Use of Proceeds. The proceeds from the issuance and sale of the Shares shall be used (i) to fund the working capital needs of the Group Companies, (ii) for the payment of existing indebtedness of the Group Companies owed to the Category Four Lenders and other financial creditors as part of the Debt Restructuring, and (iii) to pay the Group Companies’ vendors, suppliers and third-party advisors, including the payment as soon as reasonably practicable of all debt owed to suppliers; provided, for the avoidance of doubt, that such proceeds will not be used to acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof.
- Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person.For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(b) “Becaril” means Becaril, S.A., a Uruguayan corporation (sociedad anónima).
(c) “Board” means the board of directors of the Company.
4
(d) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares on the Closing Date.
(e) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(f) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(g) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(g) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(h) “Chemo” means Chemo Project SA, a Swiss corporation (società anonima).
(i) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(j) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(k) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Hoche Secured Convertible Notes, (C) upon the exercise of the Hoche Warrant; and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
(l) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(m) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
5
(n) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US$90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Hoche Secured Convertible Notes).
(o) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(p) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(q) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(r) “FlyingFish Ventures” means Flying Fish Ventures L.P., a Canadian limited partnership.
(s) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(t) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(u) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(v) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
(w) “HocheSecured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
6
(x) “HocheSecured Convertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended on the Effective Date and from time to time, and pursuant to which the Company issued the Hoche Secured Convertible Notes.
(y) “HocheSecured Convertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US$20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US$20,000,000.
(z) “HocheWarrant” means the warrant issuable to Hoche upon conversion of the Hoche Secured Convertible Notes, in a “warrant amount” of US$10,000,000.
(aa) “HocheWarrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(bb) “IndemnificationAgreements” means those certain indemnification agreements pursuant to which the Company shall agree to indemnify and hold harmless each director of the Company.
(cc) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(dd) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(ee) “Investors’Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement among the Company and certain shareholders of the Company, to be entered into substantially in the form of Exhibit C;
(ff) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
7
(gg) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(hh) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(ii) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole, provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the Effective Date; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
(jj) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(kk) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(ll) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
8
(mm) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US$0.01 per share.
(nn) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(oo) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(pp) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(qq) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(rr) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(ss) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US$0.01 per share.
(tt) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US$0.01 per share.
(uu) “RemediationPlan” means a plan to remediate and correct certain deficiencies and other issues identified as a result of the Internal Investigation, as set forth in Exhibit D.
(vv) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(ww) “Santana” means Santana S.A., a Chilean sociedad anónima.
9
(xx) “SEC” means the Securities and Exchange Commission.
(yy) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(zz) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(aaa) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(bbb) “Subscriptionand Conversion Agreements” means, collectively, (i) that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes, (ii) that certain Subscription and Conversion Agreement to be entered into between the Company and Santana, ST Commercial and Flying Fish Ventures on or about the Closing Date, pursuant to which Santana, ST Commercial and Flying Fish Ventures will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes; and (iii) that certain Subscription and Conversion Agreement to be entered into between the Company and Chemo and Becaril on or about the Closing Date, pursuant to which Chemo and Becaril will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes.
(ccc) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(ddd) “STCommercial” means Saint Thomas Commercial S.A., a Panamanian sociedad anónima.
(eee) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
10
(fff) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
3. Representations and Warranties of the Group Companies. The Company hereby represents and warrants to the Investor, as of the Effective Date and as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.3 Capitalization.
(a) As of the Effective Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Effective Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US$11.50 per share; and (ii) the Hoche Secured Convertible Notes convertible into Ordinary Shares and the Hoche Warrant.
11
(b) Except as set forth in Section 3.3(a), as of the Effective Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Effective Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Effective Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
12
3.7 Private Placement. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Investor as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Investor and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US $500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
13
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Investor accurate and complete copies of all material correspondence through the Effective Date between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Effective Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Effective Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Effective Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Effective Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US$500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’ length dealings with a Person that is not an Affiliate, as of the Effective Date***,*** none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
14
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
15
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US$500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Effective Date (the “MaterialInsurance Policies”). As of the Effective Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Effective Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Effective Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US$500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
16
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
17
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect.All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
4. Representations and Warranties of the Investor. The Investor, severally but not jointly, hereby represents and warrants to the Company, as of the Effective Date and as of the Closing Date, as follows:
4.1 Organization. The Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. The Investor has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent the Investor is a legal entity, the execution and performance by the Investor of this Agreement, the performance by the Investor of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by the Investor, and constitutes legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
4.3 No Conflicts. The execution by the Investor of this Agreement, the performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which the Investor is a party or by which the Investor’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Investor is a party or by which the Investor or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair the Investor’s ability to consummate the transactions contemplated hereby.
18
4.4 Own Account. The Investor understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law.
4.5 Restrictive Legend. The Investor agrees that any certificates or book-entry positions representing the Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares.
4.6 Investor Status. The information in the Investor Questionnaire completed by the Investor is true and accurate in all respects. At the time the Investor was offered Shares, it was, and as of the Closing Date, the Investor is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
4.7 Experience of Investor. The Investor, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
19
4.8 General Solicitation. The Investor is not purchasing Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. The Investor has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as the Investor has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including, the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Investor’s evaluation of its investment. The Investor has consulted, to the extent deemed appropriate by the Investor, with the Investor’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares, and believes that an investment in the Shares is suitable and appropriate for the Investor in accordance with the terms of this Agreement.
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, the Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investor. The Investor is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to the Investor in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of the Investor’s Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Investor’s Shares. The Investor’s subscription and payment for and continued beneficial ownership of its Shares will not violate any applicable securities or other laws of the Investor’s jurisdiction.
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Investor or any of its Affiliates.
20
4.13 Financial Wherewithal. The obligations of the Investor under this Agreement are not subject to any conditions regarding the Investor’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) The Investor has conducted to the Investor’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. The Investor has been represented by, and had the assistance of, counsel in the conduct of the Investor’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) THE INVESTOR ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO THE INVESTOR OR ANY OF THE INVESTOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
5. Conditions to the Investor’s Obligations at the Closing. The obligation of the Investor to subscribe for and purchase the Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Investor:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
5.2 Performance. The Company shall have performed and complied in all material respects with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing.
5.3 No Material Adverse Effect. From the Effective Date through the Closing Date, no Material Adverse Effect shall have occurred.
5.4 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
21
5.5 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.6 Qualifications. All authorizations, approvals (including the Company Shareholders’ Approval) or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
5.7 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements (the “Binding Debt Restructuring Documents”) which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “Debt Conversion”), and shall include the terms set forth in Schedule 5.7 attached hereto (the “Debt Restructuring”).
5.8 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
5.9 Debt Conversion. The Debt Conversion shall not have resulted in the Category Four Lenders aggregately holding more than (i) 9.23% of the Company’s issued and outstanding shares of capital stock or, (ii) if the Hoche Warrant has been exercised in full, 8.65% of the Company’s issued and outstanding shares of capital stock.
5.10 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect following the Board Resolutions.
5.11 Issuance of the Shares. After payment in full of the Subscription Amount by the Investor to the Company, the Company shall have issued, sold and delivered the Shares to the Investor in accordance with Section 1.3(b)(i).
6. Conditions to the Company’s Obligations at the Closing. The obligations of the Company to sell and issue the Shares to the Investor at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Company:
6.1 Representations and Warranties. The representations and warranties of the Investor contained in Section 4 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
6.2 Performance. The Investor shall have performed and complied with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Investor on or before the Closing.
6.3 Qualifications. All authorizations, approvals or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
22
6.4 Payment in full of the Subscription Amount. The Investor shall have paid the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company in accordance with Section 1.3(a)(iii).
6.5 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
6.6 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect, following the Board Resolutions.
7. Company’s Covenants.
7.1 Debt Restructuring. Promptly after the Effective Date, the Company shall use commercially reasonable efforts to enter into, and cause the Group Companies party to the Category Four Loan Agreements to enter into, the Binding Debt Restructuring Documents that shall include the terms set forth in Schedule 5.7 attached hereto, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Debt Restructuring as soon as reasonably practicable, including, without limitation, obtaining all Permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities (and consents, approvals and agreements of Persons other than Governmental Authorities, including the Company Shareholders’ Approval) necessary for the consummation of the Debt Restructuring.
7.2 Equity Raise.
(a) The Company shall use commercially reasonable efforts to cause the consummation of the Equity Raise, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Equity Raise as soon as reasonably practicable, but no later than the Outside Date, including, without limitation, using its commercially reasonable efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of Governmental Authority (and consents, approvals and agreements of Persons other than Governmental Authority, including the Company Shareholders’ Approval) necessary for the consummation of the Equity Raise.
(b) Notwithstanding anything else set forth in this Agreement, the Company, upon (i) becoming aware of any termination (or purported termination) of any of the subscription agreements (including this Agreement), entered into by the Company with any Person in connection with the Equity Raise (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”), or (ii) not expecting to receive any portion of the full amount of the Equity Raise on the terms, in the manner or from the sources contemplated by the Subscription Agreements, shall have the right to amend one or more Subscription Agreements or enter into one or more new subscription agreements with any Person, as required to consummate, and obtain the full amount of, the Equity Raise; provided that such transactions shall (x) not be under terms less favorable to the Company than those contained in this Agreement, when considered as a whole, (y) be at a price of US$ 0.06313 per Ordinary Share of the Company, and (z) not cause the amount of the Equity Raise to exceed US$90,000,000, provided that the Company may not amend a Subscription Agreement entered into with any other party which has fully complied with the terms thereunder without the written consent of the Investor.
23
7.3 [Intentionally Omitted].
7.4 Inspection. Except for any information that is subject to attorney-client privilege (provided that, to the extent possible, the parties shall cooperate in good faith to permit disclosure of such information in a manner that preserves such privilege or compliance with such confidentiality obligations), and to the extent permitted by applicable Law, the Company shall, and shall cause its Subsidiaries to, afford to the Investor and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (“Representatives”) reasonable access during the period commencing on the Effective Date and ending on the Closing Date, during normal business hours and with reasonable advance notice, in such manner as to not materially interfere with the ordinary course of business of the Company and its Subsidiaries, to all of their respective properties, books, records and appropriate officers and employees of the Company and its Subsidiaries, and shall furnish such Representatives with all financial and operating data and other information that are in the possession or control of the Company or its Subsidiaries concerning the affairs of the Company or any of its Subsidiaries as such Representatives may reasonably request for the purposes of and in connection with the transactions contemplated hereby, including, without limitation, the status of the negotiations with the Category Four Lenders and drafts of the Binding Debt Restructuring Documents . All information obtained from the Company or its Subsidiaries by the Investor or its Representatives pursuant to this Section 7.4 shall be subject to the confidentiality and/or non-disclosure agreement entered into by the Investor and the Company in connection with the Equity Raise (the “Confidentiality Agreement”).
7.5 Conduct of Business. From the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall and shall cause the Group Companies to use their commercially reasonable efforts to preserve intact their respective business organizations and assets, and to maintain in effect all of its material Permits. Except (i) as required by applicable Law, (ii) as expressly contemplated or permitted by this Agreement, or (iii) as contemplated and in furtherance of the Equity Raise, the Debt Restructuring, Debt Conversion, the Hoche Secured Convertible Note Subscription Agreement, the Hoche Secured Convertible Notes, the Hoche Warrant, the Hoche Secured Convertible Notes Assignment Agreements, the Hoche Warrant Assignment Agreements, the Subscription and Conversion Agreements, each Indemnification Agreement, the Company Shareholders’ Approval, or the Board Resolutions, from the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall not (and shall cause any other Group Company not to):
(a) issue (other than to any other Group Company) (A) any capital stock of any Group Company; or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any capital stock of any Group Company;
24
(b) transfer or Encumber any of the Group Companies’ material assets, other than as a result of a Permitted Encumbrance or any transfer or Encumbrance in the ordinary course of the Group Companies’ business;
(c) acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; or
(d) amend the Organizational Documents of the Company.
7.6 Remediation Plan. The Company shall continue adopting and implementing all reasonable measures, as needed to remediate and correct the deficiencies and other weaknesses identified under the Internal Investigation, including those measures in the Remediation Plan set forth in Exhibit D.
8. Termination.
8.1 Termination. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and all the transactions contemplated herein abandoned at any time prior to Closing only:
(a) by written consent of the Investor and the Company;
(b) by the Investor, if the Investor is not in material breach of its obligations under this Agreement and the Company breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 5, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Investor and (B) the Outside Date, and (iii) has not been waived by the Investor;
(c) by the Company, if the Company is not in material breach of its obligations under this Agreement and the Investor breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 6, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Company and (B) the Outside Date, and (iii) has not been waived by the Company;
(d) by the Investor or the Company, upon written notice to the other, if the Closing shall not have occurred on or before May 30, 2025 (the “Outside Date”); provided that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party hereto that is in material default or breach of any provision of this Agreement, which default or breach has been a cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; or
25
(e) by either the Investor or the Company in the event that (i) there shall be any Law, rule or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Judgment restraining or enjoining the transactions contemplated hereby, and such Judgment shall have become final and non-appealable.
The party seeking to terminate this Agreement pursuant to this Section 8.1 shall give prompt written notice of such termination to the other parties.
8.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that (A) this Section 8 and Section 10 shall survive the termination of this Agreement as applicable and in accordance with their terms and (B) that nothing herein shall relieve any party hereto from any liability for Fraud or any willful breach of this Agreement or any agreement made as of the Effective Date or subsequent thereto pursuant to this Agreement.
9. Survival and Limitation on Liability.
9.1 Survival of Representations and Warranties and Covenants.
(a) Subject to Section 8, (i) the representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
(b) Subject to Section 8, (i) the representations and warranties of the Investor contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Investor Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Investor contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
26
(d) Notwithstanding anything to the contrary in this Section 9.1, in the event a Claim Notice is properly delivered in good faith under Section 9.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 9.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
9.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Company shall indemnify, defend and hold harmless the Investor and its respective Representatives, employees, Affiliates, successors and assigns (each, an “InvestorIndemnified Party” and collectively, the “Investor Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by the Investor, net of any Losses indemnified to the Investor under this Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) or Section 9.2(a)(iii) of any other Subscription Agreement (excluding, for the avoidance of doubt, this Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) or Section 7.2(a)(iii) of the Subscription and Conversion Agreements and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
(b) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Investor shall indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Investor in Section 4, or (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Investor under this Agreement.
9.3 Indemnification Procedures
(a) In order for any Investor Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 9, the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 9.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
27
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 9, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 9.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 9 (including Section 9.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
28
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
9.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 9 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to the Investor Indemnified Parties for any Loss pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii) (any such Loss, an “Investors Applicable Loss”) if the sum total of (X) such Investors Applicable Loss and (Y) all other Losses that arise from the same or from one or more similar or related events, occurrences or circumstances as such Investors Applicable Loss, does not, in the aggregate, exceed an amount equal to US$ 100,000 (the “DeMinimis Exclusion”), and no claim for an Investors Applicable Loss that does not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(a)(i) or Section 9.2(a)(iii) unless the sum total of (A) such Investors Applicable Loss and (B) any other Losses arising from the same or from one or more similar or related events, occurrences or circumstances as such Investors Applicable Loss, shall exceed, in the aggregate, the De Minimis Exclusion; (ii) the Company shall not be liable to the Investor Indemnified Parties for any Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(a)(i) or Section 9.2(a)(iii) which do not exceed the De Minimis Exclusion) exceeds an amount equal to US $1,000,000, at which time the Company shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Company shall not be liable to the Investor Indemnified Parties for any Losses pursuant to Section 9.2(a)(i), other than in respect of Fraud or breach of any Company Fundamental Representation, in excess of US $1,050,000, subject to the other limitations herein; (iv) the Company shall not be liable to the Investor Indemnified Parties for any Losses pursuant to Section 9.2(a)(iii), other than in respect of Fraud, in excess of US $1,575,000, subject to the other limitations herein; and (v) the Company shall not be liable to the Investor Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
29
(c) Notwithstanding anything herein to the contrary, (i) the Investor shall not be liable to the Company Indemnified Parties for any Loss pursuant to Section 9.2(b)(i) (any such Loss, a “Company Applicable Loss”) if the sum total of (X) such Company Applicable Loss and (Y) all other Losses that arise from the same or from one or more similar or related events, occurrences or circumstances as such Company Applicable Loss, does not, in the aggregate, exceed the De Minimis Exclusion and no claim for a Company Applicable Loss that does not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(b)(i) unless the sum total of (A) such Company Applicable Loss and (B) any other Losses arising from the same or from one or more similar or related events, occurrences or circumstances as such Company Applicable Loss, shall exceed, in the aggregate, the De Minimis Exclusion; (ii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(b)(i) which do not exceed the De Minimis Exclusion) exceeds an amount equal to US $1,000,000, at which time the Investor shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, in excess of US $1,050,000, subject to the other limitations herein; and (iv) the Investor shall not be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Investor Indemnified Party for any Losses under this Section 9, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Investor Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 9.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Investor Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Investor Indemnified Party in the form attached hereto as Exhibit E (the “Indemnity Warrant”), that will entitle such Investor Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US$0.01.
30
(f) In the event that the Investor has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 9, the Investor shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by the Investor and such Company Indemnified Party) after such Losses have been finally determined and are owed by the Investor in accordance with Section 9.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 9 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
9.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 10.9, following the Closing Date, the indemnification obligations under this Section 9 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
10. Miscellaneous.
10.1 Release. The Investor, on behalf of itself and on behalf of its respective Representatives, Affiliates (excluding the Company and its Subsidiaries), assigns and successors and any and all persons or entities claiming by or through any of the foregoing (collectively, the “InvestorReleasing Parties”), hereby irrevocably and unconditionally releases, waives and forever discharges fully and finally to the fullest extent permitted by Law, the Company, its Subsidiaries and each of their respective current Representatives, assigns and successors (collectively, the “Company Released Parties”), from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity (collectively, “Claims”) that such Investor Releasing Party has or may have in the future for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Claims arising under (i) this Agreement or any other agreement entered into on the Effective Date between the Investor, on the one hand, and any of the Company and/or any of its Subsidiaries, on the other hand, and any of the transactions contemplated hereunder or thereunder and/or (ii) matters not disclosed in writing (which for these written disclosure purposes, shall include any filing on or furnishing to the United States Securities & Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system) by any of the Group Companies to any of the Investors prior to the date hereof ((i) and (ii), collectively, the “Excluded Claims”). The Investor shall not, and shall cause each of the Investor Releasing Parties not to, commence or institute any Claims, including any legal actions, litigation, arbitration or any other legal proceedings of any kind whatsoever, in law or equity, or assert any Claim, demand, action or cause of action against any of the Company Released Parties, arising under or in connection with any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Excluded Claims.
31
10.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
10.3 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
10.4 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
32
10.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
10.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
10.7 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
(b) if to the Investor, to physical or e-mail address set forth on the Investor’s signature pages hereto.
10.8 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
10.9 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
33
10.10 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Investor.
10.11 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
10.12 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement and/or by Law or otherwise afforded to any party hereunder, shall be cumulative and not alternative.
10.13 Press Releases. The Company, on the one hand, and the Investor, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
10.14 Entire Agreement. This Agreement and the Confidentiality Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
10.15 Legal Counsel. Upon execution and delivery of a counterpart to this Agreement, the Investor acknowledges the following: (a) the Company has retained Greenberg Traurig, LLP (“GT”) in connection with the transactions contemplated in this Agreement; (b) GT is not representing the Investor in connection with any of the transactions contemplated in this Agreement; and (c) the Investor will, if Investor wishes counsel on the transactions contemplated in this Agreement, retain Investor’s own independent counsel at Investor’s own cost and expense.
[SignaturePages Follow]
34
Exhibit10.4
PROCAPS GROUP, S.A.
SUBSCRIPTION AGREEMENT
by and between
Procaps Group, S.A.
and
BTG Pactual Chile S.A. Corredores de Bolsa
as of April 3, 2025
Procaps Group, S.A.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is made as of April 3, 2025 (the “Effective Date”), by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), and BTG Pactual Chile S.A. Corredores de Bolsa, a sociedad anónimaincorporated and existing under the laws of Chile (where applicable, on behalf of its client designees) (the “Investor”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
1. Issuance, Subscriptions and Closing.
1.1 Issuance of Shares and Payment of Subscription Amount. Subject to the terms and conditions of this Agreement, the Investor agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investor, that number of Ordinary Shares of the Company (rounded down to the nearest whole Ordinary Share) (the “Shares”) equal to the quotient obtained by dividing US$2,105,000 (the “Subscription Amount”) by US$0.06313 per Ordinary Share (the “Price PerShare”). The Investor agrees to pay to the Company on or prior to the Closing, in exchange for the issuance and sale of the Shares, the Subscription Amount.
1.2 Closing. The closing of the subscription and purchase, and the sale and issuance, of the Shares shall take place remotely via the exchange of documents and signatures on the date the conditions set forth in Section 5 and Section 6 (other than conditions that by their nature are to be satisfied at the Closing itself, but subject to the satisfaction or waiver of those conditions) are satisfied or waived in writing by the applicable party hereto, or at such other time and place as the Company and the Investor mutually agree upon in writing (which time and place are designated as the “Closing”). The Company shall notify the Investor no later than two (2) Business Days prior to the satisfaction of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing itself). All proceedings to be taken and all documents to be executed and delivered by the Company and the Investor at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
2
1.3 Deliveries.
(a) Deliveries by the Investor. Upon the satisfaction or waiver by the Investor of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Investor of those conditions at the Closing), the Investor shall deliver, or cause to be delivered, to the Company:
(i) no later than five (5) Business Days prior to the Closing, know your customer (KYC) forms and other information required (A) under Luxembourg Law for the issuance of the Shares to the Investor and (B) by the Company’s transfer agent to deliver the records evidencing ownership of the Shares by the Investor (the “Transfer Agent Records”);
(ii) on the Closing, a subscription form in the form attached hereto as Exhibit A, duly completed and executed by the Investor for the Shares being subscribed for by the Investor;
(iii) on or prior to the Closing, the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company, to be informed by the Company to the Investor in writing no later than two (2) Business Days prior to the Closing;
(iv) on the Closing, a counterpart signature to the joinder to the Investors’ Registration Rights Agreement, duly executed by the Investor; and
(v) on the Closing, a certificate duly executed by an officer or authorized representative of the Investor as of the Closing Date, certifying that the conditions specified in Section 6.1 and Section 6.2 have been satisfied.
(b) Deliveries by the Company. Upon the satisfaction or waiver by the Company of the conditions set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Company of those conditions at the Closing), the Company shall deliver or cause to be delivered to the Investor:
(i) on the Closing, after payment in full of the Subscription Amount by the Investor to the Company, evidence reasonably satisfactory to the Investor of the issuance to the Investor of the Shares;
(ii) on or prior to the Closing, a certified copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval;
(iii) on or prior to the Closing, a copy of the Board Resolutions;
(iv) on the Closing, a copy of the Transfer Agent Records;
(v) on the Closing, evidence of registration of the Investor in the register of shareholders of the Company as the owner of the Shares;
3
(vi) on the Closing, copies of the Binding Debt Restructuring Documents, duly executed by the Category Four Lenders and the Group Companies party thereto;
(vii) on the Closing, evidence that all amounts outstanding under the Hoche Secured Convertible Notes have been converted into Ordinary Shares;
(viii) on the Closing, a counterpart signature to the joinder by the Investor to the Investors’ Registration Rights Agreement, duly executed by the Company; and
(ix) on the Closing, a certificate duly executed by an officer or authorized representative of the Company as of the Closing Date, certifying that the conditions specified in Section 5.1 and Section 5.2 have been satisfied.
1.4 Investor Questionnaire. The Investor shall complete and deliver to the Company the Accredited Investor Status Questionnaire, the form of which is attached hereto as Exhibit B (“Investor Questionnaire”), together with the execution and delivery of this Agreement.
1.5 Use of Proceeds. The proceeds from the issuance and sale of the Shares shall be used (i) to fund the working capital needs of the Group Companies, (ii) for the payment of existing indebtedness of the Group Companies owed to the Category Four Lenders and other financial creditors as part of the Debt Restructuring, and (iii) to pay the Group Companies’ vendors, suppliers and third-party advisors, including the payment as soon as reasonably practicable of all debt owed to suppliers; provided, for the avoidance of doubt, that such proceeds will not be used to acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof.
2. Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(b) “Becaril” means Becaril, S.A., a Uruguayan corporation (sociedad anónima).
(c) “Board” means the board of directors of the Company.
4
(d) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares on the Closing Date.
(e) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(f) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(g) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(g) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(h) “Chemo” means Chemo Project SA, a Swiss corporation (società anonima).
(i) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(j) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(k) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Hoche Secured Convertible Notes, (C) upon the exercise of the Hoche Warrant; and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
(l) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(m) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
5
(n) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US$90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Hoche Secured Convertible Notes).
(o) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(p) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(q) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(r) “FlyingFish Ventures” means Flying Fish Ventures L.P., a Canadian limited partnership.
(s) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(t) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(u) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(v) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
6
(w) “HocheSecured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
(x) “HocheSecured Convertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended on the Effective Date and from time to time, and pursuant to which the Company issued the Hoche Secured Convertible Notes.
(y) “HocheSecured Convertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US$20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US$20,000,000.
(z) “HocheWarrant” means the warrant issuable to Hoche upon conversion of the Hoche Secured Convertible Notes, in a “warrant amount” of US$10,000,000.
(aa) “HocheWarrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(bb) “IndemnificationAgreements” means those certain indemnification agreements pursuant to which the Company shall agree to indemnify and hold harmless each director of the Company.
(cc) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(dd) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(ee) “Investors’Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement among the Company and certain shareholders of the Company, to be entered into substantially in the form of Exhibit C;
(ff) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
7
(gg) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(hh) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(ii) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole, provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the Effective Date; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
(jj) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(kk) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(ll) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
8
(mm) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US$0.01 per share.
(nn) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(oo) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(pp) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(qq) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(rr) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(ss) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US$0.01 per share.
(tt) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US$0.01 per share.
(uu) “RemediationPlan” means a plan to remediate and correct certain deficiencies and other issues identified as a result of the Internal Investigation, as set forth in Exhibit D.
(vv) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(ww) “Santana” means Santana S.A., a Chilean sociedad anónima.
9
(xx) “SEC” means the Securities and Exchange Commission.
(yy) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(zz) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(aaa) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(bbb) “Subscriptionand Conversion Agreements” means, collectively, (i) that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes, (ii) that certain Subscription and Conversion Agreement to be entered into between the Company and Santana, ST Commercial and Flying Fish Ventures on or about the Closing Date, pursuant to which Santana, ST Commercial and Flying Fish Ventures will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes; and (iii) that certain Subscription and Conversion Agreement to be entered into between the Company and Chemo and Becaril on or about the Closing Date, pursuant to which Chemo and Becaril will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes.
(ccc) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(ddd) “STCommercial” means Saint Thomas Commercial S.A., a Panamanian sociedad anónima.
(eee) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
10
(fff) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
3. Representations and Warranties of the Group Companies. The Company hereby represents and warrants to the Investor, as of the Effective Date and as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.3 Capitalization.
(a) As of the Effective Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Effective Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US$11.50 per share; and (ii) the Hoche Secured Convertible Notes convertible into Ordinary Shares and the Hoche Warrant.
11
(b) Except as set forth in Section 3.3(a), as of the Effective Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Effective Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Effective Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
12
3.7 Private Placement. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Investor as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Investor and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US$500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
13
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Investor accurate and complete copies of all material correspondence through the Effective Date between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Effective Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Effective Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Effective Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Effective Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US$500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’ length dealings with a Person that is not an Affiliate, as of the Effective Date***,*** none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
14
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
15
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US$500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Effective Date (the “MaterialInsurance Policies”). As of the Effective Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Effective Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Effective Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US$500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
16
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
17
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
4. Representations and Warranties of the Investor. The Investor, severally but not jointly, hereby represents and warrants to the Company, as of the Effective Date and as of the Closing Date, as follows:
4.1 Organization. The Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. The Investor has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent the Investor is a legal entity, the execution and performance by the Investor of this Agreement, the performance by the Investor of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by the Investor, and constitutes legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
18
4.3 No Conflicts. The execution by the Investor of this Agreement, the performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which the Investor is a party or by which the Investor’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Investor is a party or by which the Investor or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair the Investor’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. The Investor understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law, in each case including, where applicable, in its capacity as an investment adviser on behalf of its client designee.
4.5 Restrictive Legend. The Investor agrees that any certificates or book-entry positions representing the Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares.
4.6 Investor Status.
(a) The information in the Investor Questionnaire completed by the Investor is true and accurate in all respects. At the time the Investor was offered Shares, it was, and as of the Closing Date, the Investor is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
19
(b) The Investor represents and warrants that (i) it has full power and authority on behalf of its clients to subscribe for Shares and to execute any necessary subscription documentation, including this Agreement; (ii) it is a financial institution, broker or entity that is subject to, and supervised for compliance with anti-money laundering and countering of terrorism financing requirements consistent with the standards set by the Financial Action Task Force; (iii) it is authorized and empowered to make all the representations in this Agreement on behalf of each of its applicable clients and has the agreement of each of these clients regarding the use of such client’s personal data; and (iv) each of its clients is eligible to invest pursuant to this Agreement and shall be deemed to have made each representation and warranty of the Investor herein.
4.7 Experience of Investor. The Investor, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
4.8 General Solicitation. The Investor is not purchasing Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. The Investor has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as the Investor has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including, the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Investor’s evaluation of its investment. The Investor has consulted, to the extent deemed appropriate by the Investor, with the Investor’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares, and believes that an investment in the Shares is suitable and appropriate for the Investor in accordance with the terms of this Agreement.
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, the Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
20
4.11 Foreign Investor. The Investor is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to the Investor in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of the Investor’s Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Investor’s Shares. The Investor’s subscription and payment for and continued beneficial ownership of its Shares will not violate any applicable securities or other laws of the Investor’s jurisdiction.
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Investor or any of its Affiliates.
4.13 Financial Wherewithal. The obligations of the Investor under this Agreement are not subject to any conditions regarding the Investor’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) The Investor has conducted to the Investor’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. The Investor has been represented by, and had the assistance of, counsel in the conduct of the Investor’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) THE INVESTOR ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO THE INVESTOR OR ANY OF THE INVESTOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
21
5. Conditions to the Investor’s Obligations at the Closing. The obligation of the Investor to subscribe for and purchase the Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Investor:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
5.2 Performance. The Company shall have performed and complied in all material respects with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing.
5.3 No Material Adverse Effect. From the Effective Date through the Closing Date, no Material Adverse Effect shall have occurred.
5.4 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
5.5 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.6 Qualifications. All authorizations, approvals (including the Company Shareholders’ Approval) or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
5.7 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements (the “Binding Debt Restructuring Documents”) which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “Debt Conversion”), and shall include the terms set forth in Schedule 5.7 attached hereto (the “Debt Restructuring”).
5.8 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
5.9 Debt Conversion. The Debt Conversion shall not have resulted in the Category Four Lenders aggregately holding more than (i) 9.23% of the Company’s issued and outstanding shares of capital stock or, (ii) if the Hoche Warrant has been exercised in full, 8.65% of the Company’s issued and outstanding shares of capital stock.
5.10 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect following the Board Resolutions.
5.11 Issuance of the Shares. After payment in full of the Subscription Amount by the Investor to the Company, the Company shall have issued, sold and delivered the Shares to the Investor in accordance with Section 1.3(b)(i).
22
6. Conditions to the Company’s Obligations at the Closing. The obligations of the Company to sell and issue the Shares to the Investor at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Company:
6.1 Representations and Warranties. The representations and warranties of the Investor contained in Section 4 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
6.2 Performance. The Investor shall have performed and complied with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Investor on or before the Closing.
6.3 Qualifications. All authorizations, approvals or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
6.4 Payment in full of the Subscription Amount. The Investor shall have paid the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company in accordance with Section 1.3(a)(iii).
6.5 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
6.6 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect, following the Board Resolutions.
7. Company’s Covenants.
7.1 Debt Restructuring. Promptly after the Effective Date, the Company shall use commercially reasonable efforts to enter into, and cause the Group Companies party to the Category Four Loan Agreements to enter into, the Binding Debt Restructuring Documents that shall include the terms set forth in Schedule 5.7 attached hereto, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Debt Restructuring as soon as reasonably practicable, including, without limitation, obtaining all Permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities (and consents, approvals and agreements of Persons other than Governmental Authorities, including the Company Shareholders’ Approval) necessary for the consummation of the Debt Restructuring.
23
7.2 Equity Raise.
(a) The Company shall use commercially reasonable efforts to cause the consummation of the Equity Raise, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Equity Raise as soon as reasonably practicable, but no later than the Outside Date, including, without limitation, using its commercially reasonable efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of Governmental Authority (and consents, approvals and agreements of Persons other than Governmental Authority, including the Company Shareholders’ Approval) necessary for the consummation of the Equity Raise.
(b) Notwithstanding anything else set forth in this Agreement, the Company, upon (i) becoming aware of any termination (or purported termination) of any of the subscription agreements (including this Agreement), entered into by the Company with any Person in connection with the Equity Raise (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”), or (ii) not expecting to receive any portion of the full amount of the Equity Raise on the terms, in the manner or from the sources contemplated by the Subscription Agreements, shall have the right to amend one or more Subscription Agreements or enter into one or more new subscription agreements with any Person, as required to consummate, and obtain the full amount of, the Equity Raise; provided that such transactions shall (x) not be under terms less favorable to the Company than those contained in this Agreement, when considered as a whole, (y) be at a price of US$0.06313 per Ordinary Share of the Company, and (z) not cause the amount of the Equity Raise to exceed US$90,000,000, provided that the Company may not amend a Subscription Agreement entered into with any other party which has fully complied with the terms thereunder without the written consent of the Investor.
7.3 [Intentionally Omitted].
7.4 Inspection. Except for any information that is subject to attorney-client privilege (provided that, to the extent possible, the parties shall cooperate in good faith to permit disclosure of such information in a manner that preserves such privilege or compliance with such confidentiality obligations), and to the extent permitted by applicable Law, the Company shall, and shall cause its Subsidiaries to, afford to the Investor and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (“Representatives”) reasonable access during the period commencing on the Effective Date and ending on the Closing Date, during normal business hours and with reasonable advance notice, in such manner as to not materially interfere with the ordinary course of business of the Company and its Subsidiaries, to all of their respective properties, books, records and appropriate officers and employees of the Company and its Subsidiaries, and shall furnish such Representatives with all financial and operating data and other information that are in the possession or control of the Company or its Subsidiaries concerning the affairs of the Company or any of its Subsidiaries as such Representatives may reasonably request for the purposes of and in connection with the transactions contemplated hereby, including, without limitation, the status of the negotiations with the Category Four Lenders and drafts of the Binding Debt Restructuring Documents. All information obtained from the Company or its Subsidiaries by the Investor or its Representatives pursuant to this Section 7.4 shall be subject to the confidentiality and/or non-disclosure agreement entered into by the Investor and the Company in connection with the Equity Raise (the “Confidentiality Agreement”).
24
7.5 Conduct of Business. From the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall and shall cause the Group Companies to use their commercially reasonable efforts to preserve intact their respective business organizations and assets, and to maintain in effect all of its material Permits. Except (i) as required by applicable Law, (ii) as expressly contemplated or permitted by this Agreement, or (iii) as contemplated and in furtherance of the Equity Raise, the Debt Restructuring, Debt Conversion, the Hoche Secured Convertible Note Subscription Agreement, the Hoche Secured Convertible Notes, the Hoche Warrant, the Hoche Secured Convertible Notes Assignment Agreements, the Hoche Warrant Assignment Agreements, the Subscription and Conversion Agreements, each Indemnification Agreement, the Company Shareholders’ Approval, or the Board Resolutions, from the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall not (and shall cause any other Group Company not to):
(a) issue (other than to any other Group Company) (A) any capital stock of any Group Company; or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any capital stock of any Group Company;
(b) transfer or Encumber any of the Group Companies’ material assets, other than as a result of a Permitted Encumbrance or any transfer or Encumbrance in the ordinary course of the Group Companies’ business;
(c) acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; or
(d) amend the Organizational Documents of the Company.
7.6 Remediation Plan. The Company shall continue adopting and implementing all reasonable measures, as needed to remediate and correct the deficiencies and other weaknesses identified under the Internal Investigation, including those measures in the Remediation Plan set forth in Exhibit D.
8. Termination.
8.1 Termination. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and all the transactions contemplated herein abandoned at any time prior to Closing only:
(a) by written consent of the Investor and the Company;
(b) by the Investor, if the Investor is not in material breach of its obligations under this Agreement and the Company breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 5, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Investor and (B) the Outside Date, and (iii) has not been waived by the Investor;
25
(c) by the Company, if the Company is not in material breach of its obligations under this Agreement and the Investor breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 6, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Company and (B) the Outside Date, and (iii) has not been waived by the Company;
(d) by the Investor or the Company, upon written notice to the other, if the Closing shall not have occurred on or before May 30, 2025 (the “Outside Date”); provided that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party hereto that is in material default or breach of any provision of this Agreement, which default or breach has been a cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; or
(e) by either the Investor or the Company in the event that (i) there shall be any Law, rule or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Judgment restraining or enjoining the transactions contemplated hereby, and such Judgment shall have become final and non-appealable.
The party seeking to terminate this Agreement pursuant to this Section 8.1 shall give prompt written notice of such termination to the other parties.
8.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that (A) this Section 8 and Section 10 shall survive the termination of this Agreement as applicable and in accordance with their terms and (B) that nothing herein shall relieve any party hereto from any liability for Fraud or any willful breach of this Agreement or any agreement made as of the Effective Date or subsequent thereto pursuant to this Agreement.
9. Survival and Limitation on Liability.
9.1 Survival of Representations and Warranties and Covenants.
(a) Subject to Section 8, (i) the representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
26
(b) Subject to Section 8, (i) the representations and warranties of the Investor contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Investor Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Investor contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
(d) Notwithstanding anything to the contrary in this Section 9.1, in the event a Claim Notice is properly delivered in good faith under Section 9.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 9.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
9.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Company shall indemnify, defend and hold harmless the Investor and its respective Representatives, employees, Affiliates, successors and assigns (each, an “InvestorIndemnified Party” and collectively, the “Investor Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by the Investor, net of any Losses indemnified to the Investor under this Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) or Section 9.2(a)(iii) of any other Subscription Agreement (excluding, for the avoidance of doubt, this Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) or Section 7.2(a)(iii) of the Subscription and Conversion Agreements and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
27
(b) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Investor shall indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Investor in Section 4, or (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Investor under this Agreement.
9.3 Indemnification Procedures
(a) In order for any Investor Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 9, the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 9.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 9, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 9.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
28
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 9 (including Section 9.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
9.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 9 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
29
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to an Investor Indemnified Party for any Losses pursuant to Section 9.2(a)(i) and/or Section 9.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, subject to the other limitations herein; and (ii) the Company shall not be liable to the Investor Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
(c) Notwithstanding anything herein to the contrary, (i) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i) which, individually considered, do not exceed US$15,000 (“De Minimis Exclusion”) and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(b)(i) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(b)(i) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US$52,500, at which time the Investor shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, in excess of US$210,500, subject to the other limitations herein; and (iv) the Investor shall not be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Investor Indemnified Party for any Losses under this Section 9, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Investor Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 9.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Investor Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Investor Indemnified Party in the form attached hereto as Exhibit E (the “Indemnity Warrant”), that will entitle such Investor Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US$0.01.
30
(f) In the event that the Investor has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 9, the Investor shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by the Investor and such Company Indemnified Party) after such Losses have been finally determined and are owed by the Investor in accordance with Section 9.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 9 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
9.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 10.9, following the Closing Date, the indemnification obligations under this Section 9 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
10. Miscellaneous.
10.1 Release. The Investor, on behalf of itself and on behalf of its respective Representatives, Affiliates (excluding the Company and its Subsidiaries), assigns, successors and its client designees and any and all persons or entities claiming by or through any of the foregoing (collectively, the “Investor Releasing Parties”), hereby irrevocably and unconditionally releases, waives and forever discharges fully and finally to the fullest extent permitted by Law, the Company, its Subsidiaries and each of their respective current Representatives, assigns and successors (collectively, the “Company Released Parties”), from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity (collectively, “Claims”) that such Investor Releasing Party has or may have in the future for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Claims arising under (i) this Agreement or any other agreement entered into on the Effective Date between the Investor, on the one hand, and any of the Company and/or any of its Subsidiaries, on the other hand, and any of the transactions contemplated hereunder or thereunder and/or (ii) matters not disclosed in writing (which for these written disclosure purposes, shall include any filing on or furnishing to the United States Securities & Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system) by any of the Group Companies to any of the Investors prior to the date hereof ((i) and (ii), collectively, the “ExcludedClaims”). The Investor shall not, and shall cause each of the Investor Releasing Parties not to, commence or institute any Claims, including any legal actions, litigation, arbitration or any other legal proceedings of any kind whatsoever, in law or equity, or assert any Claim, demand, action or cause of action against any of the Company Released Parties, arising under or in connection with any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Excluded Claims.
31
10.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
10.3 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
10.4 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
10.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
10.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
32
10.7 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
(b) if to the Investor, to physical or e-mail address set forth on the Investor’s signature pages hereto.
10.8 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
10.9 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
10.10 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Investor.
10.11 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
33
10.12 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement and/or by Law or otherwise afforded to any party hereunder, shall be cumulative and not alternative.
10.13 Press Releases. The Company, on the one hand, and the Investor, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
10.14 Entire Agreement. This Agreement and the Confidentiality Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
10.15 Legal Counsel. Upon execution and delivery of a counterpart to this Agreement, the Investor acknowledges the following: (a) the Company has retained Greenberg Traurig, LLP (“GT”) in connection with the transactions contemplated in this Agreement; (b) GT is not representing the Investor in connection with any of the transactions contemplated in this Agreement; and (c) the Investor will, if Investor wishes counsel on the transactions contemplated in this Agreement, retain Investor’s own independent counsel at Investor’s own cost and expense.
[SignaturePages Follow]
34
Exhibit 10.5
PROCAPS GROUP, S.A.
SUBSCRIPTION AGREEMENT
by and between
Procaps Group, S.A.
and
Regina International LP
as of April 3, 2025
Procaps Group, S.A.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is made as of April 3, 2025 (the “Effective Date”), by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), and Regina International LP, a limited partnership formed and existing under the laws of Ontario, Canada (the “Investor”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
1. Issuance, Subscriptions and Closing.
1.1 Issuance of Shares and Payment of Subscription Amount. Subject to the terms and conditions of this Agreement, the Investor agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investor, that number of Ordinary Shares of the Company (rounded down to the nearest whole Ordinary Share) (the “Shares”) equal to the quotient obtained by dividing US$1,500,000 (the “Subscription Amount”) by US$0.06313 per Ordinary Share (the “Price PerShare”). The Investor agrees to pay to the Company on or prior to the Closing, in exchange for the issuance and sale of the Shares, the Subscription Amount.
1.2 Closing. The closing of the subscription and purchase, and the sale and issuance, of the Shares shall take place remotely via the exchange of documents and signatures on the date the conditions set forth in Section 5 and Section 6 (other than conditions that by their nature are to be satisfied at the Closing itself, but subject to the satisfaction or waiver of those conditions) are satisfied or waived in writing by the applicable party hereto, or at such other time and place as the Company and the Investor mutually agree upon in writing (which time and place are designated as the “Closing”). The Company shall notify the Investor no later than two (2) Business Days prior to the satisfaction of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing itself). All proceedings to be taken and all documents to be executed and delivered by the Company and the Investor at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
1.3 Deliveries.
(a) Deliveries by the Investor. Upon the satisfaction or waiver by the Investor of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Investor of those conditions at the Closing), the Investor shall deliver, or cause to be delivered, to the Company:
(i) no later than five (5) Business Days prior to the Closing, know your customer (KYC) forms and other information required (A) under Luxembourg Law for the issuance of the Shares to the Investor and (B) by the Company’s transfer agent to deliver the records evidencing ownership of the Shares by the Investor (the “Transfer Agent Records”);
2
(ii) on the Closing, a subscription form in the form attached hereto as Exhibit A, duly completed and executed by the Investor for the Shares being subscribed for by the Investor;
(iii) on or prior to the Closing, the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company, to be informed by the Company to the Investor in writing no later than two (2) Business Days prior to the Closing;
(iv) on the Closing, a counterpart signature to the joinder to the Investors’ Registration Rights Agreement, duly executed by the Investor; and
(v) on the Closing, a certificate duly executed by an officer or authorized representative of the Investor as of the Closing Date, certifying that the conditions specified in Section 6.1 and Section 6.2 have been satisfied.
(b) Deliveries by the Company. Upon the satisfaction or waiver by the Company of the conditions set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Company of those conditions at the Closing), the Company shall deliver or cause to be delivered to the Investor:
(i) on the Closing, after payment in full of the Subscription Amount by the Investor to the Company, evidence reasonably satisfactory to the Investor of the issuance to the Investor of the Shares;
(ii) on or prior to the Closing, a certified copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval;
(iii) on or prior to the Closing, a copy of the Board Resolutions;
(iv) on the Closing, a copy of the Transfer Agent Records;
(v) on the Closing, evidence of registration of the Investor in the register of shareholders of the Company as the owner of the Shares;
(vi) on the Closing, copies of the Binding Debt Restructuring Documents, duly executed by the Category Four Lenders and the Group Companies party thereto;
3
(vii) on the Closing, evidence that all amounts outstanding under the Hoche Secured Convertible Notes have been converted into Ordinary Shares;
(viii) on the Closing, a counterpart signature to the joinder by the Investor to the Investors’ Registration Rights Agreement, duly executed by the Company; and
(ix) on the Closing, a certificate duly executed by an officer or authorized representative of the Company as of the Closing Date, certifying that the conditions specified in Section 5.1 and Section 5.2 have been satisfied.
1.4 Investor Questionnaire. The Investor shall complete and deliver to the Company the Accredited Investor Status Questionnaire, the form of which is attached hereto as Exhibit B (“Investor Questionnaire”), together with the execution and delivery of this Agreement.
1.5 Use of Proceeds. The proceeds from the issuance and sale of the Shares shall be used (i) to fund the working capital needs of the Group Companies, (ii) for the payment of existing indebtedness of the Group Companies owed to the Category Four Lenders and other financial creditors as part of the Debt Restructuring, and (iii) to pay the Group Companies’ vendors, suppliers and third-party advisors, including the payment as soon as reasonably practicable of all debt owed to suppliers; provided, for the avoidance of doubt, that such proceeds will not be used to acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof.
2. Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(b) “Becaril” means Becaril, S.A., a Uruguayan corporation (sociedad anónima).
(c) “Board” means the board of directors of the Company.
(d) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares on the Closing Date.
4
(e) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(f) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(g) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(g) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(h) “Chemo” means Chemo Project SA, a Swiss corporation (società anonima).
(i) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(j) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(k) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Hoche Secured Convertible Notes, (C) upon the exercise of the Hoche Warrant; and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
(l) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(m) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
(n) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US$90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Hoche Secured Convertible Notes).
5
(o) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(p) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(q) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(r) “FlyingFish Ventures” means Flying Fish Ventures L.P., a Canadian limited partnership.
(s) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(t) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(u) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(v) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
(w) “HocheSecured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
6
(x) “HocheSecured Convertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended on the Effective Date and from time to time, and pursuant to which the Company issued the Hoche Secured Convertible Notes.
(y) “HocheSecured Convertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US$20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US$20,000,000.
(z) “HocheWarrant” means the warrant issuable to Hoche upon conversion of the Hoche Secured Convertible Notes, in a “warrant amount” of US$10,000,000.
(aa) “HocheWarrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(bb) “IndemnificationAgreements” means those certain indemnification agreements pursuant to which the Company shall agree to indemnify and hold harmless each director of the Company.
(cc) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(dd) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(ee) “Investors’Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement among the Company and certain shareholders of the Company, to be entered into substantially in the form of Exhibit C;
(ff) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
(gg) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
7
(hh) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(ii) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole, provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the Effective Date; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
(jj) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(kk) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(ll) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
8
(mm) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US$0.01 per share.
(nn) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(oo) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(pp) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(qq) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(rr) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(ss) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US$0.01 per share.
(tt) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US$0.01 per share.
(uu) “RemediationPlan” means a plan to remediate and correct certain deficiencies and other issues identified as a result of the Internal Investigation, as set forth in Exhibit D.
(vv) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(ww) “Santana” means Santana S.A., a Chilean sociedad anónima.
(xx) “SEC” means the Securities and Exchange Commission.
9
(yy) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(zz) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(aaa) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(bbb) “Subscriptionand Conversion Agreements” means, collectively, (i) that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes, (ii) that certain Subscription and Conversion Agreement to be entered into between the Company and Santana, ST Commercial and Flying Fish Ventures on or about the Closing Date, pursuant to which Santana, ST Commercial and Flying Fish Ventures will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes; and (iii) that certain Subscription and Conversion Agreement to be entered into between the Company and Chemo and Becaril on or about the Closing Date, pursuant to which Chemo and Becaril will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes.
(ccc) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(ddd) “STCommercial” means Saint Thomas Commercial S.A., a Panamanian sociedad anónima.
(eee) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
10
(fff) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
3. Representations and Warranties of the Group Companies. The Company hereby represents and warrants to the Investor, as of the Effective Date and as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.3 Capitalization.
(a) As of the Effective Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Effective Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US$11.50 per share; and (ii) the Hoche Secured Convertible Notes convertible into Ordinary Shares and the Hoche Warrant.
11
(b) Except as set forth in Section 3.3(a), as of the Effective Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Effective Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Effective Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
12
3.7 Private Placement. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Investor as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Investor and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US$500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
13
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Investor accurate and complete copies of all material correspondence through the Effective Date between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Effective Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Effective Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Effective Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Effective Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US$500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’ length dealings with a Person that is not an Affiliate, as of the Effective Date***,*** none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
14
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
15
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US$500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Effective Date (the “MaterialInsurance Policies”). As of the Effective Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Effective Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
16
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Effective Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US$500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
17
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
4. Representations and Warranties of the Investor. The Investor, severally but not jointly, hereby represents and warrants to the Company, as of the Effective Date and as of the Closing Date, as follows:
4.1 Organization. The Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. The Investor has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent the Investor is a legal entity, the execution and performance by the Investor of this Agreement, the performance by the Investor of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by the Investor, and constitutes legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
18
4.3 No Conflicts. The execution by the Investor of this Agreement, the performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which the Investor is a party or by which the Investor’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Investor is a party or by which the Investor or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair the Investor’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. The Investor understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law.
4.5 Restrictive Legend. The Investor agrees that any certificates or book-entry positions representing the Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares.
4.6 Investor Status. The information in the Investor Questionnaire completed by the Investor is true and accurate in all respects. At the time the Investor was offered Shares, it was, and as of the Closing Date, the Investor is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
4.7 Experience of Investor. The Investor, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
19
4.8 General Solicitation. The Investor is not purchasing Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. The Investor has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as the Investor has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including, the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Investor’s evaluation of its investment. The Investor has consulted, to the extent deemed appropriate by the Investor, with the Investor’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares, and believes that an investment in the Shares is suitable and appropriate for the Investor in accordance with the terms of this Agreement.
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, the Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investor. The Investor is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to the Investor in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of the Investor’s Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Investor’s Shares. The Investor’s subscription and payment for and continued beneficial ownership of its Shares will not violate any applicable securities or other laws of the Investor’s jurisdiction.
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Investor or any of its Affiliates.
20
4.13 Financial Wherewithal. The obligations of the Investor under this Agreement are not subject to any conditions regarding the Investor’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) The Investor has conducted to the Investor’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. The Investor has been represented by, and had the assistance of, counsel in the conduct of the Investor’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) THE INVESTOR ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO THE INVESTOR OR ANY OF THE INVESTOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
5. Conditions to the Investor’s Obligations at the Closing. The obligation of the Investor to subscribe for and purchase the Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Investor:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
5.2 Performance. The Company shall have performed and complied in all material respects with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing.
5.3 No Material Adverse Effect. From the Effective Date through the Closing Date, no Material Adverse Effect shall have occurred.
5.4 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
21
5.5 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.6 Qualifications. All authorizations, approvals (including the Company Shareholders’ Approval) or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
5.7 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements (the “Binding Debt Restructuring Documents”) which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “Debt Conversion”), and shall include the terms set forth in Schedule 5.7 attached hereto (the “Debt Restructuring”).
5.8 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
5.9 Debt Conversion. The Debt Conversion shall not have resulted in the Category Four Lenders aggregately holding more than (i) 9.23% of the Company’s issued and outstanding shares of capital stock or, (ii) if the Hoche Warrant has been exercised in full, 8.65% of the Company’s issued and outstanding shares of capital stock.
5.10 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect following the Board Resolutions.
5.11 Issuance of the Shares. After payment in full of the Subscription Amount by the Investor to the Company, the Company shall have issued, sold and delivered the Shares to the Investor in accordance with Section 1.3(b)(i).
6. Conditions to the Company’s Obligations at the Closing. The obligations of the Company to sell and issue the Shares to the Investor at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Company:
6.1 Representations and Warranties. The representations and warranties of the Investor contained in Section 4 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
6.2 Performance. The Investor shall have performed and complied with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Investor on or before the Closing.
6.3 Qualifications. All authorizations, approvals or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
22
6.4 Payment in full of the Subscription Amount. The Investor shall have paid the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company in accordance with Section 1.3(a)(iii).
6.5 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
6.6 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect, following the Board Resolutions.
7. Company’s Covenants.
7.1 Debt Restructuring. Promptly after the Effective Date, the Company shall use commercially reasonable efforts to enter into, and cause the Group Companies party to the Category Four Loan Agreements to enter into, the Binding Debt Restructuring Documents that shall include the terms set forth in Schedule 5.7 attached hereto, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Debt Restructuring as soon as reasonably practicable, including, without limitation, obtaining all Permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities (and consents, approvals and agreements of Persons other than Governmental Authorities, including the Company Shareholders’ Approval) necessary for the consummation of the Debt Restructuring.
7.2 Equity Raise.
(a) The Company shall use commercially reasonable efforts to cause the consummation of the Equity Raise, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Equity Raise as soon as reasonably practicable, but no later than the Outside Date, including, without limitation, using its commercially reasonable efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of Governmental Authority (and consents, approvals and agreements of Persons other than Governmental Authority, including the Company Shareholders’ Approval) necessary for the consummation of the Equity Raise.
(b) Notwithstanding anything else set forth in this Agreement, the Company, upon (i) becoming aware of any termination (or purported termination) of any of the subscription agreements (including this Agreement), entered into by the Company with any Person in connection with the Equity Raise (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”), or (ii) not expecting to receive any portion of the full amount of the Equity Raise on the terms, in the manner or from the sources contemplated by the Subscription Agreements, shall have the right to amend one or more Subscription Agreements or enter into one or more new subscription agreements with any Person, as required to consummate, and obtain the full amount of, the Equity Raise; provided that such transactions shall (x) not be under terms less favorable to the Company than those contained in this Agreement, when considered as a whole, (y) be at a price of US$0.06313 per Ordinary Share of the Company, and (z) not cause the amount of the Equity Raise to exceed US$90,000,000, provided that the Company may not amend a Subscription Agreement entered into with any other party which has fully complied with the terms thereunder without the written consent of the Investor.
23
7.3 [Intentionally Omitted].
7.4 Inspection. Except for any information that is subject to attorney-client privilege (provided that, to the extent possible, the parties shall cooperate in good faith to permit disclosure of such information in a manner that preserves such privilege or compliance with such confidentiality obligations), and to the extent permitted by applicable Law, the Company shall, and shall cause its Subsidiaries to, afford to the Investor and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (“Representatives”) reasonable access during the period commencing on the Effective Date and ending on the Closing Date, during normal business hours and with reasonable advance notice, in such manner as to not materially interfere with the ordinary course of business of the Company and its Subsidiaries, to all of their respective properties, books, records and appropriate officers and employees of the Company and its Subsidiaries, and shall furnish such Representatives with all financial and operating data and other information that are in the possession or control of the Company or its Subsidiaries concerning the affairs of the Company or any of its Subsidiaries as such Representatives may reasonably request for the purposes of and in connection with the transactions contemplated hereby, including, without limitation, the status of the negotiations with the Category Four Lenders and drafts of the Binding Debt Restructuring Documents. All information obtained from the Company or its Subsidiaries by the Investor or its Representatives pursuant to this Section 7.4 shall be subject to the confidentiality and/or non-disclosure agreement entered into by the Investor and the Company in connection with the Equity Raise (the “Confidentiality Agreement”).
7.5 Conduct of Business. From the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall and shall cause the Group Companies to use their commercially reasonable efforts to preserve intact their respective business organizations and assets, and to maintain in effect all of its material Permits. Except (i) as required by applicable Law, (ii) as expressly contemplated or permitted by this Agreement, or (iii) as contemplated and in furtherance of the Equity Raise, the Debt Restructuring, Debt Conversion, the Hoche Secured Convertible Note Subscription Agreement, the Hoche Secured Convertible Notes, the Hoche Warrant, the Hoche Secured Convertible Notes Assignment Agreements, the Hoche Warrant Assignment Agreements, the Subscription and Conversion Agreements, each Indemnification Agreement, the Company Shareholders’ Approval, or the Board Resolutions, from the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall not (and shall cause any other Group Company not to):
(a) issue (other than to any other Group Company) (A) any capital stock of any Group Company; or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any capital stock of any Group Company;
(b) transfer or Encumber any of the Group Companies’ material assets, other than as a result of a Permitted Encumbrance or any transfer or Encumbrance in the ordinary course of the Group Companies’ business;
24
(c) acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; or
(d) amend the Organizational Documents of the Company.
7.6 Remediation Plan. The Company shall continue adopting and implementing all reasonable measures, as needed to remediate and correct the deficiencies and other weaknesses identified under the Internal Investigation, including those measures in the Remediation Plan set forth in Exhibit D.
8. Termination.
8.1 Termination. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and all the transactions contemplated herein abandoned at any time prior to Closing only:
(a) by written consent of the Investor and the Company;
(b) by the Investor, if the Investor is not in material breach of its obligations under this Agreement and the Company breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 5, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Investor and (B) the Outside Date, and (iii) has not been waived by the Investor;
(c) by the Company, if the Company is not in material breach of its obligations under this Agreement and the Investor breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 6, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Company and (B) the Outside Date, and (iii) has not been waived by the Company;
(d) by the Investor or the Company, upon written notice to the other, if the Closing shall not have occurred on or before May 30, 2025 (the “Outside Date”); provided that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party hereto that is in material default or breach of any provision of this Agreement, which default or breach has been a cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; or
(e) by either the Investor or the Company in the event that (i) there shall be any Law, rule or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Judgment restraining or enjoining the transactions contemplated hereby, and such Judgment shall have become final and non-appealable.
25
The party seeking to terminate this Agreement pursuant to this Section 8.1 shall give prompt written notice of such termination to the other parties.
8.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that (A) this Section 8 and Section 10 shall survive the termination of this Agreement as applicable and in accordance with their terms and (B) that nothing herein shall relieve any party hereto from any liability for Fraud or any willful breach of this Agreement or any agreement made as of the Effective Date or subsequent thereto pursuant to this Agreement.
9. Survival and Limitation on Liability.
9.1 Survival of Representations and Warranties and Covenants.
(a) Subject to Section 8, (i) the representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
(b) Subject to Section 8, (i) the representations and warranties of the Investor contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Investor Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Investor contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
(d) Notwithstanding anything to the contrary in this Section 9.1, in the event a Claim Notice is properly delivered in good faith under Section 9.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 9.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
26
9.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Company shall indemnify, defend and hold harmless the Investor and its respective Representatives, employees, Affiliates, successors and assigns (each, an “InvestorIndemnified Party” and collectively, the “Investor Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by the Investor, net of any Losses indemnified to the Investor under this Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) or Section 9.2(a)(iii) of any other Subscription Agreement (excluding, for the avoidance of doubt, this Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) or Section 7.2(a)(iii) of the Subscription and Conversion Agreements and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
(b) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Investor shall indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Investor in Section 4, or (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Investor under this Agreement.
9.3 Indemnification Procedures
(a) In order for any Investor Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 9, the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 9.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
27
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 9, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 9.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 9 (including Section 9.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
28
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
9.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 9 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to an Investor Indemnified Party for any Losses pursuant to Section 9.2(a)(i) and/or Section 9.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, subject to the other limitations herein; and (ii) the Company shall not be liable to the Investor Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
(c) Notwithstanding anything herein to the contrary, (i) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i) which, individually considered, do not exceed US$15,000 (“De Minimis Exclusion”) and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(b)(i) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(b)(i) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US$ 37,500, at which time the Investor shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, in excess of US$ 150,000, subject to the other limitations herein; and (iv) the Investor shall not be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
29
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Investor Indemnified Party for any Losses under this Section 9, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Investor Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 9.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Investor Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Investor Indemnified Party in the form attached hereto as Exhibit E (the “Indemnity Warrant”), that will entitle such Investor Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US$0.01.
(f) In the event that the Investor has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 9, the Investor shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by the Investor and such Company Indemnified Party) after such Losses have been finally determined and are owed by the Investor in accordance with Section 9.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
30
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 9 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
9.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 10.9, following the Closing Date, the indemnification obligations under this Section 9 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
10. Miscellaneous.
10.1 Release. The Investor, on behalf of itself and on behalf of its respective Representatives, Affiliates (excluding the Company and its Subsidiaries), assigns and successors and any and all persons or entities claiming by or through any of the foregoing (collectively, the “InvestorReleasing Parties”), hereby irrevocably and unconditionally releases, waives and forever discharges fully and finally to the fullest extent permitted by Law, the Company, its Subsidiaries and each of their respective current Representatives, assigns and successors (collectively, the “Company Released Parties”), from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity (collectively, “Claims”) that such Investor Releasing Party has or may have in the future for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Claims arising under (i) this Agreement or any other agreement entered into on the Effective Date between the Investor, on the one hand, and any of the Company and/or any of its Subsidiaries, on the other hand, and any of the transactions contemplated hereunder or thereunder and/or (ii) matters not disclosed in writing (which for these written disclosure purposes, shall include any filing on or furnishing to the United States Securities & Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system) by any of the Group Companies to any of the Investors prior to the date hereof ((i) and (ii), collectively, the “Excluded Claims”). The Investor shall not, and shall cause each of the Investor Releasing Parties not to, commence or institute any Claims, including any legal actions, litigation, arbitration or any other legal proceedings of any kind whatsoever, in law or equity, or assert any Claim, demand, action or cause of action against any of the Company Released Parties, arising under or in connection with any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Excluded Claims.
10.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
31
10.3 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
10.4 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
10.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
10.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
32
10.7 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
(b) if to the Investor, to physical or e-mail address set forth on the Investor’s signature pages hereto.
10.8 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
10.9 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
10.10 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Investor.
10.11 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
33
10.12 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement and/or by Law or otherwise afforded to any party hereunder, shall be cumulative and not alternative.
10.13 Press Releases. The Company, on the one hand, and the Investor, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
10.14 Entire Agreement. This Agreement and the Confidentiality Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
10.15 Legal Counsel. Upon execution and delivery of a counterpart to this Agreement, the Investor acknowledges the following: (a) the Company has retained Greenberg Traurig, LLP (“GT”) in connection with the transactions contemplated in this Agreement; (b) GT is not representing the Investor in connection with any of the transactions contemplated in this Agreement; and (c) the Investor will, if Investor wishes counsel on the transactions contemplated in this Agreement, retain Investor’s own independent counsel at Investor’s own cost and expense.
[SignaturePages Follow]
34
Exhibit 10.6
PROCAPS GROUP, S.A.
SUBSCRIPTION AGREEMENT
by and between
Procaps Group, S.A.
and
Corales, LLC
as of April 3, 2025
Procaps Group, S.A.
SUBSCRIPTION AGREEMENT
This Subscription Agreement (this “Agreement”) is made as of April 3, 2025 (the “Effective Date”), by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), and Corales, LLC, a limited liability company formed and existing under the laws of Delaware (the “Investor”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
1. Issuance, Subscriptions and Closing.
1.1 Issuance of Shares and Payment of Subscription Amount. Subject to the terms and conditions of this Agreement, the Investor agrees to subscribe for and purchase, and the Company agrees to issue and sell to the Investor, that number of Ordinary Shares of the Company (rounded down to the nearest whole Ordinary Share) (the “Shares”) equal to the quotient obtained by dividing US$750,000 (the “Subscription Amount”) by US$0.06313 per Ordinary Share (the “Price PerShare”). The Investor agrees to pay to the Company on or prior to the Closing, in exchange for the issuance and sale of the Shares, the Subscription Amount.
1.2 Closing. The closing of the subscription and purchase, and the sale and issuance, of the Shares shall take place remotely via the exchange of documents and signatures on the date the conditions set forth in Section 5 and Section 6 (other than conditions that by their nature are to be satisfied at the Closing itself, but subject to the satisfaction or waiver of those conditions) are satisfied or waived in writing by the applicable party hereto, or at such other time and place as the Company and the Investor mutually agree upon in writing (which time and place are designated as the “Closing”). The Company shall notify the Investor no later than two (2) Business Days prior to the satisfaction of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing itself). All proceedings to be taken and all documents to be executed and delivered by the Company and the Investor at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
1.3 Deliveries.
(a) Deliveries by the Investor. Upon the satisfaction or waiver by the Investor of the conditions set forth in Section 5 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Investor of those conditions at the Closing), the Investor shall deliver, or cause to be delivered, to the Company:
(i) no later than five (5) Business Days prior to the Closing, know your customer (KYC) forms and other information required (A) under Luxembourg Law for the issuance of the Shares to the Investor and (B) by the Company’s transfer agent to deliver the records evidencing ownership of the Shares by the Investor (the “Transfer Agent Records”);
2
(ii) on the Closing, a subscription form in the form attached hereto as Exhibit A, duly completed and executed by the Investor for the Shares being subscribed for by the Investor;
(iii) on or prior to the Closing, the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company, to be informed by the Company to the Investor in writing no later than two (2) Business Days prior to the Closing;
(iv) on the Closing, a counterpart signature to the joinder to the Investors’ Registration Rights Agreement, duly executed by the Investor; and
(v) on the Closing, a certificate duly executed by an officer or authorized representative of the Investor as of the Closing Date, certifying that the conditions specified in Section 6.1 and Section 6.2 have been satisfied.
(b) Deliveries by the Company. Upon the satisfaction or waiver by the Company of the conditions set forth in Section 6 (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or waiver by the Company of those conditions at the Closing), the Company shall deliver or cause to be delivered to the Investor:
(i) on the Closing, after payment in full of the Subscription Amount by the Investor to the Company, evidence reasonably satisfactory to the Investor of the issuance to the Investor of the Shares;
(ii) on or prior to the Closing, a certified copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval;
(iii) on or prior to the Closing, a copy of the Board Resolutions;
(iv) on the Closing, a copy of the Transfer Agent Records;
(v) on the Closing, evidence of registration of the Investor in the register of shareholders of the Company as the owner of the Shares;
(vi) on the Closing, copies of the Binding Debt Restructuring Documents, duly executed by the Category Four Lenders and the Group Companies party thereto;
3
(vii) on the Closing, evidence that all amounts outstanding under the Hoche Secured Convertible Notes have been converted into Ordinary Shares;
(viii) on the Closing, a counterpart signature to the joinder by the Investor to the Investors’ Registration Rights Agreement, duly executed by the Company; and
(ix) on the Closing, a certificate duly executed by an officer or authorized representative of the Company as of the Closing Date, certifying that the conditions specified in Section 5.1 and Section 5.2 have been satisfied.
1.4 Investor Questionnaire. The Investor shall complete and deliver to the Company the Accredited Investor Status Questionnaire, the form of which is attached hereto as Exhibit B (“Investor Questionnaire”), together with the execution and delivery of this Agreement.
1.5 Use of Proceeds. The proceeds from the issuance and sale of the Shares shall be used (i) to fund the working capital needs of the Group Companies, (ii) for the payment of existing indebtedness of the Group Companies owed to the Category Four Lenders and other financial creditors as part of the Debt Restructuring, and (iii) to pay the Group Companies’ vendors, suppliers and third-party advisors, including the payment as soon as reasonably practicable of all debt owed to suppliers; provided, for the avoidance of doubt, that such proceeds will not be used to acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof.
2. Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(b) “Becaril” means Becaril, S.A., a Uruguayan corporation (sociedad anónima).
(c) “Board” means the board of directors of the Company.
(d) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares on the Closing Date.
4
(e) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(f) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(g) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(g) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(h) “Chemo” means Chemo Project SA, a Swiss corporation (società anonima).
(i) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(j) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(k) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Hoche Secured Convertible Notes, (C) upon the exercise of the Hoche Warrant; and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
(l) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(m) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
5
(n) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US$90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Hoche Secured Convertible Notes).
(o) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(p) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(q) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(r) “FlyingFish Ventures” means Flying Fish Ventures L.P., a Canadian limited partnership.
(s) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(t) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(u) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(v) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
6
(w) “HocheSecured Convertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Secured Convertible Note Subscription Agreement and the Hoche Secured Convertible Notes.
(x) “HocheSecured Convertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended on the Effective Date and from time to time, and pursuant to which the Company issued the Hoche Secured Convertible Notes.
(y) “HocheSecured Convertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US$20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US$20,000,000.
(z) “HocheWarrant” means the warrant issuable to Hoche upon conversion of the Hoche Secured Convertible Notes, in a “warrant amount” of US$10,000,000.
(aa) “HocheWarrant Assignment Agreements” means those certain Assignment and Assumption Agreements to be entered into between Hoche and each of the Flying Fish Ventures, ST Commercial, Santana, Chemo and Becaril, and acknowledged by the Company, pursuant to which Hoche shall assign to such Persons certain of its rights, title, and interest in and to the Hoche Warrant issuable upon conversion of the Hoche Secured Convertible Notes.
(bb) “IndemnificationAgreements” means those certain indemnification agreements pursuant to which the Company shall agree to indemnify and hold harmless each director of the Company.
(cc) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(dd) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(ee) “Investors’Registration Rights Agreement” means that certain Amended and Restated Registration Rights Agreement among the Company and certain shareholders of the Company, to be entered into substantially in the form of Exhibit C;
(ff) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
(gg) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
7
(hh) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(ii) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole, provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the Effective Date; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
(jj) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(kk) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(ll) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
8
(mm) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US$0.01 per share.
(nn) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(oo) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(pp) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(qq) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(rr) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(ss) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US$0.01 per share.
(tt) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US$0.01 per share.
(uu) “RemediationPlan” means a plan to remediate and correct certain deficiencies and other issues identified as a result of the Internal Investigation, as set forth in Exhibit D.
(vv) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(ww) “Santana” means Santana S.A., a Chilean sociedad anónima.
(xx) “SEC” means the Securities and Exchange Commission.
9
(yy) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(zz) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(aaa) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(bbb) “Subscriptionand Conversion Agreements” means, collectively, (i) that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes, (ii) that certain Subscription and Conversion Agreement to be entered into between the Company and Santana, ST Commercial and Flying Fish Ventures on or about the Closing Date, pursuant to which Santana, ST Commercial and Flying Fish Ventures will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes; and (iii) that certain Subscription and Conversion Agreement to be entered into between the Company and Chemo and Becaril on or about the Closing Date, pursuant to which Chemo and Becaril will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Hoche Secured Convertible Notes.
(ccc) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(ddd) “STCommercial” means Saint Thomas Commercial S.A., a Panamanian sociedad anónima.
(eee) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
10
(fff) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
3. Representations and Warranties of the Group Companies. The Company hereby represents and warrants to the Investor, as of the Effective Date and as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.3 Capitalization.
(a) As of the Effective Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Effective Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US$11.50 per share; and (ii) the Hoche Secured Convertible Notes convertible into Ordinary Shares and the Hoche Warrant.
11
(b) Except as set forth in Section 3.3(a), as of the Effective Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Effective Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Effective Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
12
3.7 Private Placement. Assuming the accuracy of the representations made by the Investor in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Investor as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Investor and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US$500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
13
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Investor accurate and complete copies of all material correspondence through the Effective Date between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Effective Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Effective Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Effective Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Effective Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US$500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’ length dealings with a Person that is not an Affiliate, as of the Effective Date***,*** none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
14
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
15
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US$500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Effective Date (the “MaterialInsurance Policies”). As of the Effective Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Effective Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Effective Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US$500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
16
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
4. Representations and Warranties of the Investor. The Investor, severally but not jointly, hereby represents and warrants to the Company, as of the Effective Date and as of the Closing Date, as follows:
4.1 Organization. The Investor is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. The Investor has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent the Investor is a legal entity, the execution and performance by the Investor of this Agreement, the performance by the Investor of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by the Investor, and constitutes legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
17
4.3 No Conflicts. The execution by the Investor of this Agreement, the performance by the Investor of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which the Investor is a party or by which the Investor’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Investor is a party or by which the Investor or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair the Investor’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. The Investor understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law.
4.5 Restrictive Legend. The Investor agrees that any certificates or book-entry positions representing the Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares.
4.6 Investor Status. The information in the Investor Questionnaire completed by the Investor is true and accurate in all respects. At the time the Investor was offered Shares, it was, and as of the Closing Date, the Investor is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
4.7 Experience of Investor. The Investor, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Investor is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
18
4.8 General Solicitation. The Investor is not purchasing Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. The Investor has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as the Investor has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including, the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Investor’s evaluation of its investment. The Investor has consulted, to the extent deemed appropriate by the Investor, with the Investor’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares, and believes that an investment in the Shares is suitable and appropriate for the Investor in accordance with the terms of this Agreement.
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, the Investor has not, nor has any Person acting on behalf of or pursuant to any understanding with the Investor, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Investor first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investor. The Investor is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to the Investor in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of the Investor’s Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Investor’s Shares. The Investor’s subscription and payment for and continued beneficial ownership of its Shares will not violate any applicable securities or other laws of the Investor’s jurisdiction.
19
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Investor or any of its Affiliates.
4.13 Financial Wherewithal. The obligations of the Investor under this Agreement are not subject to any conditions regarding the Investor’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) The Investor has conducted to the Investor’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. The Investor has been represented by, and had the assistance of, counsel in the conduct of the Investor’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) THE INVESTOR ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO THE INVESTOR OR ANY OF THE INVESTOR’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
5. Conditions to the Investor’s Obligations at the Closing. The obligation of the Investor to subscribe for and purchase the Shares at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Investor:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
5.2 Performance. The Company shall have performed and complied in all material respects with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Company on or before the Closing.
5.3 No Material Adverse Effect. From the Effective Date through the Closing Date, no Material Adverse Effect shall have occurred.
5.4 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
20
5.5 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.6 Qualifications. All authorizations, approvals (including the Company Shareholders’ Approval) or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
5.7 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements (the “Binding Debt Restructuring Documents”) which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “Debt Conversion”), and shall include the terms set forth in Schedule 5.7 attached hereto (the “Debt Restructuring”).
5.8 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
5.9 Debt Conversion. The Debt Conversion shall not have resulted in the Category Four Lenders aggregately holding more than (i) 9.23% of the Company’s issued and outstanding shares of capital stock or, (ii) if the Hoche Warrant has been exercised in full, 8.65% of the Company’s issued and outstanding shares of capital stock.
5.10 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect following the Board Resolutions.
5.11 Issuance of the Shares. After payment in full of the Subscription Amount by the Investor to the Company, the Company shall have issued, sold and delivered the Shares to the Investor in accordance with Section 1.3(b)(i).
6. Conditions to the Company’s Obligations at the Closing. The obligations of the Company to sell and issue the Shares to the Investor at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Company:
6.1 Representations and Warranties. The representations and warranties of the Investor contained in Section 4 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
6.2 Performance. The Investor shall have performed and complied with all covenants and obligations contained in this Agreement that are required to be performed or complied with by the Investor on or before the Closing.
6.3 Qualifications. All authorizations, approvals or Permits, if any, of any Governmental Authority that are required in connection with the lawful issuance, purchase, sale and subscription of the Shares pursuant to this Agreement shall be obtained and effective as of the Closing.
21
6.4 Payment in full of the Subscription Amount. The Investor shall have paid the full Subscription Amount by wire transfer of immediately available funds in U.S. dollars to the bank account designated by the Company in accordance with Section 1.3(a)(iii).
6.5 Equity Raise. The Company shall have received US$90,000,000 as part of the Equity Raise, including all amounts committed to be funded by the Investor under this Agreement.
6.6 Company Shareholders’ Approval. The Company Shareholders’ Approval shall have been obtained and remain in full force and effect, following the Board Resolutions.
7. Company’s Covenants.
7.1 Debt Restructuring. Promptly after the Effective Date, the Company shall use commercially reasonable efforts to enter into, and cause the Group Companies party to the Category Four Loan Agreements to enter into, the Binding Debt Restructuring Documents that shall include the terms set forth in Schedule 5.7 attached hereto, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Debt Restructuring as soon as reasonably practicable, including, without limitation, obtaining all Permits, consents, approvals, authorizations, qualifications and orders of Governmental Authorities (and consents, approvals and agreements of Persons other than Governmental Authorities, including the Company Shareholders’ Approval) necessary for the consummation of the Debt Restructuring.
7.2 Equity Raise.
(a) The Company shall use commercially reasonable efforts to cause the consummation of the Equity Raise, and exercise its commercially reasonable efforts to take, or cause to be taken, appropriate action, and to do, or cause to be done, such things as are necessary, proper or advisable under applicable Laws or otherwise to consummate and make effective the Equity Raise as soon as reasonably practicable, but no later than the Outside Date, including, without limitation, using its commercially reasonable efforts to obtain all permits, consents, approvals, authorizations, qualifications and orders of Governmental Authority (and consents, approvals and agreements of Persons other than Governmental Authority, including the Company Shareholders’ Approval) necessary for the consummation of the Equity Raise.
(b) Notwithstanding anything else set forth in this Agreement, the Company, upon (i) becoming aware of any termination (or purported termination) of any of the subscription agreements (including this Agreement), entered into by the Company with any Person in connection with the Equity Raise (each, a “Subscription Agreement” and collectively, the “Subscription Agreements”), or (ii) not expecting to receive any portion of the full amount of the Equity Raise on the terms, in the manner or from the sources contemplated by the Subscription Agreements, shall have the right to amend one or more Subscription Agreements or enter into one or more new subscription agreements with any Person, as required to consummate, and obtain the full amount of, the Equity Raise; provided that such transactions shall (x) not be under terms less favorable to the Company than those contained in this Agreement, when considered as a whole, (y) be at a price of US$0.06313 per Ordinary Share of the Company, and (z) not cause the amount of the Equity Raise to exceed US$90,000,000, provided that the Company may not amend a Subscription Agreement entered into with any other party which has fully complied with the terms thereunder without the written consent of the Investor.
22
7.3 [Intentionally Omitted].
7.4 Inspection. Except for any information that is subject to attorney-client privilege (provided that, to the extent possible, the parties shall cooperate in good faith to permit disclosure of such information in a manner that preserves such privilege or compliance with such confidentiality obligations), and to the extent permitted by applicable Law, the Company shall, and shall cause its Subsidiaries to, afford to the Investor and its officers, directors, employees, accountants, consultants, legal counsel, advisors, agents and other representatives (“Representatives”) reasonable access during the period commencing on the Effective Date and ending on the Closing Date, during normal business hours and with reasonable advance notice, in such manner as to not materially interfere with the ordinary course of business of the Company and its Subsidiaries, to all of their respective properties, books, records and appropriate officers and employees of the Company and its Subsidiaries, and shall furnish such Representatives with all financial and operating data and other information that are in the possession or control of the Company or its Subsidiaries concerning the affairs of the Company or any of its Subsidiaries as such Representatives may reasonably request for the purposes of and in connection with the transactions contemplated hereby, including, without limitation, the status of the negotiations with the Category Four Lenders and drafts of the Binding Debt Restructuring Documents. All information obtained from the Company or its Subsidiaries by the Investor or its Representatives pursuant to this Section 7.4 shall be subject to the confidentiality and/or non-disclosure agreement entered into by the Investor and the Company in connection with the Equity Raise (the “Confidentiality Agreement”).
7.5 Conduct of Business. From the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall and shall cause the Group Companies to use their commercially reasonable efforts to preserve intact their respective business organizations and assets, and to maintain in effect all of its material Permits. Except (i) as required by applicable Law, (ii) as expressly contemplated or permitted by this Agreement, or (iii) as contemplated and in furtherance of the Equity Raise, the Debt Restructuring, Debt Conversion, the Hoche Secured Convertible Note Subscription Agreement, the Hoche Secured Convertible Notes, the Hoche Warrant, the Hoche Secured Convertible Notes Assignment Agreements, the Hoche Warrant Assignment Agreements, the Subscription and Conversion Agreements, each Indemnification Agreement, the Company Shareholders’ Approval, or the Board Resolutions, from the Effective Date until the earlier of the Closing or termination of this Agreement pursuant to Section 8, the Company shall not (and shall cause any other Group Company not to):
(a) issue (other than to any other Group Company) (A) any capital stock of any Group Company; or (B) any options, warrants, rights of conversion or other rights, agreements, arrangements or commitments obligating any Group Company to issue, deliver or sell any capital stock of any Group Company;
23
(b) transfer or Encumber any of the Group Companies’ material assets, other than as a result of a Permitted Encumbrance or any transfer or Encumbrance in the ordinary course of the Group Companies’ business;
(c) acquire (by merger, consolidation or combination, or acquisition of stock or assets) any corporation, partnership or other business organization or division thereof; or
(d) amend the Organizational Documents of the Company.
7.6 Remediation Plan. The Company shall continue adopting and implementing all reasonable measures, as needed to remediate and correct the deficiencies and other weaknesses identified under the Internal Investigation, including those measures in the Remediation Plan set forth in Exhibit D.
8. Termination.
8.1 Termination. Notwithstanding anything to the contrary in this Agreement, this Agreement may be terminated and all the transactions contemplated herein abandoned at any time prior to Closing only:
(a) by written consent of the Investor and the Company;
(b) by the Investor, if the Investor is not in material breach of its obligations under this Agreement and the Company breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 5, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Investor and (B) the Outside Date, and (iii) has not been waived by the Investor;
(c) by the Company, if the Company is not in material breach of its obligations under this Agreement and the Investor breaches or fails to perform in any respect any of its representations, warranties or covenants contained in this Agreement and such breach or failure to perform (i) would give rise to the failure of a condition set forth in Section 6, (ii) is not capable of being cured, or if curable, is not cured prior to the earlier of (A) thirty (30) days after the giving of notice thereof by the Company and (B) the Outside Date, and (iii) has not been waived by the Company;
(d) by the Investor or the Company, upon written notice to the other, if the Closing shall not have occurred on or before May 30, 2025 (the “Outside Date”); provided that the right to terminate this Agreement pursuant to this Section 8.1(d) shall not be available to any party hereto that is in material default or breach of any provision of this Agreement, which default or breach has been a cause of, or resulted in, the failure of the Closing to occur on or before the Outside Date; or
24
(e) by either the Investor or the Company in the event that (i) there shall be any Law, rule or regulation that makes consummation of the transactions contemplated hereby illegal or otherwise prohibited or (ii) any Governmental Authority shall have issued a Judgment restraining or enjoining the transactions contemplated hereby, and such Judgment shall have become final and non-appealable.
The party seeking to terminate this Agreement pursuant to this Section 8.1 shall give prompt written notice of such termination to the other parties.
8.2 Effect of Termination. In the event of termination of this Agreement as provided in Section 8.1, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except that (A) this Section 8 and Section 10 shall survive the termination of this Agreement as applicable and in accordance with their terms and (B) that nothing herein shall relieve any party hereto from any liability for Fraud or any willful breach of this Agreement or any agreement made as of the Effective Date or subsequent thereto pursuant to this Agreement.
9. Survival and Limitation on Liability.
9.1 Survival of Representations and Warranties and Covenants.
(a) Subject to Section 8, (i) the representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
(b) Subject to Section 8, (i) the representations and warranties of the Investor contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Investor Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Investor contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
25
(d) Notwithstanding anything to the contrary in this Section 9.1, in the event a Claim Notice is properly delivered in good faith under Section 9.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 9.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
9.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Company shall indemnify, defend and hold harmless the Investor and its respective Representatives, employees, Affiliates, successors and assigns (each, an “InvestorIndemnified Party” and collectively, the “Investor Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by the Investor, net of any Losses indemnified to the Investor under this Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) or Section 9.2(a)(iii) of any other Subscription Agreement (excluding, for the avoidance of doubt, this Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) or Section 7.2(a)(iii) of the Subscription and Conversion Agreements and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
(b) From and after the Closing Date and subject to the provisions of this Section 9 (including Section 9.4), the Investor shall indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Investor in Section 4, or (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Investor under this Agreement.
9.3 Indemnification Procedures
(a) In order for any Investor Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 9, the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 9.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
26
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 9, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 9.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 9 (including Section 9.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
9.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 9 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to an Investor Indemnified Party for any Losses pursuant to Section 9.2(a)(i) and/or Section 9.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, subject to the other limitations herein; and (ii) the Company shall not be liable to the Investor Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
27
(c) Notwithstanding anything herein to the contrary, (i) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i) which, individually considered, do not exceed US$10,000 (“De Minimis Exclusion”) and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 9.2(b)(i) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 9.2(b)(i) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US$18,750, at which time the Investor shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Investor shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 9.2(b)(i), other than in respect of Fraud or breach of any Investor Fundamental Representation, in excess of US$75,000, subject to the other limitations herein; and (iv) the Investor shall not be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of the Subscription Amount, subject to the other limitations herein.
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Investor Indemnified Party for any Losses under this Section 9, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Investor Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 9.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Investor Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Investor Indemnified Party in the form attached hereto as Exhibit E (the “Indemnity Warrant”), that will entitle such Investor Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US$0.01.
(f) In the event that the Investor has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 9, the Investor shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by the Investor and such Company Indemnified Party) after such Losses have been finally determined and are owed by the Investor in accordance with Section 9.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 9 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
9.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 10.9, following the Closing Date, the indemnification obligations under this Section 9 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
28
10. Miscellaneous.
10.1 Release. The Investor, on behalf of itself and on behalf of its respective Representatives, Affiliates (excluding the Company and its Subsidiaries), assigns and successors and any and all persons or entities claiming by or through any of the foregoing (collectively, the “InvestorReleasing Parties”), hereby irrevocably and unconditionally releases, waives and forever discharges fully and finally to the fullest extent permitted by Law, the Company, its Subsidiaries and each of their respective current Representatives, assigns and successors (collectively, the “Company Released Parties”), from any and all actions, causes of action, suits, losses, liabilities, rights, debts, dues, sums of money, accounts, reckonings, obligations, costs, expenses, liens, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, claims and demands of every kind and nature whatsoever, whether now known or unknown, foreseen or unforeseen, matured or unmatured, suspected or unsuspected, in law, admiralty, or equity (collectively, “Claims”) that such Investor Releasing Party has or may have in the future for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Claims arising under (i) this Agreement or any other agreement entered into on the Effective Date between the Investor, on the one hand, and any of the Company and/or any of its Subsidiaries, on the other hand, and any of the transactions contemplated hereunder or thereunder and/or (ii) matters not disclosed in writing (which for these written disclosure purposes, shall include any filing on or furnishing to the United States Securities & Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system) by any of the Group Companies to any of the Investors prior to the date hereof ((i) and (ii), collectively, the “Excluded Claims”). The Investor shall not, and shall cause each of the Investor Releasing Parties not to, commence or institute any Claims, including any legal actions, litigation, arbitration or any other legal proceedings of any kind whatsoever, in law or equity, or assert any Claim, demand, action or cause of action against any of the Company Released Parties, arising under or in connection with any matter, cause or thing whatsoever from the beginning of time through the date hereof, except for any Excluded Claims.
10.2 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
10.3 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
10.4 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
10.5 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
10.6 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
10.7 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
29
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
(b) if to the Investor, to physical or e-mail address set forth on the Investor’s signature pages hereto.
10.8 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
10.9 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
10.10 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Investor.
10.11 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
10.12 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement and/or by Law or otherwise afforded to any party hereunder, shall be cumulative and not alternative.
10.13 Press Releases. The Company, on the one hand, and the Investor, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
10.14 Entire Agreement. This Agreement and the Confidentiality Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
10.15 Legal Counsel. Upon execution and delivery of a counterpart to this Agreement, the Investor acknowledges the following: (a) the Company has retained Greenberg Traurig, LLP (“GT”) in connection with the transactions contemplated in this Agreement; (b) GT is not representing the Investor in connection with any of the transactions contemplated in this Agreement; and (c) the Investor will, if Investor wishes counsel on the transactions contemplated in this Agreement, retain Investor’s own independent counsel at Investor’s own cost and expense.
[SignaturePages Follow]
30
Exhibit 10.7
AMENDMENT NO. 1
TO THE SECURED CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT
THIS AMENDMENT NO. 1 TOTHE SECURED CONVERTIBLE NOTE SUBSCRIPTION AGREEMENT, (this “Amendment”), which shall be effective as of April 3, 2025 (the “Effective Date”), is entered into by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”) and Hoche Partners Pharma Holding S.A., a public limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg with its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) under number B206416 (the “Subscriber,” and together with the Company, each, a “Party” and collectively, the “Parties”). Capitalized terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Original Agreement (as defined below).
RECITALS
WHEREAS, reference is hereby made to that certain Secured Convertible Note Subscription Agreement, dated as of November 29, 2024, by and between the Company and the Subscriber (the “Original Agreement”, as further amended by this Amendment or otherwise, and together with the Schedules and Exhibits thereto, the “Subscription Agreement”);
WHEREAS, pursuant to Section 13.11 of the Original Agreement, the Original Agreement may only be amended with the written consent of the Company and the Subscriber; and
WHEREAS, the Company and the Subscriber wish to amend the Original Agreement pursuant to the terms of, and as set forth in, this Amendment.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements herein contained, and intending to be legally bound hereby, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
- Amendments. Effective as of the Effective Date, the Parties agree to amend the Original Agreement as follows:
(a) Section 2 (Defined Terms) of the Original Agreement is hereby amended by adding the following definitions in alphabetical order:
““Category Four Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
“Debt Restructuring” means a full restructuring of the Company’s debt with the Category Four Lenders.”
(b) Section 2 (Defined Terms) of the Original Agreement is hereby amended by replacing the definition of “Conversion Price” with the following definition:
““Conversion Price” means US$0.06313 per Ordinary Share.”
(c) Section 2 (Defined Terms) of the Original Agreement is hereby amended by replacing the definition of “Securities” with the following definition:
““Securities” means the Notes, the Ordinary Shares issuable upon Conversion, the Warrant issuable upon Conversion and the Ordinary Shares issuable upon the exercise of the Warrant.”
(d) Section 2 (Defined Terms) of the Original Agreement is hereby amended by replacing the definition of “Transaction Documents” with the following definition:
“Transaction Documents” means this Agreement, the Notes, the Pledge Agreement, the Subscription and Conversion Agreement executed upon Conversion, the Warrant issuable on Conversion and the other documents referred to herein.
(e) Section 2 (Defined Terms) of the Original Agreement is hereby amended by deleting the definition of “Nasdaq” and “Triggering Event” in their entirety.
(f) Section 3.6 (Mechanics and Effect of Conversion) of the Original Agreement is hereby amended as follows (with deletions shown in ~~strikethrough~~ and additions in underline):
“3.6 Mechanics and Effectof Conversion.
(a) ~~Assoon as reasonably practicable, but in any event no later than five (5) Business Days following a~~ Uponthe occurrence of a Conversion Event:
(i) The Subscriber shall: (A) execute and deliver to the Company a subscription and conversion **~~form~~**agreement~~,~~ in the form attached to this Agreement as Exhibit D (the “Subscription and Conversion ~~Form~~ Agreement”); and (B) surrender the Note, duly endorsed, at the principal offices of the Company or any transfer agent of the Company; and
(ii) The Company shall, at its expense, (A) execute and deliver the Subscription and Conversion Agreement to the Subscriber;(B) issue the number of Ordinary Shares to which the Subscriber is entitled upon Conversion pursuant to Section 3.4 (it being understood that an amount of $0.01 of the per Ordinary Share conversion price shall be allocated to the share capital of the Company), together with the Warrant pursuant to Section 3.5, to the Subscriber by way of a capital increase to be resolved by means of the authorized share capital of the Company to be authorized and approved by the board of directors of the Company (the “Board Decision”); ~~(B)~~ (C) deliver, or cause to be delivered, to the Subscriber a copy of the records of the transfer agent for the Company, showing the Subscriber as the owner of such Ordinary Shares to which the Subscriber is entitled upon Conversion pursuant to Section 3.4; and ~~(C)~~****(D) register the Subscriber in the register of shareholders of the Company as the owner of the Ordinary Shares issued upon Conversion pursuant to Section 3.4, and update the Notes register of the Company accordingly.
2
(b) Notwithstanding the foregoing, in the event a Conversion Event occurs prior to the satisfaction of any Warrant Condition, the Company shall issue the Warrant to the Subscriber under the authorized share capital of the Company to be resolved upon in the Board Decision, as soon as reasonably practicable, but in any event no later than three (3) Business Days, following the satisfaction of the Warrant Condition.
(c) Upon Conversion, the Company will be forever released from all of its obligations and liabilities under the Notes, including with regard to the outstanding principal amount and accrued interest thereunder.
(d) Upon Conversion, the security interests granted herein and under the Notes shall automatically terminate, and the parties shall comply with the provisions of Section 12 and the terms of the Pledge Agreement to (i) terminate Pledge Agreement, (ii) terminate all securities interests granted under the Pledge Agreement, and (iii) revert all Collateral to the Company.”
(g) Section 3.7 (Adjustment to Conversion of Ordinary Shares) of the Original Agreement is hereby amended by deleting Section 3.7 in its entirety.
(h) Section 6.6 (Consents, Filings and Approvals) of the Original Agreement is hereby amended as follows (with deletions shown in ~~strikethrough~~ and additions in underline):
“6.6 Consents,Filings and Approvals. Assuming the accuracy of the representations made by the Subscribers in Section 7 of this Agreement, other than any filing or registration requirements pursuant to Section 5 and the Pledge Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority is required to be obtained or made by or with respect to the execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the consummation of the transactions contemplated hereby and thereby or the grant by the Company of the Lien granted hereby on the Collateral, except for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated by this Agreement and the other Transaction Documents to which the Company is a party. Except as may have already been obtained or will be obtained prior to the applicable Closing, or as may be required under the Securities Act, Exchange Act**~~, the listing rules of Nasdaq~~** or state securities laws, no material notices to, filings with, or authorizations, consents or approvals of any Governmental Authority are necessary for the execution, delivery or performance by the Company of this Agreement and the other Transaction Documents to which it is a party, or the consummation by it of the transactions contemplated hereby and thereby.”
3
(i) Section 10.1 (Company Equity Raise) of the Original Agreement is hereby amended as follows (with deletions shown in ~~strikethrough~~ and additions in underline):
“10.1 Company Equity Raise. The Subscriber (i) acknowledges that the Company is conducting a private offering of Ordinary Shares ~~(at a price per Ordinary Share of no less than the Conversion Price)~~ atUS$0.06313 per Ordinary Share to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are, exempt from registration under the Securities Act and to occur on or prior to the consummationof the Debt Restructuring, for an aggregate investment of ~~up to $100,000,000.00, netof the Initial Note Loan Amount and the Secondary Note Loan Amount~~ no more than$90,000,000, which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Notes (collectively, the “Company Equity Raise”), and (ii) agrees to assist and cooperate with the Company and to exercise best efforts to cause the consummation of the Company Equity Raise in the maximum investment amount possible, as promptly as practicable (but in any event no later than the Maturity Date), and in compliance with applicable U.S. federal and state securities laws and the laws of any other applicable jurisdictions.”
(j) Exhibit C (Form of Warrant) of the Original Agreement is hereby replaced by Exhibit C attached hereto.
(k) Exhibit D (Subscription and Conversion Form) of the Original Agreement is hereby replaced by Exhibit D attached hereto.
Limited Effect. Except as expressly provided in this Amendment, all of the terms and provisions of the Subscription Agreement are and will remain in full force and effect and are hereby ratified and confirmed by the Parties. Without limiting the generality of the foregoing, the amendments contained in Section 1 of this Amendment shall not be construed as an amendment to any other terms or conditions of the Original Agreement. On and after the Effective Date, each reference in the Subscription Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import will mean and be a reference to the Original Agreement as amended by this Amendment.
Miscellaneous.
(a) Titles and Subtitles. The titles and subtitles used in this Amendment are used for convenience only and are not to be considered in construing or interpreting this Amendment.
(b) Entire Agreement. This Amendment constitutes the full and entire understanding and agreement between the Parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties are expressly canceled.
(c) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Amendment shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Amendment (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each Party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
(d) WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
(e) General Provisions. Each of Section 13.3 (Successors and Assigns), Section 13.6 (Counterparts), Section 13.8 (Notices), Section 13.11 (Amendments and Waivers) and Section 13.12 (Severability) of the Subscription Agreement is incorporated into this Amendment by reference, mutatis mutandis, with the same force and effect as if expressly included herein.
[Signature Page follows]
4
Exhibit 10.8
EXHIBIT C
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
FORM OF ORDINARY SHARE PURCHASE WARRANT
ProcapsGroup, S.A.
| Warrant Amount: $[●] | Issue Date: [●],[●] |
|---|
THIS ORDINARY SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Hoche Partners Pharma Holding S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) under number B206416, or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of issuance of this Warrant (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on the tenth (10th) anniversary of the Initial Exercise Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés,Luxembourg) under number B253360 (the “Company”), up to the number of Ordinary Shares equal to the quotient obtained by dividing the Warrant Amount by the Exercise Price, as defined in Section 2.2 (the “Warrant Shares”). The purchase price of one Ordinary Share under this Warrant shall be equal to the Exercise Price. The Warrant is being issued pursuant to that certain Secured Convertible Note Subscription Agreement, dated November 29, 2024, as amended by Amendment No. 1 to the Secured Convertible Note Subscription Agreement, dated April 3, 2025, between the Company and the Holder (as further amended and/or restated from time to time, the “Note Subscription Agreement”) and is conditioned upon the conversion of the convertible secured promissory notes issued to the Holder pursuant to the terms of the Note Subscription Agreement.
- Definitions. In addition to the terms defined above (or elsewhere in this Warrant), the following terms used in this Warrant shall be construed to have the meanings set forth or referenced below:
“Assignment Form” means the Assignment Form, in form and substance attached hereto as Exhibit A.
“Business Day” means any day except a Saturday, Sunday or any other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by law to close.
“Category Four Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
“Company Equity Raise” means the Company’s private offering of Ordinary Shares at $0.06313 per Ordinary Share to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are, exempt from registration under the Securities Act and to occur on or prior to the consummation of the Debt Restructuring, for an aggregate investment of no more than $90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of secured convertible notes pursuant to the Note Subscription Agreement).
“Debt Restructuring” means a full restructuring of the Company’s debt with the Category Four Lenders.
“Ordinary Shares” means the ordinary shares of the Company, each having a nominal value of $0.01 per share.
“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
“Warrant Amount” means, at any date of determination, $[●] minus the aggregate Exercise Price of all Warrant Shares subscribed for and issued to the Holder as of immediately prior to such date of determination.
- Exercise.
2.1 Exercise of Warrant. Exercise of the subscription rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed Notice of Exercise in the form attached hereto as Exhibit B (the “Notice of Exercise”). Within five (5) Business Days following delivery of the Notice of Exercise, the Holder shall deliver the aggregate Exercise Price for the Warrant Shares specified in the applicable Notice of Exercise by wire transfer of immediately available funds to a bank account designated by the Company or good certified check in lawful money of the United States. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has subscribed for and purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Business Days following the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in subscriptions and purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of reducing from the original Warrant Amount, an amount equal to the aggregate Exercise Price of all Warrant Shares subscribed for and issued pursuant to all partial exercises under this Warrant. The Holder and the Company shall maintain records showing the number of Warrant Shares subscribed for and purchased, the aggregate Exercise Price of such Warrant Shares and the date of such subscriptions and purchases. The Company shall deliver any objection to any Notice of Exercise within three (3) Business Days of receipt of a Notice of Exercise. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions ofthis paragraph, following the subscription and purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares availablefor subscription and purchase hereunder at any given time may be less than the amount stated on the face hereof.
2
2.2 Exercise Price. The exercise price per Ordinary Share under this Warrant shall be $0.06313 (the “Exercise Price”).
2.3 Mechanics of Exercise.
(a) Delivery of Warrant Shares Upon Exercise. The Company shall issue the number of Warrant Shares subscribed for and purchased hereunder to the Holder, and shall deliver, or caused to be delivered, to the Holder a copy of the records of the Company’s transfer agent (the “Transfer Agent”), showing the Holder as the owner of the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address or email address specified in such Notice of Exercise by the date that is two (2) Business Days after delivery of the aggregate Exercise Price to the Company (such date, the “Warrant Share Delivery Date”).
(b) No Fractional Shares or Scrip. No fractional Warrant Shares shall be issued upon any exercise of this Warrant. As to any fraction of a Warrant Share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall round down to the number of Warrant Shares to be issued to the Holder to the next whole share and the aggregate Exercise Price for all such Warrant Shares shall be reduced by an amount equal to such fraction of a Warrant Share, multiplied by the Exercise Price.
(c) Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form duly executed by the Holder, and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
(d) Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
3
- Certain Adjustments.
3.1 Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of shares of the Ordinary Shares into any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3.1 shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
3.2 Fundamental Transaction.
(a) If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person (excluding a merger effected solely to change the Company’s name or domicile), (ii) the Company (and all of its subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectively converted into or exchanged for other securities, cash or property, and, as a result of such reclassification, reorganization or recapitalization, a Person or group of Persons own more than 50% of the outstanding securities, cash and/or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, this Warrant (to the extent not fully exercised for Warrant Shares) shall, subject to Section 3.2(b) below, remain outstanding, and upon any subsequent exercise of this Warrant or termination and cancellation of this Warrant under Section 3.2(b) below, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction. For purposes of any such exercise or termination and cancellation, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant or termination and cancellation of this Warrant under Section 3.2(b) below following such Fundamental Transaction. To the extent this Warrant is not exercised, terminated or cancelled, the Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other transaction documents in accordance with the provisions of this Section 3.2 pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in the form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction and to the extent this Warrant is not exercised, terminated or cancelled, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other transaction documents with the same effect as if such Successor Entity had been named as the Company herein. For the avoidance of doubt, the Holder shall have the right to exercise this Warrant and the Company shall have the right to terminate and cancel this Warrant under Section 3.2(b), prior to the consummation of any Fundamental Transaction, or any other corporate event or other transaction contemplated by this Section 3.2(a), instead of giving effect to the provisions of this Section 3.2(a).
4
(b) Notwithstanding anything to the contrary contained herein, including the terms of Section 3.2(a), in the event the Holder does not elect to fully exercise this Warrant prior to the consummation of a Fundamental Transaction, the Company shall have the right, exercisable at its sole discretion, to terminate and cancel this Warrant upon consummation of such Fundamental Transaction by delivering, or causing to be delivered, to the Holder the Ordinary Shares or other consideration the Holder would have received as a result of such Fundamental Transaction had the Holder exercised this Warrant immediately prior to the occurrence of such Fundamental Transaction, less the aggregate Exercise Price that would have been payable by the Holder upon the exercise of this Warrant immediately prior to the occurrence of such Fundamental Transaction. In the event the Company exercises its right to terminate and cancel this Warrant pursuant to the preceding sentence, this Warrant shall automatically terminate and be of no further force or effect, and the rights and obligations of the Company hereunder shall terminate and be of no further force or effect.
3.3 Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.
3.4 Notice to Holder.
(a) Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to this Section 3, the Company shall promptly deliver written notice to the Holder setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
(b) Notice to Allow Exercise by Holder. If (i) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Shares, (ii) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Shares, (iii) the Company shall authorize the granting to all holders of the Ordinary Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (iv) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Ordinary Shares, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Ordinary Shares is converted into other securities, cash or property, or (v) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register (as defined below) of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Shares of record shall be entitled to exchange their Ordinary Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
5
- Transfer of Warrant.
4.1 Transferability. Subject to compliance with any applicable securities laws and the conditions set forth in Section 4.4 hereof, this Warrant and all rights hereunder are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with an Assignment Form duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon assignment of all or any portion of this Warrant, the Holder shall physically surrender this Warrant to the Company within three (3) Business Days of the date on which the Holder delivers an Assignment Form to the Company assigning this Warrant. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such Assignment Form, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the subscription and purchase of Warrant Shares without having a new Warrant issued.
4.2 New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4.1, as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
4.3 Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
4.4 Transfer Restrictions. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder provide an opinion of counsel selected by the Holder and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration under the Securities Act.
4.5 Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
6
- Miscellaneous.
5.1 No Rights as Shareholder Until Exercise; No Cashless Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2. The Holder acknowledges and agrees that no “cashless exercise” shall be permitted pursuant to the terms hereof and, without limiting any rights of a Holder to receive cash payments pursuant to Section 2.3(b) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
5.2 Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
5.3 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
5.4 Authorized Shares. The Company covenants that, during the period commencing on the Initial Exercise Date and ending on the Termination Date, it will reserve from its authorized and unissued Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue or any restrictions imposed by applicable securities laws).
5.5 Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Note Subscription Agreement.
5.6 Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws.
5.7 Nonwaiver. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies.
5.8 Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Note Subscription Agreement.
5.9 Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages may not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees not to assert the defense in any action for specific performance that a remedy at law would be adequate.
5.10 Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder.
5.11 Amendment. This Warrant may be modified or amended or the provisions hereof waived only with the written consent of the Company and the Holder.
5.12 Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
5.13 Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
5.14 Execution. This Warrant may be executed in one or more counterparts, each of which shall be deemed an original, but together shall constitute the same instrument. This Warrant may be executed and delivered by facsimile transmission or by e-mail delivery of a “.pdf” or similar format data file, in which case such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” or similar format signature page were an original thereof.
[Signature Page Follows]
7
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| Procaps Group, S.A. |
|---|
| By: |
| Name: |
| Title: |
(Signature Page to Warrant)
8
EXHIBIT A
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute thisform and supply required information. Do not use this form to exercise the Warrant to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | |
|---|---|
| (Please Print) | |
| Address: | |
| (Please Print) | |
| Phone Number: | |
| Email Address: | |
| Dated: _______________ __, ______ | |
| Holder’s Signature: | |
| Holder’s Address: |
9
EXHIBIT B
NOTICE OF EXERCISE
To: PROCAPS GROUP, S.A.
(1) The undersigned hereby elects to subscribe for and purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant, and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
☐ a wire transfer in lawful money of the United States to a bank account designated by the Company; or
☐ a good certified check in lawful money of the United States.
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
[SIGNATURE OF HOLDER]
Name of Investing Entity: _______________________________________________________________________
Signature of Authorized Signatory of InvestingEntity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: _______________________________________________________________________________________
10
Exhibit 10.9
PROCAPS GROUP, S.A.
SUBSCRIPTION AND CONVERSION AGREEMENT
by and between
Procaps Group, S.A.
and
Hoche Partners Pharma Holding S.A.
as of April 9, 2025
ProcapsGroup, S.A.
SUBSCRIPTION AND CONVERSION AGREEMENT
This Subscription and Conversion Agreement (this “Agreement”) is made as of April 9, 2025, by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”) and Hoche Partners Pharma Holding S.A., a public limited liability company (sociétéanonyme) governed by the laws of the Grand Duchy of Luxembourg with its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés,Luxembourg) under number B206416 (the “Subscriber”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
1. Conversion, Subscriptions and Closing.
1.1 Subscription and Conversion.
(a) Subject to the terms and conditions of this Agreement, the Subscriber hereby irrevocably (i) elects to Convert the Secured Convertible Notes into (A) 610,618,300 Ordinary Shares (the “Shares”), by offsetting all outstanding Note Obligations as the subscription price to be paid for the issuance of the Shares (the “Subscription Price”) and (B) the Warrant, and (ii) subscribes for the Shares and the Warrant pursuant to the terms of the Secured Convertible Note Subscription Agreement, the Secured Convertible Notes Assignment Agreements and the Warrant Assignment Agreements (the “Subscription and Conversion”), it being noted that an amount of US $6,106,183.00 of the Note Obligations shall be allocated to the share capital of the Company and an amount of US $33,506,177.69 of the Note Obligations shall be allocated to the share premium of the Company on the Closing Date when the Shares are issued.
(b) In accordance with (i) the provisions of the law of 10 August 1915 on commercial companies, as amended, and in particular, article 420-27 and (b) the provisions of articles 1289 to 1299 of the Luxembourg Civil code, the Subscriber and the Company hereby acknowledge that they hold undisputable, liquid, due and payable claims (créances certaines, liquides et exigibles) against each other and as a result, the Subscription Price can be set-off with the Note Obligations. For the avoidance of doubt, the Subscriber and the Company hereby agree that the entire amount of the Note Obligations shall be set-off against the Subscription Price (the “Set-Off”).
(c) As a result of the Subscription and Conversion, and the Set-Off, the rights, title and interests in the Secured Convertible Notes not assigned by the Subscriber pursuant to the Secured Convertible Notes Assignment Agreements (and all outstanding Note Obligations thereunder) are hereby deemed paid in full and cancelled, shall have no further force or effect, and shall not be reissued, assigned or re-sold.
2
1.2 Closing. The closing of the Subscription and Conversion, the Set-Off and the issuance of the Shares and the Warrant shall take place remotely via the exchange of documents and signatures on the date hereof, or at such other time and place as the Company and the Subscriber mutually agree upon in writing (which time and place are designated as the “Closing”). All proceedings to be taken and all documents to be executed and delivered by the Company and the Subscriber at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
1.3 Deliveries.
(a) Deliveries by the Subscriber. On the Closing Date, the Subscriber shall deliver, or cause to be delivered, to the Company:
(i) written notice of the Subscriber’s election to Convert the Secured Convertible Notes (and all outstanding Note Obligations thereunder) in accordance with the terms of the Secured Convertible Note Subscription Agreement;
(ii) the Secured Convertible Notes to the Company for cancellation; and
(iii) a counterpart signature to the Pledge Release Agreement duly executed by the Subscriber.
(b) Deliveries by the Company. The Company shall deliver or cause to be delivered to the Subscriber on the Closing:
(i) reasonable evidence of the issuance of the Shares and the Warrant;
(ii) a copy of the Transfer Agent Records;
(iii) evidence of registration of the Subscriber in the register of shareholders of the Company as the owner of the Shares;
(iv) a copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval;
(v) a copy of the Board Resolutions; and
(vi) a counterpart signature to the Pledge Release Agreement duly executed by the Company and Crynssen.
3
2. Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
(b) “Becaril” means Becaril S.A., a Uruguayan corporation (sociedad anónima).
(c) “Board” means the board of directors of the Company.
(d) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares and the Warrant on the Closing Date.
(e) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(f) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(g) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(g) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(h) “Chemo” means Chemo Project SA, a Swiss corporation (società anonima).
(i) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(j) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(k) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Secured Convertible Notes, (C) upon the exercise of the Warrant, and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
4
(l) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(m) “Conversion” means the conversion of the Secured Convertible Notes and all amounts of principal and interest outstanding thereunder into Ordinary Shares and the Warrant pursuant to Section 3 of the Secured Convertible Notes Subscription Agreement. The terms “Converted,” “Convertible,” “Convert,” and other forms of the word “Conversion” shall have correlative meanings.
(n) “Crynssen” means Crynssen Pharma Group Ltd, a private limited liability company registered and incorporated under the laws of Malta with company registration number C 59671 and having its registered address situated at Trident Park, Notabile Gardens, No. 2 – Level 3, Mdina Road, Zone 2, Central Business District, Birkirkara, CBD 2010, Malta.
(o) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
(p) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US $90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Secured Convertible Notes).
(q) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(r) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(s) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
5
(t) “FlyingFish Ventures” means Flying Fish Ventures L.P., a Canadian limited partnership.
(u) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(v) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(w) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(x) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(y) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(z) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
(aa) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(bb) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
6
(cc) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(dd) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole: provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the date hereof; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
(ee) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(ff) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
(gg) “NoteObligations” means the corresponding portion of all accrued and unpaid principal, interest and all other amounts due and owing under the Secured Convertible Notes that were not assigned pursuant to the Secured Convertible Notes Assignment Agreements, totaling US $39,612,360.69 as of the Closing Date.
(hh) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US $0.01 per share.
(ii) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
7
(jj) “OtherInvestors Subscription and Conversion Agreements” means, collectively, (i) that certain Subscription and Conversion Agreement to be entered into between the Company and Santana, ST Commercial and Flying Fish Ventures on or about the Closing Date, pursuant to which Santana, ST Commercial and Flying Fish Ventures will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Secured Convertible Notes; and (ii) that certain Subscription and Conversion Agreement to be entered into between the Company and Chemo and Becaril on or about the Closing Date, pursuant to which Chemo and Becaril will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Secured Convertible Notes.
(kk) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(ll) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(mm) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(nn) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(oo) “PledgeRelease Agreement” means that certain Termination and Release of Share Pledge Agreement to be entered into among the Company, Crynssen and the Subscriber, in the form attached hereto as Exhibit A.
(pp) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US $0.01 per share.
(qq) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US $0.01 per share.
(rr) “RepresentationDate” means April 3, 2025.
8
(ss) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(tt) “Santana” means Santana S.A., a Chilean sociedad anónima.
(uu) “SEC” means the Securities and Exchange Commission.
(vv) “SecuredConvertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and the Subscriber, as amended by that certain Amendment No. 1 to the Secured Convertible Note Subscription Agreement dated April 3, 2025, and pursuant to which the Company issued the Secured Convertible Notes.
(ww) “SecuredConvertible Notes” means (i) that certain Secured Convertible Note issued by the Company to the Subscriber on November 29, 2024, in the principal amount of US $20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to the Subscriber on December 27, 2024, in the principal amount of US $20,000,000.
(xx) “SecuredConvertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements, each dated April 9, 2025, between the Subscriber and each of the Third Party Investors, and acknowledged by the Company, pursuant to which the Subscriber assigned to such Third Party Investor certain of its rights, title, and interest in and to the Secured Convertible Note Subscription Agreement and the Secured Convertible Notes.
(yy) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(zz) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(aaa) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(bbb) “STCommercial” means Saint Thomas Commercial S.A., a Panamanian sociedad anónima.
(ccc) “SubscriptionAgreements” means those certain subscription agreements entered into by the Company with any Person in connection with the Equity Raise.
9
(ddd) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(eee) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
(fff) “ThirdParty Investors” means Chemo, Becaril, Santana, Flying Fish Ventures and ST Commercial.
(ggg) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
(hhh) “Warrant” means the warrant issuable to the Subscriber upon the Subscription and Conversion, in a “warrant amount” of US $5,000,000.
(iii) “WarrantAssignment Agreements” means those certain Assignment and Assumption Agreements, each dated April 9, 2025, between the Subscriber and each of the Third Party Investors, and acknowledged by the Company, pursuant to which the Subscriber assigned to such Third Party Investors a portion of its rights, title, and interest in and to the Warrant upon conversion of the Secured Convertible Notes.
3. Representations and Warranties of the Group Companies. The Company hereby represents and warrants to the Subscriber, as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
10
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.3 Capitalization.
(a) As of the Representation Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Representation Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US $11.50 per share; and (ii) the Secured Convertible Notes convertible into Ordinary Shares and the Warrant.
(b) Except as set forth in Section 3.3(a), as of the Representation Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Representation Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Representation Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
11
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by the Subscriber in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
3.7 Private Placement. Assuming the accuracy of the representations made by the Subscriber in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Subscriber as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after the Subscription and Conversion of the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Subscriber and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares, as contemplated hereby, to the registration provisions of the Securities Act.
12
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US $500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Subscriber accurate and complete copies of all material correspondence through the date hereof between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Representation Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Representation Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Representation Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
13
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Representation Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US $500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’-length dealings with a Person that is not an Affiliate, as of the Representation Date, none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
14
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US $500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
15
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Representation Date (the “Material Insurance Policies”). As of the Representation Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Representation Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Representation Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US $500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
16
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
17
4. Representations and Warranties of the Subscriber. The Subscriber hereby represents and warrants to the Company, as of the Closing Date, as follows:
4.1 Organization. The Subscriber is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. The Subscriber has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent the Subscriber is a legal entity, the execution and performance by the Subscriber of this Agreement, the performance by the Subscriber of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by the Subscriber, and constitutes legal, valid and binding obligations of the Subscriber, enforceable against the Subscriber in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
4.3 No Conflicts. The execution by the Subscriber of this Agreement, the performance by the Subscriber of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which the Subscriber is a party or by which the Subscriber’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Subscriber is a party or by which the Subscriber or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair the Subscriber’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. The Subscriber understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law.
18
4.5 Restrictive Legend. The Subscriber agrees that any certificates or book-entry positions representing the Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares.
4.6 Subscriber Status. At the time the Subscriber was offered Shares, it was, and as of the Closing Date, the Subscriber is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
4.7 Experience of Subscriber. The Subscriber, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. The Subscriber is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
4.8 General Solicitation. The Subscriber is not purchasing Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. The Subscriber has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as the Subscriber has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Subscriber’s evaluation of its investment. The Subscriber has consulted, to the extent deemed appropriate by the Subscriber, with the Subscriber’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares, and believes that an investment in the Shares is suitable and appropriate for the Subscriber in accordance with the terms of this Agreement.
19
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, the Subscriber has not, nor has any Person acting on behalf of or pursuant to any understanding with the Subscriber, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Subscriber first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investor. The Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to the Subscriber in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of the Subscriber’s Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of the Subscriber’s Shares. The Subscriber’s Subscription and Conversion and continued beneficial ownership of its Shares will not violate any applicable securities or other laws of the Subscriber’s jurisdiction.
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of the Subscriber or any of its Affiliates.
4.13 Financial Wherewithal. The obligations of the Subscriber under this Agreement are not subject to any conditions regarding the Subscriber’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) The Subscriber has conducted to the Subscriber’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. The Subscriber has been represented by, and had the assistance of, counsel in the conduct of the Subscriber’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) THE SUBSCRIBER ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO THE SUBSCRIBER OR ANY OF THE SUBSCRIBER’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
20
5. Conditions to the Subscriber’s Obligations at the Closing. The Subscriber’s election to Convert the Secured Convertible Notes and all outstanding Note Obligations thereunder and subscribe for the issuance of the Shares and the Warrant in connection with the Subscription and Conversion at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Subscriber:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
5.2 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
5.3 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.4 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “Debt Conversion”), and shall include the terms set forth in Schedule 5.4 attached hereto (the “Debt Restructuring”).
6. Company’s Covenants.
6.1 Directors’ and Officers’ Liability Insurance. For a period of no less than six (6) years from the Closing Date, except as otherwise consented in writing by the Subscriber, the Company shall maintain directors’ and officers’ (D&O) liability insurance with coverage for each director and officer of the Company and under terms no less favorable to the Group Companies (including the premium, coverage and exclusions) than those contained in the directors’ and officers’ (D&O) insurance policy listed in Schedule 3.21.
7. Survival and Limitation on Liability.
7.1 Survival of Representations and Warranties and Covenants.
(a) (i) The representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
21
(b) (i) The representations and warranties of the Subscriber contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Subscriber Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Subscriber contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
(d) Notwithstanding anything to the contrary in this Section 7.1, in the event a Claim Notice is properly delivered in good faith under Section 7.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 7.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
7.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 7 (including Section 7.4), the Company shall indemnify, defend and hold harmless the Subscriber and its Representatives, employees, Affiliates, successors and assigns (each, a “SubscriberIndemnified Party” and collectively, the “Subscriber Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by the Subscriber, net of any Losses indemnified to the Subscriber under this Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) and/or Section 9.2(a)(iii) of any Subscription Agreement (excluding, for the avoidance of doubt, this Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) and/or Section 7.2(a)(iii) of any of the Other Investors Subscription and Conversion Agreements entered into by the Company with one or more Third Party Investors and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
22
(b) From and after the Closing Date and subject to the provisions of this Section 7 (including Section 7.4), the Subscriber shall indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Subscriber in Section 4, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Subscriber under this Agreement, or (iii) any breach or inaccuracy of any of the representations and warranties made by the Subscriber in the Antitrust Representation Letter executed and delivered by the Subscriber on April 3, 2025, a copy of which is attached hereto as Exhibit B.
7.3 Indemnification Procedures
(a) In order for any Subscriber Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 7 the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 7.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 7, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 7.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
23
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 7 (including Section 7.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
24
7.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 7 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to the Subscriber Indemnified Parties for any Losses pursuant to Section 7.2(a)(i) and/or Section 7.2(a)(iii) which, individually considered, do not exceed an amount equal to US $100,000 (the “De Minimis Exclusion”) and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 7.2(a)(i) and/or Section 7.2(a)(iii) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) the Company shall not be liable to the Subscriber Indemnified Parties for any Losses pursuant to Section 7.2(a)(i) and/or Section 7.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 7.2(a)(i) and/or Section 7.2(a)(iii) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US $1,000,000, at which time the Company shall be liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Company shall not be liable to the Subscriber Indemnified Parties for any Losses pursuant to Section 7.2(a)(i), other than in respect of Fraud or breach of any Company Fundamental Representation, in excess of US $4,000,000, subject to the other limitations herein; (iv) the Company shall not be liable to the Subscriber Indemnified Parties for any Losses pursuant to Section 7.2(a)(iii), other than in respect of Fraud, in excess of US $12,000,000, subject to the other limitations herein; and (v) the Company shall not be liable to the Subscriber Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US $38,548,333.33, subject to the other limitations herein.
(c) Notwithstanding anything herein to the contrary, (i) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed the De Minimis Exclusion and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 7.2(b)(i) and/or Section 7.2(b)(iii) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US $1,000,000, at which time the Subscriber shall be severally but not jointly liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, in excess of US $4,000,000, subject to the other limitations herein; and (iv) the Subscriber shall not be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US $38,548,333.33, subject to the other limitations herein.
25
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Subscriber Indemnified Party for any Losses under this Section 7, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Subscriber Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 7.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Subscriber Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Subscriber Indemnified Party in the form attached hereto as Exhibit C (the “Indemnity Warrant”), that will entitle the Subscriber Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US $0.01.
(f) In the event that any Subscriber has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 7, the Subscriber shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by the Subscriber and such Company Indemnified Party) after such Losses have been finally determined and are owed by the Subscriber in accordance with Section 7.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 7 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
26
7.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 8.8, following the Closing Date, the indemnification obligations under this Section 7 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
8. Miscellaneous.
8.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
8.2 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
8.3 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
27
8.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
8.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
(b) if to the Subscriber, to physical or e-mail address set forth on the Subscriber’s signature pages hereto.
8.7 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
8.8 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Subscriber and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
8.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Subscriber.
8.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
8.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement and/or by Law or otherwise afforded to any party hereunder, shall be cumulative and not alternative.
8.12 Press Releases. The Company, on the one hand, and the Subscriber, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
8.13 Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
[SignaturePages Follow]
28
Exhibit10.10
PROCAPS GROUP, S.A.
SUBSCRIPTION AND CONVERSION AGREEMENT
by and between
Procaps Group, S.A.
and
Chemo Project SA
and
Becaril S.A.
as of April 9, 2025
Procaps Group, S.A.
SUBSCRIPTION AND CONVERSION AGREEMENT
This Subscription and Conversion Agreement (this “Agreement”) is made as of April 9, 2025, by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), Chemo Project SA, a Swiss corporation (società anonima) (“Chemo”), and Becaril S.A., a Uruguayan corporation (sociedad anónima) (“Becaril” and jointly with Chemo, the “Subscribers” and each, a “Subscriber”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
1. Conversion, Subscriptions and Closing.
1.1 Subscription and Conversion.
(a) Subject to the terms and conditions of this Agreement, the Subscribers hereby irrevocably (i) elect to Convert the Secured Convertible Notes into (A) 11,497,438 Ordinary Shares (the “Shares”), by offsetting all outstanding Note Obligations as the subscription price to be paid for the issuance of the Shares (the “Subscription Price”) and (B) the Warrant, and (ii) subscribe for the Shares and the Warrant pursuant to the terms of the Secured Convertible Note Subscription Agreement, the Secured Convertible Notes Assignment Agreements and the Warrant Assignment Agreements (the “Subscription and Conversion”), it being noted that an amount of US $114,974.38 of the Note Obligations shall be allocated to the share capital of the Company and an amount of US $630,893.70 of the Note Obligations shall be allocated to the share premium of the Company on the Closing Date when the Shares are issued.
(b) In accordance with (i) the provisions of the law of 10 August 1915 on commercial companies, as amended, and in particular, article 420-27 and (b) the provisions of articles 1289 to 1299 of the Luxembourg Civil code, the Subscribers and the Company hereby acknowledge that they hold undisputable, liquid, due and payable claims (créances certaines, liquides et exigibles) against each other and as a result, the Subscription Price can be set-off with the Note Obligations. For the avoidance of doubt, the Subscribers and the Company hereby agree that the entire amount of the Note Obligations shall be set-off against the Subscription Price (the “Set-Off”).
(c) As a result of the Subscription and Conversion, and the Set-Off, the rights, title and interests in the Secured Convertible Notes assigned to the Subscribers pursuant to the Secured Convertible Notes Assignment Agreements (and all outstanding Note Obligations thereunder) are hereby deemed paid in full and cancelled, shall have no further force or effect, and shall not be reissued, assigned or re-sold.
2
1.2 Closing. The closing of the Subscription and Conversion, the Set-Off and the issuance of the Shares and the Warrant shall take place remotely via the exchange of documents and signatures on the date hereof, or at such other time and place as the Company and the Subscribers mutually agree upon in writing (which time and place are designated as the “Closing”). All proceedings to be taken and all documents to be executed and delivered by the Company and the Subscribers at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
1.3 Deliveries.
(a) Deliveries by the Subscribers. On the Closing Date, the Subscribers shall jointly and severally deliver, or cause to be delivered, to the Company:
(i) written notice of the Subscribers’ election to Convert the Secured Convertible Notes (and all outstanding Note Obligations thereunder) in accordance with the terms of the Secured Convertible Note Subscription Agreement; and
(ii) the rights, title and interests in the Secured Convertible Notes assigned to the Subscribers pursuant to the Secured Convertible Notes Assignment Agreements to the Company for cancellation.
(b) Deliveries by the Company. The Company shall deliver or cause to be delivered to the Subscribers on the Closing:
(i) reasonable evidence of the issuance to each Subscriber of fifty percent (50%) of the Shares and fifty percent (50%) of the Warrant;
(ii) a copy of the Transfer Agent Records;
(iii) evidence of registration of each Subscriber in the register of shareholders of the Company as the owner of fifty percent (50%) of the Shares;
(iv) a copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval; and
(v) a copy of the Board Resolutions.
2. Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
3
(b) “Board” means the board of directors of the Company.
(c) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares and the Warrant on the Closing Date.
(d) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(e) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(f) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(f) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(g) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(h) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(i) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Secured Convertible Notes, (C) upon the exercise of the Warrant, and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
(j) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
4
(k) “Conversion” means the conversion of the Secured Convertible Notes and all amounts of principal and interest outstanding thereunder into Ordinary Shares and the Warrant pursuant to Section 3 of the Secured Convertible Notes Subscription Agreement. The terms “Converted,” “Convertible,” “Convert,” and other forms of the word “Conversion” shall have correlative meanings.
(l) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
(m) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US $90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Secured Convertible Notes).
(n) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(o) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(p) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(q) “FlyingFish Ventures” means Flying Fish Ventures L.P., a Canadian limited partnership.
(r) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(s) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
(t) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
5
(u) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
(v) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(w) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(x) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
(y) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(z) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(aa) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
(bb) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole: provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the date hereof; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
6
(cc) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(dd) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
(ee) “NoteObligations” means the corresponding portion of all accrued and unpaid principal, interest and all other amounts due and owing under the Secured Convertible Notes that were assigned to the Subscribers pursuant to the Secured Convertible Notes Assignment Agreements, totaling US $745,868.08 as of the Closing Date.
(ff) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US $0.01 per share.
(gg) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(hh) “OtherInvestors Subscription and Conversion Agreements” means, collectively, (i) that certain Subscription and Conversion Agreement to be entered into between the Company and Santana, ST Commercial and Flying Fish Ventures on or about the Closing Date, pursuant to which Santana, ST Commercial and Flying Fish Ventures will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Secured Convertible Notes; and (ii) that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Secured Convertible Notes.
7
(ii) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(jj) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(kk) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(ll) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(mm) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US $0.01 per share.
(nn) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US $0.01 per share.
(oo) “RepresentationDate” means April 3, 2025.
(pp) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(qq) “Santana” means Santana S.A., a Chilean sociedad anónima.
(rr) “SEC” means the Securities and Exchange Commission.
(ss) “SecuredConvertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended from time to time, and pursuant to which the Company issued the Secured Convertible Notes.
(tt) “SecuredConvertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US $20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US $20,000,000.
8
(uu) “SecuredConvertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements, each dated April 9, 2025, between Hoche and each of the Subscribers, and acknowledged by the Company, pursuant to which Hoche assigned to such Subscribers certain of its rights, title, and interest in and to the Secured Convertible Note Subscription Agreement and the Secured Convertible Notes.
(vv) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(ww) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(xx) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(yy) “STCommercial” means Saint Thomas Commercial S.A., a Panamanian sociedad anónima.
(zz) “SubscribersSubscription Agreement” means that certain subscription agreement dated April 3, 2025, between the Company and the Subscribers, entered into in connection with the Equity Raise.
(aaa) “SubscriptionAgreements” means those certain subscription agreements entered into by the Company with any Person in connection with the Equity Raise, other than the Subscribers Subscription Agreement.
(bbb) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(ccc) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
9
(ddd) “ThirdParty Investors” means Hoche, Santana, Flying Fish Ventures and ST Commercial.
(eee) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
(fff) “Warrant” means the warrant issuable to the Subscribers upon the Subscription and Conversion, in a “warrant amount” of US $2,500,000.
(ggg) “WarrantAssignment Agreements” means those certain Assignment and Assumption Agreements, each dated April 9, 2025, between Hoche and each of the Subscribers, and acknowledged by the Company, pursuant to which Hoche assigned to such Subscribers its rights, title, and interest in and to the Warrant upon conversion of the Secured Convertible Notes.
3. Representations and Warranties of the Group Companies. The Company hereby represents and warrants to each Subscriber, as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.3 Capitalization.
(a) As of the Representation Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Representation Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US $11.50 per share; and (ii) the Secured Convertible Notes convertible into Ordinary Shares and the Warrant.
10
(b) Except as set forth in Section 3.3(a), as of the Representation Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Representation Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Representation Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by each Subscriber in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
11
3.7 Private Placement. Assuming the accuracy of the representations made by each Subscriber in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Subscribers as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after the Subscription and Conversion of the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Subscribers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US $500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
12
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Subscribers accurate and complete copies of all material correspondence through the date hereof between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Representation Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Representation Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Representation Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Representation Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US $500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
13
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’-length dealings with a Person that is not an Affiliate, as of the Representation Date, none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
14
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US $500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Representation Date (the “Material Insurance Policies”). As of the Representation Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Representation Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
15
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Representation Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US $500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
16
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
4. Representations and Warranties of the Subscribers. Each Subscriber, severally but not jointly, hereby represents and warrants to the Company, as of the Closing Date, as follows:
4.1 Organization. Such Subscriber is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. Such Subscriber has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent such Subscriber is a legal entity, the execution and performance by such Subscriber of this Agreement, the performance by such Subscriber of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by such Subscriber, and constitutes legal, valid and binding obligations of such Subscriber, enforceable against such Subscriber in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
17
4.3 No Conflicts. The execution by such Subscriber of this Agreement, the performance by such Subscriber of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which such Subscriber is a party or by which such Subscriber’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which such Subscriber is a party or by which such Subscriber or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair such Subscriber’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. Such Subscriber understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law.
4.5 Restrictive Legend. Such Subscriber agrees that any certificates or book-entry positions representing the Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares.
4.6 Subscriber Status. At the time such Subscriber was offered Shares, it was, and as of the Closing Date, such Subscriber is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
18
4.7 Experience of Subscriber. Such Subscriber, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Such Subscriber is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
4.8 General Solicitation. Such Subscriber is not purchasing Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. Such Subscriber has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as such Subscriber has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Subscriber’s evaluation of its investment. Such Subscriber has consulted, to the extent deemed appropriate by such Subscriber, with such Subscriber’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares, and believes that an investment in the Shares is suitable and appropriate for such Subscriber in accordance with the terms of this Agreement.
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, such Subscriber has not, nor has any Person acting on behalf of or pursuant to any understanding with such Subscriber, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Subscriber first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investor. Such Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to such Subscriber in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of such Subscriber’s Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of such Subscriber’s Shares. Such Subscriber’s Subscription and Conversion and continued beneficial ownership of its Shares will not violate any applicable securities or other laws of such Subscriber’s jurisdiction.
19
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Subscriber or any of its Affiliates.
4.13 Financial Wherewithal. The obligations of such Subscriber under this Agreement are not subject to any conditions regarding such Subscriber’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) Such Subscriber has conducted to such Subscriber’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. Such Subscriber has been represented by, and had the assistance of, counsel in the conduct of such Subscriber’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) SUCH SUBSCRIBER ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO SUCH SUBSCRIBER OR ANY OF SUCH SUBSCRIBER’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
5. Conditions to the Subscribers’ Obligations at the Closing. The Subscribers’ election to Convert the Secured Convertible Notes and all outstanding Note Obligations thereunder and subscribe for the issuance of the Shares and the Warrant in connection with the Subscription and Conversion at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Subscribers:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
20
5.2 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
5.3 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.4 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “Debt Conversion”), and shall include the terms set forth in Schedule 5.4 attached hereto (the “Debt Restructuring”).
6. [Intentionally Omitted].
7. Survival and Limitation on Liability.
7.1 Survival of Representations and Warranties and Covenants.
(a) (i) The representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
(b) (i) The representations and warranties of the Subscribers contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Subscriber Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Subscribers contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
(d) Notwithstanding anything to the contrary in this Section 7.1, in the event a Claim Notice is properly delivered in good faith under Section 7.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 7.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
21
7.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 7 (including Section 7.4), the Company shall indemnify, defend and hold harmless each of the Subscribers and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Subscribers Indemnified Party” and collectively, the “Subscribers Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by any of the Subscribers, net of any Losses indemnified to such Subscribers under this Agreement and/or the Subscribers Subscription Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) and/or Section 9.2(a)(iii) of any Subscription Agreement (excluding, for the avoidance of doubt, this Agreement and the Subscribers Subscription Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) and/or Section 7.2(a)(iii) of any of the Other Investors Subscription and Conversion Agreements entered into by the Company with one or more Third Party Investors and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
(b) From and after the Closing Date and subject to the provisions of this Section 7 (including Section 7.4), the Subscribers shall severally but not jointly indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company IndemnifiedParties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by such Subscriber in Section 4, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by such Subscriber under this Agreement, or (iii) any breach or inaccuracy of any of the representations and warranties made by such Subscriber in the Antitrust Representation Letter executed and delivered by such Subscriber on April 3, 2025, a copy of which is attached hereto as Exhibit A.
22
7.3 Indemnification Procedures.
(a) In order for any Subscribers Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 7 the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 7.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 7, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 7.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
23
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 7 (including Section 7.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
7.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 7 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to the Subscribers Indemnified Parties for any Losses pursuant to Section 7.2(a)(i) and/or Section 7.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, subject to the other limitations herein; and (ii) the Company shall not be liable to the Subscribers Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US $725,833.33, subject to the other limitations herein. Notwithstanding the foregoing, to the extent that the Company is liable to the Subscribers Indemnified Parties for any Losses under (i) Section 9.2(a)(i) of the Subscribers Subscription Agreement, after taking into account the applicable limitations on indemnification set forth thereunder, the Company shall also be liable to the Subscribers Indemnified Parties for all Losses under Section 7.2(a)(i) of this Agreement, but the aggregate Losses under Section 9.2(a)(i) of the Subscribers Subscription Agreement and Section 7.2(a)(i) of this Agreement shall be subject to all applicable limitations on indemnification for breaches of representations and warranties under Section 9.4 of the Subscribers Subscription Agreement, including Section 9.4(b)(i), Section 9.4(b)(ii), Section 9.4(b)(iii) and Section 9.4(b)(v); and (ii) Section 9.2(a)(iii) of the Subscribers Subscription Agreement, after taking into account the applicable limitations on indemnification set forth thereunder, the Company shall also be liable to the Subscribers Indemnified Parties for all Losses under Section 7.2(a)(iii) of this Agreement, but the aggregate Losses under Section 9.2(a)(iii) of the Subscribers Subscription Agreement and Section 7.2(a)(iii) of this Agreement shall be subject to all applicable limitations on indemnification for the Specified Indemnity (as defined hereunder and thereunder) under Section 9.4 of the Subscribers Subscription Agreement, including Section 9.4(b)(i), Section 9.4(b)(ii), Section 9.4(b)(iv) and Section 9.4(b)(v).
24
(c) Notwithstanding anything herein to the contrary, (i) no Subscriber shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed US $10,000 (the “De Minimis Exclusion”) and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 7.2(b)(i) and/or Section 7.2(b)(iii) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) no Subscriber shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US $18,100, at which time a Subscriber shall be severally but not jointly liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) no Subscriber shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, in excess of US $72,500, subject to the other limitations herein; and (iv) no Subscriber shall be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US $725,833.33, subject to the other limitations herein. For the avoidance of doubt, any liability of a Subscriber under this Section 7 shall be several and not joint (in accordance with such Subscriber’s 50% percentage interest).
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
25
(e) In the event that the Company has an obligation to indemnify any Subscribers Indemnified Party for any Losses under this Section 7, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Subscribers Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 7.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Subscribers Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Subscribers Indemnified Party in the form attached hereto as Exhibit B (the “Indemnity Warrant”), that will entitle such Subscribers Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US $0.01.
(f) In the event that any Subscriber has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 7, such Subscriber shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by such Subscriber and such Company Indemnified Party) after such Losses have been finally determined and are owed by such Subscriber in accordance with Section 7.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 7 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
7.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 8.8, following the Closing Date, the indemnification obligations under this Section 7 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
8. Miscellaneous.
8.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
26
8.2 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
8.3 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
8.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
8.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
27
(b) if to the Subscribers, to physical or e-mail address set forth on each Subscriber’s signature pages hereto with a copy to:
RC Law LLP.
1101 Brickell Ave, Suite N-1400
Miami, Florida 33131
Attention: Xavier Ruiz
Email: Xavier.ruiz@rclawus.com
8.7 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
8.8 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Subscribers and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
8.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Subscribers.
8.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
8.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, the Subscribers Subscription Agreement and/or by Law or otherwise afforded to any party hereunder or thereunder, shall be cumulative and not alternative.
8.12 Press Releases. The Company, on the one hand, and the Subscribers, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
8.13 EntireAgreement. This Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
[SignaturePages Follow]
28
Exhibit 10.11
PROCAPS GROUP, S.A.
SUBSCRIPTION AND CONVERSION AGREEMENT
by and between
Procaps Group, S.A.
and
Flying Fish Ventures L.P.
Saint Thomas Commercial S.A.
and
Santana S.A.
as of April 9, 2025
ProcapsGroup, S.A.
SUBSCRIPTION AND CONVERSION AGREEMENT
This Subscription and Conversion Agreement (this “Agreement”) is made as of April 9, 2025, by and between Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), Flying Fish Ventures L.P., a Canada limited partnership (“Flying Fish”), Saint Thomas Commercial S.A., a sociedad anónima organized under the laws of Panamá (“ST Commercial”), and Santana S.A., a sociedad anónima organized under the laws of Chile (“Santana” and jointly with Flying Fish and ST Commercial, the “Subscribers” and each, a “Subscriber”). Capitalized terms shall have the meaning assigned to such terms in Section 2 and throughout the rest of this Agreement.
The parties hereby agree as follows:
- Conversion, Subscriptions and Closing.
1.1 Subscription and Conversion.
(a) Subject to the terms and conditions of this Agreement, the Subscribers hereby irrevocably (i) elect to Convert the Secured Convertible Notes into (A) 11,497,437 Ordinary Shares (the “Shares”), by offsetting all outstanding Note Obligations as the subscription price to be paid for the issuance of the Shares (the “Subscription Price”) and (B) the Warrant, and (ii) subscribe for the Shares and the Warrant pursuant to the terms of the Secured Convertible Note Subscription Agreement, the Secured Convertible Notes Assignment Agreements and the Warrant Assignment Agreements (the “Subscription and Conversion”), it being noted that an amount of US $114,974.37 of the Note Obligations shall be allocated to the share capital of the Company and an amount of US $630,893.71 of the Note Obligations shall be allocated to the share premium of the Company on the Closing Date when the Shares are issued.
(b) In accordance with (i) the provisions of the law of 10 August 1915 on commercial companies, as amended, and in particular, article 420-27 and (b) the provisions of articles 1289 to 1299 of the Luxembourg Civil code, the Subscribers and the Company hereby acknowledge that they hold undisputable, liquid, due and payable claims (créances certaines, liquides et exigibles) against each other and as a result, the Subscription Price can be set-off with the Note Obligations. For the avoidance of doubt, the Subscribers and the Company hereby agree that the entire amount of the Note Obligations shall be set-off against the Subscription Price (the “Set-Off”).
(c) As a result of the Subscription and Conversion, and the Set-Off, the rights, title and interests in the Secured Convertible Notes assigned to the Subscribers pursuant to the Secured Convertible Notes Assignment Agreements (and all outstanding Note Obligations thereunder) are hereby deemed paid in full and cancelled, shall have no further force or effect, and shall not be reissued, assigned or re-sold.
2
1.2 Closing. The closing of the Subscription and Conversion, the Set-Off and the issuance of the Shares and the Warrant shall take place remotely via the exchange of documents and signatures on the date hereof, or at such other time and place as the Company and the Subscribers mutually agree upon in writing (which time and place are designated as the “Closing”). All proceedings to be taken and all documents to be executed and delivered by the Company and the Subscribers at the Closing shall be deemed to have been taken and executed simultaneously, and no proceedings shall be deemed to have been taken nor documents executed or delivered until all have been taken, executed and delivered. The date on which the Closing occurs shall be referred to in this Agreement as the “Closing Date.”
1.3 Deliveries.
(a) Deliveries by the Subscribers. On the Closing Date, the Subscribers shall jointly and severally deliver, or cause to be delivered, to the Company:
(i) written notice of the Subscribers’ election to Convert the Secured Convertible Notes (and all outstanding Note Obligations thereunder) in accordance with the terms of the Secured Convertible Note Subscription Agreement; and
(ii) the rights, title and interests in the Secured Convertible Notes assigned to the Subscribers pursuant to the Secured Convertible Notes Assignment Agreements to the Company for cancellation.
(b) Deliveries by the Company. The Company shall deliver or cause to be delivered to the Subscribers on the Closing:
(i) reasonable evidence of the issuance to each Subscriber of its Percentage Allocation of the Shares and its Percentage Allocation of the Warrant;
(ii) a copy of the Transfer Agent Records;
(iii) evidence of registration of each Subscriber in the register of shareholders of the Company as the owner of its Percentage Allocation of the Shares;
(iv) a copy of the minutes of the Company Shareholders’ Meeting evidencing the Company Shareholders’ Approval; and
(v) a copy of the Board Resolutions.
- Defined Terms Used in this Agreement. In addition to the terms defined above (or elsewhere in this Agreement), the following terms used in this Agreement shall be construed to have the meanings set forth or referenced below.
(a) “Affiliate” means, with respect to any specified Person, any other Person who, directly or indirectly, controls, is controlled by, or is under common control with, such Person. For purposes of this definition, the term “control” (including the correlative terms “controlling,” “controlled by” and “under common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
3
(b) “Becaril” means Becaril S.A., a Uruguayan corporation (sociedad anónima).
(c) “Board” means the board of directors of the Company.
(d) “BoardResolutions” means the resolutions to be adopted by the Board on the Closing in order to inter alia issue the Shares and the Warrant on the Closing Date.
(e) “BusinessDay” means any day except a Saturday, Sunday or other day on which commercial banks in the Grand Duchy of Luxembourg or in New York, NY, are authorized by Law to close.
(f) “CategoryFour Lenders” means, collectively, The Prudential Insurance Company of America, Fortitude Life Insurance & Annuity Company (f/k/a Prudential Annuities Life Assurance Corporation), Cigna Health and Life Insurance Company, Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch, and Banco BTG Pactual Colombia S.A.
(g) “CategoryFour Loan Agreements” means those certain agreements described in Schedule 2(g) attached hereto and entered into by certain Group Companies and the Category Four Lenders.
(h) “Chemo” means Chemo Project SA, a Swiss corporation (società anonima).
(i) “Code” means the United States Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder from time to time.
(j) “Company’sKnowledge” means the actual knowledge of any of Melissa Angelini (Co-Chief Executive Officer), Alejandro Weinstein (Chairman of the Board of Directors), Nicolas Weinstein (Director), Camilo Camacho (Co-Chief Executive Officer), Maria Alejandra Molina (Corporate Director Legal Compliance), Natalia Caballero (Corporate Manager of Legal Affairs), and Mario Lopez (Financial Resources Director).
(k) “CompanyShareholders’ Approval” means the approval of the shareholders of the Company, at the Company Shareholders’ Meeting, to inter alia increase the authorized share capital to allow the Company to issue new Ordinary Shares (A) in the Equity Raise, (B) upon the conversion of the Secured Convertible Notes, (C) upon the exercise of the Warrant, and (D) to issue new Ordinary Shares in implementation of the Debt Conversion.
4
(l) “CompanyShareholders’ Meeting” means the extraordinary general meeting of shareholders held on March 24, 2025, in accordance with the terms set forth in the convening notice published by the Company in the Luxemburger Wort and the electronic gazette RecueilElectronique des Sociétés et Associations, for the purpose of obtaining the Company Shareholders’ Approval.
(m) “Conversion” means the conversion of the Secured Convertible Notes and all amounts of principal and interest outstanding thereunder into Ordinary Shares and the Warrant pursuant to Section 3 of the Secured Convertible Notes Subscription Agreement. The terms “Converted,” “Convertible,” “Convert,” and other forms of the word “Conversion” shall have correlative meanings.
(n) “Encumbrance” means any mortgage, lien, pledge, charge, right of first refusal, encumbrance, deed of trust, easement, encroachment, restriction on the right to vote, sell, transfer or otherwise dispose of any capital stock, other voting securities, properties and assets, or any other security interest or rights of third parties or any agreement to create any of the foregoing.
(o) “EquityRaise” means the Company’s private offering of Ordinary Shares to “accredited investors,” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act, in a transaction that is, or a series of transactions that are (including the subscription and issuance of the Shares pursuant hereto) exempt from registration under the Securities Act and occur on or prior to the consummation of the Debt Restructuring, for an aggregate amount of no more than US $90,000,000 (which, for the avoidance of doubt, excludes the proceeds received in connection with the issuance of the Secured Convertible Notes).
(p) “ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
(q) “ERISAAffiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Group Company under section 414 of the Code.
(r) “ExchangeAct” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
(s) “Fraud” means conduct consisting of all of the following elements: (A) representation made of material fact, (B) that was untrue, (C) which the party making the representation knew to be untrue at the time such representation was made, (D) with the intent to deceive and for the purpose of inducing the recipient to act upon it, (E) on which the recipient relied and (F) as a result of such reliance, the recipient suffered Losses.
(t) “GovernmentalAuthority” means any sovereign government or any political subdivision thereof, whether federal, state or municipal, any legislative or judicial body, or autonomous constitutional body and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government.
5
(u) “GroupCompanies” means the Company and all of its Subsidiaries, collectively.
(v) “Hoche” means Hoche Partners Pharma Holding S.A., a public limited company (société anonyme), incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Trade and Companies’ Register (Registre de Commerce et des Sociétés, Luxembourg) under number B 206416.
(w) “IntellectualProperty” means any and all patents, utility models, copyrights and copyrightable works, trademarks, domain names, and all registrations and applications of the foregoing and trade secrets.
(x) “InternalInvestigation” means the internal investigation of the Group Companies initiated by the Company’s Audit Committee with the assistance of external advisors into matters involving the Company’s historical accounting treatment and associated financial statement disclosure.
(y) “Judgment” means, with respect to any Person, any judgment, order, injunction, writ, award or decree of any Governmental Authority or arbitration tribunal applicable to such Person or any of its Subsidiaries or any of their respective properties or assets.
(z) “Law” or “Laws” means any foreign, federal, state, provincial or local laws, statutes, codes, ordinances, rules, regulations, resolutions or Judgments issued, enacted, adopted, promulgated, implemented or otherwise put into effect by or under the authority of any Governmental Authority.
(aa) “Losses” means any actual damages, losses, claims, liabilities, demands, charges, suits, penalties, fees, Taxes, interest, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable out-of-pocket attorneys’ fees and disbursements and expenses of experts). “Losses” shall exclude any consequential, incidental and indirect damages, lost profits, loss of business reputation or opportunity, and punitive, special and exemplary damages and, in particular, no “diminution in value”, “multiple of profits” or “multiple of cash flow” or similar valuation methodology shall be used in calculating the amount of any Losses.
(bb) “Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Group Companies taken as a whole.
6
(cc) “MaterialAdverse Effect” means any change, event, state of facts, circumstance, condition, or effect that results, or would reasonably be expected to result, in a material and significant Loss or detriment to the condition (financial or otherwise), results of operations, properties, assets, relationships with suppliers or business of the Group Companies taken as a whole, provided, however, in no event shall any fact, circumstance, condition, event, change, development, occurrence or effect constitute or be taken into account in determining the occurrence of a Material Adverse Effect if it relates to, arises out of or results from (i) general economic, social or political conditions, (ii) changes in the financing, banking, trade, currency or capital markets in general; (iii) changes in applicable Laws or changes in accounting statutes, requirements or principles that are enacted and become valid after the date hereof; (iv) matters generally affecting the industries, market sectors or territory in which the Group Companies operate (including Pandemic Measures); (v) the announcement of the transactions contemplated by this Agreement (including any impact of the transactions contemplated by this Agreement on the relationships with customers or employees); (vi) acts of God or terrorism, any natural disaster, pandemics or any acts of terrorism, sabotage, military action, armed hostilities or war (whether or not declared) or any escalation or worsening thereof, whether or not occurring or commenced before or after the date of this Agreement; or (vii) the failure by any of the Group Companies to meet internal or published projections, forecasts or revenue or earning predictions for any period.
(dd) “MultiemployerPlan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
(ee) “Non-U.S.Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Group Company or any of its Subsidiaries primarily for the benefit of employees of any Group Company or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
(ff) “NoteObligations” means the corresponding portion of all accrued and unpaid principal, interest and all other amounts due and owing under the Secured Convertible Notes that were assigned to the Subscribers pursuant to the Secured Convertible Notes Assignment Agreements, totaling US $745,868.08 as of the Closing Date.
(gg) “OrdinaryShares” means the ordinary shares of the Company, each having a nominal value of US $0.01 per share.
(hh) “OrganizationalDocuments” means the legal document(s) by which any Person (other than an individual) establishes its legal existence or which govern its internal affairs, including, as applicable, its articles of incorporation, by-laws, articles of association or similar corporate or organizational documents, as amended, supplemented or restated from time to time.
(ii) “OtherInvestors Subscription and Conversion Agreements” means, collectively, (i) that certain Subscription and Conversion Agreement to be entered into between the Company and Chemo and Becaril on or about the Closing Date, pursuant to which Chemo and Becaril will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Secured Convertible Notes; and (ii) that certain Subscription and Conversion Agreement to be entered into between the Company and Hoche on or about the Closing Date, pursuant to which Hoche will be issued by the Company certain Ordinary Shares and a certain warrant, upon the conversion of the Secured Convertible Notes.
7
(jj) “PandemicMeasures” means any applicable quarantine, “shelter in place,” “stay at home,” workforce reduction, social distancing, shut down, closure, sequester or any other Law, order, directive, guidelines or recommendations by any Governmental Authority having jurisdiction over the Group Companies in connection with or in response to COVID-19 or other pandemics.
(kk) “PercentageAllocation” means 74.058541% with respect to Flying Fish, 12.970729% with respect to ST Commercial and 12.970729% with respect to Santana.
(ll) “Permits” means any approvals, authorizations, consents, licenses, permits or certificates of a Governmental Authority, including certificates and licenses to operate manufacturing or storage facilities.
(mm) “Person” means any individual, corporation, partnership, trust, limited liability company, association, Governmental Authority or other entity.
(nn) “Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Group Company or any ERISA Affiliate or with respect to which any Group Company or any ERISA Affiliate may have any liability.
(oo) “RedeemableA Shares” means the redeemable A shares of the Company, nominal value US $0.01 per share.
(pp) “RedeemableB Shares” means the redeemable B shares of the Company, nominal value US $0.01 per share.
(qq) “RepresentationDate” means April 3, 2025.
(rr) **“Restatement”**means the restatement of the Company’s financial statements for the fiscal year ended December 31, 2023, to be filed with the SEC under Form 20-F.
(ss) “SEC” means the Securities and Exchange Commission.
(tt) “SecuredConvertible Note Subscription Agreement” means that certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between the Company and Hoche, as amended from time to time, and pursuant to which the Company issued the Secured Convertible Notes.
8
(uu) “SecuredConvertible Notes” means (i) that certain Secured Convertible Note issued by the Company to Hoche on November 29, 2024, in the principal amount of US $20,000,000, and (ii) that certain Secured Convertible Note issued by the Company to Hoche on December 27, 2024, in the principal amount of US $20,000,000.
(vv) “SecuredConvertible Notes Assignment Agreements” means those certain Assignment and Assumption Agreements, each dated April 9, 2025, between Hoche and each of the Subscribers, and acknowledged by the Company, pursuant to which Hoche assigned to such Subscribers certain of its rights, title, and interest in and to the Secured Convertible Note Subscription Agreement and the Secured Convertible Notes.
(ww) “SecuritiesAct” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
(xx) “ShortSales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall not be deemed to include locating and/or borrowing Ordinary Shares).
(yy) “SpecifiedIndemnity” means any Loss to the Company deriving from any “illegal acts” performed by any of the Company’s directors or officers and identified under the Internal Investigation, to the extent that such Loss is not covered by any insurance policy of any of the Group Companies, including any Company’s directors and officers (D&O) insurance policy.
(zz) “SubscribersSubscription Agreement” means that certain subscription agreement dated April 3, 2025, between the Company and the Subscribers, entered into in connection with the Equity Raise.
(aaa) “SubscriptionAgreements” means those certain subscription agreements entered into by the Company with any Person in connection with the Equity Raise, other than the Subscribers Subscription Agreement.
(bbb) “Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). The term “Subsidiaries” shall have a correlative meaning.
(ccc) “Tax” or “Taxes” means any federal, state, local or foreign taxes, including all net income, gross receipts, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, equity, franchise, profits, withholding, social security, unemployment, disability, real property, personal property, sales, use, transfer, registration, value added, alternative or add-on minimum or other tax of any kind whatsoever, including any interest, penalty or addition thereto imposed by a Tax Governmental Authority.
9
(ddd) “ThirdParty Investors” means Hoche, Chemo and Becaril.
(eee) “VWAP” means the volume-weighted average price per share, rounded to the nearest four decimal points, of the Ordinary Shares of the Company traded over-the-counter (OTC) or on any stock exchange, for the relevant period.
(fff) “Warrant” means the warrant issuable to the Subscribers upon the Subscription and Conversion, in a “warrant amount” of US $2,500,000.
(ggg) “WarrantAssignment Agreements” means those certain Assignment and Assumption Agreements, each dated April 9, 2025, between Hoche and each of the Subscribers, and acknowledged by the Company, pursuant to which Hoche assigned to such Subscribers its rights, title, and interest in and to the Warrant upon conversion of the Secured Convertible Notes.
- Representations and Warranties of the Group Companies. The Company hereby represents and warrants to each Subscriber, as of the Closing Date, as follows:
3.1 Organization. The Company is a public limited liability company (société anonyme), duly incorporated and validly existing under the Laws of the Grand Duchy of Luxembourg. Each of the Subsidiaries of the Company is duly organized and validly existing under the Laws of its respective jurisdiction of organization. The Company and each Subsidiary of the Company has the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted.
3.2 Authority Execution. The Company has corporate power and authority to execute and deliver this Agreement, and, subject to the Board Resolutions, to perform its obligations hereunder and to consummate the transactions contemplated hereby. Subject to the Board Resolutions, the execution, delivery and performance by the Company of this Agreement, the performance by the Company of its obligations and the consummation of the transactions provided for herein have been duly and validly authorized, including by all necessary corporate action. This Agreement has been duly and validly executed by the Company and, subject to the Board Resolutions, constitutes legal, valid and binding obligations of the Company, enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by Laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
3.3 Capitalization.
(a) As of the Representation Date, the authorized capital stock of the Company consists of (i) 2,600,000,000 Ordinary Shares, of which 112,824,183 Ordinary Shares are issued and outstanding, (ii) 4,000,000 Redeemable A Shares, all of which are issued and held in treasury, and (iii) 4,500,000 Redeemable B Shares, all of which are issued and held in treasury. All of the issued Ordinary Shares, Redeemable A Shares and Redeemable B Shares were validly issued, fully paid and non-assessable. As of the Representation Date, the Company has issued (i) 23,375,000 warrants that are outstanding, each entitling their holders to purchase one Ordinary Share at an exercise price of US $11.50 per share; and (ii) the Secured Convertible Notes convertible into Ordinary Shares and the Warrant.
10
(b) Except as set forth in Section 3.3(a), as of the Representation Date, there are no outstanding or authorized (i) capital stock, equity securities or voting securities of the Company, (ii) securities of Company or any Subsidiary convertible into or exchangeable for capital stock, equity securities or voting securities of the Company or (iii) other than as contemplated by the Debt Restructuring, the Debt Conversion or the Equity Raise, options or other rights to acquire from the Company, and no obligation of the Company to issue, any capital stock or equity securities, voting securities or securities convertible or exchangeable for such shares of capital stock or other equity interests or voting securities of the Company or any of its Subsidiaries.
(c) The Subsidiaries of the Company, as of the Representation Date, are listed in Schedule 3.3, attached hereto.
3.4 Valid Issuance of Shares. The Shares have been duly authorized and, when issued pursuant to the terms of this Agreement and the Board Resolutions at the Closing, will be validly issued, fully paid and non-assessable, free and clear of any Encumbrances (other than Encumbrances imposed by the Organizational Documents of the Company in effect as of the Representation Date, and applicable securities laws), and will not have been issued in violation of any preemptive rights, rights of first refusal or offer, or registration rights. Each Share entitles the holder thereof to one vote.
3.5 No Conflicts. The execution by the Company of this Agreement, the performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of the Company’s or any of its Subsidiaries’ Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or any other agreement to which the Company or any of its Subsidiaries is a party or by which the Company’s or any of its Subsidiaries’ properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which the Company or any of its Subsidiaries is a party or by which the Company or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which, individually, would not materially and adversely affect any of the Group Companies or materially impair the Company’s ability to consummate the transactions contemplated hereby.
3.6 Consents, Filings and Approvals. Assuming the accuracy of the representations made by each Subscriber in Section 4 of this Agreement, no consent, approval, notification, authorization or order of, or declaration, filing or registration with any Governmental Authority or other third party is required to be obtained or made by or with respect to the execution, delivery and performance of this Agreement or the consummation of the transactions contemplated hereby, except: (A) as may have already been obtained or will be obtained prior to the Closing, (B) as may be required under the Securities Act, the Exchange Act or state securities laws, or (C) for cases where the failure to obtain (or give or make, as applicable) such consent, approval, notification, authorization, order, declaration, filing or registration, individually or in the aggregate, would not materially and adversely affect the Company and its Subsidiaries, taken as a whole, or the Company’s ability to consummate the transactions contemplated hereby.
11
3.7 Private Placement. Assuming the accuracy of the representations made by each Subscriber in Section 4 of this Agreement, no registration under the Securities Act or any state or non-US securities (or Blue Sky) Laws is required for the offer and sale of the Shares by the Company to the Subscribers as contemplated hereby.
3.8 Investment Company. The Company is not, and is not an Affiliate of, and immediately after the Subscription and Conversion of the Shares, will not be, and will not be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.
3.9 No General Solicitation. Neither the Company nor any Person acting on behalf of the Company has offered or sold any of Ordinary Shares by any form of general solicitation or general advertising in connection with the transactions contemplated hereby. The Company has offered the Shares for sale only to the Subscribers and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act. Neither the Company nor any Person acting on the Company’s behalf has, directly or indirectly, at any time within the past six (6) months, made any offer or sale of any security or solicitation of any offer to buy any security under circumstances that would (i) eliminate the availability of the exemption from registration under Regulation D under the Securities Act in connection with the offer and sale by the Company of the Shares as contemplated hereby or (ii) cause the offering of the Shares pursuant to this Agreement to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable stockholder approval provisions. Neither the Company nor any Person acting on the Company’s behalf has offered or sold or will offer or sell any securities, or has taken or will take any other action, which would reasonably be expected to subject the offer, issuance or sale of the Shares, as contemplated hereby, to the registration provisions of the Securities Act.
3.10 Litigation. Except as set forth in Schedule 3.10 attached hereto, there is no claim, action, lawsuit, proceeding, arbitration, summons, or investigation of any nature (civil, criminal, regulatory, or otherwise) in Law or in equity, pending or, to the Company’s Knowledge, threatened in writing, against any Group Company in any court or before any Governmental Authority where (i) the Losses claimed against such Group Company exceed US $500,000, or (ii) where an injunctive relief prohibiting the consummation of the Equity Raise and other transactions contemplated herein is being sought (each, a “Material Litigation”).
3.11 Compliance with Applicable Laws. Except for any of the matters discovered as a result of the Internal Investigation, no Group Company is in conflict with, or in default, breach or violation of, any Law, including environmental Laws, employment Laws, as well as any Laws applicable to the production, quality control, labeling, storage, advertising, distribution and sale, and recall of pharmaceutical products, applicable to such Group Company or by which any property or asset of such Group Company is bound or affected, except for any such conflicts, violations, breaches, defaults or other occurrences which would not result, individually or in the aggregate, in a Material Adverse Effect.
12
3.12 Property. Except as set forth in Schedule 3.12 attached hereto, the Group Companies have good and valid title to, or a valid leasehold interest in, all their respective material assets and properties, free and clear of all Encumbrances, except for (i) Encumbrances consisting of easements, rights of way, zoning ordinances and other similar encumbrances affecting real property, (ii) liens for Taxes not yet due and payable or which may thereafter be paid without penalty, (iii) mechanics’, carriers’, workmen’s, repairmen’s or other like Encumbrances securing amounts that are not past due, (iv) other imperfections of title which do not, individually or in the aggregate, materially impair the continued use or operation of any real property or personal property of the Group Companies to which they relate, (v) security interest over a cash collateral or similar account and the cash held in any such account securing amounts that are not past due, and (vi) any other Encumbrances that arise in the ordinary course of business and do not materially impair such Group Company’s ownership or use of such property or assets (“Permitted Encumbrances”). With respect to the property and assets it leases, except as set forth in Schedule 3.12 attached hereto, each Group Company is in material compliance with such leases and holds a valid leasehold interest free of any Encumbrances, other than Permitted Encumbrances or Encumbrances of the lessors of such property or assets.
3.13 SEC Matters; Internal Investigation. The Company has made available to the Subscribers accurate and complete copies of all material correspondence through the date hereof between the SEC, on the one hand, and the Company, on the other hand, including comment letters from the staff of the SEC, relating to the documents and records filed by Company with the SEC (the “Company SEC Documents”) containing unresolved comments and all written responses of the Company thereto. To the Company’s Knowledge, as of the Representation Date, no Company SEC Document is the subject of ongoing review, comment or investigation by the SEC. As of the Representation Date, there are no outstanding or unresolved comments in comment letters received from the SEC staff with respect to any Company SEC Document. To the Company’s Knowledge, no litigation, including any class action litigation or an effort to certify a litigation class, is currently underway in connection with the facts and circumstances reviewed under the Internal Investigation, including, without limitation, the Restatement. As of the Representation Date, the Company’s external auditor, Deloitte & Touche, S.A.S., has not, to the Company’s Knowledge, given notice to the Company of its intention to resign or terminate its relationship as external auditor to the Company prior to finalizing its audit in connection with the Restatement.
3.14 Permits. Products. None of the Group Companies has received in the twenty-four (24) months prior to the Representation Date, any written notice of, or been formally charged in writing by a Governmental Authority with, the violation of any Laws applicable to the ownership or operation of the business of each Group Company (including Laws applicable to manufacturing processes, quality and storage standards for the products sold by the Group Companies) that would be reasonably expected to result in more than US $500,000 in Losses. No product recall is currently underway or, to the Company’s Knowledge, anticipated. Except as set forth in Schedule 3.14 attached hereto, each Group Company owns or possesses all material Permits required under applicable Law to operate its business in the ordinary course of business consistent with past practices, and is current in the payment of any fees required to maintain such material Permits.
13
3.15 Transactions With Related Parties. Except (i) as set forth in Schedule 3.15, (ii) for the purchase or sale of supplies, products, ingredients or inventory in the ordinary course of business of such Group Company, or (iii) if on terms no less favorable to such Group Company than those that could be obtained at the time of such transaction in arms’-length dealings with a Person that is not an Affiliate, as of the Representation Date, none of the Group Companies is a party to any contracts, transactions or other arrangements required to be disclosed under Item 7.B of SEC Form 20-F.
3.16 No Unlawful Payments. No Group Company nor, to the Company’s Knowledge, any director, officer, employee or agent of the Group Companies has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made or taken an act in furtherance of an offer, promise or authorization of any direct or indirect unlawful payment or benefit to any foreign or domestic government or regulatory official or employee, including of any government-owned or controlled entity or of a public international organization, or any person acting in an official capacity for or on behalf of any of the foregoing, or any political party or party official or candidate for political office; (iii) violated any provision of the Foreign Corrupt Practices Act of 1977, as amended, or any applicable Law implementing the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions or any other applicable anti-bribery or anti-corruption Law; or (iv) made, offered, agreed, requested or taken an act in furtherance of any unlawful bribe or other unlawful benefit, including, without limitation, any rebate, payoff, influence payment, kickback or other unlawful or improper payment or benefit.
3.17 No Conflicts with Sanctions Laws. None of the Group Companies nor, to the Company’s Knowledge, any director, officer, employee or agent is currently the subject or the target of any sanctions administered or enforced by the U.S. government (including, without limitation, the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State and including, without limitation, the designation as a “specially designated national” or “blocked person”), the United Nations Security Council, the European Union, His Majesty’s Treasury or other relevant sanctions authority (collectively, “Sanctions”), nor is any of the Group Companies located, organized or resident in a country or territory that is the subject or target of any of Sanctions, including, without limitation, the Crimea region of Ukraine, Kherson, Zaporhizhia, Cuba, Iran, Venezuela, North Korea, Syria, Sudan, the so-called Donetsk People’s Republic and the so-called Luhansk People’s Republic or any other Covered Region of Ukraine (each, a “Sanctioned Country”). For the past three years, none of the Group Companies (i) have, to the Company’s Knowledge, engaged in or are now, to the Company’s Knowledge, engaged in any dealings or transactions with any person that at the time of the dealing or transaction is or was the subject or the target of Sanctions; and (ii) have been controlled by an entity or person that is or was the subject or the target of Sanctions or located in a Sanctioned Country.
3.18 Indebtedness and Other Financial Information. Schedule 3.18(a) attached hereto includes a list of all financial indebtedness of the Group Companies (other than any financial indebtedness owed by a Group Company to another Group Company), with reference to name of lender and principal terms of such indebtedness as of January 31, 2025. The financial information of the Group Companies in the audited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as included in the Restatement, shall not be, as a whole, more detrimental to the Group Companies than the financial information of the Group Companies in the unaudited consolidated balance sheet as at December 31, 2023 and the related statements of income, in each case as set forth in Schedule 3.18(b), except to the extent it would not result, individually or in the aggregate, in a Material Adverse Effect.
14
3.19 Tax Matters.
(a) All Tax returns required to be filed on or before the Closing Date by each Group Company have been, or will be, timely filed (taking into account any extension of time within which to file). All materials Taxes due and owing by the Group Companies (whether or not shown on any Tax return) have been, or will be, timely paid, except with respect to Taxes that are (whether or not such Taxes have been reported on any Tax returns) being contested in good faith.
(b) There are no Encumbrances for Taxes upon the assets of any Group Company, other than Permitted Encumbrances.
(c) There is no claim, audit, action, lawsuit, proceedings, examination, or investigation now pending or, to the Company’s Knowledge, threatened in writing against or with respect to any Group Company in respect of a material amount of Taxes, the non-payment of which would result in an Encumbrance on a Group Company.
(d) Other than ordinary course routine audits, no Group Company has received any written notice for an audit of any material Taxes that has not been resolved or completed for a Tax period which the statute of limitations for assessments remains open.
3.20 Intellectual Property.
(a) Each of the Group Companies owns or has the right to use all Intellectual Property that is exclusively used in, and material to, the conduct of the business of the Group Companies as currently conducted. Except as set forth on Schedule 3.20, there is no lawsuit pending or, to the Company’s Knowledge, threatened in writing against any Group Company by any third party contesting the ownership, use, infringement or misappropriation by any Group Company of any owned Intellectual Property which could reasonably be expected to result in damages in excess of US $500,000.
(b) Except as set forth of Schedule 3.20, to the Company’s Knowledge, the operation of the business of each Group Company, as currently conducted by such Group Company is not infringing or misappropriating any Intellectual Property of any third party in any material respect.
3.21 Insurance.
(a) Schedule 3.21 sets forth a list of material insurance policies under which the Group Companies are insured as of the Representation Date (the “Material Insurance Policies”). As of the Representation Date, all Material Insurance Policies are in full force and effect. None of the Group Companies have received written notice in the twelve (12) months prior to the Representation Date threatening cancellation or non-renewal of any of the Material Insurance Policies.
15
(b) Each of the Group Companies party to the Material Insurance Policies is in material compliance with the terms of such Material Insurance Policies, and is not in default for the failure to pay any premiums due and payable thereunder.
(c) Except as set forth on Schedule 3.21, in the twelve (12) months prior to the Representation Date, none of the Group Companies have had (A) any insurance claim relating exclusively to their respective business in excess of US $500,000 rejected or payment with respect thereto denied for such claim, or (B) the policy limit under any Material Insurance Policy exhausted.
3.22 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of any of the Group Companies.
3.23 Compliance with ERISA.
(a) The Group Companies and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect. None of the Group Companies nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Group Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Group Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Group Company’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
16
(c) The Group Companies and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Group Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Group Company would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Shares hereunder will not involve a non-exempt prohibited transaction under 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.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Group Company have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
- Representations and Warranties of the Subscribers. Each Subscriber, severally but not jointly, hereby represents and warrants to the Company, as of the Closing Date, as follows:
4.1 Organization. Such Subscriber is an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation.
4.2 Authority Execution. Such Subscriber has the power and authority or capacity, as the case may be, and has taken all action necessary, to execute this Agreement and to perform its obligations hereunder and to consummate the transactions contemplated hereby. To the extent such Subscriber is a legal entity, the execution and performance by such Subscriber of this Agreement, the performance by such Subscriber of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable. This Agreement has been duly and validly executed by such Subscriber, and constitutes legal, valid and binding obligations of such Subscriber, enforceable against such Subscriber in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
17
4.3 No Conflicts. The execution by such Subscriber of this Agreement, the performance by such Subscriber of this Agreement and the consummation of the transactions contemplated hereby do not and, at the Closing, will not (A) conflict with or violate any provision of its Organizational Documents, (B) result in a breach of or constitute a default under, give to others any right of termination, amendment, acceleration or cancellation of, result in triggering any payment or other obligations pursuant to, any note, bond, mortgage, contract, confidentiality agreement or similar agreement, lease, license, or other agreement to which such Subscriber is a party or by which such Subscriber’s properties or assets are bound or affected, or (C) violate or conflict with, constitute a breach of or default under, any Judgment to which such Subscriber is a party or by which such Subscriber or any of its properties are bound; except, in the cases of each of items (B) and (C) above, for any conflict, violation, breach, default, termination, amendment, acceleration, cancellation, right or Encumbrance which would not materially impair such Subscriber’s ability to consummate the transactions contemplated hereby.
4.4 Own Account. Such Subscriber understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities Law and is acquiring the Shares as principal for its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities Law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares in violation of the Securities Act or any applicable state securities law.
4.5 Restrictive Legend. Such Subscriber agrees that any certificates or book-entry positions representing the Shares may, at the discretion of the Company, contain one or all of the following legends:
(a) THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT, OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION, AND NEITHER THE SECURITIES NOR ANY INTEREST THEREIN MAY BE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT AND SUCH LAWS WHICH, IN THE OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IS AVAILABLE.
(b) Any legend required by the securities laws of any jurisdiction, including any state, to the extent such laws are applicable to the Shares.
4.6 Subscriber Status. At the time such Subscriber was offered Shares, it was, and as of the Closing Date, such Subscriber is or will be either: (i) an “accredited investor” as defined in Rule 501(a) of Regulation D promulgated under the Securities Act or (ii) a “qualified institutional buyer” as defined in Rule 144A(a) under the Securities Act.
18
4.7 Experience of Subscriber. Such Subscriber, either alone or together with its Representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Shares, and has so evaluated the merits and risks of such investment. Such Subscriber is able to bear the economic risk of an investment in the Shares and, at the present time, is able to afford a complete loss of such investment.
4.8 General Solicitation. Such Subscriber is not purchasing Shares as a result of any advertisement, article, notice or other communication regarding the Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
4.9 Access to Information. Such Subscriber has conducted its own independent investigation, review and analysis of the Company, including the Company’s business, results of operations, prospects, condition (financial or otherwise) and assets, and acknowledges that it has been provided (i) the opportunity to ask such questions as such Subscriber has deemed necessary of, and to receive answers from, Representatives of the Company concerning the terms and conditions of the offering of the Shares and the merits and risks of investing in the Shares; and (ii) access to certain personnel, books and records, and other documents, data and information about the Company and its financial condition, results of operations, business, properties, management and prospects (including the reports prepared by accounting and legal advisors of the Company on the Company’s Internal Investigation) in connection with Subscriber’s evaluation of its investment. Such Subscriber has consulted, to the extent deemed appropriate by such Subscriber, with such Subscriber’s own advisers as to the financial, tax, legal, accounting, regulatory and related matters concerning an investment in such Shares and on that basis understands the financial, tax, legal, accounting, regulatory and related consequences of an investment in such Shares, and believes that an investment in the Shares is suitable and appropriate for such Subscriber in accordance with the terms of this Agreement.
4.10 Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder and any other purchase of securities of the Company in an offering by the Company, such Subscriber has not, nor has any Person acting on behalf of or pursuant to any understanding with such Subscriber, directly or indirectly executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Subscriber first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof.
4.11 Foreign Investor. Such Subscriber is not a United States person (as defined by Section 7701(a)(30) of the Code) and hereby represents that it has satisfied itself as to the full observance of the Laws of all jurisdictions applicable to such Subscriber in connection with any invitation to subscribe for the Shares or any use of this Agreement, including (i) the legal requirements within all such jurisdictions for the purchase of such Subscriber’s Shares, (ii) any foreign exchange restrictions applicable to such purchase, (iii) any governmental or other consents that may need to be obtained, and (iv) the income tax and other tax consequences, if any, that may be relevant to the purchase, holding, redemption, sale, or transfer of such Subscriber’s Shares. Such Subscriber’s Subscription and Conversion and continued beneficial ownership of its Shares will not violate any applicable securities or other laws of such Subscriber’s jurisdiction.
19
4.12 No Finder’s Fee. No broker, finder or investment banker is entitled to any brokerage, finder’s or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of such Subscriber or any of its Affiliates.
4.13 Financial Wherewithal. The obligations of such Subscriber under this Agreement are not subject to any conditions regarding such Subscriber’s, its Affiliates’ or any other Person’s ability to obtain financing for the consummation of the transactions contemplated hereby.
4.14 No Additional Representations.
(a) Such Subscriber has conducted to such Subscriber’s satisfaction its own independent investigation, review and analysis of, and reached its own independent conclusions regarding, the Company, its Subsidiaries, their businesses and their operations, assets, condition (financial or otherwise) and prospects. Such Subscriber has been represented by, and had the assistance of, counsel in the conduct of such Subscriber’s due diligence, the preparation and negotiation of this Agreement, and the consummation of the transactions contemplated hereby.
(b) SUCH SUBSCRIBER ACKNOWLEDGES AND AGREES THAT OTHER THAN THE REPRESENTATIONS AND WARRANTIES EXPRESSLY SET FORTH IN SECTION 3, NONE OF THE COMPANY OR ANY OF ITS AFFILIATES OR REPRESENTATIVES HAS MADE OR IS MAKING ANY REPRESENTATION OR WARRANTY TO SUCH SUBSCRIBER OR ANY OF SUCH SUBSCRIBER’S AFFILIATES OR THEIR RESPECTIVE REPRESENTATIVES, WRITTEN OR ORAL, EXPRESS OR IMPLIED, WITH RESPECT TO THE TRANSACTIONS CONTEMPLATED UNDER THIS AGREEMENT, INCLUDING WITH RESPECT TO THE COMPANY OR ANY OF ITS AFFILIATES, THE SHARES, OR THE ASSETS OR LIABILITIES OF THE COMPANY AND ITS SUBSIDIARIES.
- Conditions to the Subscribers’ Obligations at the Closing. The Subscribers’ election to Convert the Secured Convertible Notes and all outstanding Note Obligations thereunder and subscribe for the issuance of the Shares and the Warrant in connection with the Subscription and Conversion at the Closing is subject to the fulfillment, on or before the Closing, of each of the following conditions, unless otherwise waived in writing by the Subscribers:
5.1 Representations and Warranties. The representations and warranties of the Company contained in Section 3 shall be true and correct in all material respects (or, to the extent representations or warranties are qualified by materiality, in all respects) as of the Closing.
20
5.2 No SEC Action. The SEC shall have not notified or informed the Company that it has commenced any investigation against the Company or shall have not issued, or threatened in writing to issue, any Judgment against the Company.
5.3 Judgment Restraining Transactions. No Governmental Authority shall have issued a Judgment restraining or enjoining any of the transactions contemplated hereby.
5.4 Debt Restructuring. Each of the Group Companies party to the Category Four Loan Agreements shall have entered into definitive binding agreements with the Category Four Lenders to amend the Category Four Loan Agreements which may include the conversion of a portion of the Company’s debt into Ordinary Shares (the “Debt Conversion”), and shall include the terms set forth in Schedule 5.4 attached hereto (the “Debt Restructuring”).
[Intentionally Omitted].
Survival and Limitation on Liability.
7.1 Survival of Representations and Warranties and Covenants.
(a) (i) The representations and warranties of the Company contained in Section 3.1 (Organization), Section 3.2 (Authority; Execution), Section 3.3 (Capitalization), Section 3.4 (Valid Issuance of Shares) and Section 3.22 (No Finder’s Fee) (collectively, the “Company Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; (ii) all other representations and warranties of the Company contained in Section 3 shall survive the Closing and remain in full force and effect and for a term of six (6) months after the date of filing of the Restatement with the SEC; and (iii) the Specified Indemnity shall survive the Closing and remain in full force and effect and for a term of twelve (12) months after the date of filing of the Restatement with the SEC.
(b) (i) The representations and warranties of the Subscribers contained in Section 4.1 (Organization), Section 4.2 (Authority; Execution) and Section 4.12 (No Finder’s Fee) (collectively, the “Subscriber Fundamental Representations”) shall survive the Closing and remain in full force and effect until the expiration of the relevant statute of limitations under applicable Law; and (ii) all other representations and warranties of the Subscribers contained in Section 4 shall survive the Closing and remain in full force and effect for a term of twelve (12) months after the Closing Date.
(c) The covenants and other agreements of the parties set forth herein (other than the covenants which by their terms are to be performed prior to the Closing and which shall survive the Closing for a period of six (6) months after the Closing Date) that by their nature are required to be performed following the Closing Date shall survive, and thus a claim may be brought in respect of a breach thereof, until the last date on which each such covenant was required to be performed.
21
(d) Notwithstanding anything to the contrary in this Section 7.1, in the event a Claim Notice is properly delivered in good faith under Section 7.3 by an Indemnified Party in connection with a claim for Losses related to, or arising out of, an inaccuracy or breach in any representation, warranty, covenant or agreement during the time periods provided for in Sections 7.1(a), (b) or (c) (the last day of each survival period, the “Expiration Date”), such representation, warranty, covenant or agreement will continue to survive until such claim is finally resolved by a Judgment that has become final and non-appealable. Following the corresponding Expiration Date, no claim for indemnification may be made or pursued (except as expressly permitted by the immediately preceding sentence) with respect to such representation and warranty, covenant or agreement.
7.2 Indemnification.
(a) From and after the Closing Date and subject to the provisions of this Section 7 (including Section 7.4), the Company shall indemnify, defend and hold harmless each of the Subscribers and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Subscribers Indemnified Party” and collectively, the “Subscribers Indemnified Parties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by the Company in Section 3, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by the Company under this Agreement, (iii) the Specified Indemnity, or (iv) any dilution suffered by any of the Subscribers, net of any Losses indemnified to such Subscribers under this Agreement and/or the Subscribers Subscription Agreement for substantially the same events or circumstances, as a result of the Company indemnifying any Person for a claim that is not a third party claim under (A) Section 9.2(a)(i) and/or Section 9.2(a)(iii) of any Subscription Agreement (excluding, for the avoidance of doubt, this Agreement and the Subscribers Subscription Agreement) entered into by the Company with one or more Persons in connection with the Equity Raise, (B) Section 7.2(a)(i) and/or Section 7.2(a)(iii) of any of the Other Investors Subscription and Conversion Agreements entered into by the Company with one or more Third Party Investors and/or (C) for any breaches of representations and warranties of the Company under the definitive agreements entered into by the Company and the Category Four Lenders pursuant to which the Company issued Ordinary Shares to such Category Four Lenders as part of the Debt Conversion.
(b) From and after the Closing Date and subject to the provisions of this Section 7 (including Section 7.4), the Subscribers shall severally but not jointly indemnify, defend and hold harmless the Company, its Subsidiaries and their respective Representatives, employees, Affiliates, successors and assigns (each, a “Company Indemnified Party” and collectively, the “Company IndemnifiedParties”) from and against any and all Losses incurred by any or all of them resulting from: (i) any breach or inaccuracy of any of the representations and warranties made by such Subscriber in Section 4, (ii) any breach of or failure to perform any covenant, agreement, or obligation to be performed by such Subscriber under this Agreement, or (iii) any breach or inaccuracy of any of the representations and warranties made by such Subscriber in the Antitrust Representation Letter executed and delivered by such Subscriber on April 3, 2025, a copy of which is attached hereto as Exhibit A.
22
7.3 Indemnification Procedures.
(a) In order for any Subscribers Indemnified Party or a Company Indemnified Party (either one, as applicable, “Indemnified Party”) to be entitled to any indemnification provided under this Section 7 the Indemnified Party must give reasonably prompt written notice of such claim (“Claim Notice”) to the party from whom indemnification is sought (“Indemnifying Party”); provided, however, that so long as such Claim Notice is given within the applicable time period set forth in Section 7.1, no delay on the part of the Indemnified Party in giving any such Claim Notice shall relieve the Indemnifying Party of any indemnification obligation hereunder unless (and then solely to the extent that) the Indemnifying Party is prejudiced by reason of such delay. Each Claim Notice shall be in writing and (i) shall specify in reasonable detail the basis for indemnification claimed by the Indemnified Party, (ii) shall include copies of all available material written evidence thereof, provided that if such Claim Notice is being given with respect to a Third Party Claim, such Claim Notice shall describe in reasonable detail such Third Party Claim and shall be accompanied by copies of all relevant pleadings, demands and other papers served on the Indemnified Party, and (iii) shall specify the amount of (or if not finally determined, a good faith estimate of) the Losses being incurred by, or imposed upon, the Indemnified Party on account of the basis for the claim for indemnification.
(b) Promptly after receipt by an Indemnified Party of written notice of the assertion of a claim by any Person who is not a party to this Agreement (a “Third Party Claim”) that may give rise to a claim for indemnification against an Indemnifying Party under this Section 7, the Indemnified Party shall give reasonably prompt written notice thereof in the form of a Claim Notice to the Indemnifying Party pursuant to Section 7.3(a). Thereafter, the Indemnified Party shall deliver to the Indemnifying Party, within five (5) Business Days after the Indemnified Party’s receipt thereof, copies of all notices and documents (including court papers) received by the Indemnified Party relating to such Third Party Claim.
(c) The Indemnifying Party shall have the right, at its sole option and expense, to be represented by counsel of its choice and to defend against, negotiate, settle or otherwise handle any Third Party Claim that is the subject of a Claim Notice given by or on behalf of any Indemnified Party. If the Indemnifying Party elects to defend against, negotiate, settle or otherwise handle any such Third Party Claim, it shall, as soon as reasonably practicable, but in any event within a term of thirty (30) days following the date of delivery by the Indemnified Party of the Claim Notice with respect to such Third Party Claim (the “Dispute Period”), notify the Indemnified Party of its intent to do so; provided, that such Indemnifying Party shall not have the right to defend or direct the defense of any such Third Party Claim that seeks an injunction or other equitable relief against the Indemnified Party and, in the reasonable opinion of outside counsel to the Indemnified Party, cannot reasonably be separated from any related claim for money damages. If such injunction or other equitable relief portion of such Third Party Claim can be so separated from that for money damages, the Indemnifying Party shall be entitled to assume the defense of the portion relating to money damages. If the Indemnifying Party elects to defend against, negotiate, settle with or otherwise handle any Third Party Claim within the Dispute Period, the Indemnified Party may retain separate co-counsel at its sole cost and expense and participate in the defense of such Third Party Claim. Notwithstanding any other provision of this Agreement to the contrary, the Indemnifying Party shall not consent to the entry of any Judgment or enter into any compromise or settlement with respect to a Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed) unless such Judgment, compromise or settlement involves solely the payment of money, without any finding or admission of any violation of Law or admission of any wrongdoing by the Indemnified Party.
23
(d) If the Indemnifying Party elects not to, or does not elect within the Dispute Period to, defend against, negotiate, settle or otherwise handle any Third Party Claim, the Indemnified Party may defend against, negotiate, settle or otherwise handle such Third Party Claim and seek indemnification from the Indemnifying Party for any and all Losses (subject to the limitations set forth in Section 7 (including Section 7.4)) based upon, arising from or relating to such Third Party Claim; provided, that the Indemnified Party shall not consent to the settlement of, or the entry of any Judgment arising out of or in connection with, any Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed).
(e) The Indemnified Party and the Indemnifying Party shall reasonably cooperate with each other in connection with the defense, negotiation or settlement of any Third Party Claim, including the retention and, upon request, provision to the Indemnifying Party of records and information that are reasonably relevant to such Third Party Claim, and making employees available on a mutually convenient basis to provide additional information and explanations of any materials provided hereunder in a timely manner.
7.4 Limitations on Indemnification.
(a) The amount of any Losses for which indemnification is provided under this Section 7 shall be net of any amounts (i) recovered by an Indemnified Party or its Affiliates under or pursuant to any insurance policy, and (ii) recovered by any such Person from any third party with respect to such Losses. In the event that any such recovery is made by an Indemnified Party or its Affiliates with respect to any Losses, as applicable, for which any such Indemnified Party has been indemnified hereunder and has received funds in the amount of such Losses, then a refund equal to the aggregate amount of the recovery shall be made promptly to the Indemnifying Party.
(b) Notwithstanding anything herein to the contrary, (i) the Company shall not be liable to the Subscribers Indemnified Parties for any Losses pursuant to Section 7.2(a)(i) and/or Section 7.2(a)(iii), other than in respect of Fraud or breach of any Company Fundamental Representation, subject to the other limitations herein; and (ii) the Company shall not be liable to the Subscribers Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US $725,833.33, subject to the other limitations herein. Notwithstanding the foregoing, to the extent that the Company is liable to the Subscribers Indemnified Parties for any Losses under (i) Section 9.2(a)(i) of the Subscribers Subscription Agreement, after taking into account the applicable limitations on indemnification set forth thereunder, the Company shall also be liable to the Subscribers Indemnified Parties for all Losses under Section 7.2(a)(i) of this Agreement, but the aggregate Losses under Section 9.2(a)(i) of the Subscribers Subscription Agreement and Section 7.2(a)(i) of this Agreement shall be subject to all applicable limitations on indemnification for breaches of representations and warranties under Section 9.4 of the Subscribers Subscription Agreement, including Section 9.4(b)(i), Section 9.4(b)(ii), Section 9.4(b)(iii) and Section 9.4(b)(v); and (ii) Section 9.2(a)(iii) of the Subscribers Subscription Agreement, after taking into account the applicable limitations on indemnification set forth thereunder, the Company shall also be liable to the Subscribers Indemnified Parties for all Losses under Section 7.2(a)(iii) of this Agreement, but the aggregate Losses under Section 9.2(a)(iii) of the Subscribers Subscription Agreement and Section 7.2(a)(iii) of this Agreement shall be subject to all applicable limitations on indemnification for the Specified Indemnity (as defined hereunder and thereunder) under Section 9.4 of the Subscribers Subscription Agreement, including Section 9.4(b)(i), Section 9.4(b)(ii), Section 9.4(b)(iv) and Section 9.4(b)(v).
24
(c) Notwithstanding anything herein to the contrary, (i) no Subscriber shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed US $10,000 (the “De Minimis Exclusion”) and no individual claim for Losses that do not exceed the De Minimis Exclusion shall be considered in determining the amount of Losses under Section 7.2(b)(i) and/or Section 7.2(b)(iii) unless a series of similar events arising from the same circumstances exceed the De Minimis Exclusion; (ii) no Subscriber shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, until the aggregate amount of such Losses (excluding, for the avoidance of doubt, any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii) which, individually considered, do not exceed the De Minimis Exclusion) exceeds an amount equal to US $18,100, at which time a Subscriber shall be severally but not jointly liable for the entire amount of all such Losses, subject to the other limitations herein; (iii) no Subscriber shall be liable to the Company Indemnified Parties for any Losses pursuant to Section 7.2(b)(i) and/or Section 7.2(b)(iii), other than in respect of Fraud or breach of any Subscriber Fundamental Representation, in excess of US $72,500, subject to the other limitations herein; and (iv) no Subscriber shall be liable to the Company Indemnified Parties for any Losses arising under or in connection with this Agreement, other than in respect of Fraud, in excess of US $725,833.33, subject to the other limitations herein. For the avoidance of doubt, any liability of a Subscriber under this Section 7 shall be several and not joint (in accordance with such Subscriber’s Percentage Allocation).
(d) Notwithstanding anything herein to the contrary, (i) no Indemnifying Party will have any obligation to indemnify for any Losses until a final, non-appealable Judgment is rendered with respect to such Claim Notice or a written agreement is entered into by the parties; and (ii) where substantially the same events or circumstances qualify under one or more single or multiple claims or under one or more provisions of this Agreement, the Indemnified Party shall not be entitled to double or duplicative recovery of Losses arising out of such events or circumstances, or to calculate its Losses by duplicating or double counting its Losses arising out of such events or circumstances.
(e) In the event that the Company has an obligation to indemnify any Subscribers Indemnified Party for any Losses under this Section 7, the Company shall, within ten (10) Business Days (or any other date agreed in writing by the Company and such Subscribers Indemnified Party) after such Losses have been finally determined and are owed by the Company in accordance with Section 7.4(d), at its option, pay the amount of such Losses either by (i) wire transfer of immediately available funds to an account designated in writing by such Subscribers Indemnified Party, or (ii) issuing a warrant exercisable into Ordinary Shares to such Subscribers Indemnified Party in the form attached hereto as Exhibit B (the “Indemnity Warrant”), that will entitle such Subscribers Indemnified Party to a number of Ordinary Shares resulting from the quotient of (x) the amount of such Losses, and (y) the fair market value of an Ordinary Share at the time of the payment obligation, which, to the extent the Ordinary Shares of the Company are traded over-the-counter (OTC) or in any stock exchange, shall be equivalent to the Company’s Ordinary Shares VWAP for the period of thirty (30) consecutive trading days ending on the trading day immediately prior to the date of payment. The Exercise Price (as defined in the Indemnity Warrant) under such Indemnity Warrant shall be US $0.01.
25
(f) In the event that any Subscriber has an obligation to indemnify a Company Indemnified Party for any Losses under this Section 7, such Subscriber shall pay the amount of such Losses within ten (10) Business Days (or any other date agreed in writing by such Subscriber and such Company Indemnified Party) after such Losses have been finally determined and are owed by such Subscriber in accordance with Section 7.4(d) by wire transfer of immediately available funds to an account designated in writing by such Company Indemnified Party.
(g) Each Indemnified Party agrees that in the event of any breach giving rise to an indemnification obligation under this Section 7 such Indemnified Party shall take and shall cause its Affiliates to take, or cooperate with the Indemnifying Party, if so requested by the Indemnifying Party, in order to take, all reasonable measures to mitigate the consequences of the related breach (including taking steps to prevent any contingent liability from becoming an actual liability).
7.5 Exclusive Remedy. Notwithstanding anything herein to the contrary and subject to the first sentence in Section 8.8, following the Closing Date, the indemnification obligations under this Section 7 shall be the sole and exclusive remedy of the parties (other than remedies based on Fraud) for any inaccuracy or breach of any representation, warranty, covenant, obligation or other agreement contained in this Agreement.
- Miscellaneous.
8.1 Successors and Assigns. The terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
8.2 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal Laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal action, suit or proceeding concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith, and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such action, suit or proceeding is improper or is an inconvenient venue for such proceeding.
26
8.3 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
8.4 Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.
8.5 Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
8.6 Notices. All notices and other communications given or made pursuant to this Agreement shall be in writing and shall be deemed effectively given upon the earlier of actual receipt or: (A) upon personal delivery to the party to be notified, (B) when sent, if sent by electronic mail during normal business hours of the recipient, and if not sent during normal business hours, then on the recipient’s next business day, or (C) five business days after having been sent by an internationally recognized overnight courier. All communications shall be sent to the respective parties at the following physical or e-mail addresses (or to such other physical and e-mail address as a party may have specified by notice pursuant to this provision):
(a) if to the Company:
Procaps Group, S.A.
9 Rue de Bitbourg
L-1273 Luxembourg
Grand Duchy of Luxembourg
Attention: Alejandro Weinstein and Melissa Angelini
E-mail: alexandre@bechutzpah.ch; mangelini@procapsgroup.com
With a copy (without constituting notice) to:
Greenberg Traurig, P.A.
333 S.E. 2^nd^ Avenue, Suite 4400
Miami, Florida 33131
Attention: Antonio Peña
Email: Antonio@gtlaw.com
27
(b) if to the Subscribers, to physical or e-mail address set forth on each Subscriber’s signature pages hereto with a copy to:
Fox Horan & Camerini LLP.
885 3rd Avenue
17th Floor
New York, NY 10022
Attention: Ezequiel A. Camerini
Email: eacamerini@foxlex.com
8.7 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement.
8.8 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Subscribers and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
8.9 Amendments and Waivers. Any term of this Agreement may be amended, terminated or waived only with the written consent of the Company and the Subscribers.
8.10 Severability. The invalidity or unenforceability of any provision hereof shall in no way affect the validity or enforceability of any other provision.
8.11 Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or to any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default previously or thereafter occurring. Any waiver, consent or approval of any kind on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, the Subscribers Subscription Agreement and/or by Law or otherwise afforded to any party hereunder or thereunder, shall be cumulative and not alternative.
8.12 Press Releases. The Company, on the one hand, and the Subscribers, on the other, will consult with each other and will mutually agree upon any press release or public announcement pertaining to the transactions contemplated by this Agreement, and shall not issue any such press release or public announcement prior to such consultation and agreement, except for public announcements or filings reasonably deemed required by or appropriate pursuant to applicable Law or by obligations pursuant to any listing agreement with any national securities exchange.
8.13 Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with respect to the subject matter hereof, and any other written or oral agreement relating to the subject matter hereof existing between the parties is expressly canceled.
[SignaturePages Follow]
28
Exhibit 10.12
EXECUTION VERSION
FORM OF AMENDED AND RESTATED REGISTRATION RIGHTSAGREEMENT
THIS AMENDED AND RESTATED REGISTRATION RIGHTS AGREEMENT (this “Agreement”), dated as of March 24, 2025, is made and entered into by and among Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) under number B253360 (the “Company”), Hoche Partners Pharma Holding S.A., a public limited liability company (société anonyme) governed by the laws of the Grand Duchy of Luxembourg with its registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register (Registre de Commerce et des Sociétés, Luxembourg) under number B206416 (“Hoche”), Caoton Company, S.A., acting as trustee to the Sognatore Trust, a trust organized under the laws of New Zealand (“Sognatore”), Commonwealth Trust Company, acting as trustee to the Simphony Trust, a trust organized under the laws of the State of Delaware, United States of America (“Simphony”) and Commonwealth Trust Company, acting as trustee to the Deseja Trust, a trust organized under the laws of the State of Delaware, United States of America (“Deseja”) and each of the others persons and entities, if any, listed on the signature page hereto (collectively with Hoche, Sognatore, Simphony and Deseja, the “Executing Holders”), for the purpose of amending and restating that certain Registration Rights and Lock-Up Agreement (the “Prior Agreement”) entered into on September 29, 2021, by and among the Company, Union Group International Holdings Limited and Union Acquisition Associates II, LLC (collectively, the “Founders” and each, a “Founder”), each of the persons and entities listed on Exhibit A hereto (each, a “Union II Holder”), each of the persons and entities listed on Exhibit B hereto (each, a “Procaps Holder” and, collectively with each Executing Holder, each Founder and each Union II Holder and any other person or entity who hereafter becomes a party to this Agreement by execution of a Joinder Agreement satisfactory to the Company, each a “Holder” and collectively the “Holders”).
RECITALS
WHEREAS, on September 29, 2021, the Company and certain Holders entered into the Prior Agreement, pursuant to which the Company agreed to provide, among other things, certain registration rights to such Holders;
WHEREAS, on November 29, 2024, the Company and Hoche entered into that certain Secured Convertible Note Subscription Agreement (the “NoteSubscription Agreement”) pursuant to which, among other things, the Company issued secured convertible notes to Hoche, convertible into (i) ordinary shares of the Company, each having a nominal value of $0.01 per share (“Ordinary Shares”) and a private placement warrant exercisable for Ordinary Shares;
WHEREAS, pursuant to Section 6.5 of the Prior Agreement, the provisions, covenants or conditions set forth therein may be amended or modified upon written consent of the Company and the Holders (as such term was defined in the Prior Agreement) of at least a majority-in-interest of the Registrable Securities (as such term was defined in the Prior Agreement) at the time in question;
WHEREAS, the Executing Holders represent at least a majority-in-interest of the Registrable Securities (as such term was defined in the Prior Agreement); and
WHEREAS, following the consummation of the transactions contemplated by the Note Subscription Agreement, the Company and the Executing Holders desire to amend and restate the Prior Agreement in its entirety and enter into this Agreement, pursuant to which, among other things, the Company shall grant the Holders certain registration rights with respect to certain securities of the Company, as set forth in this Agreement.
NOW, THEREFORE, in consideration of the representations, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. The terms defined in this Article I shall, for all purposes of this Agreement, have the respective meanings set forth below:
“AdverseDisclosure” shall mean any public disclosure of material non-public information, which disclosure, in the good faith judgment of the Chief Executive Officer or Chief Financial Officer of the Company, after consultation with counsel to the Company, (a) would be required to be made in any Registration Statement or Prospectus in order for the applicable Registration Statement or Prospectus not to contain any Misstatement, (b) would not be required to be made at such time if the Registration Statement were not being filed, and (c) the Company has a bona fide business purpose for not making such information public.
“Affiliate” shall mean, with respect to a specified Person, each other Person that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Person specified; provided that no Holder shall be deemed an Affiliate of any other Holder solely by reason of an investment in, or holding of Ordinary Shares (or securities convertible or exchangeable for share of Ordinary Shares) of, the Company. As used in this definition, “control” (including with correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of voting securities or by contract or other agreement).
“Agreement” shall have the meaning given in the Preamble.
“Board” shall mean the Board of Directors of the Company.
“BCA” shall mean that certain Business Combination Agreement, dated as of March 31, 2021 (as amended, restated, supplemented or otherwise modified from time to time), entered into by and among the Company, Union II, Crynssen Pharma Group Limited, a private limited liability company registered and incorporated under the laws of Malta, and Merger-Sub, pursuant to which, among other things, Merger-Sub merged with and into Union II in exchange for Union II’s shareholders receiving Ordinary Shares.
“Changein Control” shall mean the transfer (whether by tender offer, merger, share purchase, consolidation or other similar transaction), in one transaction or a series of related transactions, to a person or group of affiliated persons of the Company’s voting securities if, after such transfer, such person or group of affiliated persons would hold more than 50% of outstanding voting securities of the Company (or surviving entity) or would otherwise have the power to control the board of directors of the Company or to direct the operations of the Company.
“Claims” shall have the meaning given in subsection 4.1.1.
“Commission” shall mean the Securities and Exchange Commission.
“Company” shall have the meaning given in the Preamble.
“Deseja” shall have the meaning given in the Preamble hereto.
“Effectiveness Deadline” shall have the meaning given in subsection 2.1.1.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as it may be amended from time to time.
“Executing Holders” shall have the meaning given in the Preamble hereto.
“Form F-1 Shelf” shall have the meaning given in subsection 2.1.1.
“Founder” shall have the meaning given in the Preamble hereto.
“Hoche” shall have the meaning given in the Preamble hereto.
“Holders” shall have the meaning given in the Preamble hereto.
2
“IFC” shall mean the International Finance Corporation, an international organization established by Articles of Agreement among its member countries.
“Maximum Number of Securities” shall have the meaning given in subsection 2.2.2.
“Merger-Sub” shall mean OZLEM Limited, an exempted company incorporated under the laws of the Cayman Islands.
“Misstatement” shall mean an untrue statement of a material fact or an omission to state a material fact required to be stated therein, or necessary to make the statements therein (in the case of any Prospectus and any preliminary Prospectus, in the light of the circumstances under which they were made) not misleading.
“Note Subscription Agreement” shall have the meaning given in Recitals hereto.
“Ordinary Shares” shall mean the ordinary shares of the Company.
“PermittedTransferees” shall mean any person or entity to whom a Holder is permitted to Transfer its Registrable Securities.
“Piggyback Registration” shall have the meaning given in subsection 2.2.1.
“Prior Agreement” shall have the meaning given in the Recitals hereto.
“Procaps Holder” shall have the meaning given in the Preamble hereto.
“ProRata” shall have the meaning given in subsection 2.2.2.1.
“Prospectus” shall mean the prospectus included in any Registration Statement, as supplemented by any and all prospectus supplements and as amended by any and all post-effective amendments and including all material incorporated by reference in such prospectus.
“RegistrableSecurity” shall mean (a) any Ordinary Shares issued to a Holder pursuant to the terms of the BCA, or the Note Subscription Agreement (including the Ordinary Shares issued or issuable upon the exercise of any other equity security, option, warrant or convertible debt instrument issued to a Holder pursuant to the terms of the BCA or the Note Subscription Agreement), (b) any Ordinary Shares privately issued to a Holder by the Company for value within ninety (90) days of the date hereof in a transaction exempt from the registration requirements of the Securities Act (including the Ordinary Shares issued or issuable upon the exercise of any other equity security, option, warrant or convertible debt instrument issued to a Holder pursuant to the terms of such transaction) and (c) any other equity security of the Company issued or issuable with respect to any such Ordinary Share referred to in the foregoing clauses (a) and (b) by way of a share dividend or share split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise; provided, however, that, as to any particular Registrable Security, such securities shall cease to be Registrable Securities when: (i) a Registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such securities shall have been sold, transferred, disposed of or exchanged in accordance with such Registration Statement; (ii) such securities shall have been otherwise transferred, new certificates for such securities not bearing (or book entry positions not subject to) a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of such securities shall not require registration under the Securities Act; (iii) such securities shall have ceased to be outstanding; (iv) upon the first instance such securities may be sold without registration pursuant to Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission) (but with no volume or other restrictions or limitations); or (v) such securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction.
“Registration” shall mean a registration effected by preparing and filing a registration statement or similar document in compliance with the requirements of the Securities Act, and the applicable rules and regulations promulgated thereunder, and such registration statement becoming effective.
3
“Registration Conditions” shall have the meaning given in subsection 2.1.1.
“Registration EligibilityDate” shall mean the date in which all of the Registration Conditions have been met.
“RegistrationExpenses” shall mean the out-of-pocket expenses of a Registration, including, without limitation, the following:
| (a) | all registration and filing fees (including fees with respect to filings required to be made with the<br>Financial Industry Regulatory Authority, Inc.) and any securities exchange on which the Ordinary Shares are then listed; |
|---|---|
| (b) | fees and expenses of compliance with securities or blue-sky laws; |
| --- | --- |
| (c) | printing, messenger, telephone, delivery and road show or other marketing expenses; |
| --- | --- |
| (d) | reasonable fees and disbursements of counsel for the Company; and |
| --- | --- |
| (e) | reasonable fees and disbursements of all independent registered public accountants of the Company incurred<br>specifically in connection with such Registration. |
| --- | --- |
“RegistrationStatement” shall mean any registration statement that covers the Registrable Securities pursuant to the provisions of this Agreement, including the Prospectus included in such registration statement, amendments (including post-effective amendments) and supplements to such registration statement, and all exhibits to and all material incorporated by reference in such registration statement.
“Securities Act” shall mean the Securities Act of 1933, as amended from time to time.
“Simphony” shall have the meaning given in the Preamble hereto.
“Sognatore” shall have the meaning given in the Preamble hereto.
“SubscriptionAgreements” shall mean those certain subscription agreements dated March 31, 2021 by and between Union II and certain subscribers to purchase ordinary shares of Union II, par value $0.0001 per share.
“Transfer” shall mean to, directly or indirectly, sell, transfer, assign, pledge, encumber, hypothecate or similarly dispose of, either voluntarily or involuntarily, or to enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or similar disposition of, any interest owned by a person or any interest (including a beneficial interest) in, or the ownership, control or possession of, any interest owned by a person.
“Underwriter” shall mean a securities dealer who purchases any Registrable Securities as principal in an Underwritten Offering and not as part of such dealer’s market-making activities.
“UnderwrittenRegistration” or “Underwritten Offering” shall mean a Registration in which securities of the Company are sold to an Underwriter in a firm commitment underwriting for distribution to the public.
“Union II” shall mean Union Acquisition Corp. II, a Cayman Islands exempted company.
“Union II Holder” shall have the meaning given in the Preamble hereto.
4
ARTICLE II
REGISTRATIONS
2.1 Shelf Registration.
2.1.1 To the extent the Company remains subject to the reporting obligations of the Exchange Act and the Board has not determined, in its sole discretion, to pursue termination of the registration under the Exchange Act (a “Reporting Company”), the Company shall within thirty (30) days after the Company has (i) filed its annual report on Form 20-F for the fiscal year ended December 31, 2025 with the Commission, and (ii) is otherwise current on all reports required to be filed by the Company pursuant to Sections 13(a) or 15(d) of the Exchange Act (the “Registration Conditions”) (the “InitialFiling Deadline”), file a Registration Statement under the Securities Act to permit the public resale of all the Registrable Securities held by the Holders from time to time as permitted by Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) on the terms and conditions specified in this subsection 2.1.1 and shall use its reasonable best efforts to cause such Registration Statement to be declared effective as soon as practicable after the filing thereof, but in no event later than sixty (60) calendar days following the Initial Filing Deadline (the “Effectiveness Deadline”); provided that the Effectiveness Deadline shall be extended to one hundred and eighty (180) calendar days after the Initial Filing Deadline if the Registration Statement is reviewed by, and receives comments from, the Commission. The Registration Statement filed with the Commission pursuant to this subsection 2.1.1 shall be on a shelf registration statement on Form F-1 (a “Form F-1 Shelf”) or such other form of registration statement as is then available to effect a registration for resale of such Registrable Securities, covering such Registrable Securities, and shall contain a Prospectus in such form as to permit any Holder to sell such Registrable Securities pursuant to Rule 415 under the Securities Act (or any successor or similar provision adopted by the Commission then in effect) at any time beginning on the effective date for such Registration Statement. A Registration Statement filed pursuant to this subsection 2.1.1 shall provide for the resale pursuant to any method or combination of methods legally available to, and requested by, the Holders. So long as the Company remains a Reporting Company, the Company shall use its reasonable best efforts to cause a Registration Statement filed pursuant to this subsection 2.1.1 to remain effective, and to be supplemented and amended to the extent necessary to ensure that such Registration Statement is available (including to use its reasonable best efforts to add Registrable Securities held by Permitted Transferees) or, if not available, that another Registration Statement is available, for the resale of all the Registrable Securities held by the Holders until all such Registrable Securities have ceased to be Registrable Securities. As soon as practicable following the effective date of a Registration Statement filed pursuant to this subsection 2.1.1, but in any event within five (5) business days of such date, the Company shall notify the Holders of the effectiveness of such Registration Statement. When effective, a Registration Statement filed pursuant to this subsection 2.1.1 (including the documents incorporated therein by reference) will comply as to form in all material respects with all applicable requirements of the Securities Act and the Exchange Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading (in the case of any Prospectus contained in such Registration Statement, in the light of the circumstances under which such statement is made).
2.2 Piggyback Registration.
2.2.1 Piggyback Rights. If the Company proposes to file a Registration Statement under the Securities Act with respect to an offering of equity securities, or securities or other obligations exercisable or exchangeable for, or convertible into equity securities for its own account, other than a Registration Statement (a) filed in connection with any employee share option or other benefit plan, (b) for an exchange offer or offering of securities solely to the Company’s existing shareholders, (c) for an offering of debt that is convertible into equity securities of the Company, (d) for a dividend reinvestment plan, (e) filed pursuant to subsection 2.1.1, or (f) filed in connection with any business combination or acquisition involving the Company, then the Company shall give written notice of such proposed filing to all of the Holders of Registrable Securities as soon as practicable but not less than twenty (20) days before the anticipated filing date of such Registration Statement, which notice shall (A) describe the amount and type of securities to be included in such offering, the intended method(s) of distribution (including whether such registration will be pursuant to a shelf registration statement), and the proposed price and name of the proposed managing Underwriter or Underwriters, if any, in such offering, (B) describe such Holders’ rights under this Section 2.2 and (C) offer to all of the Holders of Registrable Securities the opportunity to register the sale of such number of Registrable Securities as such Holders may request in writing within ten (10) days after receipt of such written notice (such Registration a “PiggybackRegistration”). The Company shall, in good faith, cause such Registrable Securities identified in a Holder’s response noticed described in the foregoing sentence to be included in such Piggyback Registration and shall use its reasonable best efforts to cause the managing Underwriter or Underwriters of a proposed Underwritten Offering, if any, to permit the Registrable Securities requested by the Holders pursuant to this subsection 2.2.1 to be included in a Piggyback Registration on the same terms and conditions as any similar securities of the Company for whose account the Registration Statement is to be filed are included in such Registration and to permit the sale or other disposition of such Registrable Securities in accordance with the intended method(s) of distribution thereof. All such Holders proposing to distribute their Registrable Securities through an Underwritten Offering under this subsection 2.2.1, subject to Section 3.3 and Article IV, shall enter into an underwriting agreement and lock-up agreement in customary form with the Underwriter(s) selected for such Underwritten Offering by the Company for whose account the Registration Statement is to be filed. For purposes of this Section 2.2, the filing by the Company of an automatic shelf registration statement for offerings pursuant to Rule 415(a) that omits information with respect to any specific offering pursuant to Rule 430B shall not trigger any notification or participation rights hereunder until such time as the Company amends or supplements such Registration Statement to include information with respect to a specific offering of Registrable Securities (and such amendment or supplement shall trigger the notice and participation rights provided for in this Section 2.2).
5
2.2.2 Reduction of Piggyback Registration. If a Piggyback Registration is to be an Underwritten Offering and the managing Underwriter or Underwriters, in good faith, advises the Company and the Holders of Registrable Securities participating in the Piggyback Registration in writing that, in its opinion, the dollar amount or number of the Ordinary Shares that the Company desires to sell, taken together with (a) the Ordinary Shares, if any, as to which Registration has been demanded pursuant to separate written contractual arrangements with persons or entities other than the Holders of Registrable Securities hereunder, (b) the Registrable Securities as to which registration has been requested pursuant Section 2.2 hereof, and (c) the Ordinary Shares, if any, as to which Registration has been requested pursuant to separate written contractual piggy-back registration rights of other shareholders of the Company, exceeds the maximum dollar amount or maximum number of equity securities that can be sold in such Underwritten Offering without adversely affecting the proposed offering price, the timing, the distribution method, or the probability of success of such offering (such maximum dollar amount or maximum number of such securities, as applicable, the “Maximum Number of Securities”), then:
2.2.2.1 the Company shall include in any such Registration (a) first, the Ordinary Shares or other equity securities that the Company desires to sell for its own account, which can be sold without exceeding the Maximum Number of Securities; (b) second, to the extent that the Maximum Number of Securities has not been reached under the foregoing clause (a), the Registrable Securities of Holders exercising their rights to register their Registrable Securities pursuant to subsection 2.2.1 hereof, pro rata, based on the respective number of Registrable Securities that each Holder has requested be included in such Registration and the aggregate number of Registrable Securities that all Holders have requested be included in such Registration (such proportion is referred to herein as “Pro Rata”);, which can be sold without exceeding the Maximum Number of Securities; and (c) third, to the extent that the Maximum Number of Securities has not been reached under the foregoing clauses (a) and (b), the Ordinary Shares, if any, as to which Registration has been requested pursuant to separate written contractual arrangements with other shareholders of the Company, which can be sold without exceeding the Maximum Number of Securities.
2.2.3 Piggyback Registration Withdrawal. Any Holder of Registrable Securities shall have the right to withdraw all or any portion of its Registrable Securities in a Piggyback Registration for any or no reason whatsoever upon written notification to the Company and the Underwriter or Underwriters (if any) of his, her or its intention to withdraw such Registrable Securities from such Piggyback Registration prior to (a) in the case of a Piggyback Registration not involving an Underwritten Offering, the effectiveness of the applicable Registration Statement or (b), in the case of any Piggyback Registration involving an Underwritten Offering, prior to the pricing of such Underwritten Offering. The Company (whether on its own good faith determination or as the result of a request for withdrawal by persons pursuant to separate written contractual obligations) may withdraw a Registration Statement filed with the Commission in connection with a Piggyback Registration at any time prior to the effectiveness of such Registration Statement. The Company shall be responsible for the Registration Expenses incurred in connection with the Piggyback Registration prior to and including its withdrawal under this subsection 2.2.3.
2.3 Restrictions on Registration Rights. If (a) during the period starting with the date sixty (60) days prior to the Company’s good faith estimate of the date of the filing of, and ending on a date one hundred and twenty (120) days after the effective date of, a Company initiated Registration and provided that the Company has delivered written notice to the Holders and it continues to actively employ, in good faith, all reasonable efforts to cause the applicable Registration Statement to become effective; or (b) in the good faith judgment of the Board such Registration would be seriously detrimental to the Company or the filing or initial effectiveness of such Registration Statement would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements or other information that are unavailable to the Company, and the Board concludes as a result that it is appropriate to defer the filing of such Registration Statement at such time, then in each case the Company shall notify the Holders and the Company shall have the right to defer such filing for the shortest period of time determined in good faith by the Board to be necessary for such purpose.
6
ARTICLE III
COMPANY PROCEDURES
3.1 General Procedures. If the Company is required to effect the Registration of Registrable Securities, the Company shall use its reasonable best efforts to effect such Registration to permit the sale of such Registrable Securities in accordance with the intended plan of distribution thereof, and pursuant thereto the Company shall, as expeditiously as possible:
3.1.1 prepare and file with the Commission as soon as practicable a Registration Statement with respect to such Registrable Securities and use its reasonable best efforts to cause such Registration Statement to become effective and remain effective until all Registrable Securities covered by such Registration Statement have been sold;
3.1.2 prepare and file with the Commission such amendments and post-effective amendments to the Registration Statement, and such supplements to the Prospectus, as may be reasonably requested by the Holders or any Underwriter of Registrable Securities or as may be required by the rules, regulations or instructions applicable to the registration form used by the Company or by the Securities Act or rules and regulations thereunder to keep the Registration Statement effective until all Registrable Securities covered by such Registration Statement are sold in accordance with the intended plan of distribution set forth in such Registration Statement or supplement to the Prospectus;
3.1.3 prior to filing a Registration Statement or Prospectus (but excluding, for the avoidance of doubt, any amendment or supplement thereto), furnish without charge to the Underwriters, if any, and the Holders of Registrable Securities included in such Registration, copies of such Registration Statement as proposed to be filed, the Prospectus included in such Registration Statement (including each preliminary Prospectus), and such other documents as the Underwriters and the Holders of Registrable Securities included in such Registration may request in order to facilitate the disposition of the Registrable Securities owned by such Holders;
3.1.4 prior to any public offering of Registrable Securities, but in any case no later than the effective date of the applicable Registration Statement, use its reasonable best efforts to (a) register or qualify the Registrable Securities covered by the Registration Statement under such securities or “blue sky” laws of such jurisdictions in the United States as the Holders of Registrable Securities included in such Registration Statement (in light of their intended plan of distribution) may request and to keep such registration or qualification in effect for so long as such Registration Statement remains in effect and (b) take such action necessary to cause such Registrable Securities covered by the Registration Statement to be registered with or approved by such other governmental authorities as may be necessary by virtue of the business and operations of the Company or otherwise and do any and all other acts and things that may be necessary or advisable, in each case, to enable the Holders of Registrable Securities included in such Registration Statement to consummate the disposition of such Registrable Securities in such jurisdictions; provided, however, that the Company shall not be required to qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify or take any action to which it would be subject to general service of process or taxation in any such jurisdiction where it is not then otherwise so subject;
3.1.5 cause all such Registrable Securities to be listed on each securities exchange or automated quotation system on which similar securities issued by the Company are then listed no later than the effective date of such Registration Statement;
7
3.1.6 provide a transfer agent or warrant agent, as applicable, and registrar for all such Registrable Securities no later than the effective date of such Registration Statement;
3.1.7 advise each seller of such Registrable Securities, promptly after it shall receive notice or obtain knowledge thereof, of the issuance of any stop order by the Commission suspending the effectiveness of such Registration Statement or Prospectus or the initiation of any proceeding for such purpose and promptly use its reasonable best efforts to amend or supplement such Registration Statement or Prospectus or prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued, as applicable;
3.1.8 advise each Holder of Registrable Securities covered by such Registration Statement, promptly after the Company receives notice thereof, of the time when such Registration Statement has been declared effective;
3.1.9 at least five (5) business days prior to the filing of any Registration Statement or Prospectus (but excluding, for the avoidance of doubt, any amendment or supplement to such Registration Statement or Prospectus), furnish a copy thereof to each seller of such Registrable Securities, and not to file any such Registration Statement or Prospectus to which any such Holder or Registrable Securities shall have reasonably objected on the grounds that such Registration Statement or Prospectus or supplement or amendment thereto, does not comply in all material respects with the requirements of the Securities Act or the rules and regulations thereunder;
3.1.10 notify the Holders of Registrable Securities included in such Registration at any time when a Prospectus relating to such Registration Statement is required to be delivered under the Securities Act, of the happening of any event or the existence of any condition as a result of which the Prospectus included in such Registration Statement, as then in effect, includes a Misstatement, or in the opinion of counsel for the Company it is necessary to supplement or amend such Prospectus to comply with law, and then to correct such Misstatement or include such information as is necessary to comply with law, in each case as set forth in Section 3.4 hereof, at the request of any such Holder promptly prepare and furnish to such Holder a reasonable number of copies of a supplement to or an amendment of such Prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such Prospectus shall not include a Misstatement or such Prospectus, as supplemented or amended, shall comply with law;
3.1.11 permit a representative of the Holders of the Registrable Securities included in such Registration, the Underwriters, if any, and any attorney or accountant retained by such Holders or Underwriter to participate in the preparation of any Registration Statement, each such Prospectus included therein or filed with the Commission, and will give each of them such access to its books and records and such opportunities to discuss the business, finances and accounts of the Company and its subsidiaries with its officers, directors and the independent public accountants who have certified its financial statements as shall be necessary, in the opinion of such Holders’ and such Underwriters’ respective counsel, to conduct a reasonable investigation within the meaning of the Securities Act, and will cause the Company’s officers, directors and employees to supply all information reasonably requested by any such representative, Underwriter, attorney or accountant in connection with the Registration; provided, however, that if requested by the Company, such representatives or Underwriters enter into a confidentiality agreement, in form and substance reasonably satisfactory to the Company, prior to the release or disclosure of any such information;
3.1.12 in the event of any Underwritten Offering, enter into and perform its obligations under an underwriting agreement, in usual and customary form, with the managing Underwriter of such offering;
3.1.13 otherwise use its reasonable best efforts to comply with all applicable rules and regulations of the Commission, and to make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months beginning with the first day of the Company’s first full calendar quarter after the effective date of the Registration Statement which satisfies the provisions of Section 11(a) of the Securities Act and the rules and regulations thereunder, including Rule 158 thereunder (or any successor rule promulgated thereafter by the Commission);
8
3.1.14 otherwise, in good faith, cooperate reasonably with, and take such customary actions as may reasonably be requested by the Holders, including causing the officers and directors of the Company to enter into customary “lock-up agreements,” in connection with such Registration.
3.2 Registration Expenses. The Registration Expenses of all Registrations shall be borne by the Company. It is acknowledged by the Holders that the Holders shall bear all incremental selling expenses relating to the sale of Registrable Securities, such as Underwriters’ commissions and discounts, brokerage fees, and, other than as set forth in the definition of “Registration Expenses,” all reasonable fees and expenses of any legal counsel representing the Holders.
3.3 Participation in Underwritten Offerings.
3.3.1 No person may participate in any Underwritten Offering for equity securities of the Company pursuant to a Registration initiated by the Company hereunder unless such person (a) agrees to sell such person’s securities on the basis provided in any underwriting arrangements approved by the Company and (b) completes and executes all customary questionnaires, indemnities, lock-up agreements, underwriting agreements and other customary documents as may be reasonably required under the terms of such underwriting arrangements.
3.3.2 The Company will use its commercially reasonable efforts to ensure that no Underwriter shall require any Holder to make any representations or warranties to or agreements with the Company or the Underwriters other than representations, warranties or agreements regarding such Holder and such Holder’s intended method of distribution and any other representation required by law, and if, despite the Company’s commercially reasonable efforts, an Underwriter requires any Holder to make additional representation or warranties to or agreements with such Underwriter, such Holder may elect not to participate in such Underwritten Offering (but shall not have any claims against the Company as a result of such election). Any liability of such Holder to any Underwriter or other person under such underwriting agreement shall be limited to an amount equal to the proceeds (net of expenses and underwriting discounts and commissions) that it derives from such registration.
3.4 Suspension of Sales; Adverse Disclosure. Upon receipt of written notice from the Company that a Registration Statement or Prospectus contains a Misstatement, or in the opinion of counsel for the Company it is necessary to suspend sales under a Registration Statement or to supplement or amend such Prospectus to comply with law, each of the Holders shall forthwith discontinue disposition of Registrable Securities until it has received copies of a supplemented or amended Prospectus correcting the Misstatement or including the information counsel for the Company believes to be necessary to comply with law (it being understood that the Company hereby covenants to prepare and file such supplement or amendment as soon as practicable after the time of such notice such that the Registration Statement or Prospectus, as so amended or supplemented, as applicable, will not include a Misstatement and complies with law), or until it is advised in writing by the Company that the use of the Prospectus may be resumed. Notwithstanding anything to the contrary contained herein, if the filing, initial effectiveness or continued use of a Registration Statement in respect of any Registration at any time would require the Company to make an Adverse Disclosure or would require the inclusion in such Registration Statement of financial statements or other information that are unavailable to the Company for reasons beyond the Company’s control, the Company may, upon giving prompt written notice of such action to the Holders, delay the filing or initial effectiveness of, or suspend use of, such Registration Statement for the shortest period of time determined in good faith by the Board to be necessary for such purpose. In the event the Company exercises its rights under the preceding sentence, the Holders agree to suspend, immediately upon their receipt of the notice referred to above, their use of the Prospectus relating to any Registration in connection with any sale or offer to sell Registrable Securities. The Company shall immediately notify the Holders of the expiration of any period during which it exercised its rights under this Section 3.4.
3.5 Covenants of the Company. As long as any Holder shall own Registrable Securities, the Company hereby covenants and agrees at all times while it shall be a Reporting Company following the Registration Eligibility Date, to file timely (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the Registration Eligibility Date pursuant to Sections 13(a) or 15(d) of the Exchange Act. The Company further covenants that it shall take such further action as any Holder may reasonably request, all to the extent required from time to time to enable such Holder to sell Ordinary Shares held by such Holder without registration under the Securities Act within the limitation of the exemptions provided by Rule 144 promulgated under the Securities Act (or any successor rule promulgated thereafter by the Commission), including providing any legal opinions. Upon the request of any Holder, the Company shall deliver to such Holder a written certification of a duly authorized officer as to whether it has complied with such requirements.
9
ARTICLE IV
INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification.
4.1.1 The Company agrees to indemnify, to the extent permitted by law, each Holder of Registrable Securities, its officers, directors, partners, shareholders or members, employees, agents, investment advisors and each person who controls such Holder (within the meaning of the Securities Act and Exchange Act) from and against all losses, claims, damages, liabilities and expenses (including attorneys’ fees), joint or several (or actions or proceedings, whether commenced or threatened, in respect thereof) (collectively, “Claims”), to which any such Holder or other persons may become subject, insofar as such Claims arise out of or are based on any untrue or alleged untrue statement of any material fact contained in any Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, and the Company will reimburse such Holder or other person for any legal or any other expenses reasonably incurred by them in connection with investigating or defending any such Claim; except insofar as the Claim or expense arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such filing in reliance upon and in conformity with information furnished in writing to the Company by such Holder expressly for use therein. The Company shall indemnify the Underwriters, their officers and directors and each person who controls such Underwriters (within the meaning of the Securities Act and Exchange Act) to the same extent as provided in the foregoing with respect to the indemnification of the Holder.
4.1.2 In connection with any Registration Statement in which a Holder of Registrable Securities is participating, the Company may require that, as a condition to including any Registrable Securities in any Registration Statement, the Company shall have received an undertaking reasonably satisfactory to it from such Holder, to indemnify the Company, its directors and officers and agents and each person who controls the Company (within the meaning of the Securities Act and Exchange Act) from and against any Claims, to which any the Company or such other persons may become subject, insofar as such Claims arise out of or are based on any untrue statement of any material fact contained in the Registration Statement, Prospectus or preliminary Prospectus or any amendment thereof or supplement thereto or any omission of a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that such untrue statement or omission is contained in any information furnished in writing by such Holder expressly for use therein; provided, however, that the obligation to indemnify shall be several, not joint and several, among such Holders of Registrable Securities, and the liability of each such Holder of Registrable Securities shall be in proportion to and limited to the net proceeds received by such Holder from the sale of Registrable Securities pursuant to such Registration Statement. The Holders of Registrable Securities shall indemnify the Underwriters, their officers, directors and each person who controls such Underwriters (within the meaning of the Securities Act and Exchange Act) to the same extent as provided in the foregoing with respect to indemnification of the Company and the Company shall use its commercially reasonable efforts to ensure that no Underwriter shall require any Holder of Registrable Securities to provide any indemnification other than that provided hereinabove in this subsection 4.1.2, and, if, despite the Company’s commercially reasonable efforts, an Underwriter requires any Holder of Registrable Securities to provide additional indemnification, such Holder may elect not to participate in such Underwritten Offering (but shall not have any claim against the Company as a result of such election).
4.1.3 Any person entitled to indemnification herein shall (a) give prompt written notice to the indemnifying party of any Claim with respect to which it seeks indemnification (provided that the failure to give prompt notice shall not impair any person’s right to indemnification hereunder to the extent such failure has not materially prejudiced the indemnifying party) and (b) unless in such indemnified party’s reasonable judgment a conflict of interest between such indemnified and indemnifying parties may exist with respect to such Claim, permit such indemnifying party to assume the defense of such Claim with counsel reasonably satisfactory to the indemnified party. If such defense is assumed, the indemnifying party shall not be subject to any liability for any settlement made by the indemnified party without its consent (but such consent shall not be unreasonably withheld). An indemnifying party who is not entitled to, or elects not to, assume the defense of a claim shall not be obligated to pay the fees and expenses of more than one (1) counsel for all parties indemnified by such indemnifying party with respect to such claim, unless in the reasonable judgment of any indemnified party a conflict of interest may exist between such indemnified party and any other of such indemnified parties with respect to such claim. No indemnifying party shall, without the consent of the indemnified party, consent to the entry of any judgment or enter into any settlement which cannot be settled in all respects by the payment of money (and such money is so paid by the indemnifying party pursuant to the terms of such settlement) and which settlement includes a statement or admission of fault or culpability on the part of such indemnified party or does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect to such claim or litigation.
4.1.4 The indemnification provided for under this Agreement shall remain in full force and effect regardless of any investigation made by or on behalf of the indemnified party or any officer, director, partners, shareholders or members, employees, agents, investment advisors or controlling person of such indemnified party and shall survive the Transfer of Registrable Securities.
10
4.1.5 If the indemnification provided under Section 4.1 hereof from the indemnifying party is unavailable or insufficient to hold harmless an indemnified party in respect of any Claims, then the indemnifying party, in lieu of indemnifying the indemnified party, shall contribute to the amount paid or payable by the indemnified party as a result of such Claims (a) in such proportion as is appropriate to reflect the relative benefits received by the indemnifying party or parties on the one hand and the indemnified party or parties on the other hand from the offering of the Registrable Securities or (b) if the allocation provided by clause (a) above is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (a) above but also to reflect the relative fault of the indemnifying party or parties on the other hand in connection with the statements or omissions that resulted in such Claims, as well as any other relevant equitable considerations; provided, however, that the liability of any Holder or any director, officer, employee, agent, investment advisor or controlling person thereof under this subsection 4.1.5 shall be limited to the amount of the net proceeds received by such Holder in such offering giving rise to such liability. The amount paid or payable by a party as a result of the losses or other liabilities referred to above shall be deemed to include, subject to the limitations set forth in subsections 4.1.1, 4.1.2 and 4.1.3 above, any legal or other fees, charges or expenses reasonably incurred by such party in connection with any investigation or proceeding. The parties hereto agree that it would not be just and equitable if contribution pursuant to this subsection 4.1.5 were determined by pro rata allocation or by any other method of allocation, which does not take account of the equitable considerations referred to in this subsection 4.1.5. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution pursuant to this subsection 4.1.5 from any person who was not guilty of such fraudulent misrepresentation.
4.1.6 The indemnification required by this Section 4.1 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as and when bills are received or expense, loss, damage or liability is incurred.
ARTICLE V
MISCELLANEOUS
5.1 Notices. Any notice or communication under this Agreement must be in writing and given by (a) deposit in the United States mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b) delivery in person or by courier service providing evidence of delivery, or (c) transmission by hand delivery, electronic mail, telecopy, telegram or facsimile. Each notice or communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given, served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed and, in the case of notices delivered by courier service, hand delivery, electronic mail, telecopy, telegram or facsimile, at such time as it is delivered to the addressee (with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon presentation. Any notice or communication under this Agreement must be addressed, if to the Company, to: 9, rue de Bitbourg, Luxembourg City, Luxembourg L-1273, Attention: Melissa Angelini, Co-Interim Chief Executive Officer (mangelini@procapsgroup.com), and Yuliya Bay (5251@arendtservices.com), with a copy, which shall not constitute notice, to: Greenberg Traurig, P.A., 333 S.E. 2nd Avenue, Miami, FL 33131, Attention: Antonio Peña (antonio@gtlaw.com) and, if to any Holder, at such Holder’s address or facsimile number as set forth in the Company’s books and records. Any party may change its address for notice at any time and from time to time by written notice to the other parties hereto, and such change of address shall become effective thirty (30) days after delivery of such notice as provided in this Section 5.1.
11
5.2 Admittance of New Holders. The Company, at its sole discretion, may grant the registration rights contained herein to additional Holders, provided such Holders enter into a Joinder Agreement, in form satisfactory to the Company, whereby such Holder agrees to be bound by the terms and provisions of this Agreement.
5.3 Assignment; No Third Party Beneficiaries.
5.3.1 This Agreement and the rights, duties and obligations of the Company hereunder may not be assigned or delegated by the Company in whole or in part.
5.3.2 This Agreement and the provisions hereof shall be binding upon and shall inure to the benefit of each of the parties and its successors and the permitted assigns of the applicable Holders, which shall include Permitted Transferees.
5.3.3 This Agreement shall not confer any rights or benefits on any persons that are not parties hereto, other than as expressly set forth in this Agreement and Section 5.2 hereof.
5.3.4 No assignment by any party hereto of such party’s rights, duties and obligations hereunder shall be binding upon or obligate the Company unless and until the Company shall have received (a) written notice of such assignment as provided in Section 5.1 hereof and (b) the written agreement of the assignee, in a form reasonably satisfactory to the Company, to be bound by the terms and provisions of this Agreement (which may be accomplished by an addendum or Joinder Agreement to this Agreement). Any Transfer or assignment made other than as provided in this Section 5.2 shall be null and void.
5.4 Counterparts. This Agreement may be executed in multiple counterparts (including facsimile or PDF counterparts), each of which shall be deemed an original, and all of which together shall constitute the same instrument, but only one of which need be produced.
5.5 Governing Law; Venue. NOTWITHSTANDING THE PLACE WHERE THIS AGREEMENT MAY BE EXECUTED BY ANY OF THE PARTIES HERETO, THE PARTIES EXPRESSLY AGREE THAT (I) THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED UNDER THE LAWS OF NEW YORK AS APPLIED TO AGREEMENTS AMONG NEW YORK RESIDENTS ENTERED INTO AND TO BE PERFORMED ENTIRELY WITHIN NEW YORK, WITHOUT REGARD TO THE CONFLICT OF LAW PROVISIONS OF SUCH JURISDICTION AND (II) THE VENUE FOR ANY ACTION TAKEN WITH RESPECT TO THIS AGREEMENT SHALL BE ANY STATE OR FEDERAL COURT IN NEW YORK COUNTY IN THE STATE OF NEW YORK.
12
EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND, THEREFORE, EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT TO ANY ACTION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
5.6 Amendments and Modifications. Upon the written consent of the Company and the Holders of at least a majority-in-interest of the Registrable Securities at the time in question, compliance with any of the provisions, covenants and conditions set forth in this Agreement may be waived, or any of such provisions, covenants or conditions may be amended or modified; provided, however, that notwithstanding the foregoing, any amendment hereto or waiver hereof that adversely affects one Holder, solely in its capacity as a holder of Ordinary Shares, in a manner that is adverse and different from the other Holders (in such capacity) shall require the consent of the Holder so affected. No course of dealing between any Holder or the Company and any other party hereto or any failure or delay on the part of a Holder or the Company in exercising any rights or remedies under this Agreement shall operate as a waiver of any rights or remedies of any Holder or the Company. No single or partial exercise of any rights or remedies under this Agreement by a party shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder by such party.
5.7 Other Registration Rights. Other than pursuant to the terms of the Subscription Agreements, the Company represents and warrants that no person, other than a Holder of Registrable Securities, has any right to require the Company to register any securities of the Company for sale or to include such securities of the Company in any Registration filed by the Company for the sale of securities for its own account or for the account of any other person. Further, the Company represents and warrants that this Agreement supersedes any other registration rights agreement or agreement with similar terms and conditions among the parties thereto and in the event of a conflict between any such agreement or agreements and this Agreement, the terms of this Agreement shall prevail.
5.8 Term. This Agreement shall terminate upon the earlier to occur of (i) the date as of which all of the Registrable Securities have been sold pursuant to a Registration Statement (but in no event prior to the applicable period referred to in Section 4(a)(3) of the Securities Act and Rule 174 thereunder (or any successor rule promulgated thereafter by the Commission)), (ii) the date as of which all of the Registrable Securities cease to be Registrable Securities pursuant to the terms of this Agreement and (iii) the date as of which the Company ceases to be a Reporting Company. The provisions of Article IV shall survive any termination.
5.9 IFC Immunities and Privileges. Notwithstanding anything in this Agreement to the contrary, the parties hereto acknowledge and agree that no provision of this Agreement, in any way constitutes or implies a waiver, termination or modification by IFC of any privilege, immunity or exemption of IFC granted in the Articles of Agreement establishing IFC, international conventions, or applicable law.
5.10 Entire Agreement; Restatement. This Agreement constitutes the full and entire agreement and understanding between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings relating to such subject matter. As of the date hereof, the Prior Agreement shall no longer be of any force or effect.
[Signature Pages Follow]
13
Exhibit 10.13
Execution Version
PROCAPS S.A.
US$116,488,204.60
6.75% Guaranteed Senior SECURED Notes due December 31, 2029
Guaranteed by
PROCAPS GROUP, S.A.,
as Parent Guarantor, AND
certain Subsidiary Guarantors
AMENDED AND RESTATED
Note Purchase andGuarantee Agreement
Dated APRIL 9, 2025
(amending and restating that certain Note Purchase and Guarantee Agreement dated November 5, 2021, as amended)
TABLE OF CONTENTS
| Section | Page | ||
|---|---|---|---|
| Section 1. BACKGROUND; AMENDMENTS; guaranties aND SECURITY | 1 | ||
| Section 1.1 | Background | 1 | |
| Section 1.2 | Amendment and Restatement of Existing Agreement | 2 | |
| Section 1.3 | Amendment to Existing Notes | 2 | |
| Section 1.4 | Guarantees; Security | 2 | |
| Section 1.5 | Purchasers’ Obligations Several | 2 | |
| Section 1.6 | Waiver of Existing Events of Default | 2 | |
| Section 1.7 | Capitalization of Existing Make-Whole Amount | 3 | |
| Section 1.8 | Forgiveness of Accrued Interest | 3 | |
| Section 2. [Reserved] | 3 | ||
| Section 3. [RESERVED] | 3 | ||
| Section 4. CONDITIONS TO EFFECTIVENESS | 3 | ||
| Section 4.1 | Representations and Warranties | 3 | |
| Section 4.2 | Performance; No Default | 3 | |
| Section 4.3 | Closing Certificates; Powers of Attorney | 4 | |
| Section 4.4 | Opinions of Counsel | 5 | |
| Section 4.5 | Amended and Restated Credit Agreements | 5 | |
| Section 4.6 | Exchange of Existing Notes | 5 | |
| Section 4.7 | Payment of Fees | 5 | |
| Section 4.8 | Amended and Restated Agreement | 5 | |
| Section 4.9 | Changes in Corporate Structure | 5 | |
| Section 4.10 | [Reserved] | 5 | |
| Section 4.11 | Acceptance of Appointment to Receive Service of Process | 5 | |
| Section 4.12 | Pagarés | 6 | |
| Section 4.13 | Instruction Letters | 6 | |
| Section 4.14 | KYC Information | 6 | |
| Section 4.15 | [Reserved] | 6 | |
| Section 4.16 | Proceedings and Documents | 6 | |
| Section 4.17 | Collateral Documents | 6 | |
| Section 4.18 | Closing Equity Issuance | 7 | |
| Section 4.19 | Intercreditor Agreement | 7 | |
| Section 4.20 | Insurance | 7 | |
| Section 4.21 | Closing Equity Contribution | 7 | |
| Section 4.22 | Release of Convertible Note Collateral | 7 | |
| Section 4.23 | Unaudited 2023 Financials | 7 |
- i -
TABLE OF CONTENTS (Cont’d.)
| Section | Page | ||
|---|---|---|---|
| Section<br> 5. Representations and Warranties of the obligors | 7 | ||
| Section<br> 5.1 | Organization;<br> Power and Authority | 7 | |
| Section<br> 5.2 | Authorization,<br> Etc | 8 | |
| Section<br> 5.3 | Disclosure | 8 | |
| Section<br> 5.4 | Organization<br> and Ownership of Shares of Subsidiaries; Affiliates | 8 | |
| Section<br> 5.5 | Financial<br> Statements; Material Liabilities | 9 | |
| Section<br> 5.6 | Compliance<br> with Laws, Other Instruments, Etc | 9 | |
| Section<br> 5.7 | Governmental<br> Authorizations, Etc | 10 | |
| Section<br> 5.8 | Litigation;<br> Observance of Agreements, Statutes and Orders | 11 | |
| Section<br> 5.9 | Taxes | 11 | |
| Section<br> 5.10 | Title<br> to Property; Leases | 12 | |
| Section<br> 5.11 | Licenses,<br> Permits, Etc | 12 | |
| Section<br> 5.12 | Compliance<br> with ERISA | 12 | |
| Section<br> 5.13 | Private<br> Offering by the Company | 13 | |
| Section<br> 5.14 | Use<br> of Proceeds; Margin Regulations | 14 | |
| Section<br> 5.15 | Existing<br> Indebtedness; Liens | 14 | |
| Section<br> 5.16 | Foreign<br> Assets Control Regulations, Etc | 15 | |
| Section<br> 5.17 | Investment<br> Company | 16 | |
| Section<br> 5.18 | Environmental<br> Matters | 16 | |
| Section<br> 5.19 | Ranking<br> of Obligations | 16 | |
| Section<br> 5.20 | Solvency | 17 | |
| Section<br> 5.21 | No<br> Immunity | 17 | |
| Section<br> 5.22 | Absence<br> of Currency Exchange Controls | 17 | |
| Section<br> 5.23 | Status<br> of Pagarés | 17 | |
| Section<br> 5.24 | Fiscal<br> Year | 17 | |
| Section<br> 5.25 | Centre<br> of Main Interest | 18 | |
| Section<br> 5.26 | Security<br> Interests | 18 | |
| Section<br> 6. Representations of the Purchasers | 18 | ||
| Section<br> 6.1 | Purchase<br> for Investment | 18 | |
| Section<br> 6.2 | Source<br> of Funds | 19 | |
| Section<br> 6.3 | Accredited<br> Investor; Knowledge and Experience | 20 | |
| Section<br> 7. Information as to obligors | 20 | ||
| Section<br> 7.1 | Financial<br> and Business Information | 20 | |
| Section<br> 7.2 | Officer’s<br> Certificate | 24 | |
| Section<br> 7.3 | Visitation | 25 | |
| Section<br> 7.4 | Electronic<br> Delivery | 25 | |
| Section<br> 7.5 | Limitation<br> on Disclosure Obligation | 26 | |
| Section<br> 8. Payment and Prepayment of the Notes | 26 | ||
| Section<br> 8.1 | Required<br> Prepayments; Maturity | 26 | |
| Section<br> 8.2 | Optional<br> Prepayments | 27 | |
| Section<br> 8.3 | Prepayment<br> for Tax Reasons | 27 | |
| Section<br> 8.4 | Prepayment<br> in Connection with a Noteholder Sanctions Event | 28 | |
| Section<br> 8.5 | Allocation<br> of Partial Prepayments | 30 |
- ii -
TABLEOF CONTENTS (Cont’d.)
| Section | Page | ||
|---|---|---|---|
| Section<br> 8.6 | Maturity;<br> Surrender, Etc | 30 | |
| Section<br> 8.7 | Purchase<br> of Notes | 30 | |
| Section<br> 8.8 | [Reserved] | 31 | |
| Section<br> 8.9 | Payments<br> Due on Non-Business Days | 31 | |
| Section<br> 8.10 | Prepayment<br> in Connection with a Disposition or Excess Cash Flow | 31 | |
| Section<br> 8.11 | Interest | 32 | |
| Section<br> 8.12 | Excess<br> Cash Flow | 32 | |
| Section<br> 9. Affirmative Covenants | 32 | ||
| Section<br> 9.1 | Compliance<br> with Laws; Licenses, Etc | 32 | |
| Section<br> 9.2 | Insurance | 33 | |
| Section<br> 9.3 | Maintenance<br> of Properties | 33 | |
| Section<br> 9.4 | Payment<br> of Taxes and Claims | 33 | |
| Section<br> 9.5 | Corporate<br> Existence, Etc | 34 | |
| Section<br> 9.6 | Books<br> and Records | 34 | |
| Section<br> 9.7 | Subsidiary<br> Guarantors | 34 | |
| Section<br> 9.8 | Priority<br> of Obligations | 36 | |
| Section<br> 9.9 | Most<br> Favored Lender | 36 | |
| Section<br> 9.10 | Maintenance<br> of Fiscal Year | 37 | |
| Section<br> 9.11 | Ownership<br> of Company | 37 | |
| Section<br> 9.12 | Board<br> Observation Rights | 37 | |
| Section<br> 9.13 | [Reserved] | 37 | |
| Section<br> 9.14 | Further<br> Assurances; Covenant to Give Security | 38 | |
| Section<br> 9.15 | Intercompany<br> Subordination Agreement | 40 | |
| Section<br> 9.16 | Post-Closing<br> Covenants | 40 | |
| Section<br> 9.17 | Private<br> Credit Rating | 40 | |
| Section<br> 10. Negative Covenants | 40 | ||
| Section<br> 10.1 | Transactions<br> with Affiliates | 40 | |
| Section<br> 10.2 | Merger,<br> Consolidation, Etc | 41 | |
| Section<br> 10.3 | Line<br> of Business | 42 | |
| Section<br> 10.4 | Economic<br> Sanctions, Etc | 42 | |
| Section<br> 10.5 | Liens | 42 | |
| Section<br> 10.6 | Limitation<br> on Indebtedness | 45 | |
| Section<br> 10.7 | Dispositions | 46 | |
| Section<br> 10.8 | Financial<br> Covenants | 47 | |
| Section<br> 10.9 | Obligor<br> Coverage | 48 | |
| Section<br> 10.10 | Restricted<br> Payments | 48 | |
| Section<br> 10.11 | Inconsistent<br> Agreements | 48 | |
| Section<br> 10.12 | Limitation<br> on Loans and Guaranties | 49 | |
| Section<br> 10.13 | Amendments<br> to Organizational Documents, Etc | 49 | |
| Section<br> 10.14 | Sales<br> of Receivables | 49 | |
| Section<br> 10.15 | Investment | 49 | |
| Section<br> 10.16 | Modification<br> of Local Category IV Credit Agreements | 49 |
- iii -
TABLEOF CONTENTS (Cont’d.)
| Section | Page | ||
|---|---|---|---|
| Section 11. Events of Default | 50 | ||
| Section 12. Remedies on Default, Etc | 54 | ||
| Section 12.1 | Acceleration | 54 | |
| Section 12.2 | Other Remedies | 55 | |
| Section 12.3 | Rescission | 55 | |
| Section 12.4 | No Waivers or Election of Remedies, Expenses, Etc | 55 | |
| Section 13. Tax Indemnification; FATCA Information | 55 | ||
| Section 14. Registration; Exchange; Substitution of Notes | 60 | ||
| Section 14.1 | Registration of Notes | 60 | |
| Section 14.2 | Transfer and Exchange of Notes | 60 | |
| Section 14.3 | Replacement of Notes, Pagarés and Instruction Letters | 61 | |
| Section 15. Guaranty. | 61 | ||
| Section 15.1 | Unconditional Guaranty | 61 | |
| Section 15.2 | Obligations Absolute | 64 | |
| Section 15.3 | Waiver | 64 | |
| Section 15.4 | Obligations Unimpaired | 65 | |
| Section 15.5 | Subrogation and Subordination | 65 | |
| Section 15.6 | Reinstatement of Guaranty | 67 | |
| Section 15.7 | Term of Guaranty | 67 | |
| Section 15.8 | Information Regarding the Company | 67 | |
| Section 15.9 | Spanish Law Provisions | 67 | |
| Section 16. Payments on Notes | 68 | ||
| Section 16.1 | Place of Payment | 68 | |
| Section 16.2 | Payment by Wire Transfer | 69 | |
| Section 17. Expenses, Etc | 69 | ||
| Section 17.1 | Transaction Expenses | 69 | |
| Section 17.2 | Certain Taxes | 70 | |
| Section 17.3 | Waiver of Consequential Damages, Etc | 71 | |
| Section 17.4 | Survival | 71 |
- iv -
TABLEOF CONTENTS (Cont’d.)
| Section | Page | ||
|---|---|---|---|
| Section<br> 18. Survival of Representations and Warranties; Entire Agreement | 71 | ||
| Section<br> 19. Amendment and Waiver | 71 | ||
| Section<br> 19.1 | Requirements | 71 | |
| Section<br> 19.2 | Solicitation<br> of Holders of Notes | 72 | |
| Section<br> 19.3 | Binding<br> Effect, Etc | 72 | |
| Section<br> 19.4 | Notes<br> Held by Obligors, Etc | 73 | |
| Section<br> 20. Notices; English Language | 73 | ||
| Section<br> 21. Reproduction of Documents | 74 | ||
| Section<br> 22. Confidential Information | 74 | ||
| Section<br> 23. Substitution of Purchaser | 75 | ||
| Section<br> 24. Miscellaneous | 76 | ||
| Section<br> 24.1 | Successors<br> and Assigns | 76 | |
| Section<br> 24.2 | Accounting<br> Terms | 76 | |
| Section<br> 24.3 | Severability | 76 | |
| Section<br> 24.4 | Construction,<br> Etc | 76 | |
| Section<br> 24.5 | Counterparts | 78 | |
| Section<br> 24.6 | Governing<br> Law | 78 | |
| Section<br> 24.7 | Jurisdiction<br> and Process; Waiver of Jury Trial | 78 | |
| Section<br> 24.8 | Obligation<br> to Make Payment in Dollars | 79 | |
| Section<br> 24.9 | Special<br> Waiver; No Immunity | 80 | |
| Section<br> 24.10 | Inconsistency<br> with Pagarés | 80 | |
| Section<br> 24.11 | Release<br> of Claims | 81 | |
| Section<br> 24.12 | Special<br> Provisions on Spanish Enforcement Proceedings | 81 |
- v -
| Schedule A | — | Defined Terms |
|---|---|---|
| Schedule B | — | Restatement Date Subsidiary Guarantors |
| Schedule C | — | Form of Subsidiary Guarantor Joinder Agreement |
| Schedule 1-A | — | Form of Note |
| Schedule 1-B | — | Form of Pagaré |
| Schedule 1-C | — | Form of Instruction Letter |
| Schedule 5.3 | — | Disclosure Documents |
| Schedule 5.4 | — | Subsidiaries of the Parent Guarantor and Ownership of Subsidiary Stock |
| Schedule 5.5 | — | Financial Statements |
| Schedule 5.11 | — | Licenses, Permits, Etc |
| Schedule 5.15 | — | Existing Indebtedness; Future Liens |
| Schedule 8.1 | — | Amortization Schedule |
| Schedule 9.16 | — | Post-Closing Covenants |
| Schedule 10.5(a) | — | Existing Liens |
| Schedule 10.5(b) | — | Material Property |
| Schedule 10.5(c) | — | Existing Leases |
| Purchaser Schedule | — | Information Relating to Purchasers |
- vi -
PROCAPS S.A.
Calle 80 No. 78B-201, Barranquilla, Colombia
PROCAPS Group, S.A.
9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg
Guaranteed Senior Notes due December 31, 2029
April 9, 2025
To Each of the Purchasers Listed in
the Purchaser Schedule Attached Hereto:
Ladies and Gentlemen:
Procaps S.A., a sociedadanónima organized under the laws of Colombia (the “Company”), Procaps Group, S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, having its registered office at 9 rue de Bitbourg, L-1273 Luxembourg, Grand Duchy of Luxembourg and registered with the Luxembourg Trade and Companies Register under number B253360 (the “Parent Guarantor”), each of the entities set forth on Schedule B (collectively, the “RestatementDate Subsidiary Guarantors”) and each Subsidiary that becomes a Subsidiary Guarantor after the Restatement Date, jointly and severally agree with each of the Purchasers as of the Restatement Date as follows:
Section
- BACKGROUND; AMENDMENTS; guaranties aND SECURITY
Section 1.1 Background. The Company, the Parent Guarantor, certain of the Restatement Date Subsidiary Guarantors, and the Purchasers are party to that certain Note Purchase and Guarantee Agreement, dated November 5, 2021 (as amended by the First Amendment to Note Purchase and Guarantee Agreement, dated January 12, 2022, the Second Amendment to Note Purchase and Guarantee Agreement, dated February 28, 2022, the Waiver and Third Amendment to Note Purchase Agreement, dated November 1, 2022, and the Waiver and Fourth Amendment, dated March 29, 2024, and as further amended, restated, amended and restated, supplemented or modified prior to the date hereof, the “Existing Agreement”) pursuant to which the Company issued US$115,000,000 aggregate principal amount of its Guaranteed Senior Notes due November 12, 2031 (the “Existing Notes”). As of the Restatement Date, the aggregate outstanding principal amount of the Existing Notes, including capitalized interest (which is $0 in the aggregate) and the Existing Notes Make-Whole Amount (which is $1,488,204.60 in the aggregate) is $116,488,204.60, and the accrued and unpaid interest thereon, including interest accrued thereon at the Default Rate, is (x) prior to the consummation of the Notes Closing Equity Issuance, equal to the Notes Closing Equity Issuance Consideration Amount (the “Holdover Interest”) and (y) immediately following the consummation of the Notes Closing Equity Issuance, $0.
- 1 -
Section 1.2 Amendment and Restatement of Existing Agreement.
(a) Subject to the satisfaction of the conditions set forth in Section 4, the parties hereto hereby agree that, effective as of the Restatement Date, this Agreement shall, and hereby does, amend, restate and replace in its entirety the Existing Agreement which, as so amended and restated by this Agreement, continues in full force and effect without rescission or novation thereof. The parties hereto hereby acknowledge and agree that the amendments to the Existing Agreement set forth herein could have been effected through an amendment agreement or other instrument amending such agreement and, for convenience, the parties hereto have agreed to restate the terms and provisions of the Existing Agreement, as amended hereby, pursuant to this Agreement. Subject to the satisfaction of the conditions set forth in Section 4, effective as of the Restatement Date, all outstanding Notes shall be outstanding under this Agreement.
(b) Notwithstanding the foregoing clause (a), the representations and warranties of the Company, Parent Guarantor and the Original Subsidiary Guarantors (as defined in the Existing Agreement) set forth in Section 5 of the Existing Agreement shall survive the amendment and restatement of the Existing Agreement, and the representations and warranties of the Obligors set forth in Section 5 of this Agreement shall be additional representations and warranties of the Obligors. Further, the representations and warranties of the Purchasers with respect to the Existing Notes set forth in Section 6 of the Existing Agreement shall be deemed to survive the amendment and restatement of the Existing Agreement.
(c) Certain capitalized and other terms used in this Agreement are defined in Schedule A and, for purposes of this Agreement, the rules of construction set forth in Section 24.4 shall govern.
Section 1.3 Amendmentto Existing Notes. Subject to the satisfaction of the conditions set forth in Section 4, the parties hereto hereby agree that, effective as of the Restatement Date, each Existing Note shall be, and is hereby, amended to conform to the form of Existing Note set forth in Schedule 1-A. The Obligors shall execute and deliver new Existing Notes in exchange for the outstanding Existing Notes in accordance with Section 4.6.
Section 1.4 Guarantees;Security. The obligations of the Company under this Agreement and the Notes shall be guaranteed by the Guarantors as provided in Section 15. The Notes and any other Indebtedness permitted to be secured by the collateral under the Pari Passu Intercreditor Agreement will be ratably secured by a Lien on certain assets of the Company and the Guarantors pursuant to the Collateral Documents.
Section 1.5 Purchasers’Obligations Several. The Purchasers’ obligations under this Agreement and the other Finance Documents are several and not joint obligations, and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.
Section 1.6 Waiverof Existing Events of Default. Effective as of the Restatement Date and subject to the terms and conditions set forth herein, each of the Purchasers hereby waives the Restatement Date Defaults. The consent and waivers set forth above are limited to the express terms hereof, and nothing in this Agreement shall be deemed a waiver by any Purchaser with respect to any other term, condition, representation, covenant, undertaking or other provision of this Agreement or any other Finance Document or any of the other agreements, documents or instruments executed and delivered in connection therewith. The consent and waivers set forth above shall not be deemed to be a course of action upon which any Obligor or any other Person may rely in the future, and each Obligor hereby expressly waives any claim to such effect. The Purchasers reserve the right to exercise any rights and remedies available to them in connection with any present or future defaults or events of default under this Agreement or any other Finance Document.
- 2 -
Section 1.7 Capitalizationof Existing Make-Whole Amount. The Obligors and the Purchaser hereby agree that the Existing Notes Make-Whole Amount of US$1,488,204.60 shall be automatically paid by the Obligors on the Restatement Date by capitalizing such Existing Notes Make-Whole Amount and adding such Existing Notes Make-Whole Amount pro rata to the principal amount of each Note outstanding on the Restatement Date. The Existing Notes Make-Whole Amount capitalized to any Note Loan pursuant to this Section 1.7 shall, once capitalized on the Restatement Date, bear interest as provided hereunder as of it had originally been part of the outstanding principal of any such Note.
Section 1.8 Forgivenessof Accrued Interest. Effective as of the Restatement Date, all accrued and unpaid interest on the Existing Notes as of the Restatement Date, including interest accrued thereon at the Default Rate, but excluding any Holdover Interest, is hereby cancelled, forgiven and released.
Section 2. [Reserved]
Section 3. [RESERVED]
Section 4. CONDITIONS TO EFFECTIVENESS
This Agreement shall become effective as of the Restatement Date (the “Restatement Date”) subject to the fulfilment to each Purchaser’s satisfaction, on or prior to the date hereof, of the following conditions (with each of the documents referred to below being in form and substance satisfactory to the Purchasers):
Section 4.1 Representationsand Warranties. The representations and warranties of the Obligors in this Agreement shall be correct at the Restatement Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been correct as of such earlier date). The statements of the Obligors and their respective officers or other representatives made in any certificates delivered as of the Restatement Date pursuant to this Agreement shall be true and correct on and as of the Restatement Date (unless such representation or warranty relates solely to an earlier date, in which case it shall have been correct as of such earlier date).
Section 4.2 Performance;No Default. Each Obligor shall have performed and complied with all agreements and conditions contained in this Agreement and the other Finance Documents required to be performed or complied with by it prior to or at the Restatement Date. No Default or Event of Default shall have occurred and be continuing as of the Restatement Date.
- 3 -
Section 4.3 Closing Certificates; Powers of Attorney.
(a) Officer’sCertificate. The Parent Guarantor shall have delivered to such Purchaser an Officer’s Certificate of the Parent Guarantor, dated the Restatement Date, (i) certifying that the conditions specified in Section 4.1, Section 4.2 and Section 4.9 have been fulfilled and (ii) certifying that (A) there is no More Favorable Provision in effect on the Restatement Date or (B) setting forth a description of each More Favorable Provision in effect on the Restatement Date (including any defined terms used therein) and related explanatory calculations, if applicable.
(b) Secretary’sor Director’s Certificates. Subject to Section 9.16, each Obligor shall have delivered to such Purchaser a certificate of its Secretary, an Assistant Secretary, a Director or another appropriate person, dated the Restatement Date, certifying as to:
(i) the resolutions attached thereto and other corporate or other entity proceedings (which, in relation to each Spanish Guarantor, shall be raised to the status of a Spanish Public Document), as applicable, relating to the authorization, execution and delivery of each Finance Document to which such Obligor is a party, including, to the extent applicable, resolutions of the shareholders of such Obligor,
(ii) such Obligor’s organizational documents as then in effect (in the case of the Parent Guarantor, including, but not limited to, copies of its organizational documents certified by a Responsible Officer of the Parent Guarantor and the electronic excerpt (extrait) from the Luxembourg Trade and Companies Register (the “RCS”) and the certificate the non-registration of judicial decision or administrative dissolution without liquidation (certificat de non-inscription d’une décision judiciaire ou de dissolutionadministrative sans liquidation) from the Luxembourg Insolvency Register (Registre de l’insolvabilité) held and maintained by the RCS pertaining to the Parent Guarantor),
(iii) the signatures and incumbency of relevant officers of such Obligor, or other authorized persons acting on behalf of such Obligor, executing any Finance Document to which such Obligor is a party,
(iv) to the extent applicable, the due issuance of any power of attorney required for the execution of any Finance Document to which such Obligor is a party;
(v) to the extent applicable, such Obligor’s good standing, attaching a certificate of good standing (or equivalent certificates) from the applicable secretary of state of the state of organization or formation of each Obligor.
(vi) such other certifications or confirmations as such Purchaser may reasonably require.
- 4 -
Section 4.4 Opinionsof Counsel. Subject to Section 9.16, such Purchaser shall have received opinions in form and substance satisfactory to such Purchaser, dated the Restatement Date from (i) Greenberg Traurig, LLP, U.S. special counsel for the Obligors, (ii) Philippi Prietocarrizosa Ferrero DU & Uría, Colombian special counsel for the Obligors, (iii) Arendt & Medernach S.A., Luxembourg special counsel for the Parent Guarantor, (iv) Demarest Avogados, Brazilian special counsel for the Obligor organized in Brazil, (v) Arias & Muños, El Salvador special counsel for the Obligors organized in El Salvador, (vi) Osterling Abogados, Peruvian special counsel for the Obligor organized in Peru, (vii) CA Legal Services (Arias), Panamanian special counsel for the Obligor organized in Panama, (viii) Camilleri Preziosi Advocates, Maltese special counsel for the Obligor organized in Malta and (ix) Gómez-Acebo & Pombo Abogados, S.L.P., Spanish special counsel for the Obligors organized in Spain (and each Obligor hereby instructs its counsel to deliver such opinions to the Purchasers).
Section 4.5 Amendedand Restated Credit Agreements. Each of the Purchasers shall have received fully executed copies of each of those Local Category IV Credit Agreements certified by an Officer’s Certificate, dated the Restatement Date, as correct and complete.
Section 4.6 Exchangeof Existing Notes. Contemporaneously with the Restatement Date, in exchange for each original Existing Note, the Company shall have executed and delivered, as issuer, a new Existing Note in the form set forth in Schedule 1-A, except that the payee (other than any “payee” that is an Affiliate of such payee), principal amount and registration number shall be the same as set forth in the Existing Note being exchanged.
Section 4.7 Payment of Fees. Without limiting Section 17.1, the Parent Guarantor or the Company shall have paid (or arranged for the payment out of the proceeds of the Notes), on or before the Closing (i) all fees set forth in the Collateral Agent Fee Letter, (ii) all reasonable fees, charges and disbursements of (A) Baker & McKenzie, LLP, the Purchasers’ U.S. special counsel, and (B) each local counsel engaged by the Purchasers in connection with the Closing, in each case to the extent reflected in a statement of such counsel rendered to the Parent Guarantor or the Company at least one Business Day prior to the Closing, (iii) all reasonable fees, charges, and disbursements of any notary public engaged by the Purchasers or their counsel in connection with the Closing, and (iv) all other reasonable fees, expenses and documentary and similar taxes payable by the Obligors and their Subsidiaries in connection with the Closing in respect of the transactions contemplated by this Agreement and the other Finance Documents.
Section 4.8 Amended and Restated Agreement. Each of the Company, the Parent Guarantor and each Restatement Date Subsidiary Guarantor shall have duly executed and delivered to each Purchaser an executed counterpart of this Agreement.
Section 4.9 Changes in Corporate Structure. Since June 30, 2024, no Obligor shall have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity.
Section 4.10 [Reserved].
Section 4.11 Acceptance of Appointment to Receive Service of Process. Such Purchaser shall have received evidence of the acceptance by the Process Agent of the appointment and designation provided for in Section 24.7(e) for the period from the Restatement Date to a date that is at least one year after the Maturity Date of the Notes (and the payment in full of all fees in respect thereof).
- 5 -
Section4.12 Pagarés. With respect to the Note or Notes, as applicable, to be exchanged on the Restatement Date, such Purchaser shall have received one Pagaré, executed by the Company, as issuer, and the Parent Guarantor and each Restatement Date Subsidiary Guarantor, as guarantors (avalista), payable to such Purchaser (or its nominee), notarized by a Colombian notary public.
Section4.13 Instruction Letters. With respect to the Pagaré to be issued to it at the Restatement Date, such Purchaser shall have received an Instruction Letter executed by the Company, the Parent Guarantor and each Restatement Date Subsidiary Guarantor, in favor of such Purchaser (or its nominee), notarized by a Colombian notary public.
Section4.14 KYC Information. Such Purchaser shall have received all documentation (including U.S. Internal Revenue Service Forms W-9 or other applicable U.S. Internal Revenue Service forms) and other information with respect to the Obligors required by it in connection with “know your customer” and anti-money laundering rules and regulations, including the USA PATRIOT Act.
Section 4.15 [Reserved].
Section4.16 Proceedings and Documents. All corporate, private limited liability company and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be reasonably satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.
Section4.17 Collateral Documents. Subject to Section 9.16, each of the Obligors shall have executed and delivered to the Collateral Agent acting as security trustee in terms of the Intercreditor Agreement each Collateral Document to which it is a party and each Purchaser shall have received copies of the fully executed counterparts thereof, and shall have received evidence of the completion of all actions as the Purchasers shall require to perfect the Liens created pursuant to the Collateral Documents, including (i) the delivery to the Collateral Agent acting as security trustee in terms of the Intercreditor Agreement of all property with respect to which possession is necessary or desirable for the purpose of perfecting such Liens, (ii) the filing of appropriately completed and duly authorized Uniform Commercial Code financing statements and registrations with the registry of security interests of Colombia (Registro de Garantías Mobiliarias) and such other financing statements and instruments to ensure a fully perfected Liens, (iii) with respect to all collateral constituting certificated equity interests and in the case of Collateral constituting Equity Interests issued by any Obligor organized under the laws of Colombia, evidence of registration of the first-priority security interest created pursuant to each applicable Collateral Document in the stock ledger of the applicable Obligor in any Obligors or any of their Subsidiaries, delivery to the Collateral Agent acting as security trustee in terms of the Intercreditor Agreement of original stock certificates and stock transfer powers with regard to all of the applicable equity interests, (iv) with respect to all collateral consisting of Intellectual Property, delivery to the Collateral Agent of appropriate documents to be filed in the U.S. Patent and Trademark Office, the United States Copyright Office or such other applicable foreign office, as applicable, and (v) with respect to any Mortgage evidence of the public deed executed for the granting of such collateral or the transferring of such collateral to the applicable security trust and evidence of filing and payment of applicable notary fee, stamp and registration Taxes applicable for such registration.
- 6 -
Section4.18 Closing Equity Issuance. The Notes Closing Equity Issuance shall have been consummated in a form reasonably satisfactory to the Purchasers, in full satisfaction of the Holdover Interest.
Section 4.19 Intercreditor Agreement. The Purchasers and the Collateral Agent shall have received a fully executed copy of the Pari Passu Intercreditor Agreement.
Section 4.20 Insurance. Subject to Section 9.16, the Purchasers and Collateral Agent shall have received certificates of insurance satisfactory to such holder in all respects evidencing the existence of all insurance required to be maintained by the Purchasers pursuant to the terms of this Agreement and all other terms of the Finance Documents, together with lender loss payable endorsements in favor of the Collateral Agent and additional insured endorsements in favor of the Collateral Agent.
Section 4.21 Closing Equity Contribution. The Closing Equity Contribution shall have been consummated, which Closing Equity Contribution shall be made in at least the amount set forth in the definition thereof.
Section 4.22 Releaseof Convertible Note Collateral. The Obligors shall have delivered evidence (including any UCC filings or other termination statements), in form and substance reasonably satisfactory to the Purchasers, that all security granted under the Convertible Note Purchase Agreement shall have been discharged and released, and all Collateral shall have been returned to the Parent Guarantor.
Section 4.23 Unaudited2023 Financials. Duplicate copies of, (i) an unaudited consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at the fiscal year ending December 31, 2023, and (ii) unaudited consolidated statements of income, changes in shareholders’ equity and cash flows of the Parent Guarantor and its Subsidiaries, for such fiscal year, setting forth, in each case, in comparative form the figures for the corresponding periods in the fiscal year 2022, all in reasonable detail, prepared in accordance with IFRS applicable to financial statements generally, and certified by a Senior Financial Officer of the Parent Guarantor as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows.
Section 5. Representations and Warranties of the obligors.
The Parent Guarantor, on behalf of itself and all Obligors, and each Obligor on behalf of itself, represents and warrants to each Purchaser as of the Restatement Date that:
Section5.1 Organization; Power and Authority. Each Obligor is a sociedad anónima, sociétéanonyme, sociedade limitada, sociedad de responsabilidad limitada, private limited liability company, public limited liability company, corporation or other limited liability entity (as applicable) duly organized, or incorporated and validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each Obligor has the corporate or other entity power and authority to own or hold under lease the properties it purports to own or hold under lease, to transact the business it transacts and proposes to transact, to execute and deliver each Finance Document to which it is a party and to perform the provisions thereof.
- 7 -
Section5.2 Authorization, Etc. Each Finance Document to which an Obligor is a party has been duly authorized by all necessary corporate, private limited liability company or other entity action on the part of such Obligor, and this Agreement constitutes, and upon execution and delivery thereof each other Finance Document to which an Obligor is a party will constitute, a legal, valid and binding obligation of each Obligor party thereto, enforceable against each such Obligor in accordance with its terms, except as such enforceability may be limited by (i) applicable bankruptcy, insolvency, reorganization, judicial or extrajudicial recovery, moratorium or other similar laws affecting the enforcement of creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).
Section5.3 Disclosure. This Agreement, the other Finance Documents, the financial statements listed in Schedule 5.5 and the documents, certificates or other writings delivered to the Purchasers by or on behalf of the Obligors prior to or at the time this representation is made in connection with the transactions contemplated hereby and by the Existing Agreement and identified in Schedule 5.3 (this Agreement, the other Finance Documents, and such documents, certificates or other writings and such financial statements delivered to each Purchaser being referred to, collectively, as the “Disclosure Documents”), taken as a whole, do not contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances under which they were made. Notwithstanding the foregoing, the Obligors make no representation or warranty with respect to any financial projections, forecasts, general economic and market estimates or forward looking-information included in the Disclosure Documents, except that such information was prepared in good faith based upon reasonable assumptions that take into account all material matters and sensitivities of which an Obligor is aware concerning the Group and the markets in which the Group is carrying on, or is expecting or proposing to carry on, business.
Section 5.4 Organization and Ownership of Shares of Subsidiaries; Affiliates.
(a) Schedule 5.4 contains (except as noted therein) complete and correct lists of: (i) the Parent Guarantor’s Subsidiaries as of the Restatement Date, showing, as to each Subsidiary, the name thereof, the jurisdiction of its organization, and the percentage of shares of each class of its capital stock or similar Equity Interests outstanding owned by the Parent Guarantor and each other Subsidiary and whether such Subsidiary is a Subsidiary Guarantor, (ii) the Parent Guarantor’s and the Company’s Affiliates, other than the Parent Guarantor’s Subsidiaries, and (iii) the Parent Guarantor’s and the Company’s directors and senior officers.
(b) All of the outstanding shares of capital stock or similar Equity Interests of each Subsidiary shown in Schedule 5.4 as being owned by an Obligor and its Subsidiaries have been validly issued, are fully paid and non-assessable and are owned by an Obligor or a Subsidiary free and clear of any Lien that is not permitted by Section 10.5.
- 8 -
(c) Each Subsidiary (other than an Obligor) is a corporation or other legal entity duly organized, validly existing and, where applicable, in good standing under the laws of its jurisdiction of organization, and is duly qualified as a foreign corporation or other legal entity and, where applicable, is in good standing in each jurisdiction in which such qualification is required by law, other than those jurisdictions as to which the failure to be so qualified or in good standing could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Each such Subsidiary has the corporate or other organizational power and authority to own or hold under lease the properties it purports to own or hold under lease and to transact the business it transacts and proposes to transact.
(d) No Subsidiary is subject to any legal, regulatory, contractual or other restriction (other than the agreements listed on Schedule 5.4 and customary limitations imposed by corporate law or similar statutes) restricting the ability of such Subsidiary to pay dividends out of profits or make any other similar distributions of profits to any of the Obligors or any of their respective Subsidiaries that owns outstanding Equity Interests of such Subsidiary.
(e) With respect to each Subsidiary over whose capital stock or similar equity interests a Collateral Document creates, or purports to create, a Lien, such Subsidiary’s organizational and governing documents do not restrict or inhibit any transfer of any of its equity interests or creation or enforcement of the Liens created, or purported to be created, by the Collateral Documents.
Section5.5 Financial Statements; Material Liabilities. The Obligors have delivered to each Purchaser copies of the financial statements listed on Schedule 5.5. All of such financial statements (including in each case the related schedules and notes) fairly present in all material respects the consolidated financial position of the applicable Obligor and its Subsidiaries as of the respective dates specified in Schedule 5.5 and the consolidated results of their operations and cash flows for the respective periods so specified and have been prepared in accordance with IFRS consistently applied throughout the periods involved except as set forth in the notes thereto (subject, in the case of any interim financial statements, to normal year-end adjustments). None of the Obligors nor any of their respective Subsidiaries have any Material liabilities that are not disclosed in the Disclosure Documents.
Section5.6 Compliance with Laws, Other Instruments, Etc. The execution, delivery and performance by the Obligors of the Finance Documents to which an Obligor is a party, the consummation of the transactions contemplated thereby, and the granting of the Liens purported to be created by the Collateral Documents, do not and will not (i) contravene, result in any breach of, or constitute a default under, or, except for the Liens created by the Collateral Documents, result in the creation of any Lien in respect of any property of any of the Obligors or any of their respective Subsidiaries under, (x) any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, (y) corporate charter, memorandum of association, articles of association, regulations or by-laws, shareholders agreement or (z) any other agreement or instrument to which any of the Obligors or any of their respective Subsidiaries is bound or by which any of the Obligors or any of their respective Subsidiaries or any of their respective properties may be bound or affected (other than any constitutional document), (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree or ruling of any court, arbitrator or Governmental Authority applicable to any of the Obligors or any of their respective Subsidiaries or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to any of the Obligors or any of their respective Subsidiaries, in the case of clauses (i)(x) and (i)(z), expect for any conflict, breach or violation that could not reasonably be expected individually or in the aggregate to have a Material Adverse Effect.
- 9 -
Section 5.7 Governmental Authorizations, Etc.
(a) No consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution, delivery or performance by any Obligor of any Finance Document to which an Obligor is a party, including any thereof required in connection with the obtaining of Dollars to make payments under this Agreement or the Notes and the payment of such Dollars to Persons resident in the United States of America, other than (i) a filing by the Company with the Colombian Central Bank (Bancode la República) of (A) an amendment to the public external indebtedness report on Form No. 6 (Formulario 6) with respect to the issuance of the Notes and (B) an external indebtedness minimum information report (Declaración de Cambio) with respect to each payment on the Notes, (ii) registration of the security interests over Colombian movable property with the registry of security interests of Colombia (Registro de Garantía Mobiliaria), over intellectual property with the applicable intellectual property Colombian Governmental Authority and of Mortgages with the applicable real estate office (oficina de registro de instrumentos públicos), and (iii) those consents, approvals, authorizations, registrations, declarations and filings that have been obtained or made on or prior to the Restatement Date.
(b) It is not necessary to ensure the legality, validity, enforceability or admissibility into evidence in the jurisdiction of organization of any Obligor of any Finance Document to which an Obligor is a party that any thereof or any other document be filed, recorded or enrolled with any Governmental Authority, or that any such agreement or document be stamped with any stamp, registration or similar transaction tax other than any applicable de minimis Court Filing Duty that may be required in connection with admissibility into evidence; provided that (i) in order for any document written in a language other than Spanish to be admissible into evidence before a Colombian, Spanish or Peruvian court, such document must be translated into Spanish by an official translator, (ii) in order for any Finance Document executed outside Brazil to be admissible into evidence before a Brazilian Governmental Authority and a Brazilian court, it must (A) have the notarization of the signatures of the parties signing outside Brazil by an official public notary of the respective country of origin of such document, (B) be apostilled by the competent authority of the respective country of origin of the document or, in case such country of origin is not a signatory of the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, the signatures of the parties must be certified by the competent Brazilian consulate located in the country of origin, (C) be translated into Portuguese by a publicly sworn translator (tradutor público juramentado) and (D) be registered together with its respective official translation into the Portuguese language with the appropriate Registry of Deeds and Documents (Registro de Títulos e Documentos), (iii) in order for any document written in a language other than Spanish to be admissible into evidence before a Salvadoran court, such document must be translated into Spanish, notarized by a Salvadoran notary public and apostilled by the competent Governmental Authority of the respective country of origin of such document or, in case such country of origin is not a signatory of the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents, the signatures of the parties must be certified by the competent Salvadoran consulate located in the country of origin, (iv) in order for any Finance Document to be admissible into evidence before a Luxembourg court or public authority (autorité constituée), such Finance Document must be accompanied by a complete or partial translation into French, German or Luxembourgish by an official translator and a Luxembourg court may always require that the parties produce the original of the Finance Document on the basis of which a claim is made. The registration of the Finance Documents (and any document in connection therewith) with the Administration de l’Enregistrementet des Domaines et de la TVA in Luxembourg will be required where the Finance Documents are either (A) attached as an annex to an act (annexés à un acte) that itself is subject to mandatory registration or (B) deposited in the minutes of a notary (déposés au rang des minutes d’ un notaire), in which case the Finance Documents will be subject to registration duties, at a fixed rate or an ad valorem rate, depending on the nature of the Finance Documents. Such Luxembourg registration duties will also be payable in the case of voluntary registration of the Finance Documents with the Administration de l’Enregistrementet des Domaines et de la TVA in Luxembourg, and (v) in order for any document written in a language other than Spanish to be admissible into evidence before a Panamanian court, such document must be translated into Spanish by a Panamanian public translator, notarized by a Panamanian notary public (if signed in Panama); if the document is signed outside Panamanian territory, such document must be apostilled by the competent Governmental Authority of the respective country of origin of such document or, in case such country of origin is not a signatory of the Hague Convention Abolishing the Requirement of Legalization for Foreign Public Documents, the signatures of the parties must be certified by the competent Panamanian consulate located in the country of origin.
- 10 -
Section 5.8 Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits, investigations or proceedings pending or, to the best knowledge of any Obligor, threatened against or affecting any of the Obligors or any of their respective Subsidiaries or any property of any of the Obligors or any of their respective Subsidiaries in any court or before any arbitrator of any kind or before or by any Governmental Authority that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
(b) None of the Obligors nor any of their respective Subsidiaries is (i) in default under any agreement or instrument to which it is a party or by which it is bound, (ii) in violation of any order, judgment, decree or ruling of any court, any arbitrator of any kind or any Governmental Authority binding upon it or its property, or (iii) in violation of any applicable law, ordinance, rule or regulation of any Governmental Authority (including Environmental Laws, the USA PATRIOT Act or any of the other laws and regulations that are referred to in Section 5.16, as applicable), which default or violation could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 5.9 Taxes.
(a) The Obligors and their respective Subsidiaries have filed, or caused to be filed, all income and other material tax returns that are required by applicable law to have been filed by or with respect to any of them in any jurisdiction, and have paid all taxes shown to be due and payable by or with respect to any of them on such returns and all other taxes and assessments levied upon them or their properties, assets, income or franchises, to the extent such taxes and assessments have become due and payable and before they have become delinquent, except for any taxes and assessments (i) the amount of which, individually or in the aggregate, is not Material or (ii) the amount, applicability or validity of which is currently being contested in good faith by appropriate proceedings and with respect to which any such Obligor or Subsidiary, as the case may be, has established adequate reserves in accordance with IFRS. No Obligor knows of any basis for any other tax or assessment that could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The charges, accruals and reserves on the books of the Parent Guarantor and its Subsidiaries in respect of U.S. federal, state or other taxes as are applicable to them for all fiscal periods are adequate in all material respects.
(b) No liability for any Tax, directly or indirectly, imposed, assessed, levied or collected by or for the account of any Governmental Authority of the jurisdiction of organization of any Obligor or any political subdivision of any thereof will be incurred by any Obligor or any holder of a Note as a result of the execution or delivery of any Finance Document to which an Obligor is a party and no deduction or withholding in respect of Taxes imposed by or for the account of the jurisdiction of organization of any Obligor or, to the knowledge of the Obligors, any other Taxing Jurisdiction, is required to be made from any payment by any Obligor under this Agreement or, with respect to the Company only, the Notes except (i) in the case of any payment of the Guaranteed Obligations by any Guarantor, any such liability, withholding or deduction imposed, assessed, levied or collected by or for the account of any such Governmental Authority of Luxembourg, Malta, Brazil, Spain, Peru or El Salvador arising out of circumstances described in clauses (i) through (vi) of Section 13(b); (ii) in the case of any payment of the Guaranteed Obligations made by a Guarantor organized in Brazil, or any payment that is considered sourced in Brazil, (A) Brazilian withholding income tax at a rate of up to 25%, provided that a reduced rate will apply to residents not located in low tax jurisdictions and may apply in case of payments to residents in countries with Treaties to Avoid Double Taxation signed with Brazil, (B) in case of payment of Guaranteed Obligations deemed service fees or reimbursements of expenses, the Brazilian withholding income tax, the Contribution to the Social Integration Plan on imports (“PIS - Importação”), Contribution for Social Security Financing on imports (“COFINS - Importação”), Tax on Services on imports of services ( “ISS”), and Contribution for Intervention in the Economic Domain (“CIDE”); and/or (C) IOF/Exchange Tax (the “IOF/ExchangeTax”) at a rate, as of November 5, 2021, of 0.38% as a result of the conversion of Brazilian reais into foreign currency; (iii) in the case of any payment of the Guaranteed Obligations deemed to be interest made by a Guarantor that is a resident of El Salvador, or any such payment that is considered sourced in El Salvador, withholding taxes payable on payments of interest, and taxes payable on commissions and fees, made by such Guarantor to a holder of a Note that is not domiciled in El Salvador for tax purposes, as follows: (A) 20% income tax withholding on the payment of interest and 13% of Value Added Tax (VAT) to a holder of a Note that is not located in a jurisdiction with a low or null taxation regime or “tax haven” (as determined by the applicable regulations issued by the Salvadoran Ministerio de Hacienda), and (B) 25% income tax withholding on the payment of interest and 13% of Value Added Tax (VAT) to a holder of a Note that is located in a tax haven (as determined by the applicable regulations issued by the Salvadoran Ministerio de Hacienda); (iv) in the case of any payment of the Guaranteed Obligations deemed to be interest made by a Guarantor that is resident on Peru, withholding taxes payable on payments of interest, and taxes payable on commissions and fees, made by such Guarantor to a holder of a Note that is not domiciled in Peru for tax purposes, as follows: 30% income tax withholding on the payment of interest, and (v) in the case of any payment of the Guaranteed Obligations deemed to be interest made by a Guarantor that is a resident of Panama, or any such payment that is considered sourced in Panama, withholding taxes as follows: (i) a 12.5% income tax withholding on payment of interest, and (ii) 7% of Value Added Tax (VAT) on commissions and fees, when such payments are made by the Guarantor to a holder of a Note that is not domiciled in Panama for tax purposes; provided that, in the case of each of clauses (i) – (v) inclusive above, the holders of the Notes will benefit from the tax gross-up requirements set forth in Section 13 (subject to the limitations set forth therein). For avoidance of doubt, no deduction or withholding in respect of Taxes imposed by or for the account of Colombia is required in connection with interest payments under the Notes in accordance with ruling No. 032227 issued by the Colombian Dirección de Impuestos y Aduanas Nacionales DIAN (the “Colombian Tax Authority”) on November 25, 2016. In this ruling, the Colombian Tax Authority concluded that non-Colombian tax resident noteholders are not subject to withholding on interest payments in Colombia.
- 11 -
Section5.10 Title to Property; Leases. Each of the Obligors and their respective Subsidiaries have good and valid fee simple title to their respective owned real properties that individually or in the aggregate are Material, as set forth on Schedule 10.5(b) (collectively, the “Owned Real Property”), or good valid leasehold interests in their respective leased real properties (collectively, the “Leased Real Property” and together with the Owned Real Property, the “Real Property”), including all such properties reflected in the most recent audited balance sheet referred to in Section 5.5 or purported to have been acquired by any of the Obligors or any of their respective Subsidiaries after such date (except as sold or otherwise disposed of in the ordinary course of business), in each case free and clear of Liens not permitted by Section 10.5. All leases with respect to Leased Real Property set forth on Schedule 10.5(c) (collectively, the “Real Property Leases”) that individually or in the aggregate are Material to any of the Obligors or any of their respective Subsidiaries are valid and subsisting and are in full force and effect in all material respects. No Obligor or Subsidiary is in default under any Real Property Lease. The applicable Obligor or Subsidiary is the sole legal and beneficial owner or lessee of the assets or Real Property over which it grants, or purports to grant, Liens pursuant to the Collateral Documents. No Obligor or Subsidiary has leased, subleased, licensed or otherwise granted to any Person the right to use or occupy any portion of any Real Property. There are no rights of first refusal, rights of first offer, or options to purchase in connection with any Real Property. No Obligor or Subsidiary has received notice of any proposed condemnation proceeding and there is no condemnation proceeding threatened with respect to any Real Property. The applicable Obligor or Subsidiary is in peaceful and undisturbed possession of its respective Real Property, and there are no contractual or legal restrictions that preclude or restrict the ability of any Obligor or Subsidiary to use such Real Property for its current purposes. The Obligors have delivered to Purchasers accurate and complete copies of all deeds or other recorded instruments and all Real Property Leases by which the applicable Obligor or Subsidiary acquired its interest in its respective Real Property.
Section 5.11 Licenses, Permits, Etc.
(a) Each of the Obligors and their respective Subsidiaries own or possess all licenses, permits, franchises, authorizations, patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, that individually or in the aggregate are Material, without known conflict with the rights of others.
(b) Except as set forth on Schedule 5.11, to the best knowledge of each Obligor, no product or service of any of the Obligors or any of their respective Subsidiaries infringes in any material respect any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned by any other Person.
(c) To the best knowledge of each Obligor, there is no Material violation by any Person of any right of any of the Obligors or any of their respective Subsidiaries with respect to any license, permit, franchise, authorization, patent, copyright, proprietary software, service mark, trademark, trade name or other right owned or used by any of the Obligors or any of their respective Subsidiaries.
Section 5.12 Compliance with ERISA.
(a) Each Obligor and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and would not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.No Obligor nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA) except for any such liability that would not result in a Material Adverse Effect, and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by any Obligor or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of any Obligor or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, other than such liabilities or Liens as would not be individually or in the aggregate Material.
- 12 -
(b) The present value within the meaning of Section 3 of ERISA of the aggregate benefit liabilities within the meaning of Section 4001 of ERISA under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value within the meaning of Section 3 of ERISA of the assets of such Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect. The present value of the accrued benefit liabilities (whether or not vested) under each Non-U.S. Plan that is funded, determined as of the end of the applicable Obligor’s most recently ended fiscal year on the basis of reasonable actuarial assumptions, did not exceed the current value of the assets of such Non-U.S. Plan allocable to such benefit liabilities by an amount that would result in a Material Adverse Effect.
(c) The Obligors and their respective ERISA Affiliates have not incurred (i) 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 result in a Material Adverse Effect or (ii) any obligation in connection with the termination of or withdrawal from any Non-U.S. Plan that individually or in the aggregate would result in a Material Adverse Effect.
(d) The expected postretirement benefit obligation (determined as of the last day of the applicable Obligor’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by Section 4980B of the Code) of any Obligor and its Subsidiaries would not result in a Material Adverse Effect.
(e) The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve a non-exempt prohibited transaction under 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. The representation by the Obligors to each Purchaser in the first sentence of this Section 5.12(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to acquire the Notes to be acquired by such Purchaser.
(f) All Non-U.S. Plans have been established, operated, administered and maintained in compliance with all laws, regulations and orders applicable thereto, except where failure so to comply would not be reasonably expected to have a Material Adverse Effect. All premiums, contributions and any other amounts required by applicable Non-U.S. Plan documents or applicable laws to be paid or accrued by any Obligor and its Subsidiaries have been paid or accrued as required, except where failure so to pay or accrue would not be reasonably expected to have a Material Adverse Effect.
Section5.13 Private Offering by the Company. No Obligor nor anyone acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers and not more than ten (10) other Institutional Investors, each of which has been offered the Notes at a private sale for investment. No Obligor nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of any securities or blue sky laws of any applicable jurisdiction. Without limiting the foregoing, no Obligor nor anyone acting on its behalf has offered or sold any Note, or will offer or sell any Note, to any Person in any Obligor Jurisdiction other than the United States.
- 13 -
Section5.14 Use of Proceeds; Margin Regulations. The Company applied the proceeds of the sale of the Existing Notes hereunder to the repayment in full of certain existing Indebtedness of the Company and its Subsidiaries, to the payment of transaction fees and expenses related to the issuance of the Notes and for general corporate purposes of the Company and its Subsidiaries. None of the proceeds of the sale of the Notes was or will be used to finance a Hostile Tender Offer. No part of the proceeds from the sale of the Notes hereunder was or will be used, directly or indirectly, for the purpose of buying or carrying any margin stock within the meaning of Regulation U of the Board of Governors of the Federal Reserve System (12 CFR 221), or for the purpose of buying or carrying or trading in any Securities under such circumstances as to involve any Obligor in a violation of Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a violation of Regulation T of said Board (12 CFR 220). Margin stock does not constitute more than 5% of the value of the consolidated assets of the Parent Guarantor and its Subsidiaries and the Parent Guarantor does not have any present intention that margin stock will constitute more than 5% of the value of such assets. As used in this Section, the terms “margin stock” and “purpose of buying or carrying” shall have the meanings assigned to them in said Regulation U.
Section 5.15 Existing Indebtedness; Liens.
(a) Except as described therein, Schedule 5.15 sets forth a complete and correct list of all outstanding Indebtedness of the Obligors and their respective Subsidiaries as of the Restatement Date (including descriptions of the obligors and obligees, principal amounts outstanding, any collateral therefor and any Guaranties thereof), since which date there has been no Material change in the amounts, interest rates, sinking funds, installment payments or maturities of the Indebtedness of any Obligor or any Subsidiary. None of the Obligors nor any of their respective Subsidiaries is in default, and no waiver of default is currently in effect (except as expressly set forth in Section 1.6 of this Agreement and in the Local Category IV Credit Agreements, in each case, as in effecton the Restatement Date), in the payment of any principal or interest on any Indebtedness of any Obligor or any Subsidiary and no event or condition exists with respect to any Indebtedness of any Obligor or any Subsidiary that would permit (or that with notice or the lapse of time, or both, would permit) one or more Persons to cause such Indebtedness to become due and payable before its stated maturity or before its regularly scheduled dates of payment.
(b) Except for Liens securing Indebtedness existing prior to the Restatement Date as disclosed on Schedule 5.15, none of the Obligors nor any of their respective Subsidiaries has agreed or consented to cause or permit any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness or to cause or permit in the future (upon the happening of a contingency or otherwise) any of its property, whether now owned or hereafter acquired, to be subject to a Lien that secures Indebtedness.
- 14 -
(c) None of the Obligors nor any of their respective Subsidiaries is a party to, or otherwise subject to any provision contained in, any instrument evidencing Indebtedness of any Obligor or any Subsidiary, any agreement relating thereto or any other agreement (including its charter or any other organizational document) which limits the amount of, or otherwise imposes restrictions on the incurring of, Indebtedness of any Obligor, except as disclosed in Schedule 5.15.
Section 5.16 Foreign Assets Control Regulations, Etc.
(a) No Obligor nor any Controlled Entity (i) is a Blocked Person, (ii) has been notified by any competent Governmental Authority that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that have been imposed by the United Nations or any Obligor Jurisdiction or any other applicable jurisdiction.
(b) No Obligor nor any Controlled Entity (i) has violated, been found by the competent Governmental Authority to be in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Obligors’ knowledge, is under investigation by any applicable Governmental Authority for possible violation of any U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or any similar or equivalent legislation in the jurisdiction of incorporation of the Obligors.
(c) No part of the proceeds from the sale of the Notes hereunder:
(i) constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by any Obligor or any Controlled Entity, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B) for any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation of any U.S. Economic Sanctions Laws;
(ii) will be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or
(iii) will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.
It is acknowledged and agreed by each Purchaser that the representations and undertakings made pursuant to this subsection (c) by any Obligor organized in a European Union country or the United Kingdom are only sought and given for the benefit of the Purchasers to the extent that to do so would not result in any violation of, or conflict with, the EU Blocking Regulation or, as the case may be, the UK Blocking Regulation.
- 15 -
(d) Each Obligor has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure compliance by the Parent Guarantor and each Controlled Entity with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.
Section5.17 Investment Company. No Obligor is an “investment company” or a company controlled by an “investment company” within the meaning of the United States Investment Company Act of 1940, as amended.
Section 5.18 Environmental Matters.
(a) None of the Obligors nor any of their respective Subsidiaries has knowledge of any claim or has received any written notice of any claim against any such Person and no proceeding has been instituted and is still pending (in whole or in part) asserting any claim against any such Person or any of its respective Real Property or other assets now or formerly owned, leased or operated by any of them, alleging any damage to the environment or violation of any Environmental Laws, except, in each case, as could, individually or in the aggregate, not reasonably be expected to result in a Material Adverse Effect.
(b) None of the Obligors nor any of their respective Subsidiaries has knowledge of any facts which would give rise to any claim, public or private, of violation of Environmental Laws or damage to the environment emanating from, occurring on or in any way related to Real Property now or formerly owned, leased or operated by any of them or to other assets or their use, except, in each case, such as could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(c) None of the Obligors nor any of their respective Subsidiaries has stored any Hazardous Materials on Real Property now or formerly owned, leased or operated by any of them resulting in any violation of any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(d) None of the Obligors nor any of their respective Subsidiaries has disposed of any Hazardous Materials in a manner which is contrary to any Environmental Law that could, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
(e) All buildings on all Real Property are in compliance with the applicable Environmental Laws, except where failure to comply could not, individually or in the aggregate, reasonably be expected to result in a Material Adverse Effect.
Section5.19 Ranking of Obligations. Each Obligor’s payment obligations under this Agreement, the Pagarés and, with respect to the Company only, the Notes will, upon issuance of the Notes and the Pagarés, rank at least pari passu, without preference or priority, with all other unsecured and unsubordinated Indebtedness of the relevant Obligor, except, in each case, for such payment obligations that are mandatorily preferred by operation of bankruptcy, insolvency, liquidation, judicial or extrajudicial recovery or similar laws of general application.
- 16 -
Section5.20 Solvency. Each Obligor individually and the Group on a consolidated basis is and, after giving effect to the issuance of the Notes, the execution and delivery of the Finance Documents and the consummation of the transactions contemplated thereby, and the Closing Equity Contribution, will be Solvent.
Section 5.21 No Immunity. None of the Obligors nor any of their respective Subsidiaries has the right to claim for itself or any of its assets immunity of any kind with respect to jurisdiction, enforcement, seizure, service of process or other similar generally applicable legal rules, subject to, in the case of members of the Group organized in Colombia, article 594 of the Colombia General Process Code (Código General del Proceso) or other Colombian laws providing that certain assets are non-attachable.
Section 5.22 Absenceof Currency Exchange Controls. There are no restrictions or requirements under the laws or regulations of any jurisdiction in which an Obligor is organized that limit the availability of foreign currency, or require any governmental authorization for or otherwise restrict the transfer of foreign currency out of such jurisdiction, except that payments made by any Guarantor organized in Brazil under the Finance Documents with funds held in Brazil are subject to the closing of a foreign exchange transaction, which must be carried out by a financial institution in Brazil authorized by the Brazilian Central Bank to deal in the exchange market, and comply with the requirements imposed by such financial institution and the Brazilian regulations then in effect, including the presentation of proper documentation supporting the legality of the relevant remittance of funds outside of Brazil.
Section 5.23 Statusof Pagarés. As of the Restatement Date, each Pagaré will be a valid and enforceable non-negotiable executive title (título ejecutivo) and shall be issued in the form of and qualify under Colombian law as a pagaré payable no later than the Maturity Date thereof pursuant to the related Instruction Letter, and shall be enforceable under Colombian law by means of a summary judicial proceeding (proceso ejecutivo) against the Company, as issuer, and each Guarantor signatory thereto, as a guarantor (avalista). Each Note and the Pagaré related thereto (together with any aval with respect thereto) shall evidence the same obligations to pay the unpaid principal amount of, and interest on, the debt evidenced thereby. The holder of a Note may elect to enforce payment of such debt by bringing an action on either the Note or the Pagaré related thereto (together with any aval with respect thereto) in the relevant court; provided that payment by the Obligors of any part of the principal or interest of either a Note or the Pagaré related thereto (together with any aval with respect thereto) in accordance with this Agreement, the Notes and the Pagarés shall (a) reduce the outstanding principal or interest amount of both such Note and such Pagaré (together with any aval with respect thereto) pro tanto and (b) discharge the corresponding obligation of the Obligors under this Agreement, the Notes and the Pagarés to pay principal or interest of the debt evidenced by such Note and such Pagaré (together with any aval related thereto) pro tanto.
Section 5.24 FiscalYear. The fiscal year of each of the Obligors and their respective Subsidiaries is the 12-month period ending on December 31 of each year.
- 17 -
Section 5.25 Centre of MainInterest. For the purposes of The Council of the Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the “Regulation”), the Parent Guarantor has its centre of main interest (as that term is used in Article 3(1) of the Regulation) situated in its jurisdiction of incorporation and has no “establishment” (as that term is used in Article 2(10) of the Regulation) in any other jurisdiction. The Parent Guarantor has its central administration (administration centrale) in Luxembourg.
Section 5.26 SecurityInterests. Upon the execution and delivery thereof by the parties thereto, each Collateral Document (including any applicable public deed with respect to Mortgages on property located in Colombia) is effective, together with such filings and other actions required to be, and when, taken hereby or by the applicable Collateral Documents (including the filing of UCC or other financing statements or registrations, execution of Control Agreements, registration with competent registry offices and any other Governmental Authority, as applicable, and the delivery to the Collateral Agent of any certificates or promissory notes, as applicable required to be delivered pursuant to the applicable Collateral Documents), to create in favor of the Collateral Agent (for the benefit of the Purchasers) a legal, valid and enforceable, and fully perfected, security interest in the Collateral.
Section 6. Representations of the Purchasers.
Section 6.1 Purchasefor Investment. Each Purchaser severally represents as of the Restatement Date that it has purchased the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control. Each Purchaser understands that the Notes have not been, and will not be, registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes. Each Purchaser acknowledges that the Notes have not been and will not be registered with the Brazilian Securities Exchange Commission (Comissão de Valores Mobiliários- CVM),the Colombian Superintendency of Finance (Superintendencia Financiera de Colombia) or the Spanish Securities Exchange Commission (Comisión Nacional del Mercado de Valores - CNMV), and that the Notes may not be offered or sold in Brazil, Peru, El Salvador, Colombia or Spain, except in circumstances which do not constitute a public offering or distribution of securities under applicable Brazilian, El Salvador, Colombian or Spanish laws and regulations.
- 18 -
Section 6.2 Sourceof Funds. Each Purchaser severally represents as of the Restatement Date that at least one of the following statements is an accurate representation as to each source of funds (a “Source”) used by such Purchaser to acquire the Notes acquired by such Purchaser hereunder:
(a) the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption (“PTE”) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement”)) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or
(b) the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or
(c) the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of the PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or
(d) the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14, as amended (the “QPAMExemption”)) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and (i) the identity of such QPAM and (ii) the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund, have been disclosed to the Company in writing pursuant to this clause (d); or
(e) the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23, as amended (the “INHAM Exemption”)) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or
- 19 -
(f) the Source is a governmental plan; or
(g) the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or
(h) the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this Section 6.2, the terms “employeebenefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.
Section 6.3 AccreditedInvestor; Knowledge and Experience. Each Purchaser severally represents as of the Restatement Date that it is an “accredited investor” (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act (or any other sub-clause of clause (a) of such Rule 501 that applies to entities)) acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others are also “accredited investors”). Without limiting the force and effect of the representations and warranties of the Obligors, each Purchaser severally represents as of the Restatement Date that it (a) has such knowledge and experience in financial and business matters, as to enable it to evaluate the merits and risks of entering into this Agreement and purchasing the Notes and (b) has been offered the opportunity to ask questions of the Obligors and received answers thereto as it deemed necessary in connection with the decision to purchase the Notes.
Section 7. Information as to obligors.
Section 7.1 Financialand Business Information. The Obligors shall deliver (or cause to be delivered) to each Purchaser and each holder of a Note that is an Institutional Investor (and for purposes of this Agreement, the information required by this Section 7.1 shall be deemed delivered on the date of delivery of such information in the English language or the date of delivery of an English translation thereof):
(a) InterimStatements — promptly after the same are available and in any event within 60 days (or, if earlier, the date on which such financial statements are delivered under any Material Credit Facility, and, in the case of the fourth quarter financial statements, together with the delivery of the annual financial statements in accordance with Section 7.1(b)) after the end of each quarterly fiscal period in each fiscal year of the Parent Guarantor (commencing with the quarterly fiscal period ending June 30, 2025), duplicate copies of,
(i) a consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at the end of such fiscal period, and
- 20 -
(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Company and its Subsidiaries, for such fiscal period and (in the case of the second, third and fourth quarters) for the portion of the fiscal year ending with such quarters,
setting forth in each case in comparative form the figures for the corresponding periods in the previous fiscal year, all in reasonable detail, prepared in accordance with IFRS applicable to interim financial statements generally, and certified by a Senior Financial Officer of the Parent Guarantor as fairly presenting, in all material respects, the financial position of the companies being reported on and their results of operations and cash flows, subject to changes resulting from year-end adjustments;
(b) AnnualStatements — promptly after the same are available and in any event within 120 days (or, if earlier, the date on which such financial statements are delivered under any Material Credit Facility) after the end of each fiscal year of the Parent Guarantor (commencing with the fiscal year ending December 31, 2025), duplicate copies of:
(i) a consolidated balance sheet of the Parent Guarantor and its Subsidiaries as at the end of such year, and
(ii) consolidated statements of income, changes in shareholders’ equity and cash flows of the Parent Guarantor and its Subsidiaries for such year,
setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with IFRS, and accompanied by an opinion thereon (without a “going concern” or similar qualification or exception and without any qualification or exception as to the scope of the audit on which such opinion is based) of independent public accountants of recognized international standing, which opinion shall state that such financial statements present fairly, in all material respects the consolidated financial position of the companies being reported upon and their consolidated results of operations and consolidated cash flows and have been prepared in conformity with IFRS, and that the examination of such accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards, and that such audit provides a reasonable basis for such opinion in the circumstances;
(c) Regulatoryand Other Reports — promptly, and in any event within 5 Business Days, upon their becoming available, one copy of (i) each financial statement, report, circular, notice, proxy statement or similar document sent by any Obligor or any Subsidiary (x) to its creditors under any Material Credit Facility (excluding information sent to such creditors in the ordinary course of administration of a credit facility, such as information relating to pricing and borrowing availability) or (y) to its public securities holders generally, and (ii) each regular or periodic report, each registration statement (without exhibits except as expressly requested by such Purchaser or holder), and each prospectus and all amendments thereto filed by any Obligor or any Subsidiary with the SEC, the Colombian Superintendence of Finance (Superintendencia Financiera de Colombia) or any similar Governmental Authority or any securities exchange and of all press releases and other statements made available generally by any Obligor or any Subsidiary to the public concerning developments that are Material;
- 21 -
(d) Noticeof Default or Event of Default — promptly, and in any event within 5 Business Days, after a Responsible Officer of the Parent Guarantor or the Company acquiring knowledge of the existence of any Default or Event of Default or that any Person has given any notice or taken any action with respect to a claimed default hereunder or that any Person has given any notice or taken any action with respect to a claimed default of the type referred to in Section 11(f), a written notice specifying the nature and period of existence thereof and what action the Parent Guarantor or the Company, as the case may be, is taking or proposes to take with respect thereto;
(e) EmployeeBenefits Matters — promptly, and in any event within 5 Business Days after a Responsible Officer of the Parent Guarantor or the Company acquiring knowledge of any of the following, a written notice setting forth the nature thereof and the action, if any, that an Obligor or an ERISA Affiliate proposes to take with respect thereto:
(i) any reportable event, as defined in Section 4043(c) of ERISA and the regulations thereunder, with respect to any Plan for which notice thereof has not been waived pursuant to such regulations as in effect on the Restatement Date;
(ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by any Obligor or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan under Section 4041A of ERISA;
(iii) except as would not result in a Material Adverse Effect, any event, transaction or condition that could result in (i) the incurrence of any liability by any Obligor or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of Section 412 of the Code relating to employee benefit Plans or in the imposition of any Lien on any of the rights, properties or assets of any Obligor or any ERISA Affiliate pursuant to Title I or Title IV of ERISA or such penalty or excise tax provisions, if such liability, taken together with any other such liabilities or Liens then existing would reasonably be expected to have a Material Adverse Effect; or
(iv) receipt of notice of the imposition of a financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans, except for any such penalty that would not result in a Material Adverse Effect;
(f) Noticesfrom Governmental Authority — promptly, and in any event within 30 days of receipt thereof, copies of any notice to any Obligor or any Subsidiary from any Governmental Authority relating to any order, ruling, statute or other law or regulation that could reasonably be expected to have a Material Adverse Effect;
- 22 -
(g) MaterialLitigation — promptly, and in any event within 5 Business Days after a Responsible Officer of the Parent Guarantor or the Company acquiring knowledge of any of the following, the details of any litigation, arbitration or administrative proceedings which are current, threatened in writing or pending against any Obligor or any Subsidiary, and which are reasonably likely to be adversely determined and if adversely determined, are reasonably likely to have a Material Adverse Effect;
(h) Resignationor Replacement of Auditors — within 15 days following the date on which any Obligor’s auditors resign or any Obligor elects to change auditors, as the case may be, written notification thereof, together with such supporting information as the Required Holders may reasonably request;
(i) CollateralDocument Reports — the reports and notices required by the Collateral Documents (if any) as and when required by the relevant Collateral Documents;
(j) InsuranceCoverage Reports — promptly, and in any event within 45 calendar days, after the end of each Fiscal Year, a report summarizing the insurance coverage (specifying type, amount and carrier) in effect for each Obligor during such Fiscal Year and containing such additional information as the Required Holders may reasonably specify;
(k) NewSubsidiaries — not less than 15 days prior thereto, written notice of the creation, organization or acquisition of any new Subsidiary of an Obligor; and
(l) LenderConference Calls - (a) monthly until the delivery of financial statements and other information required to be delivered pursuant to Item [2] of Schedule 9.16 for the fiscal year ended December 31, 2024, and (b) thereafter, within thirty (30) days after the delivery of financial statements and other information required to be delivered pursuant to Sections 7.1(a) and 7.1(b) (starting with the fiscal quarter ending September 30, 2025), in each case, the Obligors shall cause its chief financial officer to participate in a conference call with the Purchasers during which conference call the chief financial officer shall review the financial condition of Parent Guarantor and its Subsidiaries and such other matters as the Purchasers may reasonably request; and
(m) RequestedInformation — with reasonable promptness, and in any event within 5 Business Days of such request, such other data or information relating to the business, operations, affairs, financial condition, assets or properties of any Obligor or any Subsidiary or relating to the ability of any Obligor to perform its obligations under any Finance Document to which such Obligor is a party as from time to time may be reasonably requested by any such Purchaser or holder of a Note, including information readily available to the Obligors explaining the Obligors’ financial statements if such information has been requested by the SVO in order to assign or maintain a designation of the Notes.
- 23 -
Section 7.2Officer’s Certificate. Each set of financial statements delivered to a Purchaser or a holder of a Note pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer of the Parent Guarantor:
(a) CovenantCompliance — setting forth the information from such financial statements that is required in order to establish whether the Obligors were in compliance with the requirements of Section 10 and any Incorporated Provision during the interim or annual period covered by the financial statements then being furnished (including with respect to each such provision that involves mathematical calculations, the information from such financial statements that is required to perform such calculations), and reasonably detailed calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Section, and the calculation of the amount, ratio or percentage then in existence. In the event that any Obligor or any Subsidiary has made an election to measure any financial liability using fair value (which election is being disregarded for purposes of determining compliance with this Agreement pursuant to Section 24.2) as to the period covered by any such financial statement, such Senior Financial Officer’s certificate as to such period shall include a reconciliation from IFRS with respect to such election;
(b) Eventof Default — certifying that such Senior Financial Officer has reviewed the relevant terms hereof and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Obligors and their respective Subsidiaries from the beginning of the interim or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including any condition or event resulting from the failure of any Obligor or any Subsidiary to be in material compliance with any Environmental Law), specifying the nature and period of existence thereof and what action the Obligors shall have taken or propose to take with respect thereto;
(c) SubsidiaryGuarantors – setting forth a list of all Subsidiaries that are Subsidiary Guarantors and certifying that each Subsidiary that is required to be a Subsidiary Guarantor pursuant to Section 9.7 is a Subsidiary Guarantor, in each case, as of the date of such certificate of such Senior Financial Officer;
(d) ExcessCash Flow – commencing with the fiscal quarter ending March 31, 2027, setting forth a computation of the Excess Cash Flow for the fiscal quarter covered by such financial statements in reasonable detail; and
(e) PerfectionCertificate – either (i) certifying that there have been no changes to the information contained in the Perfection Certificate delivered most recently pursuant to the U.S. Pledge and Security Agreement or (ii) attaching a Perfection Certificate as of the date of such certificate and identifying the changes to the information contained in such most recently delivered prior Perfection Certificate.
- 24 -
Section 7.3 Visitation. The Obligors shall permit the representatives of each Purchaser and each holder of a Note that is an Institutional Investor:
(a) NoDefault — if no Default or Event of Default then exists, at the expense of such Purchaser or such holder and at reasonable intervals and upon reasonable prior notice to the Parent Guarantor or the Company, as applicable, to visit the principal executive offices of the Parent Guarantor or the Company, as applicable, to discuss the affairs, finances and accounts of the Parent Guarantor and its Subsidiaries with the Parent Guarantor’s or the Company’s officers, and (with the consent of the Parent Guarantor or the Company, as applicable, which consent will not be unreasonably withheld) its independent public accountants, and subject to any safety procedures requested by the Parent Guarantor, the Company or the relevant Subsidiary (with the consent of the Parent Guarantor or the Company, as applicable, which consent will not be unreasonably withheld) to visit the other offices and properties of the Parent Guarantor and each Subsidiary, all at such reasonable times and as often as may be reasonably requested in writing; provided that such visits or inspections do not unreasonably interfere with the operation of any Obligor or any Subsidiary and such Purchaser or such holder of a Note shall use its commercially reasonable efforts to coordinate any such discussions or inspection; provided, further, that each Purchaser and each holder of a Note shall only be entitled to one such visit per calendar year; and
(b) Default — if a Default or Event of Default then exists, at the expense of the Company to visit and inspect any of the principal executive offices or properties of any of the Obligors or any of their respective Subsidiaries, to examine all their respective books of account, records, reports and other papers, to make copies and extracts therefrom, and to discuss their respective affairs, finances and accounts with their respective officers and independent public accountants (and by this provision the Obligors authorize said accountants to discuss the affairs, finances and accounts of the Obligors and their Subsidiaries), all at such times and as often as may be requested.
Section 7.4 ElectronicDelivery. Financial statements, opinions of independent certified public accountants, other information and Officer’s Certificates that are required to be delivered by the Obligors pursuant to Section 7.1(a), (b) or (c) and Section 7.2 shall be deemed to have been delivered if the Obligors satisfy any of the following requirements with respect thereto:
(a) such financial statements satisfying the requirements of Section 7.1(a) or (b) and related Officer’s Certificate satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are delivered to each Purchaser and each holder of a Note by e-mail at the e-mail address set forth in such Purchaser’s or holder’s Purchaser Schedule or as communicated from time to time in a separate writing delivered to the Parent Guarantor or the Company; or
(b) such financial statements satisfying the requirements of Section 7.1(a) or Section 7.1(b) and related Officer’s Certificate(s) satisfying the requirements of Section 7.2 and any other information required under Section 7.1(c) are timely posted by or on behalf of the Obligors on IntraLinks or on any other similar website to which each Purchaser and each holder of Notes has access without charge as of the Restatement Date;
provided however, that in no case shall access to such financial statements, other information and Officer’s Certificates be conditioned upon any waiver or other agreement or consent (other than confidentiality provisions consistent with Section 22 of this Agreement); provided further, that in the case of clause (b), the Parent Guarantor or the Company shall have given each Purchaser and each holder of a Note prior written notice, which may be by e-mail or in accordance with Section 20, of such posting or availability in connection with each delivery; and providedfurther, that upon request of any Purchaser or holder to receive paper copies of such forms, financial statements, other information and Officer’s Certificates or to receive them by e-mail, the Obligors will promptly e-mail them or deliver such paper copies, as the case may be, to such Purchaser or holder.
- 25 -
Section 7.5 Limitationon Disclosure Obligation. No Obligor shall be required to disclose the following information pursuant to Section 7.1(c)(i)(x), Section 7.1(i) or Section 7.3:
(a) information that such Obligor determines after consultation with counsel qualified to advise on such matters that, notwithstanding the confidentiality requirements of Section 22, it would be prohibited from disclosing by applicable law or regulations without making public disclosure thereof;
(b) information that, notwithstanding the confidentiality requirements of Section 22, such Obligor is prohibited from disclosing by the terms of an obligation of confidentiality contained in any agreement with any non-Affiliate binding upon such Obligor and not entered into in contemplation of this clause (b), provided that such Obligor shall use commercially reasonable efforts to obtain consent from the party in whose favor the obligation of confidentiality was made to permit the disclosure of the relevant information and provided further that such Obligor has received a written opinion of counsel confirming that disclosure of such information without consent from such other contractual party would constitute a breach of such agreement; or
(c) in the case of the disclosure of any information to any actual or prospective competitor of the Group, any information that (i) constitutes non-financial trade secrets or non-financial proprietary information or (ii) is subject to attorney-client or similar privilege or constitutes attorney work product.
Promptly after determining that an Obligor is not permitted to disclose any information as a result of the limitations described in this Section 7.5, such Obligor will provide each of the Purchasers and holders with an Officer’s Certificate describing generally the requested information that such Obligor is prohibited from disclosing pursuant to this Section 7.5 and the circumstances under which such Obligor is not permitted to disclose such information. Promptly after a request therefor from any Purchaser or holder of Notes that is an Institutional Investor, the relevant Obligor will provide such Purchaser or holder with a written opinion of counsel (which may be addressed to such Obligor) relied upon as to any requested information that such Obligor is prohibited from disclosing to such Purchaser or holder under circumstances described in this Section 7.5.
Section 8. Payment and Prepayment of the Notes.
Section 8.1 RequiredPrepayments; Maturity. The Company will prepay the Notes in the principal amounts (or such lesser principal amount as shall then be outstanding) and on the dates set forth in Schedule 8.1, at par and without payment of any premium, provided that upon any partial prepayment of the Notes pursuant to Section 8.2, Section 8.3, Section 8.4 or Section 8.10, the principal amount of each required prepayment of the Notes becoming due under this Section 8.1 on and after the date of such prepayment shall be reduced in the same proportion as the aggregate unpaid principal amount of the Notes is reduced as a result of such prepayment. As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.
- 26 -
Section 8.2 OptionalPrepayments. The Company may, at its option, upon notice as provided below, prepay at par, at any time all, or from time to time any part of, the Notes, in a minimum principal amount which, together with all optional prepayments made with respect to all Category IV Indebtedness other than Indebtedness hereunder, shall not be less than US$500,000, together with interest accrued thereon to the date of such prepayment. The Company will give each holder of Notes written notice of each optional prepayment under this Section 8.2 not less than 10 days and not more than 60 days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant to Section 19. Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.5), and the interest to be paid on the prepayment date with respect to such principal amount being prepaid.
Section 8.3 Prepayment for Tax Reasons.
(a) If at any time as a result of a Change in Tax Law (as defined below) the Company is or will be obligated under Section 13 to make any Additional Payments (as defined below) in respect of any payment of interest on account of any of the Notes in an aggregate amount for all affected Notes equal to 5% or more of the aggregate amount of such interest payment on account of all of the Notes, the Company may give the holders of all affected Notes irrevocable written notice (each, a “Tax Prepayment Notice”) of the prepayment of such affected Notes on a specified prepayment date (which shall be a Business Day not less than 30 days nor more than 60 days after the date of such notice) and the circumstances giving rise to the obligation of the Company to make any Additional Payments and the amount thereof and stating that all of the affected Notes shall be prepaid on the date of such prepayment at 100% of the principal amount so prepaid together with interest accrued thereon to the date of such prepayment, except in the case of an affected Note if the holder of such Note shall, by written notice given to the Company no more than 20 days after receipt of the Tax Prepayment Notice, reject such prepayment of such Note (each, a “Rejection Notice”). The form of Rejection Notice shall also accompany the Tax Prepayment Notice and shall state with respect to each Note covered thereby that execution and delivery thereof by the holder of such Note shall operate as a permanent waiver of such holder’s right to receive the Additional Payments arising as a result of the circumstances described in the Tax Prepayment Notice in respect of all future payments of interest on such Note (but not of such holder’s right to receive any Additional Payments that arise out of circumstances not described in the Tax Prepayment Notice or which exceed the amount of the Additional Payment described in the Tax Prepayment Notice), which waiver shall be binding upon all subsequent transferees of such Note. The Tax Prepayment Notice having been given as aforesaid to each holder of the affected Notes, the principal amount of such Notes together with interest accrued thereon to the date of such prepayment shall become due and payable on such prepayment date, except in the case of Notes the holders of which shall timely give a Rejection Notice as aforesaid.
- 27 -
(b) No prepayment of the Notes pursuant to this Section 8.3 shall affect the obligation of the Company to pay Additional Payments in respect of any payment made on or prior to the date of such prepayment. For purposes of this Section 8.3, any holder of more than one affected Note may act separately with respect to each affected Note so held (with the effect that a holder of more than one affected Note may accept such offer with respect to one or more affected Notes so held and reject such offer with respect to one or more other affected Notes so held).
(c) The Company may not offer to prepay or prepay Notes pursuant to this Section 8.3 (i) if a Default or Event of Default then exists, (ii) until the Company shall have taken commercially reasonable steps to mitigate the requirement to make the related Additional Payments or (iii) if the obligation to make such Additional Payments directly results or resulted from actions taken by an Obligor or any Subsidiary (other than actions required to be taken under applicable law), and any Tax Prepayment Notice given pursuant to this Section 8.3 shall certify to the foregoing and describe such mitigation steps, if any.
(d) For purposes of this Section 8.3: “Additional Payments” means additional amounts required to be paid to a holder of any Note pursuant to Section 13 by reason of a Change in Tax Law; and a “Change in Tax Law” means (individually or collectively with one or more prior changes) (i) an amendment to, or change in, any such law, treaty, rule or regulation of Colombia or any jurisdiction by or through which payments on the Notes are made at the Company’s direction (or any political subdivision or taxing authority thereof or therein) after November 5, 2021, or an amendment to, or change in, an official interpretation or application of such law, treaty, rule or regulation after the Restatement Date, which amendment or change is or will be in force and continuing and meets the opinion and certification requirements described below or (ii) in the case of any other jurisdiction that becomes a Taxing Jurisdiction after November 5, 2021, an amendment to, or change in, any law, treaty, rule or regulation of such jurisdiction, or an amendment to, or change in, an official interpretation or application of such law, treaty, rule or regulation, in any case after such jurisdiction shall have become a Taxing Jurisdiction, which amendment or change is or will be in force and continuing and meets such opinion and certification requirements. No such amendment or change shall constitute a Change in Tax Law unless the same would in the opinion of the Company (which shall be evidenced by an Officer’s Certificate of the Company and supported by a written opinion of counsel having recognized expertise in the field of taxation in the relevant Taxing Jurisdiction, both of which shall be delivered to all holders of the Notes prior to or concurrently with the Tax Prepayment Notice in respect of such Change in Tax Law) affect the deduction or require the withholding of any Tax imposed by such Taxing Jurisdiction on any payment payable on the Notes.
Section 8.4 Prepayment in Connection with a Noteholder Sanctions Event.
(a) Upon the Company’s receipt of notice from any Affected Noteholder that a Noteholder Sanctions Event has occurred (which notice shall refer specifically to this Section 8.4(a) and describe in reasonable detail such Noteholder Sanctions Event), the Company shall promptly, and in any event within 10 Business Days, make an offer (the “Sanctions Prepayment Offer”) to prepay the entire unpaid principal amount of Notes held by such Affected Noteholder (the “Affected Notes”), together with interest accrued thereon to the prepayment date selected by the Company with respect to each Affected Note which prepayment shall be on a Business Day not less than 30 days and not more than 60 days after the date of the Sanctions Prepayment Offer (the “Sanctions Prepayment Date”). Such Sanctions Prepayment Offer shall provide that such Affected Noteholder notify the Company in writing by a stated date (the “SanctionsPrepayment Response Date”), which date is not later than 10 Business Days prior to the stated Sanctions Prepayment Date, of its acceptance or rejection of such prepayment offer. If such Affected Noteholder does not notify the Company as provided above, then the holder shall be deemed to have accepted such offer.
- 28 -
(b) Subject to the provisions of subparagraphs (c) and (d) of this Section 8.4, the Company shall prepay on the Sanctions Prepayment Date the entire unpaid principal amount of the Affected Notes held by such Affected Noteholder who has accepted (or has been deemed to have accepted) such prepayment offer (in accordance with subparagraph (a)), together with interest accrued thereon to the Sanctions Prepayment Date with respect to each such Affected Note.
(c) If a Noteholder Sanctions Event has occurred but the Company and/or the Controlled Entities have taken such action(s) in relation to their activities so as to remedy such Noteholder Sanctions Event (with the effect that a Noteholder Sanctions Event no longer exists, as reasonably determined by such Affected Noteholder) prior to the Sanctions Prepayment Date, then the Company shall no longer be obliged or permitted to prepay such Affected Notes in relation to such Noteholder Sanctions Event. If the Company and/or the Controlled Entities shall undertake any actions to remedy any such Noteholder Sanctions Event, the Company shall keep the holders reasonably and timely informed of such actions and the results thereof.
(d) If any Affected Noteholder that has given written notice to the Company of its acceptance of (or has been deemed to have accepted) the Company’s prepayment offer in accordance with subparagraph (a) also gives notice to the Company prior to the relevant Sanctions Prepayment Date that it has determined (in its sole discretion) that it requires clearance from any Governmental Authority in order to receive a prepayment pursuant to this Section 8.4, the principal amount of each Note held by such Affected Noteholder, together with interest accrued thereon to the date of prepayment, shall become due and payable on the later to occur of (but in no event later than the Maturity Date of the relevant Note) (i) such Sanctions Prepayment Date and (ii) the date that is 10 Business Days after such Affected Noteholder gives notice to the Company that it is authorized to receive a prepayment pursuant to this Section 8.4 (which may include payment to an escrow account designated by such Affected Noteholder to be held in escrow for the benefit of such Affected Noteholder until such Affected Noteholder obtains such clearance from such Governmental Authority), and in any event, any such delay in accordance with the foregoing clause (ii) shall not be deemed to give rise to any Default or Event of Default.
(e) Promptly, and in any event within 5 Business Days, after the Company’s receipt of notice from any Affected Noteholder that a Noteholder Sanctions Event shall have occurred with respect to such Affected Noteholder, the Company shall forward a copy of such notice to each other Purchaser or holder of Notes.
- 29 -
(f) The Company shall promptly, and in any event within 10 Business Days, give written notice to the Purchasers and holders after the Company or any Controlled Entity having been notified by a competent Governmental Authority (or becoming aware) that (i) its name appears or may in the future appear on a State Sanctions List or (ii) it is in violation of, or is subject to the imposition of sanctions under, any U.S. Economic Sanctions Laws, in each case which written notice shall describe the facts and circumstances thereof and set forth the action, if any, that the Company or a Controlled Entity proposes to take with respect thereto.
(g) The foregoing provisions of this Section 8.4 shall be in addition to any rights or remedies available to any Purchaser or any holder of Notes that may arise under this Agreement as a result of the occurrence of a Noteholder Sanctions Event; provided, that, if the Notes shall have been declared due and payable pursuant to Section 12.1 as a result of the events, conditions or actions of the Company or any Controlled Entity that gave rise to a Noteholder Sanctions Event, the remedies set forth in Section 12 shall control.
Section 8.5 Allocationof Partial Prepayments. In the case of each partial prepayment of the Notes pursuant to Section 8.1 or Section 8.2, the principal amount of the Notes to be prepaid 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 prepayment.
Section 8.6 Maturity;Surrender, Etc. In the case of each prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, 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, as aforesaid, interest on such principal amount shall cease to accrue. Any Note paid or prepaid in full shall be, as soon as practicable thereafter, 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. In the case of the payment or prepayment in full of all of a holder’s Notes, as soon as practicable thereafter, the related Pagaré and the Instruction Letter related to such Pagaré shall be surrendered to the Company and cancelled and shall not be reissued.
Section 8.7 Purchaseof Notes. The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except (a) upon the payment or prepayment of the Notes in accordance with the terms of this Agreement and the Notes or (b) pursuant to an offer to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions. Any such offer shall provide each holder of a Note with sufficient information to enable it to make an informed decision with respect to such offer, and shall remain open for at least 20 Business Days. If the holders of more than 50% of the principal amount of the Notes then outstanding accept such offer, the Company shall promptly notify the remaining holders of the Notes of such fact and the expiration date for the acceptance by holders of Notes of such offer shall be extended by the number of days necessary to give each such remaining holder at least 10 Business Days from its receipt of such notice to accept such offer. The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment, prepayment 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.
- 30 -
Section 8.8 [Reserved].
Section 8.9 PaymentsDue on Non-Business Days. Anything in this Agreement or the Notes to the contrary notwithstanding, any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest payable on such next succeeding Business Day.
Section 8.10Prepayment in Connection with a Disposition or Excess Cash Flow.
(a) In the event that the Company makes an offer of prepayment of the Notes pursuant to Section 10.7(i)(iii)(B) or in accordance with Section 8.12, the Company shall give written notice thereof (a “Prepayment Notice”) to each holder of a Note, which notice shall (i) describe the relevant Disposition in reasonable detail or set forth the Excess Cash Flow for the applicable fiscal quarter, (ii) refer to this Section 8.10, (iii) state the amount of the cash proceeds of such Disposition or Excess Cash Flow and the aggregate principal amount of Indebtedness being prepaid or offered to be prepaid, (iv) contain an irrevocable offer by the Company to prepay outstanding principal of each Note held by such holder in an amount equal to such Note’s Pro Rata Share of the proceeds of such Disposition being applied or offered pursuant to Section 10.7(i)(iii)(B) or the Excess Cash Flow offered in accordance with Section 8.12, together with interest accrued thereon to the date of prepayment (without payment of any premium with respect thereto), on a specified date (the “Prepayment Date”), which date shall be a Business Day not less than 30 nor more than 60 days after the date of such Prepayment Notice (unless another time period is otherwise agreed by the Company and the Required Holders), (v) with respect to each Note of such holder, state the amount of principal of such Note offered to be prepaid and the amount of interest that would be paid on the Prepayment Date, and (vi) request that such holder notify the Company in writing by a specified date (the “Prepayment AcceptanceNotification Date”), which date shall be not less than 20 days after the date of such Prepayment Notice (unless another time period is otherwise agreed by the Company and the Required Holders) if such holder wishes any of its Notes to be so prepaid.
(b) A holder may accept or reject an offer of prepayment made pursuant to this Section 8.10 by causing written notice of such acceptance or rejection to be delivered to the Company on or before the Prepayment Acceptance Notification Date. If a holder does not notify the Company on or before the Prepayment Acceptance Notification Date of such holder’s acceptance or rejection of the prepayment offer contained in the relevant Prepayment Notice, such holder will be deemed to have rejected the prepayment offer. For purposes of this Section 8.10, any holder of more than one Note may act separately with respect to each such Note (with the effect that a holder may accept an offer with respect to one or more Notes and reject such offer with respect to one or more other Notes).
- 31 -
(c) On the Prepayment Date, the appropriate outstanding principal amount of each Note with respect to which the holder thereof has accepted such prepayment offer (equal to such Note’s Pro Rata Share of the proceeds of such Disposition being applied or offered pursuant to Section 10.7(i)(iii)(B) or the Excess Cash Flow offered in accordance with Section 8.12), together with interest accrued thereon to the date of prepayment (without payment of any premium), will be due and payable.
Section 8.11 Interest.
(a) Commencing January 1, 2027, each Note shall bear interest (computed on the basis of a 360-day year of twelve 30-day months) on the unpaid principal balance of such Note at the rate of 6.75% per annum from the date thereof, payable quarterly on each Determination Date, commencing with the quarter ending March 31, 2027, and on the Maturity Date; and
(b) on and after the Restatement Date, to the extent permitted by law, (i) on any overdue payment of interest (other than Holdover Interest) and (ii) during the continuance of an Event of Default, on such unpaid principal balance, at the Default Rate, payable quarterly as aforesaid (or, at the option of the registered holder thereof, on demand).
(c) For the avoidance of doubt, no interest shall accrue on Holdover Interest.
Section 8.12 ExcessCash Flow. No later than twenty (20) days following the final day of each fiscal quarter, commencing with the fiscal quarter ending March 31, 2027, the Company shall offer to prepay each outstanding Note in accordance with Section 8.10, in an aggregate principal amount equal to such Note’s Pro Rata Share of 100% of the Excess Cash Flow for such fiscal quarter, accompanied by an Officer’s Certificate setting forth in reasonable detail a calculation of the Excess Cash Flow as of the final day of such fiscal quarter. Each prepayment of the Notes pursuant to this Section 8.12 shall be applied to the respective installments of principal of the Notes due pursuant to Section 8.1 in the inverse order of maturity.
Section 9. Affirmative Covenants.
Each Obligor jointly and severally covenants that so long as the Notes are outstanding:
Section 9.1 Compliancewith Laws; Licenses, Etc. Without limiting Section 10.4, each Obligor will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject (including ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.16, as applicable), and will obtain, own or possess, and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations, and all patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, in each case as are necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain, own or possess, or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations or such patents, copyrights, proprietary software, service marks, trademarks and trade names, or rights thereto, could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
- 32 -
Section 9.2 Insurance.
(a) Each Obligor will, and will cause each of its Subsidiaries to, maintain, with financially sound and reputable insurers, insurance with respect to their respective properties and businesses against such casualties and contingencies, of such types, on such terms and in such amounts (including deductibles, co-insurance and self-insurance, if adequate reserves are maintained with respect thereto) as is customary in the case of entities of established reputations engaged in the same or a similar business and similarly situated. All insurance covering (i) liability shall name the Collateral Agent, for the benefit of the Category IV Creditors, as an additional insured thereunder as its interests may appear and/or (ii) in the case of each property and casualty insurance policy, contain a lenders loss payable clause or endorsement that names the Collateral Agent, for the benefit of the Category IV Creditors, as the lenders loss payee thereunder. Any insurance proceeds received by the Collateral Agent or any Obligor or Subsidiary thereof (which shall be turned over to the Collateral Agent) shall be applied by the Collateral Agent (at the direction of the Category IV Required Secured Parties) against the payment obligations of the Obligors to the Category IV Creditors as provided in the Pari Passu Intercreditor Agreement under this Agreement, the Notes and the other Finance Documents.
(b) Each of the insurance policies required to be maintained under this Section 9.2 shall provide at least thirty (30) days’ prior written notice to Collateral Agent of any material modification or cancellation of such policy (or ten (10) days’ prior written notice in the case of cancellation due to the failure to pay any premiums thereunder). Receipt of such notice shall entitle the Collateral Agent (but the Collateral Agent shall not be obligated) to renew any such policies, cause the coverages and amounts thereof to be maintained at levels required pursuant to this Section 9.2, or otherwise to obtain similar insurance in place of such policies, in each case at the expense of the Company.
Section 9.3 Maintenanceof Properties. Each Obligor will, and will cause each of its Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, provided that this Section 9.3 shall not prevent any Obligor or any Subsidiary from discontinuing the operation and the maintenance of any of its properties if such discontinuance is desirable in the conduct of its business and such Obligor has concluded that such discontinuance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
Section 9.4 Paymentof Taxes and Claims. Each Obligor will, and will cause each of its Subsidiaries to, file all tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien (other than any Lien that is permitted by Section 10.5(b)) on properties or assets of any Obligor or any Subsidiary, provided that no Obligor nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested by such Obligor or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and such Obligor or such Subsidiary has established adequate reserves therefor in accordance with IFRS on the books of such Obligor or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
- 33 -
Section 9.5 CorporateExistence, Etc. Except as permitted by Section 10.2, each Obligor will at all times preserve and keep its corporate, limited liability company, limited partnership or other entity existence, as applicable, in full force and effect. Subject to Section 10.2 and Section 10.7, each Obligor will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries that is not an Obligor (unless merged into an Obligor or a Wholly-Owned Subsidiary) and all rights and franchises of such Obligor and its Subsidiaries unless, in the good faith judgment of such Obligor, the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the foregoing, each Obligor will promptly obtain, and maintain in full force and effect, all material governmental or other consents, licenses, approvals, permits or authorizations from time to time necessary for the maintenance of its corporate existence and, where applicable, good standing and for its authorization, execution and delivery of the Finance Documents to which it is a party.
Section 9.6 Booksand Records. Each Obligor will, and will cause each of its Subsidiaries to, maintain proper books of record and account in conformity with IFRS (where applicable) and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over such Obligor or such Subsidiary, as the case may be. Each Obligor will, and will cause each of its Subsidiaries to, keep books, records and accounts which, in reasonable detail, accurately reflect all transactions and dispositions of assets. Each Obligor and its Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and each Obligor will, and will cause each of its Subsidiaries to, continue to maintain such system.
Section 9.7 Subsidiary Guarantors.
(a) Subject to Section 9.16 with respect to any Subsidiary in existence as of the Restatement Date, each Obligor will cause each of its Subsidiaries (other than an Obligor) that is a Material Subsidiary (within thirty (30) days after such formation, acquisition, or occurrence or, in each case, such longer period as the Required Holders may agree in their reasonable discretion) to deliver the following to each holder of a Note:
(i) an executed subsidiary guarantor joinder agreement in substantially the form set out in Schedule C and otherwise in form and substance satisfactory to the Required Holders (a “Subsidiary Guarantor Joinder Agreement”) (which, in relation to any Spanish Guarantor, shall be raised to the status of a Spanish Public Document);
- 34 -
(ii) with respect to the Pagaré and the related Instruction Letter of such holder, an executed supplemental signature page to attach to such Pagaré (or, at such holder’s request, the Obligors will execute and deliver a replacement Pagaré and Instruction Letter executed by the Company and each Guarantor (including such Subsidiary)), in each case notarized by a Colombian notary public, for the purposes of, and in connection with, such Subsidiary’s guaranteeing (por aval) the debt evidenced thereby (unless the Required Holders agree otherwise in writing);
(iii) an executed security agreement supplement of such Subsidiary in substantially the form set out in Exhibit A to the U.S. Pledge and Security Agreement and otherwise in form and substance reasonably satisfactory to the Required Holders (a “U.S. Pledge and Security AgreementJoinder”);
(iv) an executed joinder agreement of such Subsidiary to the Intercompany Subordination Agreement in substantially the form set out in Annex I to the Intercompany Subordination Agreement and otherwise in form and substance satisfactory to the Required Holders (an “IntercompanySubordination Agreement Joinder”);
(v) to the extent applicable, such other agreements, instruments, approvals and other documents as may reasonably be requested by the Required Holders in order to create, perfect, establish, and maintain the status of first priority Liens in favor of the Collateral Agent, for the benefit of the Purchasers, on all or substantially all of the assets of such Subsidiary securing the obligations of the Obligors to the Purchasers under the Finance Documents, subject to such exceptions as may be agreed by the Required Holders and to Liens that are permitted pursuant to Section 10.5
(vi) to the extent applicable, evidence, in form and substance reasonably satisfactory to the Required Holders, that the Obligors have taken whatever actions (including the recording of mortgages, the filing of UCC financing statements, the giving of notices and the endorsement of notices on title documents) as may be necessary or advisable in the reasonable opinion of the Required Holders to vest in the Collateral Agent, for the benefit of the Purchasers, valid and subsisting Liens on, and security interests in, all such assets of such Subsidiary, enforceable against all third parties in accordance with their terms;
(vii) all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and, where applicable, good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and delivery of such Subsidiary Guarantor Joinder Agreement, U.S. Pledge and Security Agreement Joinder and any other Finance Documents to be entered into by it and the performance by such Subsidiary of its obligations hereunder and thereunder;
- 35 -
(viii) such opinions of counsel reasonably satisfactory to the Required Holders covering such matters relating to such Subsidiary, such Subsidiary Guarantor Joinder Agreement, such U.S. Pledge and Security Agreement Joinder, this Agreement and the other Finance Documents to which such Subsidiary is to be a party as the Required Holders may reasonably request; and
(ix) evidence of the acceptance by the Process Agent of the appointment and designation provided by Section 24.7(e), as such Subsidiary’s agent to receive, for it and on its behalf, service of process, for the period from the date of such Subsidiary Guarantor Joinder Agreement to a date that is at least one year after the Maturity Date of the Notes (and the payment in full of all fees in respect thereof).
(b) Without limiting Section 9.7(a), the Obligors may cause any Subsidiary to become a Subsidiary Guarantor in respect of this Agreement and the Notes at any time by delivering to each holder of a Note the items described in clauses (i) through (v), inclusive, of Section 9.7(a).
Section 9.8 Priority ofObligations. Each Obligor will ensure that its payment obligations under this Agreement, the Pagarés and, with respect to the Company only, the Notes will at all times rank at least pari passu, without preference or priority, with all other unsecured and unsubordinated Indebtedness of such Obligor, except, in each case, for such payment obligations that are mandatorily preferred by operation of bankruptcy, insolvency, judicial or extrajudicial recovery, liquidation or similar laws of general application.
Section 9.9 Most Favored Lender.
(a) If as of, or at any time after, the Restatement Date any Material Credit Facility contains any Relevant Provision that is not contained in this Agreement or a Relevant Provision that is contained in this Agreement which would in any respect be more beneficial to the holders of Notes than the Relevant Provisions set forth in this Agreement (any such provision, a “More Favorable Provision”), then the Parent Guarantor or the Company shall provide a Most Favored Lender Notice in respect of such More Favorable Provision. Thereupon, unless waived in writing by the Required Holders within 15 days after each holder’s receipt of such notice, such More Favorable Provision shall be deemed automatically incorporated into this Agreement, mutatis mutandis, as if set forth in full herein, effective as of the date when such More Favorable Provision shall have become effective under such Material Credit Facility and, at the request of the Required Holders, the Obligors shall (at the Company’s sole cost and expense) enter into any additional agreement or amendment to this Agreement requested by the Required Holders evidencing any of the foregoing. Any More Favorable Provision incorporated into this Agreement is herein referred to as an “Incorporated Provision”.
(b) Any Incorporated Provision (x) shall be deemed automatically amended herein to reflect any subsequent amendments made to such Incorporated Provision under all applicable Material Credit Facilities which make such Incorporated Provision less restrictive or otherwise less onerous on the Parent Guarantor and its Subsidiaries, without any further action required on the part of any Person, and (y) shall be deemed automatically deleted from this Agreement at such time as such Incorporated Provision is deleted or otherwise removed from all applicable Material Credit Facilities or all such Material Credit Facilities are terminated, without any further action required on the part of any Person; provided, however, that:
(i) notwithstanding the foregoing, such Incorporated Provision shall continue to apply and be deemed to be set forth in this Agreement until the applicable Incorporated Provision Termination Date in respect thereof, and if a Default or Event of Default then exists (including as a result of a breach of any Incorporated Provision), such Incorporated Provision shall not be deemed to be amended or deleted from this Agreement until the later of the date such Default or Event of Default no longer exists and the Incorporated Provision Termination Date;
- 36 -
(ii) if any lender or agent under a Material Credit Facility receives any remuneration as consideration for the amendment, modification or removal of such Incorporated Provision then such remuneration shall be concurrently paid, on the same equivalent terms, ratably to each holder of the Notes then outstanding.
(c) Upon the effectiveness of any amendment, at the request of an Obligor or any holder of Notes, the holders of Notes (if applicable) and the Obligors shall (at the Company’s sole cost and expense) enter into any additional agreement or amendment to this Agreement reasonably requested by an Obligor or a holder of Notes, as the case may be, evidencing the amendment of any such Incorporated Provision. Upon the effectiveness of any deletion or removal, at the request of the Parent Guarantor or the Company, the holders of Notes shall (at the Company’s sole cost and expense) enter into any additional agreement or amendment to this Agreement reasonably requested by the Parent Guarantor or the Company evidencing the deletion and termination of any such Incorporated Provision.
(d) Notwithstanding anything set forth in this Section 9.9, no covenant or other provision contained in this Agreement as of the Restatement Date shall be deemed deleted from this Agreement or made less restrictive unless amended or otherwise modified in accordance with Section 19.
Section 9.10 Maintenanceof Fiscal Year. Each Obligor will, and will cause each of its Subsidiaries to, maintain its fiscal year as the 12-month period ending on December 31 of each year.
Section 9.11 Ownership ofCompany. The Parent Guarantor will ensure that the Company is at all times a Wholly-Owned Subsidiary.
Section 9.12 Board ObservationRights. The Required Holders shall be entitled to designate one observer (the “Board Observer”) to attend any regular meeting (a “BOD Meeting”) of the Board of Directors of the Company (or its direct or indirect ultimate parent holding company) or any of its Subsidiaries (or, in each case, any relevant committees thereof), except that the Board Observer shall not be entitled to vote on matters presented to or discussed by the Board of Directors (or any relevant committee thereof) of the Company (or its direct or indirect ultimate parent holding company) or any of its Subsidiaries at any such meetings. The Board Observer shall be timely notified of the time and place of any BOD Meetings and will be given written notice of all proposed actions to be taken by the Board of Directors (or any relevant committee thereof) of the Company (or its direct or indirect ultimate parent holding company) and any of its Subsidiaries at such meeting as if the Board Observer were a member thereof. Such notice shall describe in reasonable detail the nature and substance of the matters to be discussed and/or voted upon at such meeting (or the proposed actions to be taken by written consent without a meeting). The Board Observer shall have the right to receive all information provided to the members of the Board of Directors or any similar group performing an executive oversight or similar function (or any relevant committee thereof) of the Company (or its direct or indirect ultimate parent holding company) and any of its Subsidiaries in anticipation of or at such meeting (regular or special and whether telephonic or otherwise), in addition to copies of the records of the proceedings or minutes of such meeting, when provided to such members, and the Board Observer shall be permitted to share such materials and information with the Purchasers, provided that the Company reserves the right to withhold any information and to exclude the Board Observer from any meeting or portion thereof if the Board of Directors in good faith determines that access to such information or attendance at such meeting (i) would adversely affect the attorney-client privilege between the any Obligor and its counsel, (ii) adversely affect a director’s fiduciary duties, and (iii) will involve discussions regarding the refinancing or restructuring of, or interpretation of, any legal matter regarding the Category IV Indebtedness; provided, further, that if the Company does not provide materials or information or excludes the Board Observer from any meeting or portion thereof in reliance on the exclusions set forth in any of the foregoing clauses (i) through (iii), the Company shall notify the Purchasers that such material or information is being withheld, or the Board Observer is being excluded, and the reason therefor and use commercially reasonable efforts to communicate such material or information, or arrange such meeting, in a manner that would not result in such materials or information, or the attendance of the Board Observer, as applicable, falling within the exclusions set forth in any of the foregoing clauses (i) through (iii). The Board Observer shall keep such materials and information confidential in accordance with Section 22, as though it were a Purchaser thereunder. The Company shall reimburse the Board Observer for all reasonable out-of-pocket costs and expenses incurred in connection with its participation in any such BOD Meeting.
Section 9.13 [Reserved].
- 37 -
Section 9.14 Further Assurances; Covenant to Give Security.
(a) Each Obligor will, and will cause each of its Subsidiaries to, promptly upon request by the Required Holders, (i) correct any material defect or error that may exist or be discovered in this Agreement, the Notes or any other Finance Document or in the execution, acknowledgment, filing or recordation thereof and (ii) do, execute, acknowledge, deliver, record, re-record, file, re-file, register and re-register any and all such further acts, deeds, conveyances, pledge agreements, share mortgages, share charges, debentures, mortgages, deeds of trust, trust deeds, notices of assignment, transfers, certificates, assurances and other instruments (including promptly completing any registration or stamping of documents as may be applicable) as the Required Holders may reasonably require from time to time in order to (A) carry out more effectively the purposes of the Finance Documents, (B) to the fullest extent permitted by applicable law, subject any Obligor’s properties, assets, rights or interests to the Liens now or hereafter intended to be covered by any of the Collateral Documents, (C) to the extent possible under the applicable law of the relevant jurisdiction, perfect and maintain the validity, effectiveness and priority of any of the Collateral Documents and any of the Liens intended to be created thereunder and (D) assure, convey, grant, assign, transfer, preserve, protect and confirm more effectively unto the holders of the Notes the rights granted or now or hereafter intended to be granted to the holders of the Notes under any Finance Document or under any other instrument executed in connection with any Finance Document to which any Obligor or any of its Subsidiaries is to be a party, and cause each of its Subsidiaries to do so, and (iii) without limiting the foregoing, in the case of any Collateral Document that limits the amount secured thereby to a specified amount that is less than the amount of the Secured Obligations (as defined in the U.S. Pledge and Security Agreement) or such similar term in any other Collateral Document, provide an appraisal of the assets subject to such Collateral Document by an appraiser reasonably satisfactory to the Required Holders and, if such appraisal indicates that the fair market value of such assets is greater than the amount stated to be secured by such Collateral Document, execute and deliver such documents and take such actions as may be reasonably requested by the Required Holders or the Collateral Agent to increase the amount stated to be secured by such Collateral Document to the amount of the Secured Obligations (as defined in the U.S. Pledge and Security Agreement) or such similar term in any other Collateral Document, or such lesser amount as may be agreed by the Required Holders.
(b) If any Obligor acquires (or has acquired) a fee ownership interest in any Material Real Property after the Restatement Date, such Obligor shall provide the Collateral Agent with a Mortgage with respect to such Material Real Property owned by any such Obligor within forty-five (45) days (or such longer period as the Collateral Agent (acting at the direction of the Required Holders) may agree) of the acquisition of such Material Real Property in each case together with:
(i) evidence that counterparts of the Mortgages have been duly executed, acknowledged and delivered and are in form suitable for filing or recording in all filing or recording offices that the Collateral Agent (at the direction of the Category IV Required Secured Parties) may deem reasonably necessary in order to create a valid and subsisting perfected Lien on such Material Real Property in favor of the Collateral Agent for the benefit of the Purchasers and that all filing and recording taxes and fees have been paid or otherwise provided for in a manner reasonably satisfactory to the Collateral Agent (at the direction of the Category IV Required Secured Parties);
(ii) to the extent title insurance is available in an Obligor Jurisdiction, fully paid title insurance policies or the equivalent or other form available in such Obligor Jurisdiction in form and substance, with endorsements applicable and available in the applicable jurisdiction at commercially reasonable rates and in amount, reasonably acceptable to the Collateral Agent (at the direction of the Category IV Required Secured Parties) (not to exceed the value of the real properties covered thereby), issued, coinsured and reinsured by nationally recognized title insurers reasonably acceptable to the Collateral Agent (at the direction of the Category IV Required Secured Parties), insuring the Mortgages to be valid subsisting Liens on the Material Real Property described therein, subject only to Liens permitted by Section 10.5, and providing for such other affirmative insurance (including endorsements for future advances under the Finance Documents) and such coinsurance and direct access reinsurance as the Collateral Agent (at the direction of the Category IV Required Secured Parties) may reasonably request and available in the applicable Obligor Jurisdiction at commercially reasonable rates;
- 38 -
(iii) to the extent requested by the Collateral Agent (at the direction of the Category IV Required Secured Parties), customary opinions of local counsel for the Obligors in states or jurisdictions in which such Material Real Property is located, with respect to the enforceability and perfection of the Mortgages and any related fixture filings in form and substance reasonably satisfactory to the Collateral Agent (at the direction of the Category IV Required Secured Parties);
(iv) to the extent requested by the Collateral Agent (at the direction of the Category IV Required Secured Parties), title reports, surveys and environmental assessment reports and appraisals (if appraisals are required under the U.S. Financial Institutions Reform, Recovery & Enforcement Act of 1989) and flood certifications under Regulation H of the U.S. Federal Reserve Board (together with evidence of Flood Insurance), provided that the Collateral Agent (at the direction of the Category IV Required Secured Parties) may in its reasonable discretion accept any such existing report or survey to the extent prepared as of a date reasonably satisfactory to the Collateral Agent (at the direction of the Category IV Required Secured Parties); provided, however, that there shall be no obligation to deliver to the Collateral Agent any environmental assessment report whose disclosure to the Collateral Agent would require the consent of a Person other than the Obligors or one of their Subsidiaries, where, despite the commercially reasonable efforts of the Obligors to obtain such consent, such consent cannot be obtained; and
(c) such other evidence that all other actions that the Collateral Agent (at the direction of the Category IV Required Secured Parties) may reasonably request and deem necessary in order to create valid and subsisting Liens on the Material Real Property described in the Mortgages has been taken.
(d) Notwithstanding anything in this Section 9.14 or any Collateral Document to the contrary:
(i) this Section 9.14 and the Collateral Documents shall not require the creation or perfection of pledges of or security interests in, or the obtaining of title insurance, legal opinions or other deliverables with respect to, particular assets of the Obligors, if, in the reasonable determination of the Collateral Agent (acting at the direction of the Required Holders), the cost, burden, difficulty or consequence of creating or perfecting such pledges or security interests in such assets, or obtaining such title insurance, title reports, surveys, environmental assessment reports and appraisals, legal opinions or other deliverables in respect of such assets outweighs the benefits to be obtained by the Purchasers therefrom;
- 39 -
(ii) in no event shall Control Agreements or other control or similar arrangements be required with respect to an Account located outside the United States; and
(iii) in no event shall the Collateral include (A) any Excluded Assets (as defined in the Collateral Documents) or (B) until January 30, 2026, any property subject to the Salvadoran Mortgage.
Section 9.15 Intercompany Subordination Agreement. Each Obligor at all times will be, and will cause each of its Subsidiaries to be, a party to the Intercompany Subordination Agreement.
Section 9.16 Post-ClosingCovenants. The Obligors will deliver to the Purchasers and the Collateral Agent each of the documents (which, in each case, shall be in form and substance reasonably satisfactory to the Required Holders and the Collateral Agent) and complete (or cause to be completed) each of the actions described on Schedule 9.16, in each case by the date specified in such Schedule 9.16 or on such later date to which the Required Holders and the Collateral Agent may consent in writing.
Section 9.17 Private CreditRating. Within 60 days following written request from the Required Holders, the Obligors shall provide to the Purchasers a private credit rating for the Notes and a corporate rating or corporate family credit rating, as applicable, for the Parent Guarantor and its Subsidiaries by each of Standard and Poor and Moody’s Investors Service, Inc.
Section 10. Negative Covenants.
The Obligors jointly and severally covenant that so long as any of the Notes are outstanding:
Section 10.1 Transactionswith Affiliates. No Obligor will, or will permit any of its Subsidiaries to, enter into directly or indirectly any transaction or group of related transactions (including the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than an Obligor or another Subsidiary), except that any Obligor may enter into (a) transactions that are in the ordinary course and pursuant to the reasonable requirements of such Obligor’s or such Subsidiary’s business and upon fair and reasonable terms no less favorable to such Obligor or such Subsidiary than would be obtainable in a comparable arm’s-length transaction with a Person not an Affiliate, (b) transactions among the Obligors and between the Obligors and any of their respective Subsidiaries, (c) any intercompany loans provided by the Obligors to any Subsidiary or any Subsidiary to the Obligors or any Wholly-Owned Subsidiary of the Parent Guarantor, in each case for working capital or liquidity purposes in the ordinary course of business, and (d) Restricted Payments permitted by Section 10.10.
- 40 -
Section 10.2 Merger, Consolidation,Etc. No Obligor will, or will permit any of its Subsidiaries to, consolidate with or merge with any other Person or convey, transfer or lease all or substantially all of its assets in a single transaction or series of transactions (any such consolidation, merger or other transaction, a “Fundamental Transaction”) to any Person, other than:
(a) any Fundamental Transaction (including a Permitted Reorganization) involving the Company, provided that (i) the Company is the successor, survivor or acquiror (as applicable) (the successor, survivor or acquiror to any Fundamental Transaction (including a Permitted Reorganization) being a “Successor”) or (ii) the Successor is located in a Permitted Jurisdiction;
(b) any Fundamental Transaction involving the Parent Guarantor, provided that the Parent Guarantor is the Successor and continues to remain organized under the laws of Luxembourg;
(c) any Fundamental Transaction (including a Permitted Reorganization) involving a Subsidiary Guarantor, provided that (i) such Subsidiary Guarantor or another Obligor is the Successor or (ii) the Successor is located in a Permitted Jurisdiction; and
(d) any Fundamental Transaction (including a Permitted Reorganization) involving any Subsidiary (other than the Company or any Subsidiary Guarantor) with any other Person so long as the transaction is treated as a disposition of all of the assets of such Subsidiary for purposes of Section 10.7 (other than Section 10.7(f) and, based on such characterization, would be permitted pursuant to Section 10.7 (other than Section 10.7(f) and after giving effect to such transaction the Obligors are in compliance with Section 10.9 (on a pro forma basis);
provided that in no event may the Parent Guarantor or the Company be liquidated, dissolved, wound up or closed (or otherwise have their corporate existence terminated) unless the relevant Successor becomes a party hereto in compliance with this Section 10.2; provided further that, in the case of each of clauses (a) – (d), inclusive, above, (x), the Obligors, their Subsidiaries, and any Successor, as applicable, shall have executed and delivered such instruments of assumption (including without limitation assumptions of the due and punctual performance and observance of each covenant and condition of this Agreement, the Notes and the Pagarés), reaffirmations of obligations and other documents (including, without limitation, replacement Notes and replacement Pagarés and Instruction Letters, notarized by a Colombian notary public, in exchange for the existing Notes, Pagarés and Instruction Letters) and shall have taken such actions as may be reasonably requested by the Required Holders, within 30 days after each holder’s receipt of such documents, with respect to the Finance Documents to which any Obligor is a party and the Obligors shall have caused to be delivered to the holders of the Notes opinion(s) of internationally recognized independent counsel (or other independent counsel reasonably satisfactory to the Required Holders) in connection therewith, in each case in form and substance reasonably satisfactory to the Required Holders, (y) in the case of a Successor, it shall have provided to the holders evidence of the acceptance by the Process Agent of the appointment and designation provided for by Section 24.7(e) for the period of time from the date of such transaction to a date that is at least one year after the Maturity Date of the Notes (and the payment in full of all fees in respect thereof) and (z) immediately before and immediately after giving effect to such transaction or each transaction in any such series of transactions, no Default or Event of Default shall have occurred and be continuing. No conveyance, transfer or lease of all or substantially all of the assets of any Obligor shall have the effect of releasing such Obligor, or any successor or acquiror that shall theretofore have become such in the manner prescribed in this Section 10.2, from its liability under any Finance Document to which such Obligor is a party.
- 41 -
Section 10.3 Line of Business. No Obligor will, or will permit any of its Subsidiaries to, engage in any business if, as a result, the general nature of the business in which the Parent Guarantor and its Subsidiaries, taken as a whole, would then be engaged would be substantially and significantly changed from the general nature of the business in which the Parent Guarantor and its Subsidiaries, taken as a whole, are engaged on the Restatement Date.
Section 10.4 EconomicSanctions, Etc. No Obligor will, or will permit any Controlled Entity to (a) become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or (b) directly or indirectly have any investment in or engage in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction would be in violation of, or could result in the imposition of sanctions under, any U.S. Economic Sanctions Laws applicable to such Obligor or such Controlled Entity, except, in the case of this clause (b), to the extent that such violation or sanctions, if imposed, could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. It is acknowledged and agreed by each Purchaser and each holder of a Note that the undertakings made pursuant to this Section 10.4 by any Obligor organized in a European Union country or the United Kingdom are only sought and given for the benefit of the Purchasers and the holders of the Notes to the extent that to do so would not result in any violation of, or conflict with, the EU Blocking Regulation or, as the case may be, the UK Blocking Regulation.
Section 10.5 Liens. No Obligor will, or will permit any of its Subsidiaries to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including any document or instrument in respect of goods) of such Obligor or any such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except:
(a) Liens in existence as of the date hereof as set forth on Schedule 10.5(a) and securing Indebtedness of such Obligor or such Subsidiary outstanding on such date, including Liens under Existing Leases;
(b) any Lien for Taxes, assessments or other governmental charges or levies, in each case the payment of which is not yet due or which is being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with IFRS;
(c) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen, repairmen and other similar statutory Liens, in each case arising in the ordinary course of business for sums not yet due and payable or which are being contested in good faith by appropriate proceedings promptly initiated and diligently conducted and for which adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with IFRS;
(d) any Lien in favor of customs and revenue authorities to secure payment of custom duties in connection with the importation or exportation of goods;
- 42 -
(e) any Lien arising under any lease or hire purchase contract which, as applicable would, in accordance with IFRS, be treated as a Capital Lease;
(f) Liens (other than any Lien imposed by ERISA or any Lien imposed by law securing obligations with respect to any Pension Plan) incurred or pledges or deposits made in the ordinary course of business in connection with workers’ compensation, unemployment insurance and other types of social security or retirement benefits;
(g) deposits made to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds, appeal bonds (whether in arbitration, judicial, administrative or tax procedures), performance bonds and other obligations of a like nature, in each case incurred in the ordinary course of business and consistent with past practice and not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property;
(h) any attachment or judgment Lien, unless the judgment it secures is not, within 60 days after the entry thereof, discharged or execution thereof stayed pending appeal, or is not discharged within 60 days after the expiration of such stay;
(i) leases, subleases, licenses or sub-licenses granted to others, easements, rights-of-way, zoning restrictions, minor defects or irregularities in title, encroachments and other similar charges or encumbrances in connection with Real Property, in each case incidental to, and not interfering with, the ordinary conduct of the business of the Parent Guarantor or any of its Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from the value of such property;
(j) bankers’ Liens, rights of setoff and other similar Liens existing solely with respect to cash and cash equivalents on deposit in one or more accounts maintained by the applicable Person, in each case granted in the ordinary course of business in favor of the bank or banks with which such accounts are maintained, securing amounts owing to such bank or banks with respect to cash management and operating account arrangements;
(k) any netting or set off arrangement under any hedging arrangement entered into by such Obligor or such Subsidiary in the ordinary course of its business and not for speculative purposes;
(l) Liens securing Indebtedness permitted under Section 10.6(g); provided that (x) any such Liens shall be limited to solely to inventory, factoring of book debts or accounts receivables of the Obligors, and (y) such Liens shall be subject to the Pari Passu Intercreditor Agreement;
(m) any Lien on property or assets of a Subsidiary (other than the Company) securing Indebtedness of such Subsidiary owing to an Obligor;
(n) any Lien created to secure all or any part of the purchase price or cost of construction, or to secure Indebtedness incurred or assumed to pay all or any part of the purchase price or cost of construction, of property (or any improvement thereon) acquired or constructed by such Obligor or such Subsidiary after the Restatement Date, provided that:
(i) such Lien shall extend solely to the item or items of such property (or improvement thereon) so acquired or constructed and, if required by the terms of the instrument originally creating such Lien, other property (or improvement thereon) which is an improvement to or is acquired for specific use in connection with such acquired or constructed property (or improvement thereon) or which is real property being improved by such acquired or constructed property (or improvement thereon),
- 43 -
(ii) the principal amount of the Indebtedness secured by such Lien shall at no time exceed an amount equal to the lesser of (x) the cost to such Obligor or such Subsidiary of the property (or improvement thereon) so acquired or constructed, and (y) the fair market value (as determined in good faith by the board of directors of the Company) of such property (or improvement thereon) at the time of such acquisition or construction, and
(iii) such Lien shall be created contemporaneously with, or within 180 days after, the acquisition or construction of such property;
(o) any Lien existing on property of a Person immediately prior to its being consolidated with or merged into an Obligor or a Subsidiary or its becoming a Subsidiary, or any Lien existing on any property acquired by an Obligor or any of its Subsidiaries at the time such property is so acquired (whether or not the Indebtedness secured thereby shall have been assumed), provided, that:
(i) such Lien shall not have been created or assumed in contemplation of such consolidation or merger or such Person’s becoming a Subsidiary or such acquisition of property,
(ii) such Lien shall extend solely to the item or items of property so acquired and, if required by the terms of the instrument originally creating such Lien, other property which is an improvement to or is acquired for specific use in connection with such acquired property, and
(iii) such Lien shall be discharged within 270 days after such consolidation or merger or such Person’s becoming a Subsidiary or such acquisition of property;
(p) any Lien under the Collateral Documents and securing the obligations of the Obligors to the Purchasers under the Finance Documents; and
(q) any Lien securing the obligations of the Obligors under the Local Category IV Credit Agreements.
- 44 -
Section 10.6 Limitationon Indebtedness. No Obligor will, or will permit any of its Subsidiaries to, directly or indirectly, create, incur, assume, guarantee, have outstanding, or otherwise become or remain directly or indirectly liable with respect to, any Indebtedness other than:
(a) the obligations of the Obligors to the Purchasers under the Finance Documents;
(b) Indebtedness of a Subsidiary owed to an Obligor;
(c) Indebtedness of a Person outstanding at the time such Subsidiary becomes a Subsidiary, provided that (i) such Indebtedness shall not have been incurred in contemplation of such Subsidiary becoming a Subsidiary, (ii) immediately prior to and after such Subsidiary becomes a Subsidiary, no Default or Event of Default shall exist, (iii) the principal amount of such Indebtedness shall not be increased, and (iv) such Indebtedness shall cease to be permitted under this clause (c) on the 180th day after such Subsidiary becomes a Subsidiary;
(d) Indebtedness set forth in Schedule 5.15 existing as at the date hereof; provided, that the principal amount of such Indebtedness shall not be increased above the amount outstanding as of the Restatement Date;
(e) any Indebtedness covered in full by a letter of credit, bond, bank guarantee or bank indemnity;
(f) [reserved];
(g) Indebtedness of an Obligor for general working capital purposes or other general corporate purposes (the “Working Capital Credit Facility”) or Permitted Receivables Financings; provided, that (i) if such Obligor desires to incur or issue such Indebtedness, such Obligor shall, first (and, in any event, at least ten Business Days before any approach by or on behalf of such Obligor to any Prospective Lender (as defined below)) provide a written notice to the Category IV Creditors setting forth in reasonable detail the proposed terms of such Indebtedness (including amount, currency, pricing, fees and maturity together with additional supporting information as appropriate) (the “ProposedTerms”) before it approaches or enters into any commitments with one or more prospective lenders or noteholders (other than an Affiliated Lender) (“Prospective Lenders”) and shall give the Category IV Creditors the opportunity to make a bona fide offer to fund or provide all or a portion of such Indebtedness on the Proposed Terms or such other terms that are at least as favorable in all material respects to such Obligor and (ii) without limiting, and regardless of whether or not the Purchasers have made an offer pursuant to, the foregoing clause (i), if such Obligor receives any offer or proposal from any Prospective Lender to provide any Indebtedness to such Obligor, such Obligor shall promptly, within two Business Days following receipt of such offer or proposal, provide a written notice to the Category IV Creditors setting forth in reasonable detail the Proposed Terms thereof, and shall give the Category IV Creditors the opportunity to make a bona fide offer to fund or provide all or a portion of such Indebtedness on such Proposed Terms or such other terms that are at least as favorable in all material respects to such Obligor; provided, further, the aggregate outstanding principal amount of all Working Capital Credit Facilities, together with the aggregate amount of all Permitted Receivables Financings (other than Permitted Non-Recourse Receivables Financings), shall not at any time exceed US $30,000,000; and
- 45 -
(h) the Indebtedness outstanding under the Local Category IV Credit Agreements; provided that (x) the principal amount thereof is not increased after the Restatement Date; and (y) the lenders thereunder shall become parties to the Pari Passu Intercreditor Agreement.
Section 10.7 Dispositions. No Obligor will, or will permit any of its Subsidiaries to, make any Disposition, other than:
(a) (i) any Disposition by an Obligor to another Obligor and (ii) any Disposition by a Subsidiary (other than an Obligor) to an Obligor or any Wholly-Owned Subsidiary of the Parent Guarantor;
(b) any Disposition of inventory, supplies, material, equipment, patents, copyrights, proprietary software, service marks, trademarks, sanitary registrations, permits or marketing authorizations, the Group’s intellectual property or trade names, or rights thereto, in each case, in the ordinary course of business;
(c) Dispositions of assets on arm’s length terms in return for other assets of comparable or greater value;
(d) any Disposition of damaged, obsolete or worn out property, whether now owned or hereafter acquired, in the ordinary course of business;
(e) the liquidation, sale or use of cash and cash equivalents for fair market value in the ordinary course of business not prohibited by this Agreement;
(f) any Disposition constituting a consolidation or merger of, or a conveyance, transfer or lease of all or substantially all of the assets of, a Subsidiary Guarantor that is permitted by Section 10.2 (other than clause (d) thereof);
(g) any Disposition of inventory, factoring of book debts or accounts receivable pursuant to a Permitted Non-Recourse Receivables Financing;
(h) the granting of licenses, sublicenses, leases or subleases to other Persons in the ordinary course of business which do not interfere in any material respect with the business of the Parent Guarantor and its Subsidiaries; and
(i) any Disposition not otherwise permitted by the foregoing clauses (a) through (h), provided that:
(i) such Disposition is made for consideration in an amount not less than the fair market value of the property disposed of,
- 46 -
(ii) immediately before and after giving effect to such Disposition, no Default or Event of Default has occurred and is continuing, and
(iii) the net cash proceeds of Dispositions permitted under this Section 10.7(i) do not exceed, in the aggregate, US $50,000,000 or are, within 30 days after the date of any such Disposition, applied to offer to prepay the Notes and, if such offer is accepted, applied to prepay the Notes in accordance with Section 8.10 in an aggregate principal amount equal to such Note’s Pro Rata Share of the proceeds of such Disposition being applied or offered pursuant to this clause (iii).
Notwithstanding anything herein to the contrary, in no event shall any Obligor convey, exclusively license, contribute, sell, assign, dispose of, or otherwise transfer (including by transfer of equity interests of any Person that own such assets) to any Subsidiary that is not the Company or a Subsidiary Guarantor any Intellectual Property or Real Property that are, individually or in the aggregate, material to the conduct of the business of the Obligors and their Subsidiaries, taken as a whole.
Section 10.8 FinancialCovenants. The Obligors shall ensure that as of each Determination Date set forth below:
(a) the Consolidated EBITDA for the Relevant Period ending on such Determination Date is equal to or greater than the corresponding amount set forth below:
| Fiscal Quarter Ending | Consolidated EBITDA |
|---|---|
| March 31, 2026 | US $25,000,000 |
| June 30, 2026 | US $30,000,000 |
| September 30, 2026 | US $35,000,000 |
| December 31, 2026 | US $40,000,000 |
(b) the ratio of Consolidated Total Indebtedness as at such Determination Date to Consolidated EBITDA for the Relevant Period ending on such Determination Date does not exceed the corresponding ratio set forth below:
| Fiscal Quarter<br>Ending | Consolidated Total Indebtedness to Consolidated EBITDA |
|---|---|
| March 31, 2027 | 5.00:1 |
| June 30, 2027 | 5.00:1 |
| September 30, 2027 | 4.50:1 |
| December 31, 2027 | 4.50:1 |
| March 31, 2028 | 4.25:1 |
| June 30, 2028 | 4.25:1 |
| September 30, 2028 | 4.00:1 |
| December 31, 2028 | 4.00:1 |
| March 31, 2029 | 4.00:1 |
| June 30, 2029 | 3.75:1 |
| September 30, 2029 | 3.75:1 |
| December 31, 2029 | 3.50:1 |
- 47 -
(c) the ratio of Consolidated EBITDA for the Relevant Period ending on such Determination Date to Consolidated Interest Expense for the Relevant Period ending on such Determination Date is not less than the corresponding ratio set forth below:
| Fiscal Quarter<br>Ending | Consolidated EBITDA to Consolidated Interest Expense |
|---|---|
| March 31, 2027 | 2.00:1 |
| June 30, 2027 | 2.00:1 |
| September 30, 2027 | 2.25:1 |
| December 31, 2027 | 2.25:1 |
| March 31, 2028 | 2.25:1 |
| June 30, 2028 | 2.25:1 |
| September 30, 2028 and each fiscal quarter end thereafter | 2.50:1 |
Section 10.9 Obligor Coverage. No Obligor will permit, as of each June 30 and December 31 of each year, (a) beginning with June 30, 2025, the total combined assets of the Obligors (other than the Parent Guarantor and the Intermediate Parent) as of such applicable date (excluding assets constituting Equity Interests in other Obligors), determined for each such Obligor on an uncombined and unconsolidated basis, to comprise less than 95% of Consolidated Total Assets as of such applicable date, or (b) beginning with June 30, 2027, the portion of Consolidated EBITDA for the period of four consecutive fiscal quarters of the Parent Guarantor ending on such applicable date that is contributed by the Obligors (other than the Parent Guarantor and the Intermediate Parent), determined for each Obligor on an uncombined and unconsolidated basis, to comprise less than 95% of Consolidated EBITDA for such period. The foregoing is to be measured and tested based on the consolidated financial statements of the Parent Guarantor delivered to the holders for the relevant testing date or period in accordance with Section 7.1(a) or Section 7.1(b).
Section10.10 Restricted Payments. No Obligor will, or will permit any of its Subsidiaries to, declare or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do so, other than Restricted Payments made by any Subsidiary to an Obligor.
Section 10.11 InconsistentAgreements. No Obligor will, or will permit any of its Subsidiaries to, on or after the date hereof, enter into any agreement or contractual obligation (other than this Agreement, any other Finance Document, and any Local Category IV Credit Agreements) that limits the ability of any Subsidiary to, directly or indirectly, make distributions or pay dividends to any Obligor or to otherwise transfer, directly or indirectly, property to any Obligor.
- 48 -
Section 10.12 Limitationon Loans and Guaranties. No Obligor will, or will permit any of its Subsidiaries to, on or after the date hereof, (a) be a creditor in respect of any Indebtedness (other than (i) Indebtedness owing from the Parent Guarantor or any of its Subsidiaries (which, for the avoidance of doubt, may be in the form of a dividend, Equity Interest, distribution or intercompany loan) or (ii) as otherwise permitted by Section 10.6) or (b) incur or allow to remain outstanding any Guaranty in respect of any Person (other than for the benefit of the Parent Guarantor or any of its Subsidiaries, or as otherwise permitted by Section 10.6).
Section 10.13 Amendmentsto Organizational Documents, Etc. No Obligor will, or will permit any of its Subsidiaries to, on or after the date hereof, amend any of its organizational or governing documents in any manner that could materially adversely affect the rights of any holder of a Note under this Agreement or any the Notes.
Section 10.14 Salesof Receivables. No Obligor will, or will permit any of its Subsidiaries to, sell, assign, discount, transfer, or otherwise dispose of any accounts receivable, chattel paper, promissory notes, drafts or trade acceptances or other rights to receive payment held by any of them, with or without recourse, except for the purpose of collection or settlement in the ordinary course of business, for a Permitted Receivables Financing permitted by Section 10.6(g) or a Permitted Non-Recourse Receivables Financing.
Section 10.15 Investment. No Obligor will, or will permit any of its Subsidiaries to, directly or indirectly, purchase, make or own any Investment, other than:
(a) Investments existing on the date of this Agreement and disclosed on Schedule 10.15;
(b) Investments constituting Permitted Intercompany Indebtedness;
(c) any Investment by any Obligor or any Subsidiary in (i) an Obligor (other than Parent Guarantor) or (ii) any Person that, contemporaneously with, or promptly following, the making of such Investment, becomes an Obligor; and
(d) any other Investment not otherwise permitted under this Section 10.15 provided that the aggregate amount of Investments pursuant to this Section 10.15(d) shall not exceed US $5,000,000 (or its equivalent in any other currency).
Section 10.16 Modificationof Local Category IV Credit Agreements.
(a) No Obligor will, or will permit any Subsidiary to, directly or indirectly, amend or otherwise modify, or permit the amendment or modification of, any provision of any Local Category IV Credit Agreement, or enter into any new Local Category IV Credit Agreement, the effect of which is in contravention of the Pari Passu Intercreditor Agreement.
(b) No Obligor will, or will permit any Subsidiary to, directly or indirectly, make (or give any notice in respect thereof) any payment of principal of, or any payment of any premium, if any, or interest on, or redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, or any fees, indemnities or expenses owing to any holder of, any Indebtedness other (w) payments of regularly scheduled interest (including any default interest) due and owing under the Local CategoryIV Credit Agreements, the Working Capital Credit Facility and Indebtedness set forth on Schedule 5.15, (x) payments of principal due and owing under the Local Category IV Credit Agreements, the Working CapitalCredit Facility and Indebtedness set forth on Schedule 5.15, (y) voluntary and mandatory prepayments of Category IV Indebtedness, at par together with interest accrued thereon to the date of such prepayment, and so long as such prepayments are made pro rata among all such Indebtedness based on the principal outstanding thereunder, and (z) voluntary and mandatory prepayments of under the Working Capital Credit Facility.
- 49 -
Section 11.Events of Default.
An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:
(a) the Company defaults in the payment of any principal on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; provided that such default shall not constitute an Event of Default hereunder if (i) such default results solely from a technical or administrative error on behalf of the transmitting bank and (ii) the Company remedies such non-payment within one (1) Business Day of such non-payment; or
(b) the Company defaults in the payment of any interest on any Note or any Obligor defaults in the payment of any amount payable pursuant to Section 13, in each case for more than five Business Days after the same becomes due and payable; or
(c) any Obligor defaults in the performance of or compliance with any term contained in Section 7.1(d), Section 9.11, Section 9.16, Section 9.17, Section 10 or any Incorporated Provision; or
(d) any Obligor defaults in the performance of or compliance with any term contained herein (other than those referred to in Section 11(a), Section 11(b) or Section 11(c)) or in any Finance Document and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer of the Parent Guarantor or the Company, obtaining actual knowledge of such default and (ii) the Parent Guarantor or the Company, receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or
(e) any representation or warranty made in writing by or on behalf of any Obligor or by any officer of any Obligor in this Agreement, any other Finance Document or any writing furnished in connection with the transactions contemplated hereby proves to have been false or incorrect in any material respect on the date as of which made; or
- 50 -
(f) (i) the Parent Guarantor or any of its Subsidiaries is in default (as principal or as guarantor or other surety) in the payment when due of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least US$10,000,000 (or its equivalent in the relevant currency of payment) beyond any period of grace provided with respect thereto, or (ii) the Parent Guarantor or any of its Subsidiaries is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least US$10,000,000 (or its equivalent in the relevant currency of payment) or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into Equity Interests), (x) the Parent Guarantor or any of its Subsidiaries has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least US$20,000,000 (or its equivalent in the relevant currency of payment), or (y) one or more Persons have the right to require the Parent Guarantor or any of its Subsidiaries so to purchase or repay such Indebtedness; or
(g) (x) any Obligor or any Subsidiary (i) is generally not paying, or admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization, judicial or extrajudicial recovery or arrangement or any other petition in bankruptcy, for liquidation, or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, liquidator, special controller, provisional administrator, official receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or is otherwise unable to pay its debts, to be liquidated or (vi) takes corporate, limited liability company, limited partnership or other entity action for the purpose of any of the foregoing; and (y) in the case of any Obligor or any Subsidiary organized under the laws of Luxembourg, (A) the occurrence of a state of cessation of payments (cessation de payments) and the loss of commercial creditworthiness (ébranlement de credit), (B) the institution of bankruptcy proceedings (faillite) under articles 437ff of the Luxembourg Code of Commerce, the filing for relief under the suspension of payments procedure (sursis de paiement) of articles 593ff of the Luxembourg Code of Commerce, conservatory measures (mesures conservatoires), reorganisation by mutual agreement (réorganisation par accord amiable) or judicial reorganisation (réorganisation judiciaire),or any discussion with the Minister of Economy (Ministre ayant l’Économie dans ses attributions) or the Minister for Small and Medium-Sized Enterprises (Ministre ayant les Classes moyennes dans ses attributions) in respect of financial difficulties which could jeopardise all or part of the business of the Parent Guarantor under the Luxembourg law of 7 August 2023 on business preservation and modernisation of bankruptcy law (Loi du 7 août 2023 relative à la préservation des entreprises et portant modernisationdu droit de la faillite) (the “Luxembourg Business Preservation Law”), or similar legal provisions affecting the rights of creditors generally in Luxembourg or abroad, or any analogous procedure in any jurisdiction, (D) the obtaining of a moratorium in respect of any of its indebtedness or for the purpose of proposing a company voluntary arrangement with creditors, any other re-organisation proceedings or proceedings affecting the rights of creditors generally, (E) an application has been made by it or by any other Person for the appointment of an insolvency receiver (curateur), surveyor judge (juge commissaire), delegated judge (juge délégué), commissioner (commissaire), liquidator (liquidateur), judicial administrator (administrateur judiciaire), temporary administrator (administrateur provisoire ou ad hoc), conciliator (conciliateur) or other similar officer pursuant to any insolvency or similar proceedings, (F) an application has been made by it for opening of any voluntary liquidation and dissolution proceedings under articles 1100-1 et seqq. of the Luxembourg law dated 10 August 1915 on commercial companies, as amended, or (G) such Obligor or Subsidiary takes corporate, limited liability company, limited partnership or other entity action for the purpose of any of the foregoing; or
- 51 -
(h) a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by any Obligor or any Subsidiary, a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization, judicial or extrajudicial recovery or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy, judicial or extrajudicial recovery or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of any Obligor or any Subsidiary, or any such petition shall be filed against any Obligor or any Subsidiary and such petition shall not be dismissed within 60 days; or
(i) any event occurs with respect to any Obligor or any Subsidiary which under the laws of any jurisdiction is analogous to any of the events described in Section 11(g) or Section 11(h), provided that the applicable grace period, if any, which shall apply shall be the one applicable to the relevant proceeding which most closely corresponds to the proceeding described in Section 11(g) or Section 11(h); or
(j) one or more final judgments or orders for the payment of money aggregating in excess of US$10,000,000 (or its equivalent in the relevant currency of payment), including any such final order enforcing a binding arbitration decision, are rendered against one or more of the Obligors and their respective Subsidiaries and which judgments are not, within 90 days (or such longer period as agreed by the Required Holders acting reasonably) after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 90 days (or such longer period as agreed by the Required Holders acting reasonably) after the expiration of such stay; or
(k) if (i) any Plan shall fail to satisfy the minimum funding standards of section 302 of ERISA or Section 412 of the Code for any plan year or part thereof or a waiver of such standards is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been or is reasonably expected to be filed with the PBGC or the PBGC shall have instituted proceedings under section 4042 of ERISA to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified any Obligor or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) there is any “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under one or more Plans, determined in accordance with Title IV of ERISA, (iv) the aggregate present value of accrued benefit liabilities under all funded Non-U.S. Plans exceeds the aggregate current value of the assets of such Non-U.S. Plans allocable to such liabilities, (v) any Obligor or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (vi) any Obligor or any ERISA Affiliate withdraws from any Multiemployer Plan, (vii) any Obligor or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of any Obligor or any of its Subsidiaries thereunder, (viii) any Obligor or any Subsidiary fails to administer or maintain a Non-U.S. Plan in compliance with the requirements of any and all applicable laws, statutes, rules, regulations or court orders or any Non-U.S. Plan is involuntarily terminated or wound up, or (ix) any Obligor or any of its Subsidiaries becomes subject to the imposition of a financial penalty (which for this purpose shall mean any tax, penalty or other liability, whether by way of indemnity or otherwise) with respect to one or more Non-U.S. Plans; and any such event or events described in clauses (i) through (ix) above, either individually or together with any other such event or events, would reasonably be expected to have a Material Adverse Effect; or
- 52 -
(l) a Change of Control shall have occurred; or
(m) an event or situation shall occur or exist that, in the discretion of the Required Holders, results in a Material Adverse Effect; or
(n) the Guaranty of any Guarantor provided in Section 15 shall cease to be in full force and effect, any Guarantor or any Person acting on behalf of any Guarantor shall contest in any manner the validity, binding nature or enforceability of any such Guaranty, or the obligations of any Guarantor under such Guaranty are not or cease to be legal, valid, binding and enforceable in accordance with the terms of Section 15 (except as permitted by Section 9.7(c) and in accordance with the express terms of this Agreement); or
(o) any Governmental Authority of any jurisdiction in which any Obligor or any Subsidiary is organized or has material operations shall take any action, whether legal or de facto, to (i) condemn, seize, nationalize or expropriate all or any substantial portion of the property (including, without limitation, its Equity Interests) of any Obligor or any Subsidiary or any Material Property of any Obligor or any Subsidiary, (ii) assume custody or control of all or any substantial portion of the property of any Obligor or any Subsidiary or any Material Property of any Obligor or any Subsidiary, or of the business or operations of any Obligor or any Subsidiary, or (iii) dissolve or disestablish any Obligor or any Subsidiary or otherwise prevent any Obligor or any Subsidiary from carrying on its business or any substantial part thereof; or
(p) any Governmental Authority of any jurisdiction in which the Parent Guarantor or any of its Subsidiaries is organized or has material operations shall take any action, whether legal or de facto, to revoke, terminate or cease to renew any material license, authorization, permit or approval and any such action or inaction, either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect, unless such material license, authorization, permit or approval shall have been extended or replaced by the Parent Guarantor or any of its Subsidiaries with an analogous license, authorization, permit or approval, in each case within 60 days thereafter; or
- 53 -
(q) (i) any Finance Document shall at any time be suspended, revoked or terminated or for any reason cease to be valid and binding or in full force and effect (in each case, other than upon expiration in accordance with the terms thereof or for a termination resulting from the full performance of the obligations under such Finance Document), (ii) the performance by any Obligor of any of its obligations under any Finance Document to which such Obligor is a party shall become unlawful or any Obligor shall so assert in writing or (iii) the validity or enforceability of any Finance Document shall be contested by any Obligor in writing or by any Governmental Authority; or
(r) except as contemplated hereby and by the Collateral Documents, any Lien granted or created on the Collateral by any Collateral Document shall cease to constitute a valid and perfected first priority Lien, free and clear of all other Liens except Liens permitted with respect to Collateral under Section 10.5.
As used in Section 11(k) above, the terms “employeebenefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA.
Without limiting the remedies of the holder of the Notes hereunder and under applicable law and without prejudice to any action or remedy against the Obligors, Section 11(g), Section 11(h) and Section 11(i) shall not (1) prevent the Obligors from commencing any proceeding or filing any petition in Colombia under Colombian bankruptcy laws; (2) be construed to mean that the purpose of Section 11(g), Section 11(h) and Section 11(i) is to prevent or restrict, directly or indirectly, the commencement of proceedings against the Obligors in Colombia under Colombian bankruptcy laws; (3) prohibit the Obligors from negotiating or entering into a restructuring agreement under Colombian bankruptcy laws; or (4) impose any restrictions, prohibitions or disadvantageous effects (efectos desfavorables) on the Obligors for the negotiation or execution of a restructuring agreement under Colombian bankruptcy laws.
Section 12. Remedies on Default, Etc.
Section 12.1 Acceleration.
(a) If an Event of Default with respect to any Obligor described in Section 11(g), (h) or (i) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.
(b) If any other Event of Default has occurred and is continuing, the Required Holders may at any time at their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.
(c) If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.
- 54 -
(d) Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus all accrued and unpaid interest thereon (including interest accrued thereon at the Default Rate), 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. Each Obligor acknowledges, and the parties hereto agree, that each holder of a Note had the right to maintain its investment in the Notes free from repayment by the Obligors (except as herein specifically provided for).
Section 12.2 Other Remedies. If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any other Finance Document, 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.
Section 12.3 Rescission. At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Obligors have paid all overdue interest on the Notes, all principal of any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 19, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes. No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.
Section 12.4 No Waiversor Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note or the Collateral Agent in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s or the Collateral Agent’s rights, powers or remedies. No right, power or remedy conferred by any Finance Document upon any holder thereof 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. Without limiting the obligations of the Obligors under Section 17, the Obligors will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including reasonable attorneys’ fees, expenses and disbursements and any Court Filing Duty.
Section 13. Tax Indemnification; FATCA Information.
(a) All payments whatsoever under this Agreement, the Notes and the other Finance Documents will be made by the relevant Obligor in lawful currency of the United States of America free and clear of, and without liability for withholding or deduction for or on account of, any present or future Taxes of whatever nature imposed or levied by or on behalf of any jurisdiction other than the United States of America (or any political subdivision or taxing authority of or in such jurisdiction) (hereinafter a “Taxing Jurisdiction”), unless the withholding or deduction of such Tax is required by law.
- 55 -
(b) If any deduction or withholding for any Tax of a Taxing Jurisdiction shall at any time be required from any amounts to be paid by any Obligor under any Finance Document, the relevant Obligor will pay to the relevant Taxing Jurisdiction the full amount required to be withheld, deducted or otherwise paid before penalties attach thereto or interest accrues thereon and pay to each holder of a Note such additional amounts as may be necessary in order that the net amounts paid to such holder pursuant to the terms of such Finance Document after such deduction, withholding or payment (including any required deduction or withholding of Tax on or with respect to such additional amount), shall be not less than the amounts then due and payable to such holder under the terms of such Finance Document before the assessment of such Tax, provided that no payment of any additional amounts shall be required to be made for or on account of:
(i) any Tax that would not have been imposed but for the existence of any present or former connection between such holder (or a fiduciary, settlor, beneficiary, member of, shareholder of, or possessor of a power over, such holder, if such holder is an estate, trust, partnership or corporation or any Person other than the holder to whom the Notes or any amount payable thereon is beneficially owned or attributable for the purposes of such Tax) and the Taxing Jurisdiction, other than the mere holding of the relevant Note or the receipt of payments thereunder or in respect thereof or the exercise of remedies in respect thereof, including such holder (or such other Person described in the above parenthetical) being or having been a citizen or resident thereof, or being or having been present or engaged in trade or business therein or having or having had an establishment, office, fixed base or branch therein, provided that this exclusion shall not apply with respect to a Tax that would not have been imposed but for the relevant Obligor, after November 5, 2021 (or, in the case of any Additional Subsidiary Guarantor, after the date such Additional Subsidiary Guarantor becomes a Subsidiary Guarantor), opening an office in, moving an office to, reincorporating in, or changing the Taxing Jurisdiction from or through which payments on account of any Finance Document are made to, the Taxing Jurisdiction imposing the relevant Tax;
(ii) any Tax that would not have been imposed but for the delay or failure by such holder (following a written request by the applicable Obligor) in the filing with the relevant Taxing Jurisdiction or delivery to the applicable Obligor of Forms (as defined below) that are required to be filed by such holder or delivered to the applicable Obligor to avoid or reduce such Taxes (including for such purpose any refilings or renewals of filings that may from time to time be required by the relevant Taxing Jurisdiction), provided that the filing or delivery of such Forms would not (in such holder’s reasonable judgment) impose any unreasonable burden (in time, resources or otherwise) on such holder or result in any confidential or proprietary income tax return information being revealed, either directly or indirectly, to any Person and such delay or failure could have been lawfully avoided by such holder, and provided further that such holder shall be deemed to have satisfied the requirements of this clause (b)(ii) upon the good faith completion and submission or delivery of such Forms (including refilings or renewals of filings) as may be specified in a written request of the applicable Obligor no later than 60 days after receipt by such holder of such written request (accompanied by copies of such Forms and related instructions, if any, all in the English language or with an English translation thereof);
- 56 -
(iii) Tax imposed under FATCA;
(iv) a Tax that is imposed by the so-called Luxembourg Relibi Law dated 23 December 2005, as amended;
(v) any Tax that is imposed other than by way of deduction or withholding; or
(vi) any combination of clauses (i), (ii), (iii), (iv) and (v) above;
provided further that in no event shall any Obligor be obligated to pay such additional amounts to any holder or beneficial owner of a Note (i) not resident in the United States of America or any other jurisdiction in which an original Purchaser is resident for tax purposes on November 5, 2021 in excess of the amounts that such Obligor would be obligated to pay if such holder or beneficial owner had been a resident of the United States of America or such other jurisdiction, as applicable, for purposes of, and eligible for the benefits of, any double taxation treaty from time to time in effect between the United States of America or such other jurisdiction and the relevant Taxing Jurisdiction or (ii) registered in the name of a nominee if under the law of the relevant Taxing Jurisdiction (or the current regulatory interpretation of such law) securities held in the name of a nominee do not qualify for an exemption from the relevant Tax and such Obligor shall have given timely notice of such law or interpretation to such holder.
(c) By acceptance of any Note, the holder of such Note agrees, subject to the limitations of clause (b)(ii) above, that it will from time to time with reasonable promptness (x) duly complete and deliver to or as reasonably directed by any Obligor all such forms, certificates, sworn statements, documents and returns provided to such holder by such Obligor (collectively, together with instructions for completing the same, “Forms”), duly notarized and apostilled if applicable, required to be filed by or on behalf of or furnished by such holder in order to avoid or reduce any such Tax pursuant to the provisions of an applicable statute, regulation or administrative practice of the relevant Taxing Jurisdiction or of a tax treaty between the United States of America and such Taxing Jurisdiction and (y) provide the applicable Obligor with such information with respect to such holder as such Obligor may reasonably request in order to complete any such Forms, provided that nothing in this Section 13 shall require any holder to provide information with respect to any such Form or otherwise if in the opinion of such holder such Form or disclosure of information would involve the disclosure of tax return or other information that is confidential or proprietary to such holder, and provided further that each such holder shall be deemed to have complied with its obligation under this paragraph with respect to any Form if such Form shall have been duly completed and delivered by such holder to the relevant Obligor or mailed to the appropriate taxing authority, whichever is applicable, within 60 days following a written request of such Obligor (which request shall be accompanied by copies of such Form and English translations of any such Form not in the English language) and, in the case of a transfer of any Note, at least 90 days prior to the relevant interest payment date.
- 57 -
(d) On or before the Restatement Date the Company will furnish each Purchaser with copies of the appropriate Form (and English translation if required as aforesaid) currently required to be filed in Colombia pursuant to Section 13(b)(ii), if any, and in connection with the transfer of any Note the Company will furnish the transferee of such Note with copies of any Form and English translation then required.
(e) If any payment is made by any Obligor to or for the account of the holder of any Note after deduction for or on account of any Taxes, and increased payments are made by such Obligor pursuant to this Section 13, then, if such holder at its discretion (acting reasonably) determines that it has received or been granted a refund of such Taxes, such holder shall, to the extent that it can do so without prejudice to the entitlement to the amount of such refund from the relevant taxing authority, reimburse to such Obligor such amount as such holder shall, in its discretion (acting reasonably), determine to be attributable to the relevant Taxes or deduction or withholding. Nothing herein contained shall interfere with the right of the holder of any Note to arrange its tax affairs in whatever manner it thinks fit and, in particular, no holder of any Note shall be under any obligation to claim relief from its corporate profits or similar tax liability in respect of such Tax in priority to any other claims, reliefs, credits or deductions available to it or (other than as set forth in Section 13(b)(ii)) oblige any holder of any Note to disclose any information relating to its tax affairs or any computations in respect thereof.
(f) The applicable Obligor will furnish the holders of Notes, promptly and in any event within 60 days after the date of any payment by such Obligor of any Tax in respect of any amounts paid under any Finance Document, the original tax receipt issued by the relevant taxation or other authorities involved for all amounts paid as aforesaid (or if such original tax receipt is not available or must legally be kept in the possession of such Obligor, a duly certified copy of the original tax receipt or any other reasonably satisfactory evidence of payment), together with such other documentary evidence with respect to such payments as may be reasonably requested from time to time by any holder of a Note.
(g) Notwithstanding Section 13(b)(v), if any Obligor is required by any applicable law, as modified by the practice of the taxation or other authority of any relevant Taxing Jurisdiction, to make any deduction or withholding of any Tax in respect of which such Obligor would be required to pay any additional amount under this Section 13 (including as a result of the representation in Section 5.9(b) being incorrect), but for any reason does not make such deduction or withholding with the result that a liability in respect of such Tax is assessed directly against the holder of any Note, and such holder pays such liability, then such Obligor will promptly reimburse such holder for such payment (including any related interest, penalties and costs or expenses) upon demand by such holder accompanied by an official receipt (or a duly certified copy thereof) issued by the taxation or other authority of the relevant Taxing Jurisdiction.
- 58 -
(h) If any Obligor makes payment to or for the account of any holder of a Note pursuant to this Section 13 and such holder is entitled to a refund of the Tax to which such payment is attributable upon the making of a filing (other than a Form described above), then such holder shall, as soon as practicable after receiving written request from such Obligor (which shall specify in reasonable detail and supply the refund forms to be filed) use reasonable efforts to complete and deliver such refund forms to or as directed by such Obligor, subject, however, to the same limitations with respect to Forms as are set forth above.
(i) The obligations of the Obligors under this Section 13 shall survive the payment or transfer of any Note and the provisions of this Section 13 shall also apply to successive transferees of the Notes.
(j) By acceptance of any Note, the holder of such Note agrees that such holder will with reasonable promptness duly complete and deliver to the applicable Obligor, or to such other Person as may be reasonably requested by such Obligor, from time to time (i) in the case of any such holder that is a United States Person, such holder’s United States tax identification number or other Forms reasonably requested by such Obligor necessary to establish such holder’s status as a United States Person under FATCA and as may otherwise be necessary for such Obligor to comply with its obligations under FATCA and (ii) in the case of any such holder that is not a United States Person, such documentation prescribed by applicable law (including as prescribed by section 1471(b)(3)(C)(i) of the Code) and such additional documentation as may be necessary for such Obligor to comply with its obligations under FATCA and to determine that such holder has complied with such holder’s obligations under FATCA or to determine the amount (if any) to deduct and withhold from any such payment made to such holder. Nothing in this Section 13(j) shall require any holder to provide information that is confidential or proprietary to such holder unless the applicable Obligor is required to obtain such information under FATCA and, in such event, such Obligor shall treat any such information it receives as confidential.
(k) The Obligors shall pay and, within three Business Days of demand, indemnify each original Purchaser or holder against any cost, loss or liability that original Purchaser or holder incurs in relation to all stamp duty, registration and other similar Taxes payable, in respect of any Finance Document, other than any stamp duty, registration and other similar Taxes and fees payable on or by reference to or in consequence of the transfer or assignment of the whole or any part of the rights of a Purchaser under a Finance Document and any Luxembourg registration duties (droits d’enregistrement) payable due to the registration of the Notes or any Finance Document, when such registration is not required to maintain or preserve the rights of the original purchaser or holder under that Finance Document.
- 59 -
Section 14. Registration; Exchange; Substitution of Notes.
Section 14.1 Registrationof Notes. The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes (the “Register”). 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 the Register. If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes shall also be registered in the Register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement. Prior to due presentment for 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. 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.
Section 14.2 Transferand Exchange of Notes. Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 20(a)(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within 10 Business Days thereafter, the Company shall execute and deliver, at the Company’s expense, one or more new Notes (as requested by the holder thereof) in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note. In the case of a surrender for registration of transfer of all of a holder’s Notes, such Note(s) shall be surrendered to the Company in accordance with the preceding sentence together with the related Pagaré and Instruction Letter and, within 10 Business Days thereafter, the Company and the Guarantors shall execute and deliver, at the Company’s expense, a new Pagaré and Instruction Letter for such Note(s), notarized by a Colombian notary public. Each such new Note and Pagaré shall be payable to such Person as such holder may request and shall be substantially in the forms of Schedule 1-A and Schedule 1-B, respectively. Each such new Instruction Letter shall be in favor of such Person as such holder may request and shall be substantially in the form of Schedule 1-C. Each such new Note and Pagaré shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note and Pagaré (or dated the date of the surrendered Note and Pagaré if no interest shall have been paid thereon). The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes and Pagarés, if applicable. Notes shall not be transferred in denominations of less than US$100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes, one Note may be in a denomination of less than US$100,000. Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representation set forth in Section 6.2. Each Purchaser and holder of a Note, by its acceptance of a Note, will be deemed to have agreed that such Purchaser or holder of a Note, as applicable, will not sell or otherwise transfer any Note to any Person organized or resident for tax purposes in Colombia.
- 60 -
Section 14.3 Replacementof Notes, Pagarés and Instruction Letters. Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 20(a)(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note, Pagaré and/or Instruction Letter (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and
(a) evidence of the compliance by the relevant holder with the requirements of Article 398 of the Colombian General Process Code (CódigoGeneral del Proceso), and
(b) (i) in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the relevant holder is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least US$50,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or (ii) in the case of mutilation, upon surrender and cancellation thereof,
within 10 Business Days thereafter, the Company and the Guarantors, as applicable, at the Company’s expense, shall execute and deliver, in lieu thereof, a new Note, Pagaré and/or Instruction Letter, as applicable, notarized by a Colombian notary public in the case of a Pagaré or Instruction Letter only, in the case of an Instruction Letter dated the date to which interest shall have been paid on the related Pagaré (or dated the date of the related Pagaré if no interest shall have been paid thereon), and in the case of a Note or a Pagaré dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or Pagaré (or dated the date of such lost, stolen, destroyed or mutilated Note or Pagaré if no interest shall have been paid thereon).
Section 15. Guaranty.
Section 15.1 Unconditional Guaranty.
(a) In consideration of the execution and delivery of this Agreement and the acquisition of the Notes by each of the Purchasers, each Guarantor hereby irrevocably, absolutely, unconditionally and jointly and severally with the other Guarantors guarantees to each holder, as a primary obligor and not merely as a surety, the due and punctual payment in full of (i) the principal of and interest on (including, without limitation, interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization, judicial or extrajudicial recovery or like proceeding, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding) and any other amounts due under the Notes when and as the same shall become due and payable (whether at stated maturity or by required or optional prepayment or by acceleration or otherwise), (ii) any other sums which may become due and payable under the terms and provisions of the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein, and (iii) in the case of the Parent Guarantor, the performance of all other obligations to be performed by the Company under this Agreement (all such obligations described in clauses (i), (ii) and (iii) above are herein called the “Guaranteed Obligations”). The Guaranty in the preceding sentence is an absolute, present and continuing guaranty of payment and not of collectability and is in no way conditional or contingent upon any attempt to collect from the Company or any other guarantor of the Notes (including, without limitation, any other Guarantor) or upon any other action, occurrence or circumstance whatsoever. In the event that the Company shall fail so to pay when due any of such Guaranteed Obligations, each Guarantor agrees to pay the same when due to the holders entitled thereto, without demand, presentment, protest or notice of any kind, in lawful currency of the United States of America, pursuant to the requirements for payment specified in the Notes and this Agreement. Each default in payment of any of the Guaranteed Obligations shall give rise to a separate cause of action hereunder and separate suits may be brought hereunder as each cause of action arises. Each Guarantor agrees that the Notes issued in connection with this Agreement may (but need not) make reference to the Guaranty provided in this Section 15. Notwithstanding anything to the contrary in this Agreement or in any other Finance Document, the maximum liability of the Guarantors under this Agreement and under the other Finance Documents shall not exceed an amount equal to the total aggregate outstanding obligations of the Company under the Finance Documents and the term “Guaranteed Obligations” shall be so interpreted and limited.
- 61 -
(b) Each Guarantor agrees to pay when due and to indemnify and save each holder harmless from and against any damage, loss, cost or expense (including attorneys’ fees) which such holder may incur or be subject to as a consequence, direct or indirect, of (i) any breach by such Guarantor, by any other Guarantor or by the Company of any warranty, covenant, term or condition in, or the occurrence of any default under, the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein, together with all expenses resulting from the compromise or defense of any claims or liabilities arising as a result of any such breach or default, (ii) any legal action commenced to challenge the validity or enforceability of the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein and (iii) enforcing or defending (or determining whether or how to enforce or defend) the provisions of this Section 15.
(c) Each Guarantor hereby acknowledges and agrees that such Guarantor’s liability hereunder is joint and several with the other Guarantors and any other Person(s) who may guarantee the obligations and Indebtedness under and in respect of the Notes and this Agreement.
(d) Each Guarantor incorporated under the laws of Colombia expressly waives any defense, benefit or protection granted by Articles 2383 (beneficiode excusión) and 2392 (beneficio de division) of the Colombian Civil Code (Código Civil Colombiano). Each such Guarantor also waives any defense or right to not perform under this Section 15 on the basis of not having received any consideration or economic benefit as an inducement to grant the Guaranty set forth herein and declares and accepts that the obligations set forth in the Finance Documents shall be paid by such Guarantor even if such obligations become obligaciones naturales of the Company under Colombian law.
(e) Each Guarantor incorporated under the laws of Ecuador expressly waives any defense, benefit or protection granted by Articles 2264 (beneficiode excusión) and 2269 (beneficio de division) of the Ecuadorian Civil Code (Código Civil Ecuatoriano). Each such Guarantor also waives any defense or right to not perform under this Section 15 on the basis of not having received any consideration or economic benefit as an inducement to grant the Guaranty set forth herein and declares and accepts that the obligations set forth in the Finance Documents shall be paid by such Guarantor even if such obligations become obligaciones naturales of the Company under Ecuadorian law.
- 62 -
(f) Each Guarantor incorporated under the laws of Brazil hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any benefits to which it may be entitled as set forth in articles 333 (sole paragraph), and articles 364, 366, 368, 371, 821, 824, 827, 829, 830, 834, 835, 837, 838 and 839 of the Brazilian Civil Code, and Articles 130 and 794 of the Brazilian Code of Civil Procedure.
(g) Each Guarantor incorporated under the laws of Malta expressly waives any defense, benefit or protection granted by Article 1934 (benefit of discussion) and Article 1937 (benefit of division) of the Maltese Civil Code (Chapter 16, Laws of Malta) and expressly hereby renounces both such benefits for the purposes of Article 1935(a) and Article 1937(2) of the Maltese Civil Code. For the avoidance of doubt, the Guaranty provided by any Guarantor incorporated under the laws of Malta in this Section 15 does not apply to any liability to the extent that it would result in this Guaranty constituting unlawful financial assistance within the meaning of article 110 of the Maltese Companies Act (Chapter 386 of the Laws of Malta).
(h) The Parent Guarantor hereby confirms that no benefit of “discussion” (articles 2021 to 2024 Luxembourg Civil Code or any other statutory provision having a similar effect), “subrogation” (article 2029 Luxembourg Civil Code or any other statutory provision having a similar effect) and, to the extent relevant, “division” (article 2026 and 2027 Luxembourg Civil Code or any other statutory provision having a similar effect) applies to the guarantee granted under this section. To the extent necessary, the Parent Guarantor hereby waives, for so long as any Guaranteed Obligations remain outstanding, any personal right of recourse against the Company.
(i) Each Guarantor incorporated under the laws of El Salvador hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any benefits to which it may be entitled as set forth in Article 2107 (beneficio de excusión) of the El Salvador Civil Code.
(j) Each Guarantor incorporated under the laws of Peru hereby irrevocably and unconditionally waives, to the fullest extent permitted by law, any benefits to which it may be entitled as set forth in Articles 1879 (beneficio de excusión), 1884, 1885, 1896, 1887 (beneficiode división), 1897, 1898, 1899, 1900, 1901 and 1902 of the Peruvian Civil Code.
- 63 -
Section 15.2 ObligationsAbsolute. The obligations of each Guarantor hereunder shall be primary, absolute, irrevocable and unconditional, irrespective of the validity or enforceability of the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein, shall not be subject to any counterclaim, setoff, deduction or defense based upon any claim such Guarantor may have against the Company or any holder or otherwise, and shall remain in full force and effect (to the extent permitted by applicable law) without regard to, and shall not be released, discharged or in any way affected by, any circumstance or condition whatsoever (whether or not such Guarantor shall have any knowledge or notice thereof), including, without limitation: (a) any amendment to, modification of, supplement to or restatement of the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein (it being agreed that the obligations of each Guarantor hereunder shall apply to the Notes, this Agreement, any other Finance Document or any such other instrument as so amended, modified, supplemented or restated) or any assignment or transfer of any thereof or of any interest therein, or any furnishing, acceptance or release of any security for the Notes or the addition, substitution or release of any other Guarantor or any other entity or other Person primarily or secondarily liable in respect of the Guaranteed Obligations; (b) any waiver, consent, extension, indulgence or other action or inaction under or in respect of the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein; (c) any bankruptcy, insolvency, arrangement, reorganization, judicial or extrajudicial recovery, readjustment, composition, liquidation or similar proceeding with respect to the Company or any Guarantor or the property of the Company or any Guarantor; (d) any merger, amalgamation or consolidation of any Guarantor or of the Company into or with any other Person or any sale, lease or transfer of any or all of the assets of any Guarantor or of the Company to any Person; (e) any failure on the part of the Company for any reason to comply with or perform any of the terms of any other agreement with any Guarantor; (f) any failure on the part of any holder to obtain, maintain, register or otherwise perfect any security; or (g) any other event or circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (whether or not similar to the foregoing), and in any event however material or prejudicial it may be to any Guarantor or to any subrogation, contribution or reimbursement rights any Guarantor may otherwise have. Each Guarantor covenants that its obligations hereunder will not be discharged except by indefeasible payment in full in cash of all of the Guaranteed Obligations in the agreed currency and at the agreed place of payment or, in the case of a Subsidiary Guarantor, in accordance with Section 9.7(c).
Section 15.3 Waiver. Each Guarantor unconditionally waives to the fullest extent permitted by applicable law, (i) notice of acceptance hereof, of any action taken or omitted in reliance hereon and of any default by the Company in the payment of any amounts due under the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein, and of any of the matters referred to in Section 15, (ii) all notices which may be required by statute, rule of law or otherwise to preserve any of the rights of any holder against such Guarantor, including, without limitation, presentment to or demand for payment from the Company or any Guarantor with respect to any Note, notice to the Company or to any Guarantor of default or protest for nonpayment or dishonor and the filing of claims with a court in the event of the bankruptcy or insolvency of the Company, (iii) any right to require any holder to enforce, assert or exercise any right, power or remedy including, without limitation, any right, power or remedy conferred in this Agreement or the Notes, (iv) any requirement for diligence on the part of any holder, (v) any other act or omission or thing or delay in doing any other act or thing which might in any manner or to any extent vary the risk of such Guarantor or otherwise operate as a discharge of such Guarantor or in any manner lessen the obligations of such Guarantor hereunder and (vi) the Guarantors waive any right it may have of first requiring the beneficiary (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantors. This waiver applies irrespective of any law or any provision of a Document to the contrary.
- 64 -
Section 15.4 Obligations Unimpaired.
(a) Each Guarantor authorizes the holders, without notice or demand to such Guarantor or any other Guarantor and without affecting its obligations hereunder, from time to time: (i) to take and hold security for the payment of the Notes, this Agreement, any Finance Document or any other instrument referred to herein or therein, for the performance of the Guaranty provided in this Section 15 or otherwise for the Indebtedness guaranteed hereby and to exchange, enforce, waive, subordinate and release any such security; (ii) to apply any such security and to direct the order or manner of sale thereof as the holders in their sole discretion may determine; (iii) to obtain additional or substitute endorsers or guarantors or release any other Guarantor or any other Person or entity primarily or secondarily liable in respect of the Guaranteed Obligations; (iv) to exercise or refrain from exercising any rights against the Company, any Guarantor or any other Person; and (v) to apply any sums, by whomsoever paid or however realized, to the payment of the Guaranteed Obligations and all other obligations owed hereunder. The holders shall have no obligation to proceed against any additional or substitute endorsers or guarantors or to pursue or exhaust any security provided by the Company, such Guarantor or any other Guarantor or any other Person or to pursue any other remedy available to the holders. For the avoidance of doubt, the holders may, subject to obtaining the Parent Guarantor’s prior consent, (i) renew, compromise, extend, accelerate or otherwise change the time for payment of, all or any part of the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein or (ii) change any of the representations, covenants, events of default or any other terms or conditions of or pertaining to the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein, including, without limitation, decreases or increases in amounts of principal, rates of interest or any other obligation in accordance with Section 19.
(b) If an event permitting the acceleration of the maturity of the principal amount of any Notes shall exist and such acceleration shall at such time be prevented or the right of any holder to receive any payment on account of the Guaranteed Obligations shall at such time be delayed or otherwise affected by reason of the pendency against the Company, any Guarantor or any other guarantors of a case or proceeding under a bankruptcy, reorganization, judicial or extrajudicial recovery or insolvency law, such Guarantor agrees that, for purposes of this Agreement and its obligations hereunder, the maturity of such principal amount shall be deemed to have been accelerated with the same effect as if the holder thereof had accelerated the same in accordance with the terms of this Agreement, and such Guarantor shall forthwith pay such accelerated Guaranteed Obligations.
Section 15.5 Subrogation and Subordination.
(a) Each Guarantor will not exercise any rights which it may have acquired by way of subrogation under this Section 15, by any payment made hereunder or otherwise, or accept any payment on account of such subrogation rights, or any rights of reimbursement, setoff, counterclaim, contribution or indemnity or any rights or recourse to any security for the Notes or this Section 15 unless and until all of the Guaranteed Obligations shall have been indefeasibly paid in full in cash.
- 65 -
(b) Each Guarantor hereby subordinates the payment of all Indebtedness and other obligations of the Company or any other guarantor of the Guaranteed Obligations owing to such Guarantor, whether now existing or hereafter arising, including, without limitation, all rights and claims described in clause (a) of this Section 15.5, to the indefeasible payment in full in cash of all of the Guaranteed Obligations. If the Required Holders so request, while an Event of Default is continuing, any such Indebtedness or other obligations shall be enforced and performance received by such Guarantor as trustee for the holders and the proceeds thereof shall be paid over to the holders promptly, in the form received (together with any necessary endorsements) to be applied to the Guaranteed Obligations, whether matured or unmatured, as may be directed by the Required Holders, but without reducing or affecting in any manner the liability of any Guarantor under this Section 15. Notwithstanding the foregoing, repayments can be made in accordance with Section 10.10 while no Event of Default is continuing.
(c) If any amount or other payment is made to or accepted by any Guarantor in violation of any of the preceding clauses (a) and (b) of this Section 15.5, such amount shall be deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the holders and shall be paid over to the holders promptly, in the form received (together with any necessary endorsements) to be applied to the Guaranteed Obligations, whether matured or unmatured, as may be directed by the Required Holders, but without reducing or affecting in any manner the liability of such Guarantor under this Section 15.
(d) Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Agreement and that its agreements set forth in this Section 15 (including this Section 15.5) are knowingly made in contemplation of such benefits.
(e) Each Guarantor hereby agrees that, to the extent that a Guarantor shall have paid an amount hereunder to any holder that is greater than the net value of the benefits received, directly or indirectly, by such paying Guarantor as a result of the issuance and sale of the Notes (such net value, its “Proportionate Share”), such paying Guarantor shall, subject to this Section 15.5, be entitled to contribution from any Guarantor that has not paid its Proportionate Share of the Guaranteed Obligations. Any amount payable as a contribution under this Section 15.5(e) shall be determined as of the date on which the related payment is made by such Guarantor seeking contribution and each Guarantor acknowledges that the right to contribution hereunder shall constitute an asset of such Guarantor to which such contribution is owed. Notwithstanding the foregoing, the provisions of this Section 15.5(e) shall in no respect limit the obligations and liabilities of any Guarantor to the holders of the Notes under the Notes, this Agreement, any other Finance Document or any other document, instrument or agreement executed in connection therewith, and each Guarantor shall remain jointly and severally liable for the Guaranteed Obligations until discharged or such Guarantor has been released in accordance with this Section 15.
- 66 -
Section 15.6 Reinstatementof Guaranty. The Guaranty provided in this Section 15 shall continue to be effective, or be reinstated, as the case may be, if and to the extent at any time payment, in whole or in part, of any of the sums due to any holder on account of the Guaranteed Obligations is rescinded or must otherwise be restored or returned by a holder upon the insolvency, bankruptcy, dissolution, liquidation, judicial or extrajudicial recovery or reorganization of the Company or any other guarantors, or upon or as a result of the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to the Company or any other guarantors or any part of its or their property, or otherwise, all as though such payments had not been made.
Section 15.7 Term of Guaranty. Subject to Section 9.7(c) in the case of any Subsidiary Guarantor, the Guaranty provided in this Section 15 and all guarantees, covenants and agreements of the Guarantors contained herein shall continue in full force and effect and shall not be discharged until such time as all of the Guaranteed Obligations shall be indefeasibly paid in full in cash and shall be subject to reinstatement pursuant to Section 15.6.
Section 15.8 InformationRegarding the Company. Each Guarantor represents and warrants to each holder that (a) such Guarantor now has and will continue to have independent means of obtaining information concerning the affairs, financial condition and business of the Company, (b) such Guarantor has executed and delivered this Agreement without reliance upon any representation by the holders including, without limitation, with respect to (i) the due execution, validity, effectiveness or enforceability of any instrument, document or agreement evidencing or relating to any of the Guaranteed Obligations or any loan or other financial accommodation made or granted to the Company, (ii) the validity, genuineness, enforceability, existence, value or sufficiency of any property securing any of the Guaranteed Obligations or the creation, perfection or priority of any lien or security interest in such property or (iii) the existence, number, financial condition or creditworthiness of other guarantors or sureties, if any, with respect to any of the Guaranteed Obligations. No holder shall have any duty or responsibility to provide any Guarantor with any credit or other information concerning the affairs, financial condition or business of the Company which may come into possession of the holders.
Section 15.9 Spanish Law Provisions
(a) Each Spanish Guarantor acknowledges that any obligations under the terms and provisions of the Notes, this Agreement, any other Finance Document or any other instrument referred to herein or therein shall constitute, when due and payable, liquid, due and payable obligations of such Spanish Guarantor (deuda líquida, vencida y exigible).
(b) Each Spanish Guarantor waives the benefits of order, division and prior exhaustion of the Spanish Guarantor’s assets (beneficios deorden, división y excusión) provided for in articles 1,830 et seq. of the Spanish Civil Code and the exception for inability to subrogate in the position of each holder of the Notes provided for in article 1,852 of the Spanish Civil Code.
(c) Each Spanish Guarantor agrees that without notice to or consent of the Spanish Guarantors and without impairing or releasing the obligations of the Spanish Guarantors hereunder, the terms of any obligations or liabilities under the Finance Documents may be amended at any time, including the granting of extensions of the Maturity Date, to which each Spanish Guarantor expressly consents in the terms required by article 1,851 of the Spanish Civil Code.
- 67 -
(d) Each and any of the obligations and liabilities of any Spanish Guarantor under any Finance Document to which any of them is a party shall remain exactly within the terms stated herein irrespective of whether or not a holder of a Note votes in favor of the approval or ratification of a composition (convenio) or a restructuring plan (plan de reestructuración) of a Spanish Guarantor, or if the insolvency proceeding has been filed in Spain, unless a composition (convenio) or a restructuring plan (plan de reestructuración) is approved with respect to a Spanish Guarantor, in which case the obligations and liabilities of that Spanish Guarantor will be subject to the terms of the convenio or plan de reestructuración. The obligations and liabilities of all other Guarantors will remain unaltered in any of the aforementioned events.
(e) Notwithstanding the foregoing and any other provisions of this Agreement, the obligations and liabilities of any Spanish Guarantor under this Section 15, or any other provision of this Agreement (i) shall be deemed not to be assumed by such Spanish Guarantor to the extent that they constitute or may constitute unlawful financial assistance within the meaning of article 150 of the Spanish Companies Act (where such Spanish Guarantor is a Spanish public company (sociedad anónima)) or article 143 of the Spanish Companies Act (where such Spanish Guarantor is a Spanish limited liability company (sociedad de responsabilidad limitada)). Accordingly, the obligations and liabilities of any Spanish Guarantor under this Section 15 or any other provision of this Agreement and any of the other Finance Documents shall not include and shall not be extended to any repayment obligations with respect to financing used in or towards payment of, or refinance of, the purchase price or subscription for the shares or quotas in the Spanish Guarantor and/or the acquisition of, or subscription for, the shares or quotas in its controlling corporation directly or indirectly (or, where such Spanish Guarantor is a Spanish limited liability company (Sociedad de Responsabilidad Limitada), of any company of its group) and (ii) shall be limited to a maximum amount equal to twice its net equity (recursos propios) as reflected in the individual annual financial statements of the relevant Spanish Guarantor as of the year ended on December 31, 2023. The Parties agree that the limitation set out in item (ii) shall not apply as from the date on which one or more Liens in the form of a mortgage are created by any Guarantor pursuant to a Collateral Document and any such mortgage Lien remains in effect. To the extent that the limitation in item (ii) above remains in effect, it shall apply mutatis mutandis to each Lien created by any Spanish Guarantor that qualifies as a Spanish limited liability company (sociedadde responsabilidad limitada).
Section 16. Payments on Notes.
Section 16.1 Place of Payment. Subject to Section 16.2, payments of principal, and interest becoming due and payable on the Notes shall be made in New York, New York, United States of America at the principal office of JPMorgan Chase Bank, N.A. in such jurisdiction. The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.
- 68 -
Section 16.2 Payment byWire Transfer. So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 16.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, interest and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in the Purchaser Schedule, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note (or the related Pagaré or Instruction Letter related to such Pagaré) or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note (in the case of a payment or prepayment in full of all of such Purchaser’s Notes, together with the related Pagaré and the Instruction Letter related to such Pagaré) for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 16.1. Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note (in the case of a sale or other disposition of all of such Purchaser’s Notes, together with the related Pagaré and the Instruction Letter related to such Pagaré) to the Company in exchange for a new Note or Notes (and a new Pagaré and Instruction Letter with respect to such Pagaré) pursuant to Section 14.2. The Company will afford the benefits of this Section 16.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 16.2.
Section 17. Expenses, Etc.
Section 17.1 TransactionExpenses. Whether or not the transactions contemplated hereby are consummated, the Obligors will pay, or cause to be paid, all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Required Holders, or the Collateral Agent (or any Sub-Agents), local or other counsel) incurred by the Purchasers and each other holder of a Note, or the Collateral Agent (or any Sub-Agents), in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Notes or any other Finance Document (whether or not such amendment, waiver or consent becomes effective), including: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Notes or any other Finance Document or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Notes or any other Finance Document, or by reason of being a holder of any Note or being the Collateral Agent (or any Sub-Agents), (b) the costs and expenses incurred by, or other payments required to be made by, the Purchasers or other holders of the Notes under Section 24.7, (c) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency, judicial or extrajudicial recovery or bankruptcy of any Obligor or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby and by the Notes or any other Finance Document, and (d) the costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO, provided that such costs and expenses under this clause (d) shall not exceed US$5,000. If required by the NAIC, the Company shall obtain and maintain at its own cost and expense a Legal Entity Identifier (LEI).
- 69 -
The Obligors will pay, and will save each Purchaser and each other holder of a Note and the Collateral Agent (or any Sub-Agents) harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its acquisition of the Notes), (ii) any and all wire transfer fees that any bank or other financial institution deducts from any payment under such Note to such holder or the Collateral Agent (or any Sub-Agents) or otherwise charges to a holder of a Note or the Collateral Agent (or any Sub-Agents) with respect to a payment under such Note and (iii) any judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and expenses) or obligation resulting from the consummation of the transactions contemplated hereby, including the use of the proceeds of the Notes by the Company, other than, in the case of clause (iii) only, any claims, fees, indemnification payments or other amounts solely resulting from (a) such Purchaser or holder’s bad faith, fraud, gross negligence or willful misconduct, as determined by a final non-appealable decision of a New York State or federal court sitting in the Borough of Manhattan, the City of New York, or (b) such Purchaser or holder’s material breach of its obligations under this Agreement, solely amongst the Purchasers and/or the holders.
The Company shall pay to the Collateral Agent the fees set forth in the Collateral Agent Fee Letter in the amounts and at the times specified in the Collateral Agent Fee Letter.
Section 17.2 Certain Taxes
(a) Subject to Section 13(k), the Obligors agree to pay all stamp, documentary, court or similar taxes or fees which may be payable in respect of the execution and delivery or the enforcement of this Agreement or any other Finance Document or the execution and delivery or the enforcement of any of the Notes in the United States of America, Colombia, Luxembourg, Malta, Brazil, Peru, El Salvador or any other jurisdiction of organization of any Obligor or any other jurisdiction where any Obligor has assets or of any amendment of, or waiver or consent under or with respect to, this Agreement, any of the Notes or any other Finance Document and to pay any value added tax due and payable in respect of reimbursement of costs and expenses by any Obligor pursuant to this Section 17, and will save each holder of a Note to the extent permitted by applicable law harmless against any loss or liability resulting from nonpayment or delay in payment of any such tax or fee required to be paid by the Obligors hereunder.
(b) The Obligors agree to pay or, as applicable, reimburse each holder of a Note for any IOF/Exchange Tax that is paid or payable in connection with any payment in respect of such holder’s Notes.
- 70 -
Section 17.3 Waiver of ConsequentialDamages, Etc. To the fullest extent permitted by applicable law, each Obligor shall not assert, and hereby waives, any claim against any Purchaser, any holder of a Note, or any Related Party of any of the foregoing Persons (collectively, “Covered Persons”) on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Finance Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Note or the use of the proceeds thereof. No Covered Person shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Finance Documents or the transactions contemplated hereby or thereby.
Section 17.4 Survival. The obligations of the Obligors under this Section 17 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, the Notes or any other Finance Document, and the termination of this Agreement.
Section 18. Survival of Representations and Warranties; Entire Agreement.
All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note. All statements contained in any certificate or other instrument delivered by or on behalf of any Obligor pursuant to this Agreement shall be deemed representations and warranties of such Obligor under this Agreement. Subject to the preceding sentence, this Agreement, the Notes, and any other Finance Documents embody the entire agreement and understanding between each Purchaser and the Obligors and supersede all prior agreements and understandings relating to the subject matter hereof.
Section 19. Amendment and Waiver.
Section 19.1 Requirements. This Agreement, the Notes, the Pagarés and the Instruction Letters may be amended, and the observance of any term hereof or thereof may be waived (either retroactively or prospectively), only with the written consent of each Obligor and the Required Holders, except that:
(a) no amendment or waiver of any of Section 1, Section 2, Section 3, Section 4, Section 5, Section 6 or Section 23 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing; and
(b) no amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest on the Notes or (y) [reserved], (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver or the principal amount of the Notes that the Purchasers are to acquire hereunder, (iii) amend any of Section 8 (except as set forth in the second sentence of Section 8.2), Section 11(a), Section 11(b), Section 12, Section 13, Section 15, Section 19, Section 22 or Section 24.8, or (iv) limit the liability of any Guarantor under its Guaranty provided in Section 15 (except, in the case of an Additional Subsidiary Guarantor, to the extent provided in its Subsidiary Guarantor Joinder Agreement and agreed to by the Required Holders), or release any Guarantor from its Guaranty provided in Section 15 (except in accordance with Section 9.7(c)).
- 71 -
Section 19.2 Solicitation of Holders of Notes.
(a) Solicitation. The Obligors will provide each Purchaser and each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such Purchaser and such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof or of the Notes or any other Finance Document. The Obligors will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 19 or any other Finance Document to each Purchaser and each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite Purchasers or holders of Notes.
(b) Payment. No Obligor will directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any Purchaser or holder of a Note as consideration for or as an inducement to the entering into by such Purchaser or holder of any waiver or amendment of any of the terms and provisions hereof or of any Note or any other Finance Document unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each Purchaser and each holder of a Note even if such Purchaser or holder did not consent to such waiver or amendment.
(c) Consentin Contemplation of Transfer. Any consent given pursuant to this Section 19 or any other Finance Document by a holder of a Note that has transferred or has agreed to transfer its Note to (i) any Obligor, (ii) any Subsidiary or any other Affiliate of any Obligor or (iii) any other Person in connection with, or in anticipation of, such other Person acquiring, making a tender offer for or merging with any Obligor and/or any of their respective Affiliates, in each case in connection with such consent, shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.
Section 19.3 Binding Effect,Etc. Any amendment or waiver consented to as provided in this Section 19 or any other Finance Document applies equally to all Purchasers and holders of Notes and is binding upon them and upon each future holder of any Note and upon each Obligor without regard to whether such Note has been marked to indicate such amendment or waiver. No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon. No course of dealing between any Obligor and any Purchaser or holder of a Note and no delay in exercising any rights hereunder or under any Note or any other Finance Document shall operate as a waiver of any rights of any Purchaser or holder of such Note.
- 72 -
Section 19.4 Notes Heldby Obligors, Etc. Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, the Notes or any other Finance Document, or have directed the taking of any action provided herein or in the Notes or any other Finance Document to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by any Obligor or any Affiliate of an Obligor shall be deemed not to be outstanding.
Section 20. Notices; English Language.
(a) Except to the extent otherwise provided in Section 7.4, all notices and communications provided for hereunder shall be in writing and sent (x) by e-mail or by facsimile if the sender on the same day sends a confirming copy of such notice by an internationally recognized commercial delivery service (charges prepaid) or (y) by an internationally recognized commercial delivery service (charges prepaid). Any such notice must be sent:
(i) if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in the Purchaser Schedule, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,
(ii) if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing,
(iii) if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Grethel Ruth Moreno Romero, or at such other address as the Company shall have specified to the holder of each Note in writing,
(iv) if to the Parent Guarantor, to the Parent Guarantor, c/o the Company, at the address of the Company set forth at the beginning hereof to the attention of Grethel Ruth Moreno Romero, or at such other address as the Parent Guarantor shall have specified to the holder of each Note in writing, or
(v) if to any Subsidiary Guarantor, to such Subsidiary Guarantor, c/o the Parent Guarantor, at the address of the Company set forth at the beginning hereof to the attention of Grethel Ruth Moreno Romero, or at such other address as such Subsidiary Guarantor shall have specified to the holder of each Note in writing.
Notices under this Section 20 will be deemed given only when actually received.
- 73 -
(b) Each document, instrument, financial statement, report, notice or other communication delivered in connection with this Agreement shall be in English or accompanied by an English translation thereof.
(c) This Agreement has been prepared and signed in English and the parties hereto agree that the English version hereof (to the maximum extent permitted by applicable law) shall be the only version valid for the purpose of the interpretation and construction hereof notwithstanding the preparation of any translation into another language hereof, whether official or otherwise or whether prepared in relation to any proceedings which may be brought in Colombia, Luxembourg, Malta, Brazil, Peru, El Salvador or any other jurisdiction in respect hereof.
Section 21. Reproduction of Documents.
This Agreement and all documents relating thereto, including (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes, Pagarés and Instruction Letters themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced. Each Obligor agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. This Section 21 shall not prohibit any Obligor or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.
Section 22. Confidential Information.
For the purposes of this Section 22, “Confidential Information” means information delivered to any Purchaser by or on behalf of any Obligor or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement that is proprietary in nature, including all such information made available to a Purchaser or a holder in a data room and in response to due diligence questions and the Finance Documents; provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by any Obligor or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available. Each Purchaser will maintain the confidentiality of such Confidential Information in accordance with procedures adopted and implemented by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent that such disclosure reasonably relates to the administration of the investment represented by its Notes) (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information in accordance with this Section 22, (iii) any other holder of any Note, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 22), (v) any Person from which it offers to purchase any security of the Parent Guarantor or the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 22), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that, in each case, requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process, (y) in connection with any litigation to which such Purchaser is a party or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement or any other Finance Document. Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 22 as though it were a party to this Agreement. On reasonable request by an Obligor in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the relevant Obligor embodying this Section 22.
- 74 -
In the event that as a condition to receiving access to information relating to the Parent Guarantor or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 22, this Section 22 shall not be amended thereby and, as between such Purchaser or such holder and the Obligors, this Section 22 shall supersede any such other confidentiality undertaking.
The parties hereto acknowledge and agree that this Agreement may be disclosed to (a) Bancolombia S.A. and Banco Davivienda S.A. and their respective directors (or equivalent managers), officers, employees, attorneys, or other advisors, in each case, who have been informed of the confidential nature by the Company and who have agreed to treat such information as confidential and (b) any federal or state regulatory authority having jurisdiction over the Parent Guarantor or any Subsidiary (including, without limitation, the SEC, the Colombian Superintendence of Finance (SuperintendenciaFinanciera de Colombia) or any similar Governmental Authority or any securities exchange).
Section 23. Substitution of Purchaser.
Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “SubstitutePurchaser”) as the purchaser of the Notes that it has agreed to acquire hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser, shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6. Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 23), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser. In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 23), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.
- 75 -
Section 24. Miscellaneous.
Section 24.1 Successorsand Assigns. All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including any subsequent holder of a Note) whether so expressed or not, except that, subject to Section 10.2, no Obligor may assign or otherwise transfer any of its rights or obligations hereunder or under the Notes or any other Finance Document without the prior written consent of each holder. Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto and their respective successors and assigns permitted hereby) any legal or equitable right, remedy or claim under or by reason of this Agreement.
Section 24.2 AccountingTerms. All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with IFRS. Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with IFRS, and (ii) all financial statements shall be prepared in accordance with IFRS. For purposes of determining compliance with this Agreement (including Section 9, Section 10, the definition of “Indebtedness” and any Incorporated Provision), any election by any Obligor or any Subsidiary to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option, IFRS 9 – Financial Instruments, or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.
Section 24.3 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.
Section 24.4 Construction,Etc. Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant. Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.
- 76 -
Defined terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise (a) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, restated, supplemented or otherwise modified (subject to any restrictions on such amendments, restatements, supplements or modifications set forth herein or in the other Finance Documents) and, for purposes of the Notes, shall also include any such notes issued in substitution therefor pursuant to Section 14, (b) subject to Section 24.1, any reference herein to any Person shall be construed to include such Person’s successors and assigns, (c) the words “herein,” “hereof” and “hereunder,” and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (d) all references herein to Sections and Schedules shall be construed to refer to Sections of, and Schedules to, this Agreement, and (e) any reference to any law or regulation herein shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time.
Unless a contrary indication appears, where it relates to a Person incorporated under the laws of Spain, any reference to (a) an “attachment” includes, without limitation, an embargo preventivo and an embargo ejecutivo; (b) a “composition, compromise, assignmentor arrangement with any creditor” includes, without limitation, the celebration of a convenio in the context of an insolvency proceeding or a restructuring plan (plan de reestructuración) according to articles 614 et seq. of the Spanish Insolvency Act; (c) “guarantee or guaranty” includes, without limitation, any guaranty (fianza), surety (aval) and first demand guarantee (garantía a primer requerimiento); (d) “insolvency” (concurso or any other equivalent legal proceeding) and any step or proceeding related to it has the meaning attributed to them under the Spanish Insolvency Act and “insolvency proceeding” includes, without limitation, a declaración de concurso, necessary or voluntary (necesario o voluntario) and any notice to a competent court pursuant to articles 585 or 643 (comunicaciónde apertura de negociaciones o solicitud de homologación de un plan de reestructuración) of the Spanish Insolvency Act and its solicitud de inicio de procedimiento de concurso, auto de declaración de concurso, convenio judicial oextrajudicial con acreedores and transacción judicial o extrajudicial); (e) “person being unable to pay itsdebts” includes that person being in a state of insolvencia or concurso according to the Spanish Insolvency Act; (f) “receiver, administrator” or the like includes, without limitation, administración del concurso, administradorconcursal, liquidador, experto en la reestructuración or any other person performing the same function includes an administradorjudicial or any other person appointed as a result of any proceedings described in paragraphs (d) and (j); (g) “securityinterest or security” includes, without limitation, any mortgage (hipoteca mobiliaria o inmobiliaria), pledge (prendacon o sin desplazamiento posesorio), garantía financiera and, in general, any right in rem (garantíareal) governed by Spanish law, created for the purpose of granting security; (h) “set-off“ includes the right to compensar under the Spanish Civil Code; (i) “control” has the meaning stated under article 42 of the Spanish Commercial Code; and (j) “winding-up, administration or dissolution” includes, without limitation, disolución, liquidación, or administración concursal or any other similar proceedings or situation under the Spanish corporate, commercial, insolvency and civil law regulation.
- 77 -
Section 24.5 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument. Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto. Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as delivery of an original executed counterpart hereof. Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver an original executed counterpart hereof but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Agreement.
Section 24.6 GoverningLaw. This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.
Section 24.7 Jurisdiction and Process; Waiver of Jury Trial.
(a) Each Obligor irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes. To the fullest extent permitted by applicable law, each Obligor irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. Each of the parties hereto expressly, unconditionally and irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum. To the fullest extent permitted by applicable law, each of the parties hereto further expressly, unconditionally and irrevocably waives any right to the jurisdiction of any other court over any suit, action or proceeding arising out of or relating to this Agreement or the Notes to which such party may be entitled by reason of its present or future domicile or otherwise.
(b) Each Obligor agrees, to the fullest extent permitted by applicable law, that a final judgment in any suit, action or proceeding of the nature referred to in Section 24.7(a) brought in any such court shall be conclusive and binding upon it subject to rights of appeal, as the case may be, and may be enforced in the courts of the United States of America or the State of New York (or any other courts to the jurisdiction of which it or any of its assets is or may be subject) by a suit upon such judgment.
- 78 -
(c) Each Obligor consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 24.7(a) by mailing a copy thereof by registered, certified, priority or express mail, postage prepaid, return receipt or delivery confirmation requested, or delivering a copy thereof in the manner for delivery of notices specified in Section 20, to the Process Agent, at 530 Seventh Avenue, Suite 508, New York, NY 10018, as its agent for the purpose of accepting service of any process in the United States of America. Each Obligor agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it. Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.
(d) Nothing in this Section 24.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against any Obligor in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.
(e) Each Obligor hereby irrevocably designates and appoints (including for the purpose of Article 684 of the Brazilian Civil Code) the Process Agent to receive for it, and on its behalf, service of process in the United States of America. The appointment by the Brazilian Obligor is made pursuant to the terms of Article 654 and 684 of the Brazilian Civil Code and for this purpose, the appointment and designation are considered made on the date hereof, in the city of New York.
(f) Theparties hereto hereby waive trial by jury in any action brought on or with respect to this Agreement, the Notes or any other documentexecuted in connection herewith or therewith.
Section 24.8 Obligationto Make Payment in Dollars. Any payment on account of an amount that is payable hereunder or under the Notes in Dollars which is made to or for the account of any holder in any other currency, whether as a result of any judgment or order or the enforcement thereof or the realization of any security or the liquidation of any Obligor, shall constitute a discharge of the obligation of the relevant Obligor under this Agreement or the Notes only to the extent of the amount of Dollars which such holder could purchase in the foreign exchange markets in New York, New York, United States of America, with the amount of such other currency in accordance with normal banking procedures at the rate of exchange prevailing on the New York Banking Day following receipt of the payment first referred to above. If the amount of Dollars that could be so purchased is less than the amount of Dollars originally due to such holder, each Obligor agrees to the fullest extent permitted by law, to indemnify and save harmless such holder from and against all loss or damage arising out of or as a result of such deficiency. This indemnity shall, to the fullest extent permitted by law, constitute an obligation separate and independent from the other obligations contained in this Agreement and the Notes, shall give rise to a separate and independent cause of action, shall apply irrespective of any indulgence granted by such holder from time to time and shall continue in full force and effect notwithstanding any judgment or order for a liquidated sum in respect of an amount due hereunder or under the Notes or under any judgment or order. As used herein the term “New York Banking Day” shall mean any day other than Saturday or Sunday or a day on which commercial banks are required or authorized by law to be closed in New York, New York, United States of America.
- 79 -
Section 24.9 Special Waiver; No Immunity.
(a) To the extent that any Obligor may be entitled to the benefit of any provision of law requiring any holder in any suit, action or proceeding brought in a court of Colombia, Luxembourg, Malta, Brazil, Peru, El Salvador or any other jurisdiction arising out of or in connection with any of this Agreement or any other Finance Document, or the transactions contemplated hereby or thereby, to post security for litigation costs or otherwise post a performance bond or guaranty, or to take any similar action, such Obligor hereby irrevocably waives such benefit, in each case to the fullest extent now or hereafter permitted under the laws of Colombia, Luxembourg, Malta, Brazil, Peru, El Salvador or, as the case may be, such other jurisdiction.
(b) To the extent that any Obligor may be or become entitled, in any jurisdiction in which judicial proceedings may at any time be commenced with respect to this Agreement or any other Finance Document, to claim for itself or its properties, assets or revenues, any immunity from suit, court jurisdiction, attachment prior to judgment, attachment in aid of execution of a judgment, execution of a judgment or from any other legal process or remedy relating to its obligations under this Agreement or any other Finance Document, and to the extent that in any such jurisdiction there may be attributed such an immunity (whether or not claimed), such Obligor hereby irrevocably agrees not to claim and hereby irrevocably waives such immunity to the fullest extent permitted by the laws of such jurisdiction and, without limiting the generality of the foregoing, agrees that the waivers set forth in this Section shall be effective to the fullest extent now or hereafter permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and are intended to be irrevocable for purposes of such Act.
Section 24.10 Inconsistencywith Pagarés. In the case of any inconsistency between the terms of this Agreement or any Note and the terms of any Pagaré (a) for purposes of presentment of such Pagaré in the courts of Colombia in connection with any legal action or proceeding (other than an action to enforce a judgment obtained in any other jurisdiction) brought in respect of such Pagaré in any such court, the terms of such Pagaré shall govern, and (b) for all other purposes, the terms of this Agreement and the Notes shall govern.
- 80 -
Section 24.11 Release of Claims.
(a) Effective on the Restatement Date, each Obligor hereby acknowledges that: (a) it has no defenses, claims or set-offs to the enforcement by Purchasers’ liabilities, obligations and agreements on the date hereof, (b) the Purchasers have fully performed all undertakings and obligations owed to it as of the Restatement Date, and (c) none of the Purchasers waives, diminishes or limits any term or condition contained in the Existing Agreement, this Agreement, any Notes or any other Finance Documents. Each Obligor hereby remises, releases, acquits, satisfies and forever discharges the Purchasers and their Affiliates, and each of their respective agents, employees, officers, directors, predecessors, attorneys and all others acting or purporting to act on behalf of or at the direction of the Purchasers and their Affiliates (“Releasees”), of and from any and all manner of actions, causes of action, suit, debts, accounts, covenants, contracts, controversies, agreements, variances, damages, judgments, claims and demands whatsoever, known or unknown, in law or in equity, which any of such parties ever had, now has or, to the extent arising from or in connection with any act, omission or state of facts taken or existing on or prior to the date hereof, may have after the date hereof against the Releasees, for, upon or by reason of any matter, cause or thing whatsoever through the date hereof, relating to or arising under, the Existing Agreement, this Agreement, any Notes or any other Finance Documents. Without limiting the generality of the foregoing, each Obligor waives and affirmatively agrees not to allege or otherwise pursue any defenses, affirmative defenses, counterclaims, claims, causes of action, setoffs or other rights they do, shall or may have relating to or arising under, the Existing Agreement, this Agreement, any Notes or any other Finance Documents as of the Restatement Date, including, but not limited to, the rights to contest (i) the right of Purchasers to exercise its rights and remedies described in this Agreement, the Note Purchase Agreement, any Notes or any of the other Finance Documents, (ii) any provision of the Existing Agreement, this Agreement, any Notes or any of the other Finance Documents, or (iii) any conduct of Purchaser or other Releasees relating to or arising out of the Existing Agreement, this Agreement, any Notes or any of the other Finance Documents on or prior to the date hereof.
(b) Effective on the Restatement Date, each Purchaser hereby remises, releases, acquits, satisfies and forever discharges the Obligors (“Obligor Releasees”), of and from any and all manner of actions, causes of action, suit, covenants, contracts, controversies, agreements, damages, judgments, claims and demands whatsoever, known, in law or in equity (collectively, “Claims”), which Purchaser ever had, now has or, to the extent arising from or in connection with any act, omission or fact that occurred or existed on or immediately prior to the Restatement Date against any of the Obligor Releasees, for, upon or by reason of any matter or cause whatsoever, relating to or arising under the Existing Agreement, in each case, other than any Claim (i) arising from matters or liabilities not previously disclosed in writing (including by way of filing on or furnishing to the United States Securities & Exchange Commission’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system) by any of the Obligor Releasees to each of the Purchasers prior to the date hereof, (ii) relating to any debt or monetary obligations owing by the Obligor Releasees under the Existing Agreement, any Finance Document (as defined in the Existing Agreement) or the Existing Notes, or (iii) for the avoidance of doubt, under this Agreement, any Notes or any other Finance Documents.
Section 24.12 Special Provisions on Spanish Enforcement Proceedings
(a) Each Spanish Guarantor, the Company and the Parent Guarantor (as applicable) undertake to raise (at its own cost) this Agreement, each Collateral Document to which each Spanish Guarantor is a party and any other Finance Document to which they are a party (as applicable) as the Required Holders may require to the status of a Spanish Public Document within 30 days (or such longer period as the Required Holders may agree at its sole discretion) from their request. Any amendments of the aforementioned documents shall be also raised to the status of a Spanish Public Document by the Spanish Guarantor, the Company and the Parent Guarantor (as applicable).
- 81 -
(b) Any notarial fees and any other costs, expenses and taxes in connection with any Spanish Public Document executed or granted in connection with any Finance Document (including any such costs of release of any copies of such Spanish Public Document) shall be satisfied in accordance with Section 17.
(c) Each Spanish Public Document shall (i) have the effects established under articles 517 et seq. of the Spanish Civil Procedure Act; and (ii) if necessary, for the purposes of articles 571 et seq. of the Spanish Civil Procedure Act, include an authorization in favor of each Purchasers to determine the amounts due and payable to such Purchaser under the Finance Documents that may be claimable in any executive proceeding.
(d) Each party hereto hereby expressly authorizes the Purchasers to request and obtain from the Spanish notary public before whom any Finance Document has been formalized, any further copy (copia autorizada con o sin carácter ejecutivo) of such Finance Document notarized.
(e) For the purposes of enforcing the provisions of, or foreclosing under, this Agreement and/ or any Collateral Document pursuant to Spanish law, each Purchaser), shall open and maintain a special ledger account (cuenta interna) in its books with respect to the Obligors, from which all interest, fees, expenses, default interest, additional costs and any other amounts that the Obligors owe to each Purchaser under the Finance Documents will be debited and into which all amounts received by or on account of each Purchaser from the Obligors under the Finance Documents will be credited, so that the balance of the ledger account represents the amount owed from time to time by the Obligors to the relevant Purchaser. In the event of assignment or transfer as provided in Section 14.2, the assignor will totally or partially cancel the referenced accounts, with corresponding accounts to be opened by the assignee.
(f) Any failure to keep the ledger accounts referred to in paragraph (e) above or any error in doing so will not, however, limit or otherwise affect the obligation of the Obligors to pay any amount owed pursuant to the Finance Documents.
(g) For the purpose of articles 571 et seq. of the Spanish Civil Procedure Act (i) the amount due and payable under the Finance Documents that may be claimed in any executive proceedings will be contained in a certificate supplied by the relevant Purchaser and will be based on the account maintained by such Purchaser in connection with the Finance Documents; (ii) the parties hereto expressly agree that such balance shall be considered as an acknowledgement of debt and may be claimed pursuant to the same provisions of such law; (iii) the determination of the debt to be claimed though the executive proceeding shall be effected by the relevant Purchaser, as the case may be) by means of the appropriate certificate evidencing the balance shown in the account maintained by such Purchaser in connection with the Finance Documents with respect to the Obligors; and (iv) the relevant Purchaser may have the certificate notarized.
(h) The relevant Purchaser may start executive proceedings by presenting to any relevant court (i) an original notarial copy of this Agreement and/or as required by law, the relevant Finance Document; and (ii) a notarial document (acta notarial) incorporating the certificate of such Purchaser referred to in paragraph (g)(i) above, evidencing that the determination of the amounts due and payable by the Obligors have been calculated as agreed in this Agreement and that such amounts coincide with the balance shown in the account maintained by such Purchaser in connection with the Finance Documents with respect to the Obligors.
* * * * *
- 82 -
If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Obligors, whereupon this Agreement shall become a binding agreement among you and the Obligors.
| Very truly yours, | |
|---|---|
| PROCAPS S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PROCAPS GROUP, S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| C.I. PROCAPS S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| DIABETRICS HEALTHCARE S.A.S. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PHARMAYECT S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PROCAPS, S.A. DE C.V. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Special Manager |
- 83 -
| BIOKEMICAL, S.A. DE C.V. | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Special Manager |
| COLBRAS INDÚSTRIA E COMÉRCIO LTDA. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Attorney-in-Fact |
| By: | /s/ Melissa Andreia Silva Angelini |
| Name: | Melissa Andreia Silva Angelini |
| Title: | Attorney-in-Fact |
| Witnesses: | |
| 1. | /s/ Natalia Caballero |
| Name: | Natalia Caballero |
| Id: | C.C 53.145.522 |
| 2. | /s/ Maria Alejandra Molina |
| Name: | Maria Alejandra Molina |
| Id: | C.E. 723.124 |
| SOFGEN PHARMACEUTICALS LLC | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| CRYNSSEN PHARMA GROUP LTD | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
- 84 -
| FUNTRITION S.A.S. | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| RYMCO MEDICAL S.A.S. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PHARMARKETING, S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Treasurer and Authorized Signatory |
| UNIMED DEL PERÚ S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| CRYNSSEN PHARMA S.A.S. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| FUNTRITION LLC | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
- 85 -
| SOFGEN PHARMA LLC | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| INDUSTRIAS KADIMA S.A.S. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| INVERSIONES JADES S.A.S. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| INVERSIONES GANEDEN S.A.S. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| INVERSIONES HENIA S.A.S. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
- 86 -
| INVERSIONES CRYNSEEN S.A.S. | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| COLOMBIANA DE SUMINISTROS MÉDICOS HOSPITALARIOS LIMITADA - COLMED LTDA. (a.k.a. Colmed Ltda.) | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| ALLOPHANE HOLDINGS, S.L. | |
| By: | /s/ Gonzalo Egas Bobo Mayor |
| Name: | Gonzalo Egas Bobo Mayor |
| Title: | Representative of the Sole Director, Ibertax Servicios Integrales, S.L. |
| UNIMED FARMACÉUTICA HOLDING S.L. | |
| By: | /s/ Gonzalo Egas Bobo Mayor |
| Name: | Gonzalo Egas Bobo Mayor |
| Title: | Representative of the Sole Director, Ibertax Servicios Integrales, S.L. |
| CDI S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Director and Authorized Signatory |
- 87 -
| PHARMARKETING COSTA RICA S.A. | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Treasurer and Authorized Signatory |
| PHARMARKETING DOMINICANA, S.R.L. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| RODDOME PHARMACEUTICAL S.A. | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Director and Authorized Signatory |
- 88 -
| This Agreement is hereby | |
|---|---|
| accepted and agreed to as | |
| of the date hereof. | |
| PURCHASERS: | |
| THE PRUDENTIAL INSURANCE COMPANY OF AMERICA | |
| By: | PGIM, Inc. (as Investment Manager) |
| By: | /s/ Michael Gurovitsch |
| Name: | Michael Gurovitsch |
| Title: | Vice President |
| FORTITUDE LIFE INSURANCE & ANNUITY COMPANY, F/K/A PRUDENTIAL ANNUITIES LIFE ASSURANCE CORPORATION | |
| By: | The Prudential Insurance Company of America, as administrator |
| By: | PGIM, Inc. (as Investment Manager) |
| By: | /s/ Michael Gurovitsch |
| Name: | Michael Gurovitsch |
| Title: | Vice President |
| CIGNA HEALTH AND LIFE INSURANCE COMPANY | |
| By: | Cigna Investments, Inc. (authorized agent) |
| By: | /s/ Leonard Mazlish |
| Name: | Leonard Mazlish |
| Title: | Senior Managing Director |
- 89 -
Schedule A
DEFINED TERMS
As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:
“Additional Defaults” means those events of default under the Existing Agreement set forth on Schedule 1.6.
“Additional SubsidiaryGuarantor” means a Subsidiary that has executed and delivered a Subsidiary Guarantor Joinder Agreement, so long as such Subsidiary has not been discharged and released from its obligations under this Agreement.
“Affected Noteholder” is defined within the definition of “Noteholder Sanctions Event.”
“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person, and, with respect to any Obligor, shall include (a) any Person beneficially owning or holding, directly or indirectly, 10% or more of any class of voting interests or Equity Interests in such Obligor or any of its Subsidiaries and (b) any Person in which the Obligors and their respective Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly, 10% or more of any class of voting interests or Equity Interests. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of any Obligor.
“Affiliated Lender” means any lender, noteholder or Person (other than any Category IV Creditor) that (i) is an Affiliate or (ii) holds a direct or indirect Equity Interests, in each case, in any Obligor or any Subsidiary.
“Agreement” means this Amended and Restated Note Purchase and Guarantee Agreement, including all Schedules attached to this Agreement.
“Anti-CorruptionLaws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act 2010, the criminal offenses related to corruption included in the Colombian Criminal Code (Código Penal Colombiano), Law 1474 of 2011 (Estatuto Anticorrupción) of Colombia, and Law 1778 of 2016 of Colombia or the Maltese Criminal Code (Chapter 9, Laws of Malta) or Articles 397, 397-A and 398 of Section IV of Chapter II of Title XVIII of the Peruvian Criminal Code, Peruvian Legislative Decree No. 635, Law No. 30424 (as amended by Legislative Decree No. 1352 and Law No. 30835) and its regulations approved by Peruvian Supreme Decree No. 002-2019-JUS, Legislative Decree No. 1385, Peruvian Law No. 30737 and Peruvian Supreme Decree No. 096-2018-EF, and the rules and regulations promulgated thereunder.
- 90 -
“Anti-Money LaunderingLaws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including the United States Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act), the USA PATRIOT Act and articles 333 and 345 of the Colombian Criminal Code (CódigoPenal Colombiano) or the Prevention of Money Laundering Act (Chapter 373, Laws of Malta) and any regulations issued thereunder and the Maltese Criminal Code (Chapter 9, Laws of Malta) and any similar or equivalent legislation under the laws of any jurisdiction to which any of the Obligors is subject.
“Blocked Person” means (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (b) a Person, entity, organization, country or regime that is blocked under sanctions that have been imposed under U.S. Economic Sanctions Laws or (c) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (a) or (b).
“Board Observer” has the meaning specified in Section 9.12.
“BOD Meeting” has the meaning specified in Section 9.12.
“Brazil” means the Federative Republic of Brazil.
“Business Day” means (a) for the purposes of Section 8.8 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York, United States of America are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York, United States of America or Colombia are required or authorized to be closed.
“Capital Lease” means, at any time, a lease with respect to which the lessee is required concurrently to recognize the acquisition of an asset and the incurrence of a liability in accordance with IFRS.
“Category IV Creditors” means the Purchasers and the Local Category IV Lenders.
“Category IV Indebtedness” means the Indebtedness under this Agreement and the Local Category IV Credit Agreements.
“Category IV RequiredSecured Parties” has the meaning ascribed to such term in the Pari Passu Intercreditor Agreement.
“Change of Control” means any Person (or any group of Persons acting together) other than the Permitted Holders collectively (a) owning, directly or indirectly, more than 50% of the Equity Interests in the Company, (b) owning, directly or indirectly, more than 50% of the voting Equity Interests in the Company entitled to vote at a general meeting of its shareholders or its equivalent body, (c) being entitled, directly or indirectly, whether through ownership of Equity Interests, contract or otherwise, to elect a majority of the board of directors or equivalent governing body of the Company and/or (d) being entitled, directly or indirectly, whether through ownership of Equity Interests, contract or otherwise, to direct or cause the direction of the management and policies of the Company.
- 91 -
“Cigna Group” means, collectively, the holders of Notes that are Affiliates of or are advised or managed by Cigna Investments, Inc. (or any Affiliate of Cigna Investments, Inc.).
“Closing” means the amendment and restatement of the Existing Agreement upon satisfaction or waiver of the conditions contained in Section 4.
“Closing Equity Contribution” means cash equity contributions, which shall be common equity, directly or indirectly in Parent Guarantor in an aggregate amount equal to, when combined with the Convertible Note Equity Contribution, at least U.S. $130,000.000.
“Code” means the United States Internal Revenue Code of 1986 and the rules and regulations promulgated thereunder from time to time.
“Colombia” means the Republic of Colombia.
“Collateral” means all the “Collateral” and “Mortgaged Property” (or similar terms in English or in other languages) referred to in the Collateral Documents and all of the other property that is or is intended under the terms of the Collateral Documents to be subject to Liens in favor of the Collateral Agent for the benefit of the Purchasers.
“Collateral Agent” means GLAS AMERICAS LLC.
“Collateral AgentFee Letter” means that certain Indicative Fee Proposal for Agency Services, dated as of February 25, 2025, between, Company and Collateral Agent, as amended, restated, amended and restated, replaced, supplemented or otherwise modified from time to time.
“Collateral Documents” means, collectively, the U.S. Pledge and Security Agreement, Malta Pledge Agreement, any Mortgages, the Intercompany Subordination Agreement, each Control Agreement, each U.S. Pledge and Security Agreement Joinder, each Intercompany Subordination Agreement Joinder, each Colombian Pledge Agreement, other security agreements, mortgages, pledge agreements, intellectual property security agreements, UCC financing statements and any fixture filings, or any similar or equivalent agreement, document or instrument in any Obligor Jurisdiction or any other applicable jurisdiction, including, without limitation, those set forth on Schedule 9.16, naming any Obligor as a debtor and the Collateral Agent as secured party, all recordings made with any office (including, without limitation, the United States Patent and Trademark Office and the United States Copyright Office) for recording interests in Intellectual Property or other assets, and all other agreements, mortgages, instruments and documents entered into or delivered by any Person from time to time to secure the payment or performance of all or any part of the obligations of the Obligors or any other Person to the Purchasers under this Agreement, the Notes or any other Finance Document, in each case, as amended, restated, amended and restated, supplemented or otherwise modified from time to time.
“Colombian PledgeAgreement” shall mean each pledge agreement to be entered into by the Collateral Agent on behalf of the Category 4 Creditors, as secured creditor and by (a) the shareholders of each of the Obligors organized under the laws of Colombia with respect to the Equity Interests of each such Obligor and (b) the Obligors organized under the laws of Colombia with respect to all of their assets that qualify as movable property under the laws of Colombia.
- 92 -
“Company” is defined in the first paragraph of this Agreement.
“Confidential Information” is defined in Section 22.
“Consolidated EBITDA” means, for any period of determination, in relation to a Person and its Subsidiaries, the Consolidated Net Income for such period plus (i) Consolidated Interest Expense for such period, (ii) provision for federal, state, local and foreign Taxes based on income, profits or capital payable or accrued for such period, including franchise and similar Taxes and foreign withholding Taxes paid or accrued during such period (and penalties and interest related to such Taxes or arising from any tax examination), (iii) the amount of depreciation and amortization expense for such period (including amortization of intangible assets and deferred financing fees or costs), (iv) extraordinary or non-recurring charges, expenses or losses, (v) other non-cash charges, expenses or losses, (vi) non-cash stock option and other equity-based compensation expenses, (vii) fees and expenses relating to this Agreement, (viii) any net loss for such period attributable to the early extinguishment of Indebtedness or to hedging obligation or other derivative instruments, (ix) any net loss from disposed abandoned or discontinued operations, and (x) the amount of any fees and expenses incurred or any amortization thereof in connection with any acquisition, investment, recapitalization, Disposition, issuance or repayment of Indebtedness or issuance of Equity Interests, refinancing transaction or amendment or other modification of any debt instrument and any charges or non-recurring merger costs incurred during such period as a result of any such transaction, in each case, to the extent not otherwise prohibited hereunder, provided that (x)(A) all such expenses and charges described in clauses (iv) through (x) above shall be identified in detail in the Officer’s Certificate delivered with respect to such period pursuant to Section 7.2, and (B) the aggregate amount of all such expenses and charges for any period in the fiscal years (1) ending December 31, 2025, December 31, 2026 and December 31, 2027, shall not exceed the amount equal to US $15,000,000 for such period, and (2) ending December 31, 2028 and December 31, 2029, shall not exceed an amount equal to US $10,000,000 for such period. Consolidated EBITDA shall (a) include the Consolidated EBITDA (calculated mutatis mutandis in the same way as described above) of (i) any Subsidiary that becomes an Obligor during such period or (ii) that is attributable to any business or asset acquired by the Obligors during such period, in each of cases (i) and (ii) as though such change of status or acquisition had occurred as of the first day of such period, and (b) exclude the Consolidated EBITDA (calculated mutatis mutandis in the same way as described above) of (i) any Subsidiary that ceases to be an Obligor during such period or (ii) that is attributable to any business or asset disposed of by the Obligors during such period, in each of cases (i) and (ii) as though such change of status or disposition had occurred as of the first day of such period (without duplication of the corresponding adjustments set forth in the definitions of “Consolidated Interest Expense” and “Consolidated Net Income”).
“Consolidated InterestExpense” means, for any period of determination, the consolidated interest expense with respect to Indebtedness (including amortizations of any discount on any Indebtedness) of the Parent Guarantor and its Subsidiaries for that period, in each case determined on a consolidated basis in accordance with IFRS and, in the case of any determination for a Relevant Period, as set forth in the consolidated financial statements of the Parent Guarantor for such period delivered to the holders in accordance with Section 7.1(a) or 7.1(b). For purposes of the foregoing, Consolidated Interest Expense shall be determined after giving effect to any net payments made or received by the Parent Guarantor or any of its Subsidiaries during the relevant period with respect to interest rate or currency Swap Contracts relating to Indebtedness for borrowed money. Consolidated Interest Expense shall (a) include the Consolidated Interest Expense (calculated mutatis mutandis in the same way as described above) of (i) any Subsidiary that becomes an Obligor during such period or (ii) that is attributable to any business or asset acquired by the Obligors during such period, in each of cases (i) and (ii) as though such change of status or acquisition had occurred as of the first day of such period, and (b) exclude the Consolidated Interest Expense (calculated mutatis mutandis in the same way as described above) of (i) any Subsidiary that ceases to be an Obligor during such period or (ii) that is attributable to any business or asset disposed of by the Obligors during such period, in each of cases (i) and (ii) as though such change of status or disposition had occurred as of the first day of such period.
- 93 -
“Consolidated NetIncome” means, for any period, the net income (loss) of the Parent Guarantor and its Subsidiaries on a consolidated basis as determined in accordance with IFRS after deducting, to the extent included in computing said net income and without duplication, (i) the income (or deficit) of any Person (other than a Subsidiary of such Person), in which such Person or any of its Subsidiaries has any ownership interest, except to the extent that any such income has been actually received by such Person or such Subsidiary in the form of cash dividends or similar cash distribution, (ii) any gains or losses or other income which are non-recurring, extraordinary or attributable to discontinued operations, and (iii) gains or losses resulting from the write-up or write-down of any assets. Consolidated Net Income shall (a) include the Consolidated Net Income (calculated mutatis mutandis in the same way as described above) of (i) any Subsidiary that becomes an Obligor during such period or (ii) that is attributable to any business or asset acquired by the Obligors during such period, in each of cases (i) and (ii) as though such change of status or acquisition had occurred as of the first day of such period, and (b) exclude the Consolidated Net Income (calculated mutatis mutandis in the same way as described above) of (i) any Subsidiary that ceases to be an Obligor during such period or (ii) that is attributable to any business or asset disposed of by the Obligors during such period, in each of cases (i) and (ii) as though such change of status or disposition had occurred as of the first day of such period.
“Consolidated TotalAssets” means, as of any date of determination, the total assets of the Parent Guarantor and its Subsidiaries that would be shown as assets on a consolidated balance sheet of the Parent Guarantor and its Subsidiaries prepared in accordance with IFRS as of such date.
“Consolidated TotalIndebtedness” means, as of any date of determination, the aggregate Indebtedness of the Parent Guarantor and its Subsidiaries, determined on a consolidated basis in accordance with IFRS as of such date and, in the case of any determination as of a Determination Date, as set forth on the consolidated balance sheet of the Parent Guarantor as of such date delivered to the holders in accordance with Section 7.1(a) or 7.1(b).
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise; and the terms “Controlled” and “Controlling” shall have meanings correlative to the foregoing.
- 94 -
“Control Agreements” means, collectively, Deposit Account Control Agreements and Securities Account Control Agreements.
“Controlled Entity” means (a) the Company, any of the Subsidiaries of the Company, and any of their or the Company’s respective Controlled Affiliates, (b) the Parent Guarantor, any of the Subsidiaries of the Parent Guarantor, and any of their or the Parent Guarantor’s respective Controlled Affiliates, and (c) if the Parent Guarantor has a parent company, such parent company and its Controlled Affiliates.
“Convertible NoteEquity Contributions” means the conversion of the Convertible Notes into Ordinary Shares and the Warrants (in each case as defined in the Convertible Note Subscription Agreement) in accordance with the terms of Section 3 of the Convertible Note Subscription Agreement.
“Convertible Notes” means that certain (i) Secured Convertible Note, dated November 29, 2024, between, Parent Guarantor, and Hoche Partners Pharma Holding S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, for the original principal amount of US $20,000,000, and (ii) Secured Convertible Note, dated December 27, 2024, between, Parent Guarantor, and Hoche Partners Pharma Holding S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg, for the original principal amount of US $20,000,000.
“Convertible NoteSubscription Agreement” certain Secured Convertible Note Subscription Agreement dated November 29, 2024, between Parent Guarantor and Hoche Partners Pharma Holding S.A., a public limited liability company (société anonyme) incorporated and existing under the laws of the Grand Duchy of Luxembourg.
“Copyrights” means any and all of the following (whether now owned or hereafter adopted or acquired by a Person): works of authorship (whether or not published and whether or not copyrightable), copyrights (registered or otherwise) and registrations and applications for registration thereof, including, without limitation, (a) all restorations, reversions, renewals, reissues, continuations or extensions thereof, (b) all income, license fees, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including, without limitation, payments under all Intellectual Property Licenses entered into in connection therewith and damages and payments for past, present or future infringements thereof, (c) the right to sue for past, present and future infringements thereof, and (d) all of such Person’s rights corresponding thereto throughout the world.
“Court Filing Duty” means any filing duty or similar amount payable in the jurisdiction of organization of any Obligor in connection with the use in a judicial proceeding in such jurisdiction of this Agreement, the Notes or any other Finance Document or any other document related hereto or thereto or to the transactions contemplated herein or therein.
“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.
“Default Rate” means the interest rate equal to 8.75% per annum.
- 95 -
“Deposit Account” has the meaning ascribed to such term in the UCC.
“Deposit AccountControl Agreement” means any control agreement or similar agreement entered into by and among any Obligor, the Collateral Agent and any bank (as that term is defined in UCC Section 9-102(a)(8)) establishing or maintaining Deposit Accounts for such Obligor, in form and substance reasonably satisfactory to the Required Holders and the Collateral Agent, pursuant to which the Collateral Agent obtains “control” (within the meaning of 9-104 of the UCC) over such Deposit Accounts (including all funds and any other property from time to time held therein or credited thereto, including any free credit balance, together with any proceeds and profits thereof in any form).
“Determination Date” means the last day of a fiscal quarter of the Parent Guarantor.
“Disclosure Documents” is defined in Section 5.3.
“Disposition” or “Dispose” means the sale, assignment, transfer, license, lease, conveyance or other disposition (including any sale and leaseback transaction) of any property by any Person (or the granting of any option or other right to do any of the foregoing), including any sale, assignment, transfer or other disposal, with or without recourse, of any notes receivable or accounts receivable or any rights and claims associated therewith.
“Dollars”, “US$”, “$” or “USD” means lawful currency of the United States of America.
“El Salvador” means the Republic of El Salvador.
“Environmental Laws” means any and all applicable federal, national, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to Hazardous Materials.
“Equity Interests” means any and all shares, interests, participations, quotas or other equivalents (however designated) of capital stock of a corporation, any and all ownership interests in a Person other than a corporation (including beneficial interests in a trust), any and all warrants or options to purchase any of the foregoing or any securities convertible into or exchangeable or exercisable for any of the foregoing.
“ERISA” means the United States Employee Retirement Income Security Act of 1974 and the rules and regulations promulgated thereunder from time to time in effect.
“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with any Obligor under section 414 of the Code.
“EU Blocking Regulation” means the Council Regulation (EC) 2271/96.
“Event of Default” is defined in Section 11.
- 96 -
“Excess Cash Flow” means, for any fiscal quarter, the Liquidity of the Parent Guarantor and its Subsidiaries minus $15,000,000, as set forth in the certificate delivered pursuant to Section 7.2.
“Existing Agreement” is defined in Section 1.1.
“Existing ForbearanceAgreement” means that certain Forbearance Agreement, entered into as of August 26, 2024, by and among, inter alios, Company, certain of the existing Restatement Date Subsidiary Guarantor, and the Purchasers, as amended, supplemented or otherwise modified prior to the Restatement Date.
“Existing Leases” means each of the lease agreements set forth on Schedule 10.5(c).
“Existing Notes” is defined in Section 1.1.
“Existing Notes Make-WholeAmount” means the “Make-Whole Amount” as defined in the Existing Agreement, and, as of the Restatement Date, is an amount equal to US$1,488,204.60.
“FATCA” means (a) sections 1471 through 1474 of the Code, as of the Restatement Date (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), together with any current or future regulations or official interpretations thereof, (b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the United States of America and any other jurisdiction, which (in either case) facilitates the implementation of the foregoing clause (a), and (c) any agreements entered into pursuant to section 1471(b)(1) of the Code.
“Finance Documents” means this Agreement, the Notes, the Pagarés, the Collateral Documents, each Perfection Certificate, the Pari Passu Intercreditor Agreement, the Collateral Agent Fee Letter, the Instruction Letters, any Spanish Public Document granted in connection with the former documents and any other document designated a “Finance Document” in a writing signed by the Company or the Parent Guarantor, on the one hand, and the Required Holders, on the other hand.
“Fundamental Transaction” is defined in Section 10.2.
“Governmental Authority” means:
(a) the government of:
(i) the United States of America, Colombia, Luxembourg, Malta, Brazil, Peru, El Salvador, Panama, Spain or any state or other political subdivision of any thereof, or
(ii) any other jurisdiction in which any Obligor or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of any Obligor or any Subsidiary, or
- 97 -
(b) any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.
“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.
“Group” means the Parent Guarantor and its Subsidiaries.
“Guarantors” means, collectively, the Parent Guarantor and each Subsidiary Guarantor.
“Guaranteed Obligations” is defined in Section 15.1(a).
“Guaranty” means, with respect to any Person, any obligation (except the endorsement in the ordinary course of business of negotiable instruments for deposit or collection) of such Person guaranteeing or in effect guaranteeing any indebtedness, dividend or other monetary obligation of any other Person in any manner, whether directly or indirectly, including obligations incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of such indebtedness or obligation, or (ii) to maintain any working capital or other balance sheet condition or any income statement condition of any other Person or otherwise to advance or make available funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services primarily for the purpose of assuring the owner of such indebtedness or obligation of the ability of any other Person to make payment of the indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or obligation against loss in respect thereof.
In any computation of the indebtedness or other liabilities of the obligor under any Guaranty, the indebtedness or other obligations that are the subject of such Guaranty shall be assumed to be direct obligations of such obligor. The verbs “guaranty” and “guarantee” shall have meanings correlative to the foregoing.
“Hazardous Materials” means any and all pollutants, toxic or hazardous wastes or other substances that might pose a hazard to health and safety, the removal of which may be required or the generation, manufacture, refining, production, processing, treatment, storage, handling, transportation, transfer, use, disposal, release, discharge, spillage, seepage or filtration of which is or shall be restricted, prohibited or penalized by any applicable law, including asbestos, urea formaldehyde foam insulation, polychlorinated biphenyls, petroleum, petroleum products, lead based paint, radon gas or similar restricted, prohibited or penalized substances.
- 98 -
“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 14.1, provided, however, that if such Person is a nominee, then for the purposes of Section 7, Section 12, Section 19.2 and Section 20 and any related definitions in this Schedule A, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.
“Holdover Interest” is defined in Section 1.1.
“Hostile Tender Offer” means, with respect to the use of proceeds of any Note, any offer to purchase, or any purchase of, shares of capital stock of any corporation or Equity Interests in any other entity, or securities convertible into or representing the beneficial ownership of, or rights to acquire, any such shares or Equity Interests, if such shares, Equity Interests, securities or rights are of a class which is publicly traded on any securities exchange or in any over-the-counter market, other than purchases of such shares, Equity Interests, securities or rights representing less than 5% of the Equity Interests or beneficial ownership of such corporation or other entity for portfolio investment purposes, and such offer or purchase has not been duly approved by the board of directors of such corporation or the equivalent governing body of such other entity prior to the Restatement Date.
“IFRS” means International Financial Reporting Standards, as in effect from time to time.
“Incorporated Provision” is defined in Section 9.9(a).
“Incorporated ProvisionTermination Date” means, in respect of any Incorporated Provision, the day on which the holders of Notes receive an Officer’s Certificate satisfying the requirements of Section 7.2 with respect to the next subsequent quarterly fiscal period of the Parent Guarantor following the quarterly fiscal period in which such Incorporated Provision is deleted or otherwise removed from all applicable Material Credit Facilities or all such Material Credit Facilities are terminated, as applicable.
“Indebtedness” with respect to any Person means, at any time, without duplication,
(a) its liabilities for borrowed money and its redemption obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of property acquired by such Person (excluding accounts payable arising in the ordinary course of business);
(c) all liabilities appearing on its balance sheet in accordance with IFRS in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with respect to any property owned by such Person (whether or not it has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or instruments serving a similar function issued or accepted for its account by banks and other financial institutions (whether or not representing obligations for borrowed money);
- 99 -
(f) net payment obligations of such Person derived from factoring operations;
(g) all of such Person’s obligations to any landlord under any sale-leaseback that are classified as financial indebtedness in accordance with IFRS, with the exception of so-called operational leasing without the option of purchase or return of the property subject to such sale-leaseback;
(h) all financial obligations of such Person related to the purchase price of assets, goods or services with a term greater than 360 days that are classified as financial indebtedness in accordance with IFRS;
(i) the aggregate Swap Termination Value of all Swap Contracts of such Person; and
(j) any Guaranty of such Person with respect to liabilities of a type described in any of clauses (a) through (i) hereof.
Indebtedness of any Person shall include all obligations of such Person of the character described in clauses (a) through (j) to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is deemed to be extinguished under IFRS.
“INHAM Exemption” is defined in Section 6.2(e).
“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.
“Instruction Letter” means, with respect to each Note, one letter of instruction, in favor of such Purchaser (or its nominee), in the form set out in Schedule 1-C.
“Intermediate Parent” means Crynssen Pharma Group Ltd, a private limited liability company registered and organized under the laws of Malta under company registration number C 59671.
“Intellectual Property” means all intellectual property, including (a) Copyrights, (b) Patents, (c) Trademarks, (d) Intellectual Property Licenses, (e) recipes, formulas and mixtures, (f) computer software, (g) trade secrets and confidential, technical and business information (including ideas, formulas, compositions, inventions, and conceptions of inventions whether patentable or unpatentable and whether or not reduced to practice), (h) whether or not confidential, technology (including know-how and show-how), manufacturing and production processes and techniques, research and development information, drawings, specifications, designs, plans, proposals, technical data, copyrightable works, financial, marketing and business data, pricing and cost information, business and marketing plans and customer and supplier lists and information, (i) copies and tangible embodiments of all the foregoing, in whatever form or medium, (j) all rights to obtain and rights to apply for patents, and to register trademarks and copyrights, (k) all other intellectual property or proprietary rights, (l) all claims or causes of action arising out of or related to any infringement, misappropriation or other violation of any of the foregoing, and (m) all rights to sue or recover and retain damages and costs and attorneys’ fees for past, present and future violations of any of the foregoing throughout the world.
- 100 -
“Intellectual PropertyLicenses” shall mean rights under or interest in any Patents, Trademarks, Copyrights or other Intellectual Property.
“Intercompany SubordinationAgreement” means the Intercompany Subordination Agreement, dated as of the Restatement Date, made by the Parent Guarantor and its Subsidiaries in favor of the Collateral Agent for the benefit of the Purchasers.
“Intercompany SubordinationAgreement Joinder” is defined in Section 9.7(a)(iv).
“Investments” means, as applied to any Person, (a) any direct or indirect acquisition by such Person of capital stock or similar equity interests, other securities or other interests of, or investments in, any other Person, or all or any substantial part of the assets of any other Person (or of any division or business line of such other Person), (b) any direct or indirect loan, guarantee, advance (other than trade accounts receivables for goods or services from customers incurred in the ordinary course of business (including such receivables evidenced by a promissory note)) or capital contribution by such Person to any other Person and (c) any other items that are or would be classified as investments on a balance sheet prepared in accordance with IFRS.
“IOF/Exchange Tax” is defined in Section 5.9(b).
“Leased Real Property” is defined in Section 5.10.
“Lien” means, with respect to any Person, any mortgage, lien, pledge, garantía mobiliaria, caução, fiduciary lien (propriedade fiduciária), assignment for security purposes (including alienação fiduciária and cessão fiduciária), chattel mortgage, guarantee trust, passive easement, security interest or other encumbrance, or any interest or title of any vendor, lessor, lender or other secured party to or of such Person under any conditional sale or other title retention agreement or Capital Lease, upon or with respect to any property or asset of such Person (including in the case of stock, stockholder agreements, voting trust agreements and all similar arrangements).
“Liquidity” shall mean, as of any Determination Date, the amount of unrestricted cash and cash equivalents of Parent Guarantor and its Subsidiaries as of such date.
“Local Category IVLenders” means each of Bancolombia S.A., Banco Davivienda S.A., Banco BTG Pactual S.A. – Cayman Branch and Banco BTG Pactual Colombia S.A.
“Local Category IVCredit Agreements” means each of (i) Modificación Integral al Contrato de Crédito, dated as of the Restatement Date, between, inter alios, Company, Parent Guarantor, Bancolombia S.A. and Banco Davivienda S.A., as lenders, (ii) ModificaciónIntegral al Contrato de Crédito, dated as of the Restatement Date, between, inter alios, Company, Parent and Banco BTG Pactual S.A. – Cayman Branch, as lender, and (iii) Modificación Integral al Contrato de Crédito, dated as of the Restatement Date, between, inter alios, Company, Parent and Banco BTG Pactual Colombia S.A., as lender, in each case, together with all material instruments, documents and agreements related thereto.
- 101 -
“Luxembourg” means the Grand Duchy of Luxembourg.
“Malta” means the Republic of Malta.
“Malta Pledge Agreement” means the pledge agreement dated as of the Restatement Date whereby the all the capital issued by the Intermediate Parent is pledged by the Parent Guarantor in favor of the Collateral Agent in terms contained therein.
“Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Parent Guarantor and its Subsidiaries taken as a whole.
“Material AdverseEffect” means a material adverse effect on (a) the business, operations, affairs, financial condition, assets or properties of the Obligors and their respective Subsidiaries taken as a whole, (b) the ability of the Obligors to perform their obligations under the Finance Documents to which they are a party taken as a whole, or (c) the validity or enforceability of any Finance Document or the rights and remedies any of the holders of the Notes are purported to have under any Finance Document against the Obligors taken as a whole.
“Material CreditFacility” means the Local Category IV Credit Agreements and the Working Capital Credit Facility*.*
“Material Subsidiary” means, at any date, each of the Restatement Date Subsidiary Guarantors and each other Subsidiary of the Parent Guarantor (other than the Company):
(a) that guarantees or is liable at such date, whether as a borrower or an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility;
(b) whose total assets as of the most recent Determination Date (excluding assets constituting Equity Interests in other members of the Group), determined for such Subsidiary on an uncombined and unconsolidated basis, comprise 2.5% or more of Consolidated Total Assets as of such date (as reflected in the consolidated financial statements of the Parent Guarantor for such Determination Date delivered to the holders in accordance with Section 7.1(a) or 7.1(b)); provided that the Consolidated Total Assets of all Subsidiaries that are not Material Subsidiaries shall not exceed 5.0% of Consolidated Total Asset as of the last day of the most recently ended Determination Date; or
(c) beginning with June 30, 2027, whose portion of Consolidated EBITDA for the period of four consecutive fiscal quarters of the Parent Guarantor ending on the most recent Determination Date, determined for such Subsidiary on an uncombined and unconsolidated basis, comprises 2.5% or more of Consolidated EBITDA for such period (as reflected in the consolidated financial statements of the Parent Guarantor for such Determination Date delivered to the holders in accordance with Section 7.1(a) or Section 7.1(b)); provided that the Consolidated EBITDA of all Subsidiaries that are not Material Subsidiaries shall not exceed 5.0% of Consolidated EBITDA as of the last day of the most recently ended Determination Date;
- 102 -
“Material Property” means each of the manufacturing facilities of the Parent Guarantor and any of its Subsidiaries set forth on Schedule 10.5(b).
“Material Real Property” means (i) to the extent a reasonably recent appraisal or other third-party valuation is available for the relevant real property, any real property with a fair market value, on the basis of such appraisal, greater than or equal to $500,000, and (ii) if no such appraisal or other third-party valuation is available, any real property in respect of which the lower of (i) the book value and (ii) the fair market value, as reasonably determined by the Parent Guarantor in good faith, is greater than or equal to $500,000.
“Maturity Date” means December 31, 2029.
“More Favorable Provision” is defined in Section 9.9(a).
“Mortgages” means collectively, the deeds of trust, trust deeds and mortgages made by the Obligors in favor or for the benefit of the Collateral Agent on behalf of the Category IV Creditors in form and substance reasonably satisfactory to the Collateral Agent (at the direction of the Category IV Required Secured Parties), and any other mortgages executed and delivered pursuant to Section 9.14.
“Most Favored LenderNotice” means, in respect of any More Favorable Provision, a written notice to each of the holders of the Notes delivered no later than five Business Days after the inclusion of such More Favorable Provision in any Material Credit Facility (including by way of amendment or other modification of any existing provision thereof) from a Senior Financial Officer of the Company or the Parent Guarantor referring to the provisions and setting forth a reasonably detailed description of such More Favorable Provision (including any defined terms used therein) and related explanatory calculations, as applicable; provided that, in the case of any More Favorable Provision in effect on the Restatement Date and described in such Officer’s Certificate, the Officer’s Certificate delivered pursuant to Section 4.3(a) shall be deemed to constitute a Most Favored Lender Notice with respect to each such More Favorable Provision.
“Multiemployer Plan” means any “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA).
“NAIC” means the National Association of Insurance Commissioners.
“Non-U.S. Plan” means any plan, fund or other similar program that (a) is established or maintained outside the United States of America by any Obligor or any of its Subsidiaries primarily for the benefit of employees of any Obligor or one or more of its Subsidiaries residing outside the United States of America, which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment, and (b) is not subject to ERISA or the Code.
“Noteholder SanctionsEvent” means, with respect to any Purchaser or holder of a Note (an “Affected Noteholder”), such Purchaser or holder or any of its affiliates being in violation of or subject to sanctions (a) under any U.S. Economic Sanctions Laws as a result of the Company or any Controlled Entity becoming a Blocked Person or, directly or indirectly, having any investment in or engaging in any dealing or transaction (including any investment, dealing or transaction involving the proceeds of the Notes) with any Blocked Person or (b) under any similar laws, regulations or orders adopted by any State within the United States of America as a result of the name of the Company or any Controlled Entity appearing on a State Sanctions List.
- 103 -
“Notes” shall have the meaning set forth in the recitals to this Agreement and shall include each of the Existing Notes as amended in accordance with the terms of this Agreement.
“Notes Closing EquityIssuance” means the issuance by Parent Guarantor to the Purchasers, on a pro rata basis, of 131,798,311 ordinary shares of the Parent Guarantor.
“Notes Closing EquityIssuance Consideration Amount” means $8,320,427.36.
“Obligors” means, collectively, the Company and each Guarantor.
“Obligor Jurisdiction” means each of United States of America, Colombia, Luxembourg, Malta, Spain, Peru, Panama, El Salvador, Brazil, Guatemala, Dominican Republic, Costa Rica, Ecuador, and any other jurisdiction under the laws of which an Obligor is organized or of which an Obligor is a resident or where an Obligor has assets, business operations or is otherwise treated as engaged in business for purposes of the tax laws of such jurisdiction or any political subdivision or taxing authority of or in each such jurisdiction.
“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.
“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx.
“Officer’sCertificate” of an Obligor means a certificate of a Senior Financial Officer or Responsible Officer (as applicable) of such Obligor, or of any other officer of such Obligor, whose responsibilities extend to the subject matter of such certificate.
“Owned Real Property” is defined in Section 5.10.
“Pagaré” means, with respect to each Note, one pagaré, payable to such Purchaser (or its nominee), in the form set out in Schedule 1-B.
“Parent Guarantor” is defined in the first paragraph of this Agreement.
“Pari Passu IntercreditorAgreement” means a “pari passu” intercreditor agreement among the Collateral Agent and the Obligors, in form and substance reasonably satisfactory to the Collateral Agent and the Company.
- 104 -
“Patents” means any and all of the following (whether now owned or hereafter adopted or acquired by a Person): (a) inventions, whether or not patentable, whether or not reduced to practice, and whether or not yet made the subject of a pending patent application or applications, (b) ideas and conceptions of potentially patentable subject matter, including any patent disclosures, whether or not reduced to practice and whether or not yet made the subject of a pending patent application or applications, (c) national (including the United States) and multinational statutory invention registrations, patents, patent registrations and patent applications (including all reissues, divisions, continuations, continuations-in-part, substitutes, renewals, extensions and reexaminations), and all rights therein provided by international treaties or conventions and all improvements to the inventions disclosed in each such registration, patent or application, (d) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including, without limitation, payments under all Intellectual Property Licenses entered into in connection therewith and damages and payments for past, present or future infringements thereof, (e) the right to sue for past, present and future infringements thereof, and (f) all of such Person’s rights corresponding thereto throughout the world.
“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA.
“Pension Plan” means any plan, fund or other similar program that is established and maintained by the Parent Guarantor or any of its Subsidiaries primarily for the benefit of employees of the Parent Guarantor or any of its Subsidiaries which plan, fund or other similar program provides, or results in, retirement income, a deferral of income in contemplation of retirement or payments to be made upon termination of employment.
“Perfection Certificate” means a certificate of a Responsible Officer of the Parent Guarantor and a Responsible Officer of the Company in form and substance satisfactory to the Required Holders providing information with respect to the property of each Obligor.
“Permitted Holders” means Hoche Partners Pharma Holding S.A., Chemo Project SA, Becaril, S.A., Santana S.A., Flying Fish Ventures LP and Saint Thomas Commercial S.A. and their respective Affiliates.
“Permitted IntercompanyIndebtedness” means Indebtedness constituting loans made by (a) an Obligor to another Obligor, (b) a Subsidiary that is not an Obligor to another Subsidiary that is not an Obligor, provided that both the lender and the borrower are parties to the Intercompany Subordination Agreement, and (c) a Subsidiary that is not an Obligor to an Obligor, provided that both the lender and the borrower are parties to the Intercompany Subordination Agreement.
“Permitted Jurisdiction” means (a) the United States of America, (b) Colombia and (c) any other country that on April 30, 2004 was a member of the European Union (other than Portugal, Spain, Italy or Greece).
- 105 -
“Permitted ReceivablesFinancing” means any one or more Receivables Financings and/or factoring financings that meets the following conditions: (a) the board of directors (or equivalent governing body) of the relevant Obligor shall have determined in good faith that such Receivables Financing and/or factoring is in the aggregate economically fair and reasonable to the relevant Obligor and its Subsidiaries, (b) all sales of accounts receivable and related assets by the relevant Obligor or any of its Subsidiaries to any third party Person (other than an Affiliated Lender) are made at fair value (as determined in good faith by the relevant Obligor), (c) [reserved], (d) such financing is consummated pursuant to customary contracts, arrangements or agreements on market terms for similar transactions and (e) [reserved]. The “amount” or “principal amount” of any Permitted Receivables Financing shall be deemed at any time to be (1) the aggregate principal or stated amount of the Indebtedness, fractional undivided interests (which stated amount may be described as a “net investment” or similar term reflecting the amount invested in such undivided interest) or other securities incurred or issued pursuant to such Permitted Receivables Financing, in each case outstanding at such time, or (2) in the case of any Permitted Receivables Financing in respect of which no such Indebtedness, fractional undivided interests or securities are incurred or issued, the cash purchase price paid by the buyer (other than any Receivables Subsidiary) in connection with its purchase of receivables less the amount of collections received by the relevant Obligor or any of its Subsidiaries in respect of such receivables and paid to such buyer, excluding any amounts applied to purchase fees or discount or in the nature of interest.
“Permitted Non-RecourseReceivables Financing” means any Receivables Financing and/or factoring financings that meets the following conditions: (a) the board of directors (or equivalent governing body) of the relevant Obligor shall have determined in good faith that such Receivables Financing and/or factoring is in the aggregate economically fair and reasonable to the relevant Obligor and its Subsidiaries, (b) all sales of accounts receivable and related assets by the relevant Obligor or any of its Subsidiaries to any third party Person (other than an Affiliated Lender) are made at fair value (as determined in good faith by the relevant Obligor), (c) non-recourse to the relevant Obligor and any of its Subsidiaries and their assets, other than any recourse solely attributable to a breach by the relevant Obligor and any of its Subsidiaries of representations and warranties that are customarily made by a seller in connection with “true sale” financing of receivables on a non-recourse basis, and (d) such financing is consummated pursuant to customary contracts, arrangements or agreements entered into with respect to “true sale” of receivables on market terms for similar transactions.
“Permitted Reorganization” means any (i) Reorganization between and/or among members of the Group or (ii) the change in domicile of any entity of the Group (so long as such domicile is located in a Permitted Jurisdiction).
“Person” means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization, business entity or Governmental Authority.
“Peru” means the Republic of Peru.
“Plan” means an “employee pension benefit plan” (as defined in section 3(2) of ERISA) subject to Title IV of ERISA (other than a Multiemployer Plan) that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by any Obligor or any ERISA Affiliate or with respect to which any Obligor or any ERISA Affiliate may have any liability.
“Preferred Stock” means any class of capital stock of a Person that is preferred over any other class of capital stock (or similar Equity Interests) of such Person as to the payment of dividends or the payment of any amount upon liquidation or dissolution of such Person.
- 106 -
“Prepayment AcceptanceNotification Date” is defined in Section 8.10(a).
“Prepayment Notice” is defined in Section 8.10(a).
“Prepayment Date” is defined in Section 8.10(a).
“Process Agent” means CCS Global Solutions, Inc., with offices at 99 Washington Avenue, Suite 805A, Albany, New York 12210, United States of America.
“Pro Rata Share” means, with respect to any Note , an amount equal to the product of:
(a) the total amount of proceeds being applied or offered to be applied to the repayment or prepayment of Indebtedness pursuant to Section 8.12 or Section 10.7(i)(iii)(B), multiplied by
(b) a fraction, the numerator of which is the outstanding principal amount of such Note, and the denominator of which is the aggregate outstanding principal amount of all Category IV Indebtedness being repaid or prepaid pursuant to Section 8.12 or Section 10.7(i)(iii)(B).
“property” or “properties” means, unless otherwise specifically limited, real or personal property of any kind, tangible or intangible, choate or inchoate.
“Prospective Lenders” is defined in Section 10.6(g).
“Prospective Terms” is defined in Section 10.6(g).
“Prudential Group” means, collectively, the holders of Notes that are Affiliates of or are advised or managed by PGIM, Inc. (or any Affiliate of PGIM, Inc.).
“PTE” is defined in Section 6.2(a).
“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Obligors and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 14.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 14.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.
“Purchaser Schedule” means the Purchaser Schedule to this Agreement listing the Purchasers of the Notes and including their notice and payment information.
“QPAM Exemption” is defined in Section 6.2(d).
“Qualified InstitutionalBuyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.
“Real Property” is defined in Section 5.10.
“Real Property Leases” is defined in Section 5.10.
- 107 -
“Receivables Financing” means any receivables purchase facilities, securitization, other receivables financing transaction or series of transactions that may be entered into by any Obligor pursuant to which such Obligor may sell, assign, contribute, convey or otherwise transfer to any Person (other than an Affiliated Lender) any accounts receivable (whether now existing or arising in the future) of such Obligor, and any assets related thereto including, without limitation, all collateral securing such accounts receivable, all contracts and all guarantees or other obligations in respect of such accounts receivable, any collections in respect of such accounts receivable, proceeds of such accounts receivable, and other assets which are customarily transferred or in respect of which security interests are customarily granted in connection with asset securitization transactions or other receivables financing involving accounts receivable.
“Register” is defined in Section 14.1.
“Related Fund” means, with respect to any holder of any Note, any fund or entity that (a) invests in Securities or bank loans, and (b) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.
“Related Party” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates and, if such Person is a natural person, the spouses, siblings, children, grandchildren, nieces, nephews and other lineal descendants, estates and heirs, or any trust or other investment vehicle for the primary benefit of any such Person or their respective spouses, siblings, children, grandchildren, nieces, nephews and other lineal descendants, estates or heirs.
“Releasees” is defined in Section 24.11.
“Relevant Period” means a period of twelve consecutive months ending on a Determination Date.
“Relevant Provision” means (i) any information reporting requirement, affirmative or negative covenant or undertaking or any event of default that exists in any Material Credit Facility and (ii) any covenant (whether set forth as a covenant, undertaking, event of default, restriction, prepayment event or other such provision) that requires the Parent Guarantor (or the Parent Guarantor and its Subsidiaries) or the Company (or the Company and its Subsidiaries) to achieve or maintain a stated level of financial condition or performance and includes, without limitation, any requirement that such Persons:
(a) maintain a specified level of net worth, shareholders’ equity, total assets, cash flow or net income;
(b) maintain any relationship of any component of its capital structure to any other component thereof (including without limitation, the relationship of indebtedness, senior indebtedness or subordinated indebtedness to total capitalization or to net worth);
(c) maintain any measure of its ability to service its indebtedness (including exceeding any specified ratio of revenues, cash flow or net income to indebtedness, interest expense, rental expense, capital expenditures and/or scheduled payments of indebtedness); or
- 108 -
(d) not exceed any maximum level of indebtedness, priority indebtedness, liens, claims, liabilities or other obligations, whether crystallized or contingent.
“Reorganization” means an amalgamation, demerger, merger, consolidation, re-organization (including the incorporation of new Subsidiaries or change of the legal form of Subsidiaries existing as of the Restatement Date), liquidation, closure, winding up or other corporate reconstruction, or any other transaction of substantively similar effect.
“Required Holders” means (a) at any time prior to the Closing, the Purchasers, and (b) at any time on or after the Closing, the holders of more than 80% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Obligors or any of their Affiliates); provided that, notwithstanding the foregoing, if either of the Prudential Group or the Cigna Group sells or transfers, in the aggregate, more than 25% in principal amount of the Notes that it owns to any Person (other than (x) in the case of the Prudential Group, any Affiliate of PGIM, Inc. or any managed account, investment fund or other vehicle for which PGIM, Inc. (or any of its Affiliates) acts as the investment advisor or portfolio manager and (y) in the case of the Cigna Group, any Affiliate of Cigna Investments, Inc. or any managed account, investment fund or other vehicle for which Cigna Investments, Inc. (or any of its Affiliates) acts as the investment advisor or portfolio manager), “Required Holders” shall thereafter mean the holders of more than 50% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Obligors or any of their Affiliates).
“Responsible Officer” of an Obligor means any Senior Financial Officer of such Obligor and any other officer, director or representative of such Obligor with responsibility for the administration of the relevant portion of this Agreement and who is duly authorized to act under such Obligor’s organizational documents and applicable law.
“Restatement DateDefaults” means the Specified Defaults and the Additional Defaults.
“Restatement DateSubsidiary Guarantors” has the meaning set forth in the preamble to this Agreement.
“Restricted Payment” means (a) any dividend, charge, fee, remuneration or other distribution (or interest on any unpaid dividend, charge, fee, remuneration or other distribution) (whether in cash or in kind), direct or indirect, on or in respect of any Equity Interests of any Obligor or any Subsidiary, (b) any redemption, repurchase, defeasement, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any Equity Interests of any Obligor or any Subsidiary, (c) any payment made, directly or indirectly, to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire any Equity Interests of any Obligor or any Subsidiary, (d) any payment, directly or indirectly, of any advisory or other fee to or to the order of any holder of Equity Interests of any Obligor or any Subsidiary (or any Affiliate), or (e) any payment, directly or indirectly, on Indebtedness owing to any holder of Equity Interests of any Obligor or any Subsidiary (or any Affiliate).
- 109 -
“Salvadoran Mortgage” means that certain Constitucion de Primera Hipoteca Abierta, dated as of February 18, 2025, by Procaps, S.A. de C.V. in favor of Banco Davivienda Salvadoreño, S.A., Banco Cuscatlan, S.A., Banco Promerica, S.A., Dr. Nico, S.C. de R.L. de C.V., Pentagono, S.A. de C.V. and Gems, S.A. de C.V.
“SEC” means the Securities and Exchange Commission of the United States of America.
“Securities” or “Security” shall have the meaning specified in section 2(a)(1) of the Securities Act.
“Securities AccountControl Agreement” means any control agreement or similar agreement entered into as of the Restatement Date and from time to time thereafter, by and among any Obligor, the Collateral Agent, and any securities intermediary (as that term is defined in UCC Section 8-102(a)(14)) establishing or maintaining securities accounts (as such term is defined in UCC Section 8-501(a)) or similar accounts for such Obligor, in form and substance reasonably satisfactory to the Required Holders and the Collateral Agent, pursuant to which the Collateral Agent obtains “control” (within the meaning of Sections 8-106 and 9-106 of the UCC) over such securities accounts or similar accounts (including all securities (certificated and uncertificated), securities contracts, securities entitlements, instruments, documents, general intangibles, payment intangibles, money, interests in partnerships, limited liability companies and other non-corporate entities, commodity contracts, mutual fund shares, money market shares, participations in and obligations of any Person, however organized, and all other financial assets and property of every description from time to time held therein or credited thereto, including any free credit balance, together with any proceeds, profits and products thereof, replacements and substitutions therefor and dividends and distributions in any form in respect thereof, and all related investment property however evidenced, all rights incidental to the ownership of any of the foregoing, including without limitation, voting, conversion, registration, redemption, exchange and consensual rights and rights of recovery for violations of securities laws.
“Securities Act” means the United States Securities Act of 1933 and the rules and regulations promulgated thereunder from time to time in effect.
“Senior FinancialOfficer” of an Obligor means the chief financial officer, principal accounting officer, treasurer or comptroller (or any other officer holding a title or role similar to any of the foregoing) of such Obligor.
“Solvent” means, with respect to any Person as of any date of determination, that as of such date (a) the fair market value of the assets of such Person is greater than the total amount of such Person’s liabilities (including contingent liabilities), (b) the present fair saleable value of the assets of such Person is greater than the sum of stated liabilities and identified contingent liabilities, (c) such Person is able to realize upon its assets and pay its debts and other liabilities, including contingent obligations, as they mature, (d) such Person does not have unreasonably small net worth (patrimonio), and (e) such Person is not unable to or has not been deemed to be unable to pay its debts as they fall due. The amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.
- 110 -
“Source” is defined in Section 6.2.
“Spain” means the Kingdom of Spain.
“Spanish Civil Code” means the Royal Decree of 24 July 1889 publishing the Civil Code (Real Decreto de 24 de julio de 1889 por el que se publica el CódigoCivil), as amended or substituted from time to time.
“Spanish Civil ProcedureAct” means the Act 1/2020, of 7 January, on Civil Procedure (Ley 1/2000, de 7 de enero, de Enjuiciamiento Civil), as amended or substituted from time to time.
“Spanish CommercialCode” means the Royal Decree of 22 August 1885 publishing the Commercial Code (Real Decreto de 22 de agosto de 1885 por elque se publica el Código de Comercio), as amended or substituted from time to time.
“Spanish CompaniesAct” means the consolidated text of the Companies Act approved by the Royal Legislative Decree 1/2010, of 2 July (Real DecretoLegislativo 1/2010, de 2 de julio, por el que se aprueba el texto refundido de la Ley de Sociedades de Capital), as amended or substituted from time to time.
“Spanish Guarantor” means a Guarantor that is incorporated under the laws of Spain.
“Spanish InsolvencyAct” means the consolidated text of the Insolvency Act approved by the Royal Legislative Decree 1/2020, of 5 May, (Real DecretoLegislativo 1/2020, de 5 de mayo, por el que se aprueba el texto refundido de la Ley Concursal), as amended or substituted from time to time and, in particular, as amended by virtue of Law 16/2022, of 5 September, amending the consolidated text of the Insolvency Act (Ley 16/2022, de 5 de septiembre, de reforma del texto refundido de la Ley Concursal).
“Spanish Public Document” means, a documento público, being an escritura pública, póliza or efecto intervenido por fedatariopúblico.
“Specified Defaults” has the meaning specified in the Existing Forbearance Agreement.
“State SanctionsList” means a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.
“Sub-Agent” has the meaning set forth in the Pari Passu Intercreditor Agreement.
“Subsidiary” means, as to any Person, any other Person in which such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries owns sufficient equity or voting interests to enable it or them (as a group) ordinarily, in the absence of contingencies, to elect a majority of the directors (or Persons performing similar functions) of such second Person, and any partnership or joint venture if more than a 50% interest in the profits or capital thereof is owned by such first Person or one or more of its Subsidiaries or such first Person and one or more of its Subsidiaries (unless such partnership or joint venture can and does ordinarily take major business actions without the prior approval of such Person or one or more of its Subsidiaries). Unless the context otherwise clearly requires, any reference to a “Subsidiary” is a reference to a Subsidiary of any Obligor.
- 111 -
“Subsidiary Guarantors” means, collectively, each Restatement Date Subsidiary Guarantor and each Additional Subsidiary Guarantor, in each case so long as such Subsidiary has not been discharged and released from its obligations under this Agreement.
“Subsidiary GuarantorJoinder Agreement” is defined in Section 9.7.
“Substitute Purchaser” is defined in Section 23.
“SVO” means the Securities Valuation Office of the NAIC.
“Swap Contract” means (a) any and all interest rate swap transactions, basis swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward foreign exchange transactions, cap transactions, floor transactions, currency options, spot contracts or any other similar transactions or any of the foregoing (including any options to enter into any of the foregoing), and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc. or any International Foreign Exchange Master Agreement.
“Swap TerminationValue” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amounts(s) determined as the mark-to-market values(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.
“Tax” means any tax (whether income, documentary, sales, value added, stamp, registration, issue, capital, property, excise or otherwise), duty, assessment, levy, impost, fee, compulsory loan, charge or withholding.
“Trademarks” means any and all of the following (whether now owned or hereafter adopted or acquired by a Person): trademarks (whether or not registered), trade names, registered trademarks, trademark applications, service marks, registered service marks, corporate names and service mark applications, brand names, certification marks, collective marks, d/b/as, internet domain names, logos, symbols, trade dress, assumed names, fictitious names, other indicia of origin, including, without limitation, (a) all reissues, continuations, extensions, modifications and renewals thereof, (b) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including, without limitation, payments under all Intellectual Property Licenses entered into in connection therewith and damages and payments for past, present or future infringements or dilutions thereof, (c) the right to sue for past, present and future infringements and dilutions thereof, (d) the goodwill of such Person’s business symbolized by the foregoing or connected therewith, (e) all marks registered in the United States Patent and Trademark Office, the Trademark Offices of the States and Territories of the United States of America, and the Trademark Offices of other nations throughout the world, and all rights therein provided by international treaties or conventions and (f) all of such Person’s rights corresponding thereto throughout the world.
- 112 -
“Taxing Jurisdiction” is defined in Section 13(a).
“UK Blocking Regulation” means the Council Regulation (EC) 2271/96 as it forms part of domestic law of the United Kingdom by virtue of the European Union Withdrawal Act 2018.
“Uniform CommercialCode” or “UCC” means the Uniform Commercial Code or any successor provision thereof as the same may from time to time be in effect in the State of New York or the Uniform Commercial Code or any successor provision thereof (or similar code or statute) of another jurisdiction, to the extent it may be required to apply to any item or items of Collateral.
“United States Person” has the meaning set forth in Section 7701(a)(30) of the Code.
“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001 and the rules and regulations promulgated thereunder from time to time in effect.
“U.S. Economic SanctionsLaws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States of America pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.
“U.S. Pledge andSecurity Agreement” means the Pledge and Security Agreement dated as of the Restatement Date executed by the Obligors in favor of the Collateral Agent.
“Wholly-Owned Subsidiary” means, at any time, any Subsidiary of the Parent Guarantor all of the Equity Interests (except directors’ qualifying shares) and voting interests of which are owned by, directly or indirectly, any one or more of the Parent Guarantor and the Parent Guarantor’s other Wholly-Owned Subsidiaries at such time.
“Working CapitalCredit Facility” has the meaning set forth in Section 10.6(g).
- 113 -
Exhibit 10.14
Execution Version
PARI PASSU INTERCREDITOR AGREEMENT
dated as of April 9, 2025
among
PROCAPS S.A.,
as the Company,
PROCAPS GROUP, S.A.,
as Parent,
THE OTHER GRANTORS FROM TIME TO TIME PARTY HERETO,
GLAS AMERICAS LLC,
as Collateral Agent,
the Secured Parties from time to time hereto,
and
each WC Priority Debt Representative from time to time party hereto.
TABLEOF CONTENTS
| Page | ||
|---|---|---|
| ARTICLE I DEFINITIONS; PRINCIPLES OF CONSTRUCTION | 2 | |
| Section 1.1 Defined Terms. | 2 | |
| Section 1.2 Other Definition Provisions | 11 | |
| Section 1.3 Impairments. | 12 | |
| ARTICLE II PRIORITIES AND AGREEMENTS WITH RESPECT TO SHARED collateral | 13 | |
| Section 2.1 Priority of Claims | 13 | |
| Section 2.2 Actions with Respect to Shared Collateral; Prohibition on Contesting Liens. | 14 | |
| Section 2.3 No Interference; Payment Over; Setoff. | 15 | |
| Section 2.4 Certain Agreements with Respect to Bankruptcy or Insolvency Proceedings. | 16 | |
| Section 2.5 Reinstatement | 17 | |
| Section 2.6 Insurance. | 17 | |
| Section 2.7 Controlling Collateral Agent as Gratuitous Bailee for Perfection. | 17 | |
| ARTICLE III THE CONTROLLING COLLATERAL AGENT | 18 | |
| Section 3.1 Authority. | 18 | |
| Section 3.2 Power-of-Attorney | 19 | |
| Section 3.3 Determinations with Respect to Amounts of Liens and Obligations. | 19 | |
| ARTICLE IV RELEASE OF LIENS; WC PRIORITY OBLIGATIONS; PURCHASE RIGHT | 20 | |
| Section 4.1 Release of Liens. | 20 | |
| Section 4.2 Substitute Priority Debt; WC Priority Debt. | 20 | |
| Section 4.3 Purchase Right. | 21 | |
| ARTICLE V MISCELLANEOUS PROVISIONS | 22 | |
| Section 5.1 Amendments. | 22 | |
| Section 5.2 Successors and Assigns | 23 | |
| Section 5.3 Delay and Waiver | 23 | |
| Section 5.4 Notices | 23 | |
| Section 5.5 Notice Following Discharge of Priority Obligations | 25 | |
| Section 5.6 Entire Agreement | 25 | |
| Section 5.7 Severability | 25 | |
| Section 5.8 Section Headings | 25 | |
| Section 5.9 Obligations Secured | 25 | |
| Section 5.10 Governing Law | 25 | |
| Section 5.11 Consent to Jurisdiction; Service of Process | 25 | |
| Section 5.12 WAIVER OF JURY TRIAL | 26 | |
| Section 5.13 Counterparts | 26 | |
| Section 5.14 Additional Grantors | 26 | |
| Section 5.15 Continuing Nature of this Agreement | 26 | |
| Section 5.16 Rights and Immunities of Priority Debt Representatives | 26 | |
| Section 5.17 Modification of Security Documents | 26 | |
| Section 5.18 Provisions Solely to Define Relative Rights | 27 | |
| Section 5.19 Authorization | 27 | |
| Section 5.20 Conflicts | 27 | |
| Section 5.21 Further Assurances | 27 | |
| Section 5.22 Priority Debt Representative | 27 | |
| Section 5.23 Transaction Expenses and Indemnity. | 27 | |
| GLAS AMERICAS LLC APPOINTMENT | 28 | |
| Section 6.1 Appointment and Authority. | 28 | |
| Section 6.2 Rights as a Secured Party | 29 | |
| Section 6.3 Exculpatory Provisions. | 29 | |
| Section 6.4 Resignation of Collateral Agent | 31 | |
| LOCAL LAW PROVISIONS | 32 | |
| Section 7.1 Spanish Provisions. | 32 | |
| Section 7.2 Malta Provisions | 35 |
i
Exhibits
| Exhibit A-1 | Form of Substitute Priority Debt Designation |
|---|---|
| Exhibit A-2 | Form of WC Priority Debt Designation |
| Exhibit B-1 | Form of Intercreditor Agreement Joinder-Substitute Priority Debt |
| Exhibit B-2 | Form of Intercreditor Agreement Joinder-WC Priority Debt |
| Exhibit B-3 | Form of Intercreditor Agreement Joinder-Additional Grantors |
ii
PARI PASSU INTERCREDITOR AGREEMENT (as amended, restated, supplemented or otherwise modified from time to time, this “Agreement”) dated as of April 9, 2025 among Procaps S.A., a sociedad anónima organized under the laws of Colombia (the “Company”), Procaps Group, S.A., a société anonyme incorporated under the laws of the Grand Duchy of Luxembourg (the “Parent”), the other entities party hereto from time to time as grantors (together with the Company and Parent, each a “Grantor” and together, the “Grantors”), GLAS AMERICAS LLC, as collateral agent and as security trustee in accordance with any applicable laws for the Category IV Secured Parties (as defined below) (in such capacities and together with its successors in such capacities, the “Collateral Agent”), the Secured Parties from time to time party hereto, and each WC Priority Debt Representative from time to time party hereto for the WC Secured Parties of the Series with respect to which it is acting in such capacity.
W I T N E S S E T H:
WHEREAS, the Company and the Parent entered into that certain Amended and Restated Note Purchase and Guarantee Agreement, dated April 9, 2025 (as amended, restated, supplemented or otherwise modified from time to time, the “Note Purchase Agreement”), between, inter alios, the Company, Parent, Prudential Insurance Company of America (“Prudential”), Fortitude Life Insurance & Annuity Company, f/k/a Prudential Annuities Life Assurance Corporation (“Fortitude”) and Cigna Health and Life Insurance Company, as noteholders (collectively, with Prudential and Fortitude, the “Noteholders”);
WHEREAS, the Company and the Parent entered into that certain Amended and Restated Credit Agreement, dated as of April 9, 2025 (as amended, restated, supplemented or otherwise modified from time to time, the “Club Credit Agreement”), between, inter alios, Company, Parent, Bancolombia S.A. (“Bancolombia”) and Banco Davivienda S.A., as lenders (“Davivienda” and collectively, with Bancolombia and each other lender party to the Club Credit Agreement from time to time, the “Club Lenders”);
WHEREAS, the Company and the Parent entered into that certain Amended and Restated Credit Agreement, dated as of April 9, 2025 (as amended, restated, supplemented or otherwise modified from time to time, the “BTG Cayman Credit Agreement”), between, inter alios, Company, Parent and Banco BTG Pactual S.A. – Cayman Branch, as lender (in such capacity, “BTG Cayman”);
WHEREAS, the Company and the Parent entered into that certain Amended and Restated Credit Agreement, dated as of April 9, 2025 (as amended, restated, supplemented or otherwise modified from time to time, the “BTG Colombia Credit Agreement”), between, inter alios, Company, Parent and Banco BTG Pactual Colombia S.A., as lender (in such capacity, “BTG Colombia”); and
1
NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Grantors, the Collateral Agent (for itself and on behalf of each of the Category IV Secured Parties), the Secured Parties hereunder and each WC Priority Debt Representative (for itself and on behalf of the WC Secured Parties of the applicable Series) hereby agree as follows:
ARTICLE I
DEFINITIONS; PRINCIPLES OF CONSTRUCTION
Section 1.1 Defined Terms. The following terms will have the following meanings:
“Affiliate” means, with respect to a specified Person, any other Person that directly or indirectly Controls or is Controlled by or is under common Control with such specified Person.
“Agreement” has the meaning set forth in the preamble.
“Bancolombia” has the meaning set forth in the recitals.
“Bankruptcy Code” means Title 11 of the United States Code, as amended.
“Bankruptcy Law” means the Bankruptcy Code, Colombia’s Bankruptcy Laws, the Spanish Insolvency Act, and any other federal, Republica, state, or other foreign law, including Colombian, Guatemala, Costa Rica, República Dominicana, Panamá, Brazil and/or El Salvador laws, for the relief of debtors, or any arrangement, reorganization, insolvency, moratorium, administration, receivership, liquidation, rearrangement, assignment for the benefit of creditors, any other marshalling of the assets or liabilities of the Company, the Parent or any of its Subsidiaries, or similar law affecting creditors’ rights generally.
“BTG Cayman” has the meaning set forth in the recitals.
“BTG Cayman Credit Agreement” has the meaning set forth in the recitals.
“BTG Cayman Loan Documents” means the “Documentos de la Financiación” as such term is defined in the BTG Cayman Credit Agreement.
“BTG Cayman Obligations” means all unpaid principal of and accrued and unpaid interest on any Debt under the BTG Cayman Loan Documents, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any Grantor to any of the BTG Cayman Secured Parties or any indemnified party, individually or collectively, existing on the date hereof or arising hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under any BTG Cayman Loan Document or reimbursement or other obligations incurred or other instruments at any time evidencing any thereof, including the “Obligaciones Garantizadas” (or other similar term) under and as defined in the BTG Cayman Loan Documents.
“BTG Cayman Secured Parties” means, at any time, BTG Cayman and each other holder of BTG Cayman Obligations, including the “AcreedoresGarantizados” (or other similar term) under and as defined in the BTG Cayman Loan Documents.
“BTG Cayman Security Documents” means any security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements, or agreements which grant or transfer a Lien or security interest, now existing or entered into after the date hereof, executed and delivered by any of the Grantors creating (or purporting to create) a Lien in favor of the BTG Cayman Secured Parties, including the “Documentosde Garantía” (or other similar term) under and as defined in the BTG Cayman Loan Documents, to secure the BTG Cayman Obligations.
“BTG Colombia” has the meaning set forth in the recitals.
“BTG Colombia Credit Agreement” has the meaning set forth in the recitals.
“BTG Colombia Loan Documents” means the “Documentos de la Financiación” as such term is defined in the BTG Colombia Credit Agreement.
2
“BTG Colombia Obligations” means all unpaid principal of and accrued and unpaid interest on any Debt under the BTG Colombia Loan Documents, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any Grantor to any of the BTG Colombia Secured Parties or any indemnified party, individually or collectively, existing on the date hereof or arising hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under any BTG Colombia Loan Document or reimbursement or other obligations incurred or other instruments at any time evidencing any thereof, including the “ObligacionesGarantizadas” (or other similar term) under and as defined in the BTG Colombia Loan Documents.
“BTG Colombia Secured Parties” means, at any time, BTG Colombia and each other holder of BTG Colombia Obligations, including the “AcreedoresGarantizados” (or other similar term) under and as defined in the BTG Colombia Loan Documents.
“BTG Colombia Security Documents” means any security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements, or agreements which grant or transfer a Lien or security interest, now existing or entered into after the date hereof, executed and delivered by any of the Grantors creating (or purporting to create) a Lien in favor of the BTG Colombia Secured Parties, including the “Documentosde Garantía” (or other similar term) under and as defined in the BTG Colombia Loan Documents, to secure the BTG Colombia Obligations.
“Category IV Collateral” means, at any time, (a) Collateral including “Collateral” (or other similar term) under and as defined in the Notes Security Documents, (b) “Collateral” (or other similar term) under and as defined in the Club Security Documents, (c) “Collateral” (or other similar term) under and as defined in the BTG Cayman Security Documents, and (d) “Collateral” (or other similar term) under and as defined in the BTG Colombia Security Documents.
“Category IV Priority Debt Documents” means the Notes Documents, the Club Loan Documents, the BTG Colombia Loan Documents, and the BTG Cayman Loan Documents.
“Category IV Priority Obligations” means the Notes Obligations, the Club Obligations, the BTG Cayman Obligations and the BTG Colombia Obligations.
“Category IV Required Secured Parties” means the lenders and noteholders that have or hold more than 50% of the sum of (i) the aggregate amount of the outstanding “Notes” (as defined in the Note Purchase Agreement), (ii) the aggregate amount of outstanding loans under the Club Credit Agreement, (iii) the aggregate amount of outstanding loans under the BTG Cayman Credit Agreement, (iv) the aggregate amount of outstanding loans under the BTG Colombia Credit Agreement; provided that (x) until the payment in full of cash of the Category IV Priority Obligations and Discharge of the Category IV Priority Obligations of the Noteholders, “Category IV Required Secured Parties” shall include (A) for so long as all the Initial Lenders are Secured Parties, at least one of the Initial Lenders, and (B) the Noteholders, and (y) any such Priority Obligations held by an Affiliate of the Company shall not be taken into account for purposes of this definition.
“Category IV Secured Parties” means the Notes Secured Parties, the Club Secured Parties, the BTG Cayman Secured Parties, and the BTG Colombia Secured Parties.
“Category IV Security Documents” means the Notes Security Documents, the Club Security Documents, the BTG Cayman Security Documents, and the BTG Colombia Security Documents.
3
“Club Credit Agreement” has the meaning set forth in the recitals.
“Club Lenders” has the meaning set forth in the recitals.
“Club Loan Documents” means the “Loan Documents” as such term is defined in the Club Credit Agreement.
“Club Obligations” means all unpaid principal of and accrued and unpaid interest on any Debt under the Club Loan Documents, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any Grantor to any of the Club Secured Parties or any indemnified party, individually or collectively, existing on the date hereof or arising hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under any Club Loan Document or reimbursement or other obligations incurred or other instruments at any time evidencing any thereof, including the “Obligations” (or other similar term) under and as defined in the Club Loan Documents.
“Club Secured Parties” means, at any time, the Club Lenders and each other holder of Club Obligations, including the “Secured Parties” (or other similar term) under and as defined in the Club Loan Documents.
“Club Security Documents” means any security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements, or agreements which grant or transfer a Lien or security interest, now existing or entered into after the date hereof, executed and delivered by any of the Grantors creating (or purporting to create) a Lien in favor of the Club Secured Parties, including the “Security Documents” (or other similar term) under and as defined in the Club Loan Documents, to secure the Club Obligations.
“Collateral” means all properties and assets of the Grantors now owned or hereafter acquired in which Liens have been granted in favor of any Priority Debt Representative on behalf of the applicable Secured Parties to secure any or all of the Priority Obligations, and shall exclude any properties and assets in which any Priority Debt Representative is required to release its Liens pursuant to Section 4.1 (from and after the time such release is required).
“Collateral Agent” has the meaning set forth in the preamble.
“Collateral Agent Fee Letter” means that certain Indicative Fee Proposal for Agency Services,
dated as of February 25, 2025, between, Company and Collateral Agent, as amended, restated, amended
and restated, replaced, supplemented or otherwise modified from time to time.
“Colombia’s Bankruptcy Laws” means collectively, the Law 1116 of 2006 of Colombia, Law 1676 of Colombia, the rules of bankruptcy included in Decree 1074 of 2015 of Colombia, Law Decree 560 of 2020, Law Decree 772 of 2020, Decree 2555 2010 of Colombia and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, takeover (toma de posesión) or similar debtor relief law of Colombia.
“Company” has the meaning set forth in the preamble.
4
“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlled” has a meaning correlative thereto.
“Controlling Collateral Agent” means, with respect to any Shared Collateral, as applicable, (a) from the date hereof and until the earlier of (i) repayment in full and in cash of the Category IV Priority Obligations and the Discharge of Priority Obligations (other than the WC Priority Obligations) and (ii) the occurrence and continuance of a Non-Controlling Collateral Agent Enforcement Event, the Collateral Agent, and (b) from and after the earlier of (i) repayment in full and in cash of the Category IV Priority Obligations and the Discharge of Priority Obligations (other than the WC Priority Obligations) and (ii) the occurrence and continuance of a the Non-Controlling Collateral Agent Enforcement Event, the Major Non-Controlling Collateral Agent; provided that if a Non-Controlling Collateral Agent Enforcement Event ceases to occur for any reason, the Major Non-Controlling Collateral Agent shall promptly notify in writing the Collateral Agent and each other Priority Debt Representative, and the Collateral Agent shall only reassume the role of Controlling Collateral Agent following receipt of such written notice.
“Controlling Secured Parties” means, with respect to any Shared Collateral, the Series of Secured Parties whose Priority Debt Representative is the Controlling Collateral Agent for such Shared Collateral.
“Davivienda” has the meaning set forth in the recitals.
“Debt” means, with respect to any specified Person, without duplication, all of the following, whether or not Debt or liabilities in accordance with United States of America generally accepted accounting principles applied on a consistent basis:
(a) all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or similar instruments; and
(b) the amount available to be drawn under all letters of credit (including standby and commercial) (other than letter of credit obligations relating to indebtedness, including in Debt pursuant to clause (a) of this definition) and, without duplication, the unreimbursed amount of all drafts drawn thereunder.
“Debt Facility” means one or more indentures, loan agreements or other similar governing agreements in respect of Debt, in each case, as amended, restated, amended and restated, supplemented or otherwise modified from time to time including any Refinancing thereof permitted under Section 4.2 hereof.
“DIP Financing” has the meaning assigned to such term in Section 2.4(b).
“DIP Financing Liens” has the meaning assigned to such term in Section 2.4(b).
“DIP Lenders” has the meaning assigned to such term in Section 2.4(b).
“Discharge” means, with respect to any Shared Collateral and any Series of Priority Obligations, the date on which such Series of Priority Obligations is no longer secured by such Shared Collateral. The term “Discharged” shall have a corresponding meaning.
“Discharge of Priority Obligations” means, with respect to any Shared Collateral, the Discharge of the applicable Priority Obligations with respect to such Shared Collateral; provided that a Discharge of Priority Obligations shall not be deemed to have occurred in connection with a Refinancing of such Priority Obligations with additional Priority Obligations secured by such Shared Collateral under a Priority Debt Document which has been designated in writing as a “Priority Obligation” pursuant to a WC Priority Debt Designation or Substitute Priority Debt Designation, as applicable.
5
“Fortitude” has the meaning set forth in the recitals.
“Grantors” means (a) the Company, Parent and each of its Subsidiaries that executes this Agreement as of the date hereof as a “Grantor” and (b) from and after the date hereof, each other Subsidiary that becomes a party to this Agreement pursuant to Section 5.14, in each case, unless and until released as a party hereto pursuant to the terms hereof.
“Impairment” has the meaning set forth in Section 1.3.
“Initial Lenders” means each of Bancolombia, Davivienda, BTG Cayman and BTG Colombia, together with each of their Affiliates.
“Insolvency or Liquidation Proceeding” means:
(a) any case or proceeding commenced by or against the Company or any other Grantor under any Bankruptcy Law, any other case or proceeding for the reorganization, recapitalization or adjustment or marshalling of the assets or liabilities of the Company or any other Grantor, any receivership or assignment for the benefit of creditors relating to the Company or any other Grantor or any similar case or proceeding relative to the Company or any other Grantor or its creditors, as such, in each case whether or not voluntary;
(b) any liquidation, dissolution, marshalling of assets or liabilities or other winding up of or relating to the Company or any other Grantor, in each case whether or not voluntary and whether or not involving bankruptcy or insolvency; or
(c) any other case or proceeding of any type or nature in which substantially all claims of creditors of the Company or any other Grantor are determined and any payment or distribution is or may be made on account of such claims.
“Intercreditor Agreement Joinder” means (a) with respect to the provisions of this Agreement relating to the Collateral Agent under any Substitute Credit Documents, a joinder substantially in the form of Exhibit B-1 hereto, (b) with respect to the provisions of this Agreement relating to any WC Priority Debt Representative for any Series of WC Priority Obligations, a joinder substantially in the form of Exhibit B-2 hereto and (c) with respect to the provisions of this Agreement relating to the addition of additional Grantors, a joinder substantially in the form of Exhibit B-3 hereto.
“Intervening Creditor” has the meaning set forth in Section 2.1(a).
“Lien” means, with respect to any asset, (a) any mortgage, deed of trust, lien, hypothecation, pledge, encumbrance, charge or security interest in or on such asset and (b) the interest of a vendor or a lessor under any conditional sale agreement, capital lease or title retention agreement (or any financing lease having substantially the same economic effect as any of the foregoing) relating to such asset and (c) in the case of securities, any purchase option, call or similar right of a third party with respect to such securities.
“Major Non-Controlling Collateral Agent” means, with respect to any Shared Collateral constituting WC Priority Collateral, the WC Priority Debt Representative of the Series of WC Priority Obligations that constitutes the largest outstanding principal amount of any then outstanding Series of WC Priority Obligations with respect to such Shared Collateral.
6
“Modification” has the meaning set forth in Section 4.2(e)(i).
“Mortgage” has the meaning set forth in Section 4.2(e)(i).
“Mortgaged Property” has the meaning set forth in Section 4.2(e)(i).
“Non-Controlling Collateral Agent” means, at any time with respect to any Shared Collateral, any Priority Debt Representative that is not the Controlling Collateral Agent at such time with respect to such Shared Collateral.
“Non-Controlling Collateral Agent Enforcement Event” means, with respect to any Non-Controlling Collateral Agent, the date which is sixty (60) days (throughout which sixty (60) day period such Non-Controlling Collateral Agent was the Major Non-Controlling Collateral Agent) after the occurrence of both(a) a Priority Debt Default under the WC Priority Debt Documents under which such Non-Controlling Collateral Agent is the Major Non-Controlling Collateral Agent, but only for so long as such Priority Debt Default is continuing and (b) the Controlling Collateral Agent’s and each other Priority Debt Representative’s receipt of written notice from such Non-Controlling Collateral Agent certifying that (i) such Non-Controlling Collateral Agent is the Major Non-Controlling Collateral Agent and that a Priority Debt Default under the WC Priority Debt Documents under which such Non-Controlling Collateral Agent is the Priority Debt Representative has occurred and is continuing and (ii) the WC Priority Debt Documents of the Series with respect to which such Non-Controlling Collateral Agent is the Priority Debt Representative are currently due and payable in full (whether as a result of acceleration thereof or otherwise) in accordance with the terms of the applicable WC Priority Debt Documents; provided that the Non-Controlling Collateral Agent Enforcement Event shall be stayed and shall not occur or shall otherwise cease to occur, with respect to any Shared Collateral, (x) at any time the Controlling Collateral Agent, prior to the occurrence of the Non-Controlling Collateral Agent Enforcement Event, has commenced and is diligently pursuing any enforcement action over such Shared Collateral, (y) at any time, the Grantor, which has granted a security interest in such Shared Collateral, is then a debtor under or with respect to (or otherwise subject to) any Insolvency or Liquidation Proceeding, or (z) at any time, the applicable Priority Debt Default under clause (a) herein is cured, waived or otherwise ceases to be continuing.
“Non-Controlling Secured Parties” means, with respect to any Shared Collateral, the Secured Parties which are not Controlling Secured Parties with respect to such Shared Collateral.
“Note Purchase Agreement” has the meaning set forth in the recitals.
“Noteholders” has the meaning set forth in the recitals.
“Notes Documents” means the “Finance Documents” as such term is defined in the Note Purchase Agreement.
“Notes Obligations” means all unpaid principal of and accrued and unpaid interest on any Debt under the Notes Documents, all accrued and unpaid fees and all expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any Grantor to any of the Notes Secured Parties or any indemnified party, individually or collectively, existing on the date hereof or arising hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under any Notes Document or in respect of any of the notes issued or reimbursement or other obligations incurred or other instruments at any time evidencing any thereof, including the “Obligations” (or other similar term) under and as defined in the Notes Documents.
7
“Notes Secured Parties” means, at any time, the Noteholders, each other holder of “Notes” (as defined in the Note Purchase Agreement), and each other holder of Notes Obligations, including the “Secured Parties” (or other similar term) under and as defined in the Notes Documents.
“Notes Security Documents” means any security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements, or agreements which grant or transfer a Lien or security interest, now existing or entered into after the date hereof, executed and delivered by any of the Grantors creating (or purporting to create) a Lien in favor of the Notes Secured Parties, including the “Security Documents,” or “Collateral Documents” (or other similar term) under and as defined in the Notes Documents, to secure the Notes Obligations.
“Officer’s Certificate” means a certificate with respect to compliance with a condition or covenant provided for in this Agreement, signed on behalf of the Company by an authorized officer of the Company (any certifications or representations therein in such authorized officer’s capacity and not in his or her individual capacity), including:
(a) a statement that the Person making such certificate has read such covenant or condition;
(b) a statement that, in the opinion of such Person (in such Person’s capacity as an officer and not in his or her individual capacity), he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been satisfied; and
(c) a statement as to whether or not, in the opinion of such Person (in such Person’s capacity as an officer and not in his or her individual capacity), such condition or covenant has been satisfied.
“Person” means any natural person, corporation, business trust, joint venture, association, company, partnership (general or limited), limited liability company, individual or family trusts, or government or any agency or political subdivision thereof.
“Possessory Collateral” means any Shared Collateral in the possession or control of any Priority Debt Representative (or its agents or bailees), to the extent that possession or control thereof perfects a Lien thereon under the UCC, including, for the avoidance of doubt, any Shared Collateral constituting deposit accounts, securities accounts and amounts on deposit therein.
“Priority Debt Default” means (a) the occurrence and continuance of any “Event of Default” or similar term under and as defined in any Priority Debt Document, or (b) any other event or condition that, under the terms of any Priority Debt Document causes, or permits holders of such Priority Obligations to cause, such Priority Obligations to become immediately due and payable, in each case, after all applicable notices have been given and all applicable grace periods have expired under such Priority Debt Documents.
“Priority Debt Documents” means the Category IV Priority Debt Documents, and any WC Priority Debt Documents.
“Priority Debt Representative” means the Collateral Agent, and any WC Priority Debt Representative.
8
“Priority Lien” means a Lien granted, or purported to be granted, by a Security Document to any Secured Party or any Priority Debt Representative, at any time, upon any property of any Grantor to secure the applicable Priority Obligations.
“Priority Obligations” means the Category IV Priority Obligations, and each Series of WC Priority Obligations.
“Proceeds” has the meaning set forth in Section 2.1(a).
“Proposed Purchase Date” has the meaning set forth in Section 4.3(a).
“Prudential” has the meaning set forth in the recitals.
“Purchase Price” has the meaning set forth in Section 4.3(b).
“Refinance” means, in respect of any indebtedness, to refinance, extend, renew, defease, amend, increase, modify, supplement, restructure, refund, replace or repay, or to issue other indebtedness or enter alternative financing arrangements, in exchange or replacement for such indebtedness (in whole or in part), including by adding or replacing lenders, creditors, agents, borrowers and/or guarantors, and including in each case, but not limited to, after the original instrument giving rise to such indebtedness has been terminated and including, in each case, through any credit agreement, indenture or other agreement. “Refinanced” and “Refinancing” have correlative meanings.
“Required Secured Parties” means at any time (a) the Collateral Agent is the Controlling Collateral Agent, the Category IV Required Secured Parties, and (b) the Collateral Agent is not the Controlling Collateral Agent, the lenders and noteholders that have or hold more than 50% of the sum of the aggregate amount of outstanding loans under all WC Priority Debt Documents; provided that any such loans held by an Affiliate of the Company shall not be taken into account for purposes of this definition.
“Secured Parties” means the Category IV Secured Parties, and any WC Secured Parties.
“Security Documents” means the Category IV Security Documents, and any WC Priority Debt Security Documents.
“Series” means (a) with respect to the Secured Parties, each of the Notes Secured Parties, the Club Secured Parties, the BTG Cayman Secured Parties, the BTG Colombia Secured Parties, and any WC Secured Parties that become subject to this Agreement after the date hereof that are represented by a common Priority Debt Representative (in its capacity as such for such WC Secured Parties) and (b) with respect to any Priority Obligations, each of the Notes Obligations, the Club Obligations, the BTG Cayman Obligations, the BTG Colombia Obligations, and the WC Priority Obligations incurred pursuant to any WC Priority Debt or any related WC Priority Debt Documents, which pursuant to any Intercreditor Agreement Joinder, the holders thereof are to be represented hereunder by a common Priority Debt Representative (in its capacity as such for such holders of such WC Priority Obligations).
“Shared Collateral” means, at any time, the Category IV Collateral and the WC Priority Collateral.
“Spanish Insolvency Act” means the consolidated text of the Insolvency Act approved by the Royal Legislative Decree 1/2020, of 5 May, (Real DecretoLegislativo 1/2020, de 5 de mayo, por el que se aprueba el texto refundido de la Ley Concursal), as amended or substituted from time to time and, in particular, as amended by virtue of Law 16/2022, of 5 September, amending the consolidated text of the Insolvency Act (Ley 16/2022, de 5 de septiembre, de reforma del texto refundido de la Ley Concursal).
9
“Subsidiary” of a Person means a corporation, partnership, joint venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person.
“Substitute Credit Document” means any agreement evidencing any Debt Facility with respect to which the requirements of Section 4.2(a) have been satisfied and that Refinances a Priority Debt Document or any other Substitute Credit Document.
“Substitute Priority Debt Designation” means a written designation in substantially the form of Exhibit A-1.
“UCC” means the Uniform Commercial Code as in effect from time to time in the State of New York; provided, however, that in the event that, by reason of mandatory provisions of law, any or all of the perfection or priority of, or remedies with respect to, any Collateral is governed by the Uniform Commercial Code or any other similar law as enacted and in effect in a jurisdiction other than the State of New York, the term “UCC” shall mean the Uniform Commercial Code or such other similar law as enacted and in effect in such other jurisdiction solely for purposes of the provisions hereof relating to the creation or perfection of security interests and priority or remedies with respect thereto.
“WC Priority Collateral” means the “Collateral” (or other similar term) under and as defined in any WC Priority Debt Security Documents; provided, that the “WC Priority Collateral” shall be limited solely to Collateral constituting inventory, factoring of book debts or accounts receivables of the Grantors.
“WC Priority Debt” means any Working Capital Credit Facility (as such term is defined in the Note Purchase Agreement) or Línea de Créditopara Capital de Trabajo (as defined in each of the Club Credit Agreement, the BTG Cayman Credit Agreement and the BTG Colombia Credit Agreement) that satisfies the requirements of Section 4.2(b) and that is incurred by the Company after the date hereof; provided that for purposes of this Agreement, no Debt that is owed to an Affiliate of any Grantor shall constitute WC Priority Debt; provided, that the aggregate principal amount of all WC Priority Debt shall not exceed $30 million.
“WC Priority Debt Designation” means written designation in substantially the form of Exhibit A-3.
“WC Priority Debt Documents” means, with respect to any Series of WC Priority Obligations, the notes, credit agreements, loan agreements, note purchase agreements, indentures, WC Priority Debt Security Documents and other operative agreements evidencing or governing such Series of WC Priority Obligations and liens securing such Series of WC Priority Obligations, and each other agreement entered into for the purpose of securing such Series of WC Priority Obligations.
“WC Priority Debt Representative” means the collateral agent, the administrative agent and/or trustee (as applicable) or any other similar agent or Person under any WC Priority Debt Documents for any Series of WC Priority Obligations, in each case, together with its successors in such capacity.
“WC Priority Debt Security Documents” means, with respect to any Series of WC Priority Obligations, any security agreements, pledge agreements, collateral assignments, mortgages, deeds of trust, control agreements, or agreements which grant or transfer a Lien or security interest, now existing or entered into after the date hereof, executed and delivered by the Company or any other Grantor creating (or purporting to create) a Lien in favor of the applicable WC Priority Debt Representative on behalf of the applicable WC Secured Parties to secure such Series of WC Priority Obligations.
10
“WC Priority Obligations” means, with respect to any WC Priority Debt, all principal and interest payable on such WC Priority Debt, all fees and expenses, reimbursements, indemnities and other obligations and indebtedness (including interest accruing during the pendency of any Insolvency or Liquidation Proceeding, regardless of whether allowed or allowable in such proceeding), obligations and liabilities of any Grantor to any of the WC Secured Parties payable under such WC Priority Debt or any indemnified party, individually or collectively, existing on the date hereof or arising hereafter, direct or indirect, joint or several, absolute or contingent, matured or unmatured, liquidated or unliquidated, secured or unsecured, arising by contract, operation of law or otherwise, arising or incurred under any WC Priority Debt Document for such WC Priority Debt or in respect of any of the loans made or reimbursement or other obligations incurred or any of the letters of credit or other instruments at any time evidencing any thereof.
“WC Priority Obligations Cap Amount” means as of any date the lesser of (a) all outstanding WC Priority Obligations as of such date and (b) the aggregate amount of Proceeds of WC Priority Collateral.
“WC Secured Parties” means, at any time with respect to any Series of WC Priority Obligations, each holder of such Series of WC Priority Obligations at such time.
Section 1.2 Other Definition Provisions.
(a) The words “hereof,” “herein,” “hereto” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section and Exhibit references, are to this Agreement unless otherwise specified. References to any Exhibit shall mean such Exhibit as amended or supplemented from time to time in accordance with this Agreement.
(b) The meanings given to terms defined herein shall be equally applicable to both the singular and plural forms of such terms.
(c) The expressions “payment in full,” “paid in full” and any other similar terms or phrases when used herein shall mean payment in cash in immediately available funds.
(d) The use herein of the word “include” or “including,” when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not non-limiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.
(e) All references herein to provisions of the UCC shall include all successor provisions under any subsequent version or amendment to any Article of the UCC.
(f) All terms used in this Agreement that are defined in Article 9 of the UCC and not otherwise defined herein have the meanings assigned to them in Article 9 of the UCC.
11
(g) Notwithstanding anything to the contrary in this Agreement, any references contained herein to any section, clause, paragraph, definition or other provision of any Priority Debt Document (including any definition contained therein) shall be deemed to be a reference to such section, clause, paragraph, definition or other provision as in effect on the date of this Agreement as amended or modified from time to time if such amendment or modification has been made in accordance with the Priority Debt Documents. Unless otherwise set forth herein, references to principal amount shall include, without duplication, any reimbursement obligations with respect to a letter of credit and the face amount thereof (whether or not such amount is, at the time of determination, drawn or available to be drawn). References to English language terms used in the Priority Debt Documents shall include the Spanish language equivalents or translations used in such Priority Debt Documents, as applicable.
(h) This Agreement and the other Security Documents will be construed without regard to the identity of the party who drafted it and as though the parties participated equally in drafting it. Consequently, each of the parties acknowledges and agrees that any rule of construction that a document is to be construed against the drafting party will not be applicable either to this Agreement or the other Security Documents.
Section 1.3 Impairments. It is the intention of the Secured Parties of each Series that the holders of Priority Obligations of such Series bear the risk of (a) any determination by a court of competent jurisdiction that (i) any of the Priority Obligations of such Series are unenforceable under applicable law or are subordinated to any other obligations (other than another Series of Priority Obligations), (ii) any of the Priority Obligations of such Series do not have an enforceable security interest in any of the Collateral securing any other Series of Priority Obligations and/or (iii) any intervening security interest exists securing any other obligations (other than another Series of Priority Obligations) on a basis ranking prior to the security interest of such Series of Priority Obligations but junior to the security interest of any other Series of Priority Obligations or (b) the existence of any Collateral for any other Series of Priority Obligations that is not Shared Collateral (any such condition referred to in the foregoing clauses (a) or (b) with respect to any Series of Priority Obligations, an “Impairment” of such Series); provided that the existence of a maximum claim with respect to any Mortgaged Property which applies to all Priority Obligations shall not be deemed to be an Impairment of any Series of Priority Obligations. In the event of any Impairment with respect to any Series of Priority Obligations, the results of such Impairment shall be borne solely by the holders of such Series of Priority Obligations, and the rights of the holders of such Series of Priority Obligations (including, without limitation, the right to receive distributions in respect of such Series of Priority Obligations pursuant to Section 2.1) set forth herein shall be modified to the extent necessary so that the effects of such Impairment are borne solely by the holders of the Series of such Priority Obligations subject to such Impairment. Additionally, in the event the Priority Obligations of any Series are modified pursuant to applicable law (including, without limitation, pursuant to Section 1129 of the Bankruptcy Code), any reference to such Priority Obligations or the Priority Debt Documents governing such Priority Obligations shall refer to such obligations or such documents as so modified.
12
ARTICLE II
PRIORITIES AND AGREEMENTS WITH RESPECT TO SHARED collateral
Section 2.1 Priority of Claims.
(a) Subject to Section 1.3, if a Priority Debt Default has occurred and is continuing, and the Controlling Collateral Agent is taking action to enforce rights in respect of its applicable Shared Collateral, or any distribution is made in respect of its applicable Shared Collateral in any Insolvency or Liquidation Proceeding of the Company or any other Grantor (including any adequate protection payments) or any Secured Party receives any payment (other than pursuant to this Agreement) with respect to its applicable Shared Collateral, the proceeds of any sale, collection or other liquidation of any such Shared Collateral by any Priority Debt Representative or any Secured Party and proceeds of any such distribution (all such payments, distributions, and proceeds of any sale, collection or other liquidation of any Shared Collateral and all such payments and proceeds of any such distribution being collectively referred to as “Proceeds”), shall be applied:
FIRST, the Proceeds from any WC Priority Collateral, to the payment of all amounts due and payable to each WC Priority Debt Representative (in its capacity as such) or any co-trustee or agent of such WC Priority Debt Representative in connection with performing its obligations under any WC Priority Debt Document or this Agreement (including, but not limited to, indemnification obligations arising under this Agreement or any WC Priority Debt Security Document that are then due and payable);
SECOND, the Proceeds from any WC Priority Collateral, to the respective WC Secured Parties, on a pro rata basis, for each Series of WC Priority Obligations that are secured by WC Priority Collateral for application to the payment of all such outstanding WC Priority Obligations (for application to WC Priority Obligations of a given Series in such order as may be provided in the WC Priority Debt Documents applicable to such Series of WC Priority Obligations) in an aggregate amount, for all such Series of WC Priority Obligations, not to exceed the WC Priority Obligations Cap Amount;
THIRD, the Proceeds from any Shared Collateral (including any WC Priority Collateral) to the payment of all amounts due and payable to each Priority Debt Representative (in its capacity as such) (other than any WC Priority Debt Representative) or any co-trustee or agent of such Priority Debt Representative (other than any WC Priority Debt Representative) in connection with performing its obligations under any Priority Debt Document or this Agreement (including, but not limited to, indemnification obligations arising under this Agreement or any Security Document that are then due and payable);
FOURTH, the Proceeds from any Shared Collateral (including any WC Priority Collateral) to the respective Category IV Secured Parties, on a pro rata basis, for each Series of Priority Obligations (other than WC Priority Obligations) that are secured by such Shared Collateral for application to the payment of all such outstanding Priority Obligations (other than WC Priority Obligations) (for application to Priority Obligations (other than WC Priority Obligations) of a given Series in such order as may be provided in the Priority Debt Documents applicable to such Series of Priority Obligations) in an amount sufficient to cause the repayment in full in cash of the Priority Obligations (including, for the avoidance of doubt, all interest and fees accrued thereon after the commencement of any Insolvency or Liquidation Proceeding at the rate, including any applicable post-default rate, specified in the Priority Debt Documents, even if such interest is not enforceable, allowable or allowed as a claim in such proceeding and indemnification obligations arising in relation with such Priority Obligations); and
FIFTH, any surplus remaining after the repayment in full and in cash of the Priority Obligations and the Discharge of Priority Obligations will be paid to the Company or the applicable Grantor, as the case may be, its successors or assigns, or otherwise, to such other Persons as may be entitled to such amounts under applicable law or as a court of competent jurisdiction may direct.
Notwithstanding the foregoing, with respect to any Shared Collateral for which a third party (other than a Secured Party) has a Lien or security interest that is junior in priority to the security interest of any Series of Priority Obligations, but senior (as determined by appropriate legal proceedings in the case of any dispute) to the security interest of any other Series of Priority Obligations (such third party an “Intervening Creditor”), the value of any Shared Collateral or Proceeds which are allocated to such Intervening Creditor shall be deducted on a ratable basis solely from the Shared Collateral or Proceeds to be distributed in respect of the Series of Priority Obligations with respect to which such Impairment exists. If, despite the provisions of this Section 2.1(a), any Secured Party shall receive any payment or other recovery in excess of its portion of payments on account of the Priority Obligations to which it is then entitled in accordance with this Section 2.1(a), such Secured Party shall hold such payment or recovery in trust for the benefit of all Secured Parties for distribution in accordance with this Section 2.1(a).
13
(b) It is acknowledged that the Priority Obligations of any Series may, subject to the limitations set forth in the then extant Priority Debt Documents, be increased, extended, renewed, replaced, restated, supplemented, restructured, repaid, refunded, Refinanced or otherwise amended or modified from time to time, all without affecting the priorities set forth in Section 2.1(a) or the provisions of this Agreement defining the relative rights of the Secured Parties of any Series.
(c) Notwithstanding the date, time, method, manner or order of grant, attachment or perfection of any Liens securing any Series of Priority Obligations granted on the Shared Collateral and notwithstanding any provision of the UCC of any jurisdiction, or any other applicable law or the Priority Debt Documents or any defect or deficiencies in the Liens securing the Priority Obligations of any Series or any other circumstance whatsoever (but, in each case, subject to Section 1.3), each Secured Party hereby agrees that (i) the Liens securing each Series of Priority Obligations on any Shared Collateral shall be of equal priority and (ii) the benefits and Proceeds of the Shared Collateral shall be shared among the Secured Parties as provided herein.
(d) For the avoidance of doubt and notwithstanding anything contained in Section 2.1(a),
| (i) | the payment of any Proceeds pursuant to Section 2.1(a) or otherwise in this Agreement to WC Priority<br>Debt Representative or WC Secured Party shall be limited to solely to Proceeds from the exercises or any rights or remedies permitted<br>by the terms of this Agreement with respect to WC Priority Collateral; and |
|---|---|
| (ii) | in no event shall any WC Priority Debt Representative or WC Secured Party be entitled to (x) the benefits<br>of any Lien on any Shared Collateral other than WC Priority Collateral, (y) the payment of any Proceeds from any Shared Collateral other<br>than WC Priority Collateral pursuant to Section 2.1(a) or otherwise in this Agreement or (z) any such Proceeds in excess of the<br>WC Priority Obligations Cap Amount. |
| --- | --- |
Section 2.2 Actions with Respect to Shared Collateral; Prohibition on Contesting Liens.
(a) With respect to any Shared Collateral, (i) only the Controlling Collateral Agent (at the written direction of the Required Secured Parties) shall act or refrain from acting with respect to its applicable Shared Collateral (including with respect to any other intercreditor agreement with respect to such Shared Collateral) and (ii) no Non-Controlling Collateral Agent, other Non-Controlling Secured Party, or Priority Debt Representative (other than the Controlling Collateral Agent) or Secured Party shall commence any judicial or nonjudicial foreclosure proceedings with respect to, seek to have a trustee, receiver, liquidator or similar official appointed for or over, attempt any action to take possession of, exercise any right, remedy or power with respect to, or otherwise take any action to enforce its security interest in or realize upon, or take any other action available to it in respect of, such Shared Collateral (including with respect to any intercreditor agreement with respect to such Shared Collateral), whether under any Security Document, applicable law or otherwise, it being agreed that only the Controlling Collateral Agent (at the written direction of the Required Secured Parties) shall be entitled to take any such actions or exercise any such remedies with respect to such Shared Collateral; provided that, notwithstanding the foregoing, (A) in any Insolvency or Liquidation Proceeding, any Priority Debt Representative or any other Secured Party may file a proof of claim or statement of interest with respect to the Priority Obligations owed to such Secured Parties; (B) any Priority Debt Representative or any other Secured Party may take any action to preserve or protect the validity and enforceability of the Liens granted in favor of such Secured Parties, provided that no such action is, or could reasonably be expected to be, (x) adverse to the Liens granted in favor of the Controlling Secured Parties or the rights of the Controlling Collateral Agent or any other Controlling Secured Parties to exercise remedies in respect thereof or (y) otherwise inconsistent with the terms of this Agreement; and (C) any Priority Debt Representative or any other Secured Party may file any responsive or defensive pleadings in opposition to any motion, claim, adversary proceeding or other pleading made by any Person objecting to or otherwise seeking the disallowance of the claims or Liens of such Secured Party, including any claims secured by the Shared Collateral, in each case, to the extent not inconsistent with the terms of this Agreement. Notwithstanding the equal priority of the Liens on the Shared Collateral, the Controlling Collateral Agent (at the written direction of the Required Secured Parties) may deal with its applicable Shared Collateral as if such Controlling Collateral Agent had a senior Lien on such Shared Collateral. No Non-Controlling Collateral Agent, other Non-Controlling Secured Party, or Priority Debt Representative (other than the Controlling Collateral Agent) or other Secured Party will contest, protest or object to any foreclosure proceeding or action brought by the Controlling Collateral Agent (at the written direction of the Required Secured Parties) or the Required Secured Parties or any other exercise by the Controlling Collateral Agent (at the written direction of the Required Secured Parties) or the Required Secured Parties of any rights and remedies relating to its applicable Shared Collateral. Nothing in this Agreement shall be construed to limit the rights and priorities of any Secured Party or Priority Debt Representative with respect to any Collateral not constituting Shared Collateral.
14
(b) Each Priority Debt Representative and the Secured Parties for which it is acting hereunder agree to be bound by the provisions of this Agreement.
(c) Each of the Secured Parties agrees that it will not (and hereby waives any right to) contest or support any other Person in contesting, in any proceeding (including any Insolvency or Liquidation Proceeding), the perfection, priority, validity, attachment or enforceability of a Lien held by or on behalf of any of the Secured Parties in all or any part of the Collateral, the allowability of any claims asserted with respect thereto or the provisions of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any Priority Debt Representative or any other Secured Party to enforce this Agreement.
Section 2.3 No Interference; Payment Over; Setoff.
(a) Each Priority Debt Representative and each Secured Party agrees that (i) it will not challenge, or support any other Person in challenging, in any proceeding (including any Insolvency or Liquidation Proceeding) the validity or enforceability of any Priority Obligations of any Series or any Security Document or the validity, attachment, perfection or priority of any Lien under any Security Document or the allowability of any claims asserted with respect thereto, or the validity or enforceability of the priorities, rights or duties established by or other provisions of this Agreement; (ii) it will not take or cause to be taken any action the purpose or intent of which is, or could be, to interfere, hinder or delay, in any manner, whether by judicial proceedings or otherwise, any sale, transfer or other disposition of its applicable Shared Collateral by the Controlling Collateral Agent (at the written direction of the Required Secured Parties), (iii) it will not institute in any Insolvency or Liquidation Proceeding or other proceeding any claim against the Controlling Collateral Agent or any other Secured Party seeking damages from or other relief by way of specific performance, instructions or otherwise with respect to any Shared Collateral, and none of the Controlling Collateral Agent or any other Secured Party shall be liable for any action taken or omitted to be taken by the Controlling Collateral Agent or other Secured Party with respect to any Shared Collateral in accordance with the provisions of this Agreement, (iv) it will not seek, and hereby waives any right, to have any Shared Collateral or any part thereof marshaled upon any foreclosure or other disposition of such Shared Collateral and (v) it will not attempt, directly or indirectly, whether by judicial proceedings or otherwise, to challenge the enforceability of any provision of this Agreement; provided that nothing in this Agreement shall be construed to prevent or impair the rights of any Priority Debt Representative or any other Secured Party to enforce this Agreement.
15
(b) Each Priority Debt Representative (other than the Controlling Collateral Agent) and each Secured Party hereby agrees that if it shall obtain possession of any Shared Collateral or shall realize any Proceeds in respect of any such Shared Collateral, pursuant to any Security Document or any other Priority Debt Document, or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies (including pursuant to any intercreditor agreement), at any time prior to the repayment in full and in cash of the Priority Obligations and the Discharge of Priority Obligations with respect to such Shared Collateral, then it shall hold such Shared Collateral or Proceeds in trust for the other Secured Parties that have a security interest in such Shared Collateral and within ten (10) days of receipt transfer such Shared Collateral or Proceeds, as the case may be, to the Controlling Collateral Agent or Non-Controlling Collateral Agent, as applicable, to be distributed in accordance with the provisions of Section 2.1 hereof. For the avoidance of doubt, upon making such transfer to the Controlling Collateral Agent or Non-Controlling Collateral Agent, as applicable, such Priority Debt Representative or Secured Party will be treated as not having obtained such Shared Collateral or Proceeds for purposes of determining the amount of Priority Obligations and any other obligations owing to it.
(c) Each Priority Debt Representative and each Secured Party hereby agrees that, to the extent any such Priority Debt Representative or Secured Party exercises, after obtaining the prior written consent of the Controlling Collateral Agent (at the direction of the Required Secured Parties), its rights of set-off pursuant to any Priority Debt Document, or by the exercise of any rights available to it under applicable law or in any Insolvency or Liquidation Proceeding or through any other exercise of remedies (including pursuant to any the terms of any document, agreement or instrument governing any general or special, time or demand, provisional or final, in whatever currency, deposit account) against any Shared Collateral, then the amount of such set-off shall be held in trust for the other Priority Debt Representatives and Secured Parties, and within ten (10) days of such set-off transfer the amount of such set-off to the Controlling Collateral Agent or Non-Controlling Collateral Agent, as applicable, to be distributed in accordance with the provisions of Section 2.1 hereof.
Section 2.4 Certain Agreements with Respect to Bankruptcy or Insolvency Proceedings.
(a) This Agreement shall continue in full force and effect notwithstanding the commencement of any Insolvency or Liquidation Proceeding under the Bankruptcy Code or any other Bankruptcy Law or similar law by or against any Grantor or any of their Subsidiaries. The parties hereto acknowledge that the provisions of this Agreement are intended to be enforceable as contemplated by Section 510(a) of the Bankruptcy Code and similar provisions of other Bankruptcy Laws. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.
(b) If the Company and/or any other Grantor shall become subject to any Insolvency or Liquidation Proceeding and shall, as debtor(s)-in-possession, move for approval of financing (“DIP Financing”) to be provided by one or more lenders (the “DIP Lenders”) under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law and/or the use of cash collateral under Section 363 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, then each Secured Party agrees that it will raise no objection to any such financing or to the Liens on the Shared Collateral securing the same (“DIP Financing Liens”) and/or to any use of cash collateral that constitutes Shared Collateral, unless the Controlling Collateral Agent (at the written direction of the Required Secured Parties) or the Required Secured Parties oppose or object to such DIP Financing or such DIP Financing Liens and/or use of cash collateral (and (i) to the extent that such DIP Financing Liens are senior to the Liens on any such Shared Collateral for the benefit of the Controlling Secured Parties, each Non-Controlling Secured Party will subordinate its Liens with respect to such Shared Collateral on the same terms as the Liens of the Controlling Secured Parties (other than any Liens of any Secured Parties constituting DIP Financing Liens) are subordinated thereto, and (ii) to the extent that such DIP Financing Liens rank pari passu with the Liens on any such Shared Collateral granted to secure the Priority Obligations of the Controlling Secured Parties, each Non-Controlling Secured Party will confirm the priorities with respect to such Shared Collateral as set forth herein), in each case, so long as (A) each of the Secured Parties has been provided the opportunity to participate in the DIP Financing on a pro rata basis, (B) the applicable Priority Debt Representative on behalf of the applicable Secured Parties of each Series retain the benefit of their Liens on all such Shared Collateral pledged to the DIP Lenders, including Proceeds thereof arising after the commencement of such proceeding, with the same priority vis-a-vis all the other Secured Parties (other than any Liens of the Secured Parties constituting DIP Financing Liens) as existed prior to the commencement of the Insolvency or Liquidation Proceeding, (C) the applicable Priority Debt Representative on behalf of the applicable Secured Parties of each Series are granted Liens on any additional collateral pledged to any Secured Parties as adequate protection or otherwise in connection with such DIP Financing and/or use of cash collateral, with the same priority vis-a-vis the applicable Priority Debt Representative (other than any Liens of the Secured Parties constituting DIP Financing Liens) as set forth in this Agreement, (D) if any amount of such DIP Financing and/or cash collateral is applied to repay any of the Priority Obligations, such amount is applied pursuant to Section 2.1 of this Agreement, and (E) if any Secured Parties are granted adequate protection with respect to Priority Obligations subject hereto, including in the form of periodic payments, in connection with such DIP Financing and/or use of cash collateral, the Proceeds of such adequate protection are applied pursuant to Section 2.1 of this Agreement.
16
(c) Each Priority Debt Representative (other than the Controlling Collateral Agent), on behalf of the applicable Secured Parties, and each Secured Party, will not oppose or object, and will be deemed to have consented pursuant to section 363(f) of the Bankruptcy Code and any similar Bankruptcy Law, to a disposition of Shared Collateral free and clear of its Liens or other interests under section 363 of the Bankruptcy Code and any similar Bankruptcy Law, if the Controlling Collateral Agent (at the written direction of the Required Secured Parties) consents in writing to such disposition, provided that either (i) pursuant to court order, the Liens of Secured Parties attach to the net Proceeds of such disposition with the same priority and validity as the Liens held by Secured Parties on such Shared Collateral, and the Liens remain subject to the terms of this Agreement, or (ii) the Proceeds of such disposition of Shared Collateral are distributed in accordance with the UCC and applicable law.
Section 2.5 Reinstatement. In the event that any of the Priority Obligations shall be paid in full and such payment or any part thereof shall subsequently, for whatever reason (including an order or judgment for disgorgement of a preference under the Bankruptcy Code, or any similar law, or the settlement of any claim in respect thereof), be required to be returned or repaid, the terms and conditions of this Article II shall be fully applicable thereto until all such Priority Obligations shall again have been paid in full in cash.
Section 2.6 Insurance. As between the Secured Parties, the Controlling Collateral Agent (at the written direction of the Required Secured Parties) shall have the right to adjust or settle any insurance policy or claim covering or constituting its applicable Shared Collateral in the event of any loss thereunder and to approve any award granted in any condemnation or similar proceeding affecting its applicable Shared Collateral.
Section 2.7 Controlling Collateral Agent as Gratuitous Bailee for Perfection.
(a) Each of the Controlling Collateral Agent and the Non-Controlling Collateral Agent acknowledges and agrees to hold any Shared Collateral constituting Possessory Collateral that is part of the Shared Collateral in its possession or control (or in the possession or control of its agents or bailees) as gratuitous bailee for the benefit of each applicable Secured Party and any assignee solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable Security Documents, in each case, subject to the terms and conditions of this Section 2.7; provided that at any time after the Discharge of Priority Obligations of all Series for which the Collateral Agent is acting, the Collateral Agent shall (at the sole cost and expense of the Grantors), promptly deliver all Possessory Collateral to the successor Controlling Collateral Agent (after giving effect to the Discharge of Priority Obligations of such Series) together with any necessary endorsements reasonably requested by the successor Controlling Collateral Agent (or make such other arrangements as shall be reasonably requested by the successor Controlling Collateral Agent to allow the successor Controlling Collateral Agent to obtain control of such Possessory Collateral). Pending delivery to the Controlling Collateral Agent or the Non-Controlling Collateral Agent, as applicable, each other Priority Debt Representative agrees to hold any Shared Collateral constituting Possessory Collateral, from time to time in its possession, as gratuitous bailee for the benefit of each applicable Secured Party and any assignee, solely for the purpose of perfecting the security interest granted in such Possessory Collateral, if any, pursuant to the applicable Security Documents, in each case, subject to the terms and conditions of this Section 2.7.
(b) The duties or responsibilities of the Controlling Collateral Agent, Non-Controlling Collateral Agent and each other Priority Debt Representative under this Section 2.7 shall be limited solely to holding its applicable Shared Collateral constituting Possessory Collateral as gratuitous bailee for the benefit of each applicable Secured Party for purposes of perfecting the Lien held by such Secured Parties therein.
17
ARTICLE III
THE CONTROLLING COLLATERAL AGENT
Section 3.1 Authority.
(a) Notwithstanding any other provision of this Agreement, nothing herein shall be construed to impose any fiduciary or other duty on the Controlling Collateral Agent to any Non-Controlling Collateral Agent or give any Non-Controlling Secured Party or Controlling Secured Party (other than the Required Secured Parties) the right to direct the Controlling Collateral Agent, except that the Controlling Collateral Agent shall be obligated to distribute any Proceeds of its applicable Shared Collateral in accordance with Section 2.1 hereof.
(b) In furtherance of the foregoing, each Secured Party acknowledges and agrees that the Controlling Collateral Agent (at the written direction of the Required Secured Parties) shall be entitled, for the benefit of the applicable Secured Parties, in accordance with Section 2.1, to sell, transfer or otherwise dispose of or deal with its applicable Shared Collateral as provided herein and in the Priority Debt Documents, as applicable, without regard to any rights to which the Secured Parties, each Non-Controlling Collateral Agent or any other party hereto would otherwise be entitled as a result of the Priority Obligations held by such other party. Without limiting the foregoing, each Secured Party and Non-Controlling Collateral Agent agrees that none of the Controlling Collateral Agent or any other Secured Party shall have any duty or obligation first to marshal or realize upon any type or portion of Shared Collateral or to sell, dispose of or otherwise liquidate all or any portion of such Shared Collateral in any manner that would maximize the return to the Secured Parties, notwithstanding that the order and timing of any such realization, sale, disposition or liquidation may affect the amount of Proceeds actually received by the Secured Parties from such realization, sale, disposition or liquidation. Each of the Secured Parties waives any claim it may now or hereafter have against the Controlling Collateral Agent, or the Priority Debt Representative for any other Series of Priority Obligations or any other Secured Parties of any other Series arising out of (i) any actions which the Controlling Collateral Agent or any such Secured Parties represented by it take or omit to take (including actions with respect to the creation, perfection or continuation of Liens on any Collateral, actions with respect to the foreclosure upon, sale, release or depreciation of, or failure to realize upon, any of the Collateral and actions with respect to the collection of any claim for all or any part of the Priority Obligations from any account debtor, guarantor or any other party) in accordance with this Agreement, the Priority Debt Documents or any other agreement related thereto or in connection with the collection of the Priority Obligations or the valuation, use, protection or release of any security for the Priority Obligations; provided that nothing in this clause (i) shall be construed to prevent or impair the rights of the Controlling Collateral Agent or any Secured Party to enforce this Agreement; (ii) any election by any Priority Debt Representative or any holders of Priority Obligations, in any Insolvency or Liquidation Proceeding of the application of Section 1111(b) of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law; or (iii) subject to Section 2.4, any borrowing, or grant of a security interest or administrative expense priority under Section 364 of the Bankruptcy Code or any equivalent provision of any other Bankruptcy Law, by any Grantor or any of its Subsidiaries, as debtor-in-possession. Notwithstanding any other provision of this Agreement, the Controlling Collateral Agent shall not accept any Shared Collateral in full or partial satisfaction of any Priority Obligations pursuant to Section 9-620 of the Uniform Commercial Code of any jurisdiction, without the consent of each Priority Debt Representative representing holders of Priority Obligations for whom such Collateral constitutes Shared Collateral.
18
Section 3.2 Power-of-Attorney. Each Non-Controlling Collateral Agent, for itself and on behalf of each other Secured Party of the Series for whom it is acting, hereby irrevocably appoints the Controlling Collateral Agent and any officer or agent of the Controlling Collateral Agent, which appointment is coupled with an interest with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of such Non-Controlling Collateral Agent or Secured Party, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary to accomplish the purposes of this Agreement, including the exercise of any and all remedies under each Priority Debt Document with respect to Shared Collateral and the execution of releases in connection therewith.
Section 3.3 Determinations with Respect to Amounts of Liens and Obligations. Whenever the either the Controlling Collateral Agent or any Non-Controlling Collateral Agent shall be required, in connection with the exercise of its rights or the performance of its obligations hereunder, to determine the existence or amount of any Priority Obligations of any Series, or the Shared Collateral subject to any Lien securing the Priority Obligations of any Series, it may request that such information be furnished to it in writing by each Secured Party, as applicable, and shall be entitled to make such determination on the basis of the information so furnished; provided, however, that if any Secured Party shall fail or refuse reasonably promptly to provide the requested information, the Controlling Collateral Agent and the Non-Controlling Collateral Agents shall be entitled (but not obliged) to make any such determination by such method as it may, in the exercise of its respective good faith judgment, determine, including by reliance upon a certificate of the Company. The Controlling Collateral Agent and each Non-Controlling Collateral Agent may rely conclusively, and shall be fully protected in so relying, on any determination made by it in accordance with the provisions of the preceding sentence (or as otherwise directed by a court of competent jurisdiction) and shall have no liability to any Grantor, any Secured Party or any other Person as a result of such determination. The Controlling Collateral Agent and the Non-Controlling Collateral Agents will permit each other Secured Party upon reasonable written notice from time to time to inspect and copy, at the cost and expense of the Secured Party requesting such copies, any and all Security Documents, Priority Debt Documents and other documents, notices, certificates, instructions or communications received or delivered by the Controlling Collateral Agent or the and the Non-Controlling Collateral Agents, as applicable.
19
ARTICLE IV
RELEASE OF LIENS; WC PRIORITY OBLIGATIONS; PURCHASE RIGHT
Section 4.1 Release of Liens.
(a) If, at any time, a Priority Debt Default exists and the Controlling Collateral Agent forecloses upon or otherwise exercises remedies against any part of its applicable Shared Collateral resulting in a sale or disposition thereof, then (whether or not any Insolvency or Liquidation Proceeding is pending at the time) the Liens in favor of each Priority Debt Representative for the benefit of each Series of Secured Parties upon such Shared Collateral will, subject to applicable law, automatically be released and discharged; provided that with respect to any Liens that cannot be released automatically pursuant to applicable law, the Controlling Collateral Agent shall promptly (and in no event within fifteen (15) days following such sale or disposition) make such filings and take such steps pursuant to applicable law as are necessary to effectuate such release; provided, further, any Proceeds of its applicable Shared Collateral realized therefrom shall be applied pursuant to Section 2.1 hereof.
(b) Each of the Secured Parties irrevocably authorizes the applicable Priority Debt Representative, to release any Lien on any property granted to or held by such Priority Debt Representative under any Security Document in accordance with Section 4.1(a) or upon receipt of an Officer’s Certificate from the Secured Parties certifying that the release of such Lien is permitted hereby and by the terms of each then extant Priority Debt Document. Each Priority Debt Representative, for itself and on behalf of the applicable Secured Parties agrees that, in the event any Priority Debt Representative releases its Lien on any Collateral in accordance with this Section 4.1(b), the Lien on such Collateral in favor of each other Priority Debt Representative shall terminate and be released automatically and without further action.
(c) Each Priority Debt Representative agrees to execute and deliver (at the sole cost and expense of the Grantors) all such authorizations and other instruments as shall reasonably be requested by the Controlling Collateral Agent to evidence and confirm any release of Collateral provided for in this Section 4.1.
Section 4.2 Substitute Priority Debt; WC Priority Debt.
(a) The Priority Obligations may be Refinanced by any Debt Facility without notice to, or the consent (except to the extent a consent is otherwise required to permit the Refinancing transaction under any Priority Debt Document) of any Secured Party, all without affecting the Lien priorities provided for herein or the other provisions hereof, in each case, in accordance with the terms of each Priority Debt Document. The Company may only effect such Refinancing by delivering to each Priority Debt Representative a Substitute Priority Debt Designation. On or prior to the incurrence of such Substitute Credit Document, as applicable, the applicable Priority Debt Representative for such Substitute Credit Document shall deliver an Intercreditor Agreement Joinder to each then existing Priority Debt Representative. Notwithstanding the foregoing, nothing in this Agreement will be construed to allow any Grantor to incur additional indebtedness or Liens if prohibited by the terms of any Priority Debt Documents.
(b) The Company will be permitted to designate as WC Priority Debt hereunder any Debt that is incurred by any Grantor after the date of this Agreement in accordance with the terms of each Priority Debt Document (and, in the case of WC Priority Debt, that complies with the definition thereof). The Company may only effect such designation by delivering to each Priority Debt Representative a WC Priority Debt Designation. On or prior to the incurrence of such WC Priority Debt, the applicable WC Priority Debt Representative for such Series of WC Priority Obligations shall deliver an Intercreditor Agreement Joinder to each then existing Priority Debt Representative. Notwithstanding the foregoing, nothing in this Agreement will be construed to allow any Grantor to incur additional indebtedness or Liens if prohibited by the terms of any Priority Debt Documents.
(c) Notwithstanding the foregoing, (i) the incurrence of revolving credit obligations and term loans under commitments that have previously been designated as Priority Obligations, and (ii) the issuance of letters of credit and incurrence of reimbursement obligations in respect thereof under commitments that have previously been designated as Priority Obligations shall, in each case, automatically constitute Priority Obligations and shall not require compliance with the procedures set forth in Section 4.2(a) and Section 4.2(b).
20
(d) With respect to any Substitute Credit Document, or WC Priority Debt that is issued or incurred after the date hereof, each Grantor agrees to take such actions (if any) as necessary or as otherwise may from time to time reasonably be requested by the applicable Priority Debt Representative and enter into such technical amendments, modifications and/or supplements to the then existing Security Documents (or execute and deliver such additional Security Documents) as may from time to time be reasonably requested by the applicable Priority Debt Representative (including as contemplated by clause (e) below), to ensure that such Series of Priority Obligations is secured by, and entitled to the benefits of, the relevant Security Documents, and each applicable Secured Party (by its acceptance of the benefits hereof and the execution of this Agreement) hereby agrees to, and authorizes each applicable Priority Debt Representative to enter into, any such technical amendments, modifications and/or supplements (and additional Security Documents). Each Grantor hereby further agrees that, if there are any recording, filing or other similar fees payable in connection with any of the actions to be taken pursuant to this Section 4.2(d) or Section 4.2(e), all such amounts shall be paid by, and shall be for the account of, the Grantors, on a joint and several basis.
(e) Without limitation of the foregoing, each Grantor agrees that, with respect to any real property Collateral subject to any Substitute Credit Document, or WC Priority Debt, each applicable Grantor shall enter into and deliver to each applicable Priority Debt Representative (i) a mortgage modification (each such modification, a “Modification”) or new mortgage or deed of trust (each such mortgage or deed of trust a “Mortgage,” and each such property a “Mortgaged Property”), in proper form for recording in all applicable jurisdictions, in a form and substance reasonably satisfactory to the applicable Priority Debt Representative, and each applicable Grantor is jointly and severally liable to pay all filing and recording fees and taxes, documentary stamp taxes and other taxes, charges and fees, if any, necessary for filing or recording in the recording office of each jurisdiction where such real property to be encumbered thereby is situated, (ii) a date down endorsement or similar title product to each existing title insurance policy (or in the case of a new mortgage or deed of trust a new title insurance policy) each in a form and substance reasonably satisfactory to the applicable Priority Debt Representative, (iii) executed legal opinions as to the enforceability of each Mortgage or Modification (as applicable) in a form and substance reasonably satisfactory to the applicable Priority Debt Representative and (iv) such affidavits, certificates, flood documentation as shall be reasonably requested by the applicable Priority Debt Representative.
Section 4.3 Purchase Right.
(a) Without prejudice to the enforcement of any of the Secured Parties’ (other than the WC Secured Parties) rights or remedies under this Agreement, any other Priority Debt Documents, at law or in equity or otherwise, the Secured Parties agree that at any time following the first to occur of: (i) an acceleration of all the WC Priority Obligations in accordance with the terms of the WC Priority Debt Documents, (ii) the commencement of enforcement actions by a WC Secured Party, (iii) the commencement of any Insolvency or Liquidation Proceeding with respect to any Grantor or (iv) a payment default under any WC Priority Debt Document that has not been cured or waived within the time period provided therein, the Category IV Secured Parties will have the option to purchase, and the WC Secured Parties shall be obligated to sell on the date provided in the notice to WC Secured Parties of the exercise of such purchase option by the Category IV Secured Parties (the “Proposed Purchase Date”), the entire aggregate amount (but not less than the entirety) of outstanding WC Priority Obligations at the Purchase Price without warranty or representation or recourse except as provided in Section 4.3(d), on a pro rata basis among the WC Secured Parties, which option may be exercised by less than all of the Category IV Secured Parties so long as all the accepting Category IV Secured Parties shall when taken together purchase such entire aggregate amount as set forth above; provided that (A) the Proposed Purchase Date must be no later than ten (10) days after the date upon which any Category IV Secured Parties provides notice to the WC Secured Parties of its intent to exercise the purchase right contemplated hereby, and (B) if any Category IV Secured Parties fails to purchase the WC Secured Parties on the Proposed Purchase Date in accordance with the provisions of this Section 4.3, such Category IV Secured Parties and its Affiliates shall no longer have the right to exercise a purchase right under this Section 4.3.
21
(b) The “Purchase Price” will equal the sum of (1) the full amount of all WC Priority Obligations then-outstanding and unpaid at par (including principal, accrued but unpaid interest and fees and any other unpaid amounts, including breakage costs) (which, for the avoidance of doubt, shall not include any acceleration prepayment penalties or premiums), and (2) all accrued and unpaid fees and expenses (including reasonable and documented outside attorneys’ fees and expenses) owed to the WC Priority Obligations under or pursuant to the WC Priority Debt Documents on the date of purchase, solely to the extent the Grantors are obligated to reimburse the WC Secured Parties therefor.
(c) If the Category IV Secured Parties (or any subset of them) exercise the purchase option pursuant to Section 4.3(a) above, it shall be exercised pursuant to documentation mutually acceptable to the Secured Parties and the Collateral Agent and the parties shall use commercially reasonable efforts to close promptly after such exercise.
(d) The purchase and sale of the WC Priority Obligations under this Section 4.3 will be without recourse and without representation or warranty of any kind by the WC Secured Parties, except that the WC Secured Parties shall severally and not jointly represent and warrant to the Category IV Secured Parties that on the date of such purchase, immediately before giving effect to the purchase: (i) the principal of and accrued and unpaid interest on the WC Priority Obligations, and the fees and expenses thereof owed to the respective WC Secured Party, are as stated in any assignment agreement prepared in connection with the purchase and sale of the WC Priority Obligations, and (ii) each WC Secured Party owns the WC Priority Obligations purported to be owned by it free and clear of any Liens granted by it.
(e) The Category IV Secured Parties exercising the purchase option pursuant to Section 4.3(a) above shall promptly notify the Collateral Agent in writing of such exercise with all relevant information thereto.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1 Amendments.
(a) Neither this Agreement nor any provision hereof may be terminated, waived, amended or modified (other than pursuant to any Intercreditor Agreement Joinder in accordance with the terms hereof) except pursuant to an agreement or agreements in writing entered into by each Priority Debt Representative and Secured Party (and with respect to any such termination, waiver, amendment or modification which by the terms of this Agreement requires the Company’s consent or which increases the obligations or reduces the rights of the Company or any other Grantor, with the consent of the Company), and no Priority Debt Document or Security Document to which the Collateral Agent is a party, nor any provision thereof may be terminated, waived, amended or modified except pursuant to an agreement or agreements in writing entered into by the Collateral Agent (in accordance, if applicable, with the provisions of Section 5.17(a)) and each other party thereto.
(b) Notwithstanding the foregoing, without the consent (except to the extent a consent is otherwise required under any Priority Debt Document) of any Secured Party, the Priority Debt Representative under a Substitute Credit Document, or any WC Priority Debt Representative may become a party hereto by execution and delivery of an Intercreditor Agreement Joinder in accordance with Section 4.2 and upon such execution and delivery, such Priority Debt Representative, and WC Priority Debt Representative and the Secured Parties and Priority Obligations of the Series for which it is acting shall be subject to the terms hereof.
22
(c) Notwithstanding the foregoing, without the consent of any other Priority Debt Representative or Secured Party, the Controlling Collateral Agent (at the written direction of the Required Secured Parties) and the Company may effect amendments and modifications to this Agreement to the extent necessary to reflect any incurrence of any WC Priority Obligations in compliance with the Priority Debt Documents.
(d) Notwithstanding anything contained in any Category IV Priority Debt Document, no amendment or waiver of any provision of any Category IV Priority Debt Document shall (i) release all or substantially all of the Category IV Collateral or (ii) release all or substantially all of the value of any guaranty without, in each case, the written consent of each of the Collateral Agent (at the written direction of the Required Secured Parties) and the Category IV Secured Parties.
Section 5.2 Successors and Assigns. Except in connection with a transaction permitted by the Priority Debt Documents, neither the Company nor any other Grantor may delegate any of its duties or assign any of its rights hereunder, and any attempted delegation or assignment of any such duties or rights will be null and void. All obligations of the Company and the other Grantors hereunder will inure to the sole and exclusive benefit of, and be enforceable by, each Priority Debt Representative and each present and future holder of Priority Obligations, each of whom will be entitled to enforce this Agreement as a third-party beneficiary hereof, and all of their respective successors and assigns.
Section 5.3 Delay and Waiver. No failure to exercise, no course of dealing with respect to the exercise of, and no delay in exercising, any right, power or remedy arising under this Agreement or any of the other Priority Debt Documents or Security Documents will impair any such right, power or remedy or operate as a waiver thereof. No single or partial exercise of any such right, power or remedy will preclude any other or future exercise thereof or the exercise of any other right, power or remedy. The remedies herein are cumulative and are not exclusive of any remedies provided by law.
Section 5.4 Notices. Any communications, including notices and instructions, between the parties hereto or notices provided herein to be given may be given to the following addresses:
If to the Company or any other Grantor:
c/o Procaps S.A.
Calle 80 No. 78B-201
Barranquilla, Colombia
Attention: Natalia Caballero/ Maria Alejandra Molina
Email: ncaballero@procaps.com.co; mamolina@procaps.com.co
Telephone: +(57) 605 371900
With a copy to:
Greenberg Traurig
333 S.E. 2nd Avenue
Suite 4400
Miami, FL 33131
Attention: Antonio Peña, Thomas Martin
Email: antonio.pena@gtlaw.com; thomas.martin@gtlaw.com
23
If to the Collateral Agent:
GLAS Americas LLC
3 Second Street, Suite 206
Jersey City, NJ 07311
Attention:. TMGUS/Procaps S.A.
Email: tmgus@glas.agency; clientservices.usadcm@glas.agency
If to the Notes Secured Parties:
The Prudential Insurance Company of America
c/o PGIM, Inc.
Prudential Tower
Two Prudential Plaza
180 N. Stetson Ave., Suite 5600
Chicago, IL 60601
Attention: Managing Director, PRICOA
cc: Vice President and Corporate Counsel
Email: michael.gurovitsch@pgim.com; cpw@prudential.com
and
Cigna Health and Life Insurance Company
c/o Cigna Investments, Inc.
Wilde Building, A5PRI
900 Cottage Grove Rd
Bloomfield, Connecticut 06002
Attention: Fixed Income Securities
Email:robert.tanner@cignahealthcare.com;Anthony.Dipaulo@Cignahealthcare.com; CIMFixedIncomeSecurities@Cigna.com
With a copy to:
Baker & McKenzie LLP
452 Fifth Avenue
New York, New York 10018
United States
Attention: Paul Keenan; Kevin Whittam
Email: paul.keenan@bakermckenzie.com; kevin.whittam@bakermckenzie.com
and if to any other Priority Debt Representative, to such address as it may specify by written notice to the parties named above in the applicable Intercreditor Agreement Joinder.
Any of the foregoing parties may specify a different or an additional address to which notices should be sent under this Agreement by sending other parties written notice of the new or additional address in the manner provided in this Section.
All notices and communications will be transmitted by electronic mail, or by first class mail, certified or registered, return receipt requested, or by overnight air courier guaranteeing next day delivery, to the relevant electronic mail address, or address set forth above or, as to holders of Priority Obligations, its contact information shown on the register kept by the office or agency where the relevant Priority Obligations may be presented for registration of transfer or for exchange. Failure to transmit a notice or communication to a holder of Priority Obligations or any defect in it will not affect its sufficiency with respect to other holders of Priority Obligations.
24
If a notice or communication is mailed in the manner provided above within the time prescribed, it is duly given, whether or not the addressee receives it.
All notices and communications directed to the Collateral Agent shall be in English language. The Grantors agree to, promptly upon its request, deliver to the Collateral Agent certified and apostilled translations of any Priority Debt Documents, Security Documents, or other certificates, reports, notices, documents and communications entered into or delivered in relation herewith or therewith that are not in English language.
Section 5.5 Notice Following Discharge of Priority Obligations. Promptly following the Discharge of Priority Obligations with respect to one or more Series of Priority Obligations, each Priority Debt Representative with respect to each applicable Series of Priority Obligations that is so discharged will provide written notice of such discharge to each other Priority Debt Representative.
Section 5.6 Entire Agreement. This Agreement states the complete agreement of the parties relating to the undertakings set forth herein and supersedes all oral negotiations and prior writings in respect of such undertaking.
Section 5.7 Severability. Any provision of this Agreement, which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith negotiations to replace any invalid, illegal or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
Section 5.8 Section Headings. The section headings and Table of Contents used in this Agreement are for convenience of reference only and are not to affect the construction hereof or be taken into consideration in the interpretation hereof.
Section 5.9 Obligations Secured. All obligations of the Grantors set forth in or arising under this Agreement will be Priority Obligations and are secured by all Liens granted by the Security Documents.
Section 5.10 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of New York without regard to its conflict of laws principles.
Section 5.11 Consent to Jurisdiction; Service of Process.
(a) Each party hereto hereby irrevocably and unconditionally submits for themselves and their property, to the exclusive jurisdiction of the Supreme Court of the State of New York sitting in New York County and of the United States District Court for the Southern District of New York, and any appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement, or for recognition or enforcement of any judgment, and each of the parties hereto hereby irrevocably and unconditionally agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or, to the extent permitted by law, in such Federal court. Each of the parties hereto 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. Nothing in this Agreement or any shall affect any right that any party hereto or Secured Party may otherwise have to bring any action or proceeding relating to this Agreement against any other party or its properties in the courts of any jurisdiction.
25
(b) Each party to this Agreement irrevocably consents to service of process in the manner provided for notices in Section 5.4. Nothing in this Agreement will affect the right of any party to this Agreement to serve process in any other manner permitted by law.
Section 5.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 5.13 Counterparts. This Agreement may be executed by one or more of the parties to this Agreement on any number of separate counterparts (including by facsimile or other electronic imaging means), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page of this Agreement by facsimile or other electronic transmission (e.g. “pdf” or “tif” format) shall be effective as delivery of a manually executed counterpart hereof.
Section 5.14 Additional Grantors. The Parent will cause each Subsidiary of the Parent that hereafter grants any Lien or security interest pursuant to any Security Document to secure any Series of Priority Obligations or is required by any Priority Debt Document to become a party to this Agreement, to become a party to this Agreement, for all purposes of this Agreement, by causing such Subsidiary to execute and deliver to the Priority Debt Representatives an Intercreditor Agreement Joinder (which, in relation to each Spanish Grantor (as defined in Section 7.1(a)), shall be raised to the status of a Spanish Public Document), whereupon such Subsidiary will be bound by the terms hereof to the same extent as if it had executed and delivered this Agreement as of the date hereof.
Section 5.15 Continuing Nature of this Agreement. This Agreement will be reinstated if at any time any payment or distribution in respect of any of the Priority Obligations is rescinded or must otherwise be returned in an Insolvency or Liquidation Proceeding or otherwise by any Secured Party or Priority Debt Representative or any representative of any such party (whether by demand, settlement, litigation or otherwise).
Section 5.16 Rights and Immunities of Priority Debt Representatives. Each Priority Debt Representative will be entitled to all of the rights, protections, immunities and indemnities set forth in the Priority Debt Documents, Substitute Credit Documents, and/or WC Priority Debt Documents, in each case as if specifically set forth herein. In no event will any Priority Debt Representative be liable for any act or omission on the part of the Grantors or any other Priority Debt Representative hereunder.
Section 5.17 Modification of Security Documents.
(a) No Priority Debt Representative will enter into any amendment, supplement or waiver of any Security Document unless it has received (i) an Officer’s Certificate certifying that such amendment, supplement or waiver will not result in a breach of any provision or covenant contained in any of the Priority Debt Documents and (ii) the written consent of the Required Secured Parties.
26
(b) For the avoidance of doubt, an Intercreditor Agreement Joinder (and any amendments or supplements to the Security Documents required in connection with such Intercreditor Agreement Joinder) entered into in accordance with the terms hereof shall not constitute an amendment, supplement or waiver for purposes of this Section 5.17.
Section 5.18 Provisions Solely to Define Relative Rights. The provisions of this Agreement are and are intended solely for the purpose of defining the relative rights of the Secured Parties in relation to one another. None of the Company, any other Grantor or any other creditor thereof shall have any rights or obligations hereunder, except as expressly provided in this Agreement (provided that nothing in this Agreement (other than Section 2.1, Section 2.4, Section 2.7, Section 4.1 or Section 4.2(d) and (e)) is intended to or will amend, waive or otherwise modify the provisions of the Priority Debt Documents or any Substitute Credit Documents, or WC Priority Debt Documents), and none of the Company or any other Grantor may rely on the terms hereof (other than Section 2.4, Section 2.7 or Section 4.1). Nothing in this Agreement is intended to or shall impair the obligations of any Grantor, which are absolute and unconditional, to pay the Priority Obligations as and when the same shall become due and payable in accordance with their terms.
Section 5.19 Authorization. By its signature, each Person executing this Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it is duly authorized to execute this Agreement. The Priority Debt Representative represents and warrants that this Agreement is binding upon the Secured Parties.
Section 5.20 Conflicts. In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of any of the other Priority Debt Documents, the provisions of this Agreement shall control.
Section 5.21 Further Assurances. Each Priority Debt Representative, on behalf of itself and each applicable Secured Party under the applicable Series of Priority Obligations, agrees that it will take such further action and shall execute and deliver such additional documents and instruments (in recordable form, if requested) as the other parties hereto may reasonably request to effectuate the terms of, and the Lien priorities contemplated by, this Agreement.
Section 5.22 Priority Debt Representative. It is understood and agreed that each WC Priority Debt Representative is entering into this Agreement in its capacity as noteholder, administrative agent, collateral agent, trustee (as applicable) or any other similar Person under the applicable Priority Debt Documents and the provisions of the applicable Priority Debt Documents applicable to it as noteholder, agent, trustee or similar Person thereunder shall also apply to it as Priority Debt Representative hereunder.
Section 5.23 Transaction Expenses and Indemnity.
(a) The Company shall pay to the Collateral Agent the fees set forth in the Collateral Agent Fee Letter in the amounts and at the times specified in the Collateral Agent Fee Letter.
27
(b) Whether or not the transactions contemplated under this Agreement, the Security Documents and the Priority Debt Documents, the Grantors will pay, or cause to be paid, and hold the Collateral Agent (or any sub-agents) and its officers, directors, employees, representatives and agents harmless against, all costs and expenses (including reasonable attorneys’ fees of a special counsel and, if reasonably required by the Collateral Agent (or any sub-agents), local or other counsel) incurred by the Collateral Agent (or any sub-agents), in connection with this Agreement, the Security Documents and the Priority Debt Documents and the transactions contemplated thereunder, and in connection with any amendments, waivers or consents under or in respect of this Agreement, the Security Documents and the Priority Debt Documents (whether or not such amendment, waiver or consent becomes effective), including: (a) any judgment, liability, claim, order, decree, fine, penalty, cost, fee, expense (including reasonable attorneys’ fees and expenses) or obligation resulting from the consummation of the transactions contemplated hereby, the Security Documents or the Priority Debt Documents, the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement, the Security Documents and the Priority Debt Documents or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, the Security Documents and the Priority Debt Documents, or by reason of being the Collateral Agent (or any sub-agents), or defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder or under the Security Documents or the Priority Debt Documents, except to the extent that such loss, damage, claim, liability or expense is due to its own gross negligence or willful misconduct as determined by a final non-appealable decision of a court of competent jurisdiction, and (b) the costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency, judicial or extrajudicial recovery or bankruptcy of any Grantor or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby, the Security Documents and the Priority Debt Documents.
(c) To the extent that the Grantors for any reason fails to indefeasibly pay any amount required under this Section 5.23 to be paid by it to the Collateral Agent (or any sub-agent), or any officers, directors, employees, representatives and agents of the Collateral Agent, each Category IV Secured Party severally agrees to pay to the Collateral Agent (or any sub-agent), such Category IV Secured Party’s pro rata share of such unpaid amount; provided that such reimbursement by the Category IV Secured Parties shall not affect the Grantors’ continuing reimbursement obligations with respect thereto, if any.
(d) When the Collateral Agent incurs expenses or renders services in connection with any Priority Debt Default, the expenses (including the reasonable compensation of, duly documented expenses of and disbursements by its counsel) and the compensation for its services are intended to constitute expenses of administration under any applicable United States federal or state or non-U.S. bankruptcy, insolvency or other similar law.
(e) The provisions of this Section shall survive the termination of this Agreement or the earlier resignation or removal of the Collateral Agent.
GLAS AMERICAS LLC APPOINTMENT
Section 6.1 Appointment and Authority.
Each of the Category IV Secured Parties hereby irrevocably appoints GLAS Americas LLC as Collateral Agent and authorizes the Collateral Agent, in each case, to the fullest extent required under applicable laws, to take such actions on its behalf and to exercise such powers as are delegated to the Collateral Agent by the terms hereof or under any other Category IV Security Document or Category IV Priority Debt Document (in each case, at the written direction of the Category IV Required Secured Parties) together with such powers and discretion as are reasonably incidental thereto, including performing any and all of its duties and exercise its rights and powers hereunder or under any other Category IV Security Document or Category IV Priority Debt Document, by or through any one or more sub-agents appointed by the Collateral Agent. In this connection, the Collateral Agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent pursuant to this Agreement and any applicable Category IV Priority Debt Documents for purposes of performing any and all of the Collateral Agent’s duties and exercise its rights and powers hereunder or under any other Category IV Security Document or Category IV Priority Debt Document, including holding or enforcing any Lien on the Collateral (or any portion thereof) granted under any of the Category IV Security Documents, or for exercising any other rights and remedies thereunder at the direction of the Collateral Agent, shall be entitled to the benefits of all provisions of this Article VI and the equivalent provision of any Category IV Priority Debt Document (as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” or “security trustee,” as applicable, named therein) as if set forth in full herein with respect thereto. Without limiting the foregoing, each of the Category IV Secured Parties, hereby agrees to provide such cooperation and assistance as may be reasonably requested by the Collateral Agent to facilitate and effect actions taken or intended to be taken by the Collateral Agent pursuant to this Article VI, such cooperation to include execution and delivery of notices, instruments and other documents as are reasonably deemed necessary by the Collateral Agent to effect such actions, and joining in any action, motion or proceeding initiated by the Collateral Agent for such purposes.
28
Section 6.2 Rights as a Secured Party. The Person serving as the Collateral Agent shall have the same rights and powers in its capacity as a Category IV Secured Party under any Series of Category IV Priority Obligations that it holds as any other Category IV Secured Party of such Series and may exercise the same as though it were not the Collateral Agent and the term “Secured Party” or “Secured Parties” or (as applicable) “Notes Secured Party”, “Notes Secured Parties”, “Club Secured Party”, “Club Secured Parties”, “BTG Cayman Secured Party”, “BTG Cayman Secured Parties”, “BTG Colombia Secured Party”, “BTG Colombia Secured Parties”, shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Collateral Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Grantors or any Subsidiary or other Affiliate thereof as if such Person were not the Collateral Agent hereunder and without any duty to account therefor to any other Category IV Secured Party.
Section 6.3 Exculpatory Provisions. The Collateral Agent shall not have any duties or obligations except those expressly set forth herein. Without limiting the generality of the foregoing, the Collateral Agent:
(a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Priority Debt Default or Non-Controlling Collateral Agent Enforcement Event has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or under any Category IV Security Document or Category IV Priority Debt Document, in each case as directed in writing by the Category IV Required Secured Parties (it being understood that any Category IV Security Document, Category IV Priority Debt Document, or any other document requiring or permitting the Collateral Agent to act under the direction or instructions of the “Required Holders,” the “Required Lenders,” the “Acreedores Requeridos,” or similar terms, or any other majority or group of noteholders, lenders or creditors shall be deemed to require the direction or instructions of the Category IV Required Secured Parties) and the Collateral Agent shall be entitled to request written directions, instructions, or clarification from the Category IV Required Secured Parties; provided that the Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Collateral Agent to liability or that is contrary to this Agreement or applicable law, including any action that may be in violation of the automatic stay under any bankruptcy or insolvency law. Any reference in a Category IV Security Document or Category IV Priority Debt Document to the Collateral Agent to an item or a person being acceptable to, satisfactory to, to the satisfaction or approved by or specified by the Collateral Agent, or the Collateral Agent exercising its discretion to permit or waive any action, are to be construed, unless otherwise specified, as references to that Collateral Agent taking such action or refraining from acting on the instructions of the Category IV Required Secured Parties. Where the Collateral Agent is obliged to consult with any Grantor under the terms of any Category IV Security Document or Category IV Priority Debt Document, unless otherwise specified, the Category IV Required Secured Parties must instruct the Collateral Agent to consult with such Grantor in accordance with the terms of the relevant Category IV Security Document or Category IV Priority Debt Document and the Collateral Agent must carry out that consultation in accordance with the instructions it receives from the Category IV Required Secured Parties. The Collateral Agent should be under no obligation to determine the reasonableness of such circumstances or whether in giving such instructions the Category IV Required Secured Parties (as applicable) are acting in a reasonable manner;
29
(c) shall not, except as expressly set forth herein, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to a Grantor or any of its Affiliates that is communicated to or obtained by the Person serving as the Collateral Agent or any of its Affiliates in any capacity;
(d) shall not be liable for any error of judgment, any action taken or not taken by it (i) in the absence of its own gross negligence or willful misconduct (as determined by a final non-appealable decision of a court of competent jurisdiction) or (ii) in reliance on a certificate of an authorized officer of the Company stating that such action is permitted by the terms of this Agreement. The Collateral Agent may, unless other evidence be herein specifically prescribed, in the absence of bad faith on its part, conclusively rely upon instructions from the Category IV Required Secured Parties. The Collateral Agent shall be deemed not to have knowledge of any Priority Debt Default under any Series of Category IV Priority Obligations or Non-Controlling Collateral Agent Enforcement Event unless and until notice describing such Priority Debt Default or Non-Controlling Collateral Agent Enforcement Event and referencing the applicable agreement is given to the Collateral Agent;
(e) shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Category IV Security Document or Category IV Priority Debt Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any default, Priority Debt Default or Non-Controlling Collateral Agent Enforcement Event, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Category IV Security Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Category IV Security Documents, (v) the value or the sufficiency of any Collateral for any Series of Category IV Priority Obligations, or (vi) the satisfaction of any condition set forth in any Category IV Priority Debt Document, other than to confirm receipt of items expressly required to be delivered to the Collateral Agent;
(f) need not segregate money held hereunder from other funds except to the extent required by applicable law; the Collateral Agent shall be under no liability for interest on any money received by it hereunder except as otherwise agreed in writing;
(g) shall have no responsibility for the preparation, filing or recording of any instrument or document that may be required in connection with the creation, maintenance or operation of any Liens on the Category IV Collateral or under any Category IV Security Document or Category IV Priority Debt Document, and shall not be responsible in any manner for the validity, enforceability or sufficiency of any such document, this Agreement or any Category IV Security Document or Category IV Priority Debt Document, or for the value or collectability of any Category IV Priority Obligations or other instrument, if any, so delivered, or for any representations made or obligations assumed by any party other than the Collateral Agent. The Collateral Agent shall not be responsible for any unsuitability, inadequacy, expiration or unfitness of any security interest created hereunder or pursuant to any other Category IV Security Documents (and shall be entitled to assume, its suitability, adequacy, lack of expiration and fitness), and shall not be bound to investigate, examine or inquire into or be liable for any defect or failure in the right or title of the Collateral Agent to all or any of the Category IV Collateral, whether such defect or failure was known to the Collateral Agent or might have been discovered upon examination or inquiry and whether capable of remedy or not;
30
(h) shall have no responsibility for or liability with respect to monitoring compliance of any other party to the Category IV Security Documents or the Category IV Priority Debt Documents or any other document related hereto or thereto, and shall have no duty to monitor the value or rating of any Category IV Collateral;
(i) in no event shall be responsible or liable for any failure or delay in the performance of its obligations hereunder arising out of or caused by, directly or indirectly, forces beyond its control, including, without limitation, strikes, work stoppages, epidemics, pandemics, accidents, acts of war or terrorism, civil or military disturbances, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer (software and hardware) services;
(j) in no event shall be responsible or liable for special, indirect, punitive, or consequential loss or damage of any kind whatsoever (including, but not limited to, loss of profit) irrespective of whether the Collateral Agent has been advised of the likelihood of such loss or damage and regardless of the form of action;
(k) shall not be required to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties or exercise of any of its rights or powers if the Collateral Agent has reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it, in its sole discretion; and
(l) in no event shall be responsible or liable for any actions taken or omitted to be taken by any Controlling Collateral Agent that is not the Collateral Agent (whether or not the applicable Non-Controlling Collateral Agent Enforcement Event ceases to occur or be continuing for any reason), or any other Person (including any other Priority Debt Representative) with respect to any Collateral (including any Shared Collateral) that is not the Category IV Collateral (or Proceeds thereof) or under any Priority Debt Document that is not a Category IV Priority Debt Documents or Security Document that is not a Category IV Security Document.
Section 6.4 Resignation of Collateral Agent. Subject to the appointment of a successor as set forth herein, the Collateral Agent may resign as Collateral Agent upon thirty (30) days’ notice to the Category IV Secured Parties and the Grantors. If the Collateral Agent shall resign as Collateral Agent under this Agreement and the other Category IV Security Documents and Category IV Priority Debt Documents, then the Category IV Required Secured Parties shall appoint a successor agent for the Category IV Secured Parties. Upon the successful appointment of a successor agent, such successor agent shall succeed to all the rights, powers and duties of the Collateral Agent and the term “Collateral Agent” shall mean such successor agent effective upon such appointment and approval, and the former Collateral Agent’s rights, powers and duties as the Collateral Agent shall be terminated without any other or further act or deed on the part of such former Collateral Agent or any of the parties to this Agreement. After any retiring Collateral Agent’s resignation or removal as Collateral Agent, the provisions of this Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it while it was then Collateral Agent under this Agreement and the Category IV Security Documents and Category IV Priority Debt Documents.
31
LOCAL LAW PROVISIONS
Section 7.1 Spanish Provisions.
| (a) | Definitions. In this Section 7.1, the following terms will have the following meanings: |
|---|---|
| (i) | “Spain” means the Kingdom of Spain. |
| --- | --- |
| (ii) | “Spanish Civil Code” means the Royal Decree of 24 July 1889 publishing the Civil Code<br>(Real Decreto de 24 de julio de 1889 por el que se publica el Código Civil), as amended or substituted from time to time. |
| --- | --- |
| (iii) | “Spanish Civil Procedure Act” means the Act 1/2020, of 7 January, on Civil Procedure<br>(Ley 1/2000, de 7 de enero, de Enjuiciamiento Civil), as amended or substituted from time to time. |
| --- | --- |
| (iv) | “Spanish Commercial Code” means the Royal Decree of 22 August 1885 publishing the Commercial<br>Code (Real Decreto de 22 de agosto de 1885 por el que se publica el Código de Comercio), as amended or substituted from<br>time to time. |
| --- | --- |
| (v) | “Spanish Grantor” means a Grantor that is incorporated under the laws of Spain. |
| --- | --- |
| (vi) | “Spanish Public Document” means, a documento público, being an escriturapública, póliza or efecto intervenido por fedatario público. |
| --- | --- |
(b) Spanish Interpretation Provisions. In this Agreement, where it relates to a Person incorporated under the laws of Spain, any reference to (a) an “attachment” includes, without limitation, an embargo preventivo and an embargo ejecutivo; (b) a “composition, compromise, assignment or arrangement with any creditor” includes, without limitation, the celebration of a convenio in the context of an insolvency proceeding or a restructuring plan (plan de reestructuración) according to articles 614 et seq. of the Spanish Insolvency Act; (c) “guarantee or guaranty” includes, without limitation, any guaranty (fianza), surety (aval) and first demand guarantee (garantía a primer requerimiento); (d) “insolvency” (concurso or any other equivalent legal proceeding) and any step or proceeding related to it has the meaning attributed to them under the Spanish Insolvency Act and “insolvency proceeding” includes, without limitation, a declaraciónde concurso, necessary or voluntary (necesario o voluntario) and any notice to a competent court pursuant to articles 585 or 643 (comunicación de apertura de negociaciones o solicitud de homologación de un plan de reestructuración) of the Spanish Insolvency Act and its solicitud de inicio de procedimiento de concurso, auto de declaración de concurso, convenio judicial o extrajudicial con acreedores and transacción judicial o extrajudicial); (e) “person being unable to pay its debts” includes that person being in a state of insolvencia or concurso according to the Spanish Insolvency Act; (f) “receiver**,** administrator” or the like includes, without limitation, administracióndel concurso, administrador concursal, liquidador, experto en la reestructuración or any other person performing the same function includes an administrador judicial or any other person appointed as a result of any proceedings described in paragraphs (d) and (j); (g) “security interest or security” includes, without limitation, any mortgage (hipotecamobiliaria o inmobiliaria), pledge (prenda con o sin desplazamiento posesorio), garantía financiera and, in general, any right in rem (garantía real) governed by Spanish law, created for the purpose of granting security; (h) “set-off“ includes the right to compensar under the Spanish Civil Code; (i) “control” has the meaning stated under article 42 of the Spanish Commercial Code; and (j) “winding-up, administration or dissolution” includes, without limitation, disolución, liquidación, or administración concursal or any other similar proceedings or situation under the Spanish corporate, commercial, insolvency and civil law regulation.
32
| (c) | Spanish Public Documents. Without prejudice to the foregoing provisions of this Agreement: |
|---|---|
| (i) | Each Spanish Grantor, the Company and the Parent undertake to raise (at its own cost) this Agreement to<br>the status of a Spanish Public Document within 30 days (or such longer period as the Collateral Agent may agree at its sole discretion)<br>from the Collateral Agent's request. Any amendments of the aforementioned documents shall be also raised to the status of a Spanish Public<br>Document. Any notarial fees and any other costs, expenses and taxes in connection with any Spanish Public Document executed or granted<br>in connection with this Agreement (including any such costs of release of any copies of such Spanish Public Document) shall be at the<br>sole cost of the Grantors. |
| --- | --- |
| (ii) | Each Spanish Public Document shall (i) have the effects established under articles 517 et seq.<br>of the Spanish Civil Procedure Act and (ii) if necessary, for the purposes of articles 571 et seq. of the Spanish Civil Procedure<br>Act, include an authorization in favor of the Collateral Agent and any Category IV Secured Party to determine the amounts due and payable<br>under the Category IV Priority Debt Documents that may be claimable in any executive proceeding. |
| --- | --- |
| (iii) | Each party hereto hereby expressly authorizes the Collateral Agent (and any Category IV Secured Party)<br>to request and obtain from the Spanish notary public before whom any Category IV Priority Debt Document has been formalized, any further<br>copy (copia autorizada con o sin carácter ejecutivo) of such Category IV Priority Debt Document notarized. |
| --- | --- |
| (iv) | For the purposes of enforcing the provisions of, or foreclosing under, this Agreement and/or any Category<br>IV Security Document pursuant to Spanish law, the Collateral Agent, in its capacity as such (and on behalf of the Category IV Secured<br>Parties), shall open and maintain a special ledger account (cuenta interna) in its books with respect to the Grantors, from which<br>all interest, fees, expenses, default interest, additional costs and any other amounts that the Grantors owe to the Category IV Secured<br>Parties under the Category IV Priority Debt Documents will be debited and into which all amounts received by or on account of the Category<br>IV Secured Parties from the Grantors under the Category IV Priority Debt Documents will be credited, so that the balance of the ledger<br>account represents the amount owed from time to time by the Grantors to the Category IV Secured Parties. |
| --- | --- |
| (v) | In addition to the account referred to in paragraph (c)(iv) above, each Category IV Secured Party<br>shall open and maintain a special ledger account (cuenta interna) in its records equivalent to that referred to in paragraph<br>(c)(iv) above, into which the interest, fees, expenses, default interest, additional costs and any other amounts that the Grantors<br>owe to that Category IV Secured Party under the Category IV Priority Debt Documents will be debited and into which all amounts received<br>by that Category IV Secured Party from the Grantors under the Category IV Priority Debt Documents shall be credited, so that the sum of<br>the balance of the ledger account represents the amount owed from time to time by the Grantors to that Category IV Secured Party. In the<br>event of assignment or transfer as provided in Section 5.2, the assignor will totally or partially cancel the referenced accounts,<br>with corresponding accounts to be opened by the assignee. |
| --- | --- |
33
| (vi) | Any failure to keep the ledger accounts referred to in paragraphs (c)(iv) and (v) above<br>or any error in doing so will not, however, limit or otherwise affect the obligation of the Grantors to pay any amount owed pursuant to<br>the Category IV Priority Debt Documents. In the event of any discrepancy between the accounts and records maintained by any Category IV<br>Secured Party and the accounts and records of the Collateral Agent corresponding to such matters, the Collateral Agent's accounts and<br>records will take precedence in the absence of manifest error. |
|---|---|
| (vii) | For the purpose of articles 571 et seq. of the Spanish Civil Procedure Act (i) the amount due and<br>payable under the Category IV Priority Debt Documents that may be claimed in any executive proceedings will be contained in a certificate<br>supplied by the Collateral Agent or a Category IV Secured Party and will be based on the accounts maintained by the Collateral Agent or<br>that Category IV Secured Party in connection with the Category IV Priority Debt Documents; (ii) the parties hereto expressly agree that<br>such balance shall be considered as an acknowledgement of debt and may be claimed pursuant to the same provisions of such law; (iii) the<br>determination of the debt to be claimed though the executive proceeding shall be effected by the Collateral Agent (or the relevant Category<br>IV Secured Party, as the case may be) by means of the appropriate certificate evidencing the balance shown in the account or accounts<br>maintained by the Collateral Agent or that Category IV Secured Party in connection with the Category IV Priority Debt Documents with respect<br>to the Grantors; and the Collateral Agent (or the relevant Category IV Priority Debt Documents, as the case may be) may have the certificate<br>notarized. |
| --- | --- |
| (viii) | The Collateral Agent (or the relevant Category IV Secured Party, as the case may be) may start executive<br>proceedings by presenting to any relevant court (i) an original notarial copy of this Agreement and/or as required by law, the relevant<br>Category IV Priority Debt Document; and (ii) a notarial document (acta notarial) incorporating the certificate of the Collateral<br>Agent or a Category IV Secured Party referred to in paragraph (c)(vii) above, evidencing that the determination of the amounts<br>due and payable by the Grantors have been calculated as agreed in this Agreement and that such amounts coincide with the balance shown<br>in the account or accounts of the accounts maintained by the Collateral Agent or that Category IV Secured Party in connection with the<br>Category IV Priority Debt Documents with respect to the Grantors. |
| --- | --- |
| (d) | Spanish Appointment Language. |
| --- | --- |
| (i) | Each Category IV Secured Party hereby, with respect to any Category IV Security Document which is expressed<br>to be governed by Spanish law, irrevocably appoints and authorizes the Collateral Agent (even if it involves acting with multiple parties<br>(multirepresentación), self-contracting (autocontratación) or a conflict of interest) to act as agent on its<br>behalf through a duly appointed representative on the terms and subject to the conditions of this Agreement, under and in connection with<br>any Lien purported to be created by the Spanish law Category IV Security Documents and authorizes the Collateral Agent to exercise the<br>rights, powers, authorities and discretions specifically given to the Collateral Agent under or in connection with the Spanish law Category<br>IV Security Documents together with any other incidental rights, powers, duties, obligations, responsibilities, authorities and discretions. |
| --- | --- |
34
| (ii) | In particular, the following additional powers are hereby granted to the Collateral Agent by each Category<br>IV Secured Party so that the Collateral Agent, acting through a duly appointed representative (at the written direction of the Category<br>IV Required Secured Parties), may perform, in the name and on behalf of each Category IV Secured Party the following faculties (i) to<br>negotiate, execute and deliver any public or private document in order to formalize, accept, amend, extend, assign, cancel and/or raise<br>to public status in Spain this Agreement and any Category IV Priority Debt Document, (ii) to accept, execute and deliver the creation,<br>amendment, extension, assignment, cancellation or ratification of any Lien to be granted in favor of the Category IV Secured Parties over<br>any and all Collateral, (iii) to accept, amend, ratify or accept the revocation of any irrevocable powers of attorney granted in favor<br>of the Category IV Secured Parties, as well as exercise the actions referred to therein, (iv) to request the registration and file for<br>registrations any of the documents referred to in this Agreement, (v) to make as many statements as necessary or convenient as well as<br>to grant, formalize, execute, and/or sign any public or private documents necessary or convenient in order to comply with the provisions<br>of the Ley 10/2010, de 28 de abril, de prevención del blanqueo de capitales y de la financiación del terrorismo and<br>the Real Decreto 304/2014, de 5 de mayo, por el que se aprueba el Reglamento de la Ley 10/2010, de 28 de abril, de prevencióndel blanqueo de capitales y de la financiación del terrorismo, (vi) to obtain copies (of any kind (enforceable or non-enforceable,<br>including second and subsequent copies)) of any public or private documents granted in the exercise of any of the faculties granted herein,<br>(vii) to ratify any public or private document executed by an appointed representative or verbal attorney (mandatario verbal) in<br>the name or on behalf of the Category IV Secured Parties, (viii) to represent the Category IV Secured Parties in any auction of any Collateral<br>and to grant, in their name and on their behalf, all public or private documents as may be necessary in relation to the enforcement of<br>the Spanish law Category IV Security Documents, (ix) to dispose or formalize the disposal of any asset charged under the relevant Spanish<br>law Category IV Security Documents in favor of the acquirer(s) becoming the owner(s) thereof as a result of the auction or as a result<br>of any of the enforcement proceedings foreseen in the relevant Spanish law Category IV Security Documents, (x) to take any enforcement<br>action as foreseen in the Spanish law Category IV Security Documents and/or (xi) to carry out whatsoever connected or complementary acts<br>which may be necessary or convenient for the complete fulfilment of the faculties conferred herein. This includes the faculty to grant,<br>formalize, execute, and/or sign public or private documents of formalization, acknowledgement, ratification, increase, extension, confirmation,<br>modification and/or amendment of any public or private documents referred to in this Section 6.1(c). |
|---|---|
| (iii) | To the extent any Category IV Secured Party is unable to grant such powers referred to in this Section<br>7.1(d) or in any other provision of this Agreement to the Collateral Agent, each Category IV Secured Party irrevocably undertakes<br>before the Collateral Agent and the other Category IV Secured Parties to appear and execute with the Collateral Agent to enable the Collateral<br>Agent to exercise any right, power, authority or discretion vested in it as Collateral Agent pursuant to this Agreement and to execute<br>any document or instrument including any Spanish Public Document. |
| --- | --- |
| (iv) | Upon enforcement in Spain of any Lien created by the Spanish law Category IV Security Documents, the Category<br>IV Secured Parties, at the cost of the Grantors, undertake to (i) grant a power of attorney in favor of the Collateral Agent for any action<br>to be carried out in Spain under the instructions received in accordance with this Agreement and, in the case of a Category IV Secured<br>Party that cannot grant such power of attorney, to appear before a Spanish notary public or in any proceeding in Spain as provided for<br>in (ii) and (ii) take any action or appear in any proceeding in Spain, as may be required by the Collateral Agent to enforce the Spanish<br>law Category IV Security Documents and, to such effect, follow the instructions received from it. |
| --- | --- |
Section 7.2 Malta Provisions. Without prejudice to the foregoing provisions of this Agreement, for purposes of Maltese law, the Collateral Agent is deemed to act as security trustee for the benefit of the Secured Parties and hold all Maltese security received by it in such capacity in accordance with Article 2095E of the Civil Code, Chapter 16 of the laws of Malta.
[Remainder of page intentionallyleft blank]
35
IN WITNESS WHEREOF, the parties hereto have caused this Pari Passu Intercreditor Agreement to be executed by their respective officers or representatives as of the day and year first written above.
| PROCAPS S.A., as the Company and a Grantor | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PROCAPS GROUP, S.A., as Parent and a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| C.I. PROCAPS S.A., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| DIABETRICS HEALTHCARE S.A.S., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PHARMAYECT S.A., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PROCAPS, S.A. DE C.V., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Special Manager |
| BIOKEMICAL, S.A. DE C.V., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Special Manager |
[Signature Page to Intercreditor Agreement]
36
| COLBRAS INDÚSTRIA E COMÉRCIO LTDA., as a Grantor | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Attorney-in-Fact |
| By: | /s/ Melissa Andreia Silva Angelini |
| Name: | Melissa Andreia Silva Angelini |
| Title: | Attorney-in-Fact |
| Witnesses: | |
| 1. | /s/ Natalia Caballero |
| Name: | Natalia Caballero |
| Id: | C.C. 53.145.522 |
| 2. | /s/ Maria Alejandra Molina |
| Name: | Maria Alejandra Molina |
| Id: | C.E. 723.124 |
| SOFGEN PHARMACEUTICALS LLC, as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| CRYNSSEN PHARMA GROUP LTD, as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| FUNTRITION SAS, as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
[Signature Page to Intercreditor Agreement]
37
| RYMCO MEDICAL S.A.S., as a Grantor | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| PHARMARKETING, S.A., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Treasurer and Authorized Signatory |
| UNIMED DEL PERÚ S.A., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| CRYNSSEN PHARMA S.A.S., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| FUNTRITION LLC, as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| SOFGEN PHARMA LLC, as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
[Signature Page to IntercreditorAgreement]
38
| INDUSTRIAS KADIMA S.A.S., as a Grantor | |
|---|---|
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Authorized Signatory | |
| INVERSIONES JADES S.A.S., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| INVERSIONES GANEDEN S.A.S., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| INVERSIONES HENIA S.A.S., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| INVERSIONES CRYNSEEN S.A.S., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| COLOMBIANA DE SUMINISTROS MÉDICOS HOSPITALARIOS LIMITADA - COLMED LTDA. (a.k.a.<br> Colmed Ltda.), as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| ALLOPHANE HOLDINGS, S.L., as a Grantor | |
| By: | /s/ Gonzalo Egas Bobo Mayor |
| Name: | Gonzalo Egas Bobo Mayor |
| Title: | Representative of the Sole Director, Ibertax Servicios Integrales, S.L. |
[Signature Page to Intercreditor Agreement]
39
| UNIMED FARMACEUTICA HOLDING S.L., as a Grantor | |
|---|---|
| By: | /s/ Gonzalo Egas Bobo Mayor |
| Name: | Gonzalo Egas Bobo Mayor |
| Title: | Representative of the Sole Director, Ibertax Servicios Integrales, S.L. |
| CDI S.A., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Director and Authorized Signatory |
| PHARMARKETING COSTA RICA S.A., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Treasurer and Authorized Signatory |
| PHARMARKETING DOMINICANA, S.R.L., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Authorized Signatory |
| RODDOME PHARMACEUTICAL S.A., as a Grantor | |
| By: | /s/ Mario Alberto Lopez León |
| Name: | Mario Alberto Lopez León |
| Title: | Director and Authorized Signatory |
[Signature Page to Intercreditor Agreement]
40
COLLATERAL AGENT
| GLAS AMERICAS LLC | |
|---|---|
| By: | /s/ Robert S. Peschler |
| Name: | Robert S. Peschler |
| Title: | Vice President |
[Signature Page to IntercreditorAgreement]
41
SECURED PARTIES
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: PGIM, Inc., as investment manager
| By: | /s/ Michael Gurovitsch |
|---|---|
| Name: | Michael Gurovitsch |
| Title: | Vice President |
FORTITUDE LIFE INSURANCE & ANNUITY COMPANY, F/K/A PRUDENTIALANNUITIES LIFE ASSURANCE CORPORATION
By: The Prudential Insurance Company of America, as administrator
By: PGIM, Inc.
| By: | /s/ Michael Gurovitsch |
|---|---|
| Name: | Michael Gurovitsch |
| Title: | Vice President |
CIGNA HEALTH AND LIFE INSURANCE COMPANY
By: Cigna Investments, Inc. (as authorized agent)
| By: | /s/ Leonard Mazlish |
|---|---|
| Name: | Leonard Mazlish |
| Title: | Senior Managing Director |
[Signature Page to Intercreditor Agreement]
42
| BANCOLOMBIA S.A. | |
|---|---|
| By: | /s/ Felipe Paredes Conto |
| Name: | Felipe Paredes Conto |
| Title: | Regional Manager |
| BANCO DAVIVIENDA S.A. | |
| By: | /s/ Rodrigo Arango Echeverri |
| Name: | Rodrigo Arango Echeverri |
| Title: | Vicepresidente Comercial Banca Corporativa |
| BANCO BTG PACTUAL S.A. – CAYMAN BRANCH | |
| By: | /s/ Rafael Rocha Ribas |
| Name: | Rafael Rocha Ribas |
| Title: | Procurador |
| By: | /s/ Ana Alice Antunes Haddad |
| Name: | Ana Alice Antunes Haddad |
| Title: | Procuradora |
| BANCO BTG PACTUAL COLOMBIA S.A. | |
| By: | /s/ Mabel Constanza Moreno Ochoa |
| Name: | Mabel Constanza Moreno Ochoa |
| Title: | Legal Representative |
[Signature Page to Intercreditor Agreement]
43