**Exhibit4.1**

 

EXECUTION COPY

 

 

**US$7,000,000.00**

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**LOANAGREEMENT**

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**between**

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**CORIMON,C.A.**

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**asBorrower**

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**and**

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**BANCARACASINTERNATIONAL BANKING CORPORATION**

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**asLender**

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**OCTOBER1, 2001**

 

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**LOANAGREEMENT**

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**THISLOAN AGREEMENT**(the “Agreement”) dated as of October 1, 2001, between CORIMON, C.A.(the “Borrower”), a corporation organized and existing in accordancewith the laws of the Bolivarian Republic of Venezuela (“Venezuela”) andBANCARACAS INTERNATIONAL BANKING CORPORATION (the “Lender”), a banking entity organized and existing inaccordance with the laws of Puerto Rico.

 

**WHEREAS,** the Borrower has requested the Lender tomake a loan in one or more drawings not in excess of U.S.$ 7,000,000.00 in theaggregate; and

 

**WHEREAS**, the Lender is prepared to make a loanin favor of the Borrower in accordance with the terms and subject to theconditions set forth in this Agreement.

 

**NOW**, **THEREFORE**, the parties agree as follows:

 

**1.****                                     ****Loan**.

 

The Lender agrees, subject to the terms and conditionsset forth in this Agreement, to make a loan (the “Loan”) to the Borrowerin one or more drawings not in excess of U.S.$ 7,000,000.00 in the aggregateduring a term beginning on the date hereof through October 30, 2001 (the “DisbursementPeriod”); providedthat the Lender’s obligation to make adisbursement under the Loan shall be subject to the purchase (on the date ofsuch disbursement) by one or more investors (each a “Participant”) ofparticipations in the Promissory Note issued by the Borrower with respect tosuch disbursement for a 100% of such Promissory Note.  For purposes hereof, “Dollars” and “U.S.$” mean the legalcurrency of the United States of America.

 

**2.****                                     ****Promissory Note**.

 

The Loan shall be evidenced by one or more promissorynotes (each a “Promissory Note,” and collectively the “PromissoryNotes”) drawn payable to the Lender, dated as of the applicabledisbursement date, substantially in the form of “Exhibit A” hereto, andwith maturity in accordance with Section 6 of this Agreement; providedthatthe Lender and the Borrower may specify terms and conditions different fromthose set forth in Exhibit A, which shall, to the extent so specified, or tothe extent inconsistent with the terms and conditions set forth in such ExhibitA, replace or modify such terms and conditions.

 

In the event that any Promissory Note shall be lost,stolen, destroyed or mutilated, the Borrower shall promptly execute and deliverin replacement thereof a new Promissory Note in the same principal amount andwith the same maturity date; provided that in the case of mutilation, theLender shall surrender to the Borrower such mutilated Promissory Note.

 

The Borrower agrees to execute and deliver to theLender such additional Promissory Notes as the Lender may from time to timerequest, for the purpose of full or partial substitution of an existingPromissory Note, in such principal denominations as may be requested by theLender.

 

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**3.****                                     ****Maximum Term and Prepayments**.

 

All and any amounts payable in connection with anyPromissory Note shall be paid no later than eighteen (18) months from the issuedate set forth in such Promissory Note. The Borrower shall have the right toprepay any Promissory Note, at any time or from time to time, provided that:(a) the Borrower shall give the Lender a ten (10) Business Day notice of eachsuch prepayment; and, (b) that such prepayment be made only on the last day ofan Interest Period.

 

**4.             Mannerof Borrowings**.

 

On eachdisbursement date, the Lender shall credit the amount of the net proceeds ofthe respective drawing under the Loan to the general deposit account of theBorrower with the Lender account number 20283, in immediately available funds,against delivery to the Lender of the applicable Promissory Note payable to theorder of the Lender in the principal amount of such Promissory Note.

 

**5.****                                     ****Conditions Precedent.**

 

As conditions precedent to the making of each drawingunder the Loan, the following conditions shall have been complied with, on orbefore the applicable disbursement date, to the satisfaction of the Lender:

 

(1)                                  The Lender shall have received in formand substance to its satisfaction:

 

(a)                                  The applicable Promissory Note.

 

(b)                                 Copies of all approvals or authorizationsnecessary or advisable to effect the transactions contemplated by thisAgreement.

 

(c)                                  An opinion from legal counsel to theBorrower, in the form of Exhibit B to this Agreement regarding thelegality, validity and enforceability of this Agreement, the applicablePromissory Note and any other document or instrument issued in connection withthe Loan.

 

(d)                                 An opinion from legal counsel to theLender, in the form of Exhibit C to this Agreement, regarding thelegality, validity and enforceability of this Agreement and the applicablePromissory Note.

 

(2)                                  The Lender shall have received full paymentof all fees, costs and expenses incurred by the Lender and due pursuant to thisAgreement or any other agreement, document or instrument related hereto;

 

(3)                                  All representations and warranties madeby the Borrower in this Agreement or any other document or instrument issued inconnection herewith shall be true and correct as of each disbursement date withthe same effect as though such representations and warranties had been made onand as of such date; and

 

(4)                                  Prior to or concurrently with the executionof this Agreement, the Borrower shall have certified to the Lender the name ofthe officer or officers of the Borrower authorized to sign this Agreement andthe Promissory Notes, together with a true specimen of

 

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signatures of suchofficer or officers.  The Lender mayconclusively rely on such certification until it shall have received writtennotice from the Borrower to the contrary.

 

(5)                                  In addition, as condition precedent tomaking the initial drawing under the Loan, the Lender shall have receivedevidence that (i) the Borrower has appointed as its agent for service ofprocess the person so specified in Section 12 of this Agreement, (ii) suchappointment has been made on the terms and in the manner required hereunder and(iii) such agent has accepted the appointment and has agreed to forward to theBorrower all legal process addressed to the Borrower received by it.

 

**6.****                                     ****Payment of Principal and Interest**.

 

**(1)****                                 Principal**:

 

The Borrower shall repay the principal amount of allPromissory Notes in Dollars on the date specified in the applicable PromissoryNote (the “Maturity Date”).  TheBorrower shall wire transfer or cause to be wire transferred, to the accountspecified in Section 8 hereof, at least one Business Day prior to the MaturityDate, such amount as is necessary to pay the principal amount of the applicablePromissory Note.

 

**(2)****                                 Interest**:

 

(a)                                  The Borrower shall pay interest inarrears, at least one Business Day prior to every Interest Payment Date (asdefined herein) on the outstanding principal amount of the applicablePromissory Note, at the rate per annum specified in such Promissory Note.  For purposes hereof, “Interest PaymentDate” means the interest payment date(s) set forth in the applicablePromissory Note, and “Business Day” means a day on which banks are notrequired or authorized by law or executive order to close in Puerto Rico,Venezuela, and New York City, United States of America.

 

(b)                                 All interest will be calculated based ona year of 360 days consisting of 12 months of 30 days each, and in the case ofincomplete months, the number of actual days elapsed.

 

(c)                                  In the event that the Borrower fails topay any of its obligations under any Promissory Note on the applicable MaturityDate, the Borrower will pay late payment interest at the annual rate specifiedin the applicable Promissory Note (payable on demand) over the interest rateper annum set forth in such Promissory Note. The Borrower must also reimburse the Lender for all costs and expenses,including collection costs and expenses and attorney’s fees and disbursements,incurred by the Lender in connection with the enforcement or attemptedenforcement of this Agreement, the applicable Promissory Note, or anyinstrument or document issued in connection herewith or the transactionscontemplated hereby or thereby.

 

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**7.****                                     ****Evidence of Indebtedness**.

 

The Borrower’s obligations under the Loan shall beevidenced by this Agreement, the applicable Promissory Note and any otherdocument or instrument issued in connection therewith and the records of theLender.  The records of the Lender,absent manifest error, shall be *prima facie*evidence of the Loan, accruedinterest thereon and any other amount payable to the Lender under thisAgreement or in connection with any Promissory Note.

 

**8.****                                     ****Payments to the Lender**.

 

All payments to the Lender under the Loan, thisAgreement, the applicable Promissory Note, or under any other instrument ordocument issued under this Agreement, will be made only and exclusively inDollars, in immediately available funds, by transfer to the account of theLender with Chase Manhattan Bank, New York, New York, ABA No. 021000021,account number 001-1-977287, or at such other place as the Lender may from timeto time instruct the Borrower in writing, free and clear of any deductions,including deductions for withholdings of taxes, levies, duties or charges ofany nature now or hereafter imposed, levied, collected, withheld or assessed bythe government of Venezuela (all of which will be for the sole account of theBorrower), and without any reduction or deduction for any set-off, recoupmentor counterclaim.

 

If a payment to be made under the Loan, thisAgreement, the applicable Promissory Note or any document issued in connectiontherewith, shall be due on a day which is not a Business Day, such paymentshall be made on the immediately succeeding Business Day and the extension ofthe respective payment date shall be taken into account in computing the amountof interest or fees then due and payable under this Agreement, the Loan, theapplicable Promissory Note or any document related thereto.

 

The Lender shall apply payments received under thisAgreement or the applicable Promissory Note in the following order of priority:(i) amounts due hereunder (other than interest and principal), (ii) latepayment interest, (iii) interest, and (iv) principal.

 

**9.****                                     ****Representations and Warranties**.

 

The Borrower represents and warrants to the Lenderthat:

 

(1)                                  Itis a corporation duly organized, validly existing and in good standing underthe laws of Venezuela, and has the corporate power and authority to own itsproperties and to carry on its business as now being and hereafter proposed tobe conducted.

 

(2)                                  Ithas the power, and has taken all necessary action (including any necessarystockholder action) to authorize, execute, deliver and perform in accordancewith their respective terms this Agreement, the applicable Promissory Note andany other document or instrument to be issued in connection hereto.  This Agreement has been duly executed anddelivered by the Borrower, and the applicable Promissory Note and any otherdocuments or instruments to be issued in connection hereto when executed by theBorrower and delivered to the Lender will, constitute the legal, valid andbinding obligation of the Borrower,

 

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enforceable against theBorrower in accordance with their terms. The execution, delivery and performance in accordance with theirrespective terms by the Borrower of this Agreement, the applicable PromissoryNote and any other documents or instruments to be issued in connection hereto,do not and will not (i) require any governmental approval or any other consentor approval, other than governmental approvals and other consents and approvalsthat have been obtained and are in full force and effect, or (ii) violate orconflict with, result in a breach of, constitute a default under, any contractto which the Borrower is a party or by which the Borrower or its properties maybe bound or any law, rule, regulation, enactment, decision, judgment, decree ororder.

 

(3)                                  Allgovernmental authorizations and actions of any kind, if any, necessary to authorizethis Agreement, required for the validity or enforceability against theBorrower of this Agreement, have been obtained or performed and are valid andsubsisting in full force and effect.

 

The above representations will be deemed to be true onthe applicable disbursement date and at any time that the Borrower executes anydocument or instrument in connection with this Agreement.

 

**10.****                              ****Covenants****.**

 

(1)                                   Financial Statements. The Borrower shall deliver to the Lender:

 

(a)  as soon asavailable and in any event within 45 days after the end of each quarterlyfiscal period of each fiscal year of the Borrower, consolidated andconsolidating statements of income, retained earnings and changes in financialposition (or of cash flow, as the case may be) of the Borrower and itsconsolidated subsidiaries for such period and for the period from the beginningof the respective fiscal year to the end of such period, and the relatedconsolidated and consolidating balance sheets as at the end of such period,setting forth in each case in comparative form the corresponding consolidatedand consolidating figures for the corresponding period in the preceding fiscalyear, accompanied by a certificate of a senior financial officer of theBorrower, which certificate shall state that said financial statements fairlypresent the consolidated and consolidating financial condition and results ofoperations, as the case may be, of the Borrower and its consolidatedsubsidiaries in accordance with generally accepted accounting principles,consistently applied, as at the end of, and for, such period (subject to normalyear-end audit adjustments);

 

(b)  as soon asavailable and in any event within 90 days after the end of each fiscal year ofthe Borrower, consolidated and consolidating statements of income, retainedearnings and changes in financial position (or of cash flow, as the case maybe) of the Borrower and its consolidated subsidiaries for such year and therelated consolidated and consolidating balance sheets as at the end of suchyear, setting forth in each case in comparative form the correspondingconsolidated and consolidating figures for the preceding fiscal year, andaccompanied (i) in the case of said consolidated statements and balance sheet,by

 

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an opinion thereon of independent certified publicaccountants of recognized national standing, which opinion shall state thatsaid consolidated financial statements fairly present the consolidatedfinancial condition and results of operations of the Borrower and itsconsolidated subsidiaries as at the end of, and for, such fiscal year, and acertificate of such accountants stating that, in making the examinationnecessary for their opinion, they obtained no knowledge, except as specificallystated, of any Default and (ii) in the case of said consolidating statementsand balance sheet, by a certificate of a senior financial officer of theBorrower, which certificate shall state that said consolidating financialstatements fairly present the consolidating financial condition and results ofoperations of the Borrower and its consolidated subsidiaries in accordance withgenerally accepted accounting principles, consistently applied, as at the endof, and for, such fiscal year;

 

(c)  promptlyupon their becoming available, copies of all registration statements andregular periodic reports, if any, which the Borrower shall have filed with theComisión Nacional de Valores (or any governmental agency substituted therefore)or any securities exchange; and

 

(d)  promptlyupon the mailing thereof to the shareholders of the Borrower generally, copiesof all financial statements, reports and proxy statements so mailed;

 

(2)                                                                                 Litigation.  The Borrower will promptly give to theLender notice of all legal or arbitral proceedings, and of all proceedings byor before any governmental or regulatory authority or agency, and any materialdevelopment in respect of such legal or other proceeding affecting the Borroweror any subsidiary, except proceedings which would reasonably be expected not tohave, if adversely determined, a material adverse effect on the consolidatedfinancial condition, operations, business or prospects taken as a whole of theBorrower and its consolidated subsidiaries.

 

(3)                                                                             Corporate Existence, Etc  TheBorrower will, and will cause each of its subsidiaries to:  preserve and maintain its corporateexistence and all of its material rights, privileges and franchises (providedthat nothing in this Section 10.3 shall prohibit any transaction expresslypermitted under Section 10.5 hereof); comply with the requirements of allapplicable laws, rules, regulations and orders of governmental or regulatoryauthorities if failure to comply with such requirements would materially andadversely affect the consolidated financial condition, operations, business orprospects taken as a whole of the Borrower and its consolidated subsidiaries;pay and discharge all taxes, assessments and governmental charges or leviesimposed on it or on its income or profits or on any of its property prior tothe date on which penalties attach thereto, except for any such tax,assessment, charge or levy the payment of which is being contested in goodfaith and by proper proceedings and against which adequate reserves are beingmaintained; maintain all of its properties used or useful in its business ingood working order and condition, ordinary wear and tear excepted; and permitrepresentatives of the Lender, during normal business hours, to examine, copyand

 

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make extracts from itsbooks and records, to inspect its properties, and to discuss its business andaffairs with its officers, all to the extent reasonably requested by theLender.

 

(4)                                                                                 Insurance.  The Borrower will, and will cause each ofits subsidiaries to, keep insured by financially sound and reputable insurersall property of a character usually insured by corporations engaged in the sameor similar business similarly situated against loss or damage of the kinds andin the amounts customarily insured against by such corporations and carry suchother insurance as is usually carried by such corporations.

 

(5)                                                                                 Prohibitionof Fundamental Changes.  TheBorrower will not, nor will it permit any of its major subsidiaries toliquidate, wind up or dissolve itself (or suffer any liquidation ordissolution).  The Borrower will not,and will not permit any of its subsidiaries to, convey, sell, lease, transferor otherwise dispose of, in one transaction or a series of transactions, all ora substantial part (more than 60%, taken as a whole) of its business or assets,whether now owned or hereafter acquired (including, without limitation,receivables and leasehold interests, but excluding (i) any inventory or otherassets sold or disposed of in the ordinary course of business and (ii) obsoleteor worn-out property, tools or equipment no longer used or useful in itsbusiness so long as the amount thereof sold in any single fiscal year by theBorrower and its subsidiaries shall not have a fair market value in excess of$1,000,000.00).

 

(6)                                                                                 Changesin Control.  The Borrower shall notpermit, without the prior written consent of the Lender, any significant change(in the sole opinion of the Lender) in the control of the capital stock of theBorrower or the composition of the Borrower’s board of directors.

 

**11.****                              ****Taxes**.

 

(a)                                  The Borrower shall (i) pay such amounts(the “Additional Amounts”) as may be necessary to ensure that the netamounts receivable by the holder of any Promissory Note after any withholdingor deduction for on account of any Taxes (as define below), shall equal therespective amounts of principal and interest that would have been receivable inrespect of such Promissory Note in the absence of such withholding or deduction,and (ii) pay the full amount of any Taxes to the relevant authority promptlyand promptly  (but in no event laterthan 45 days after paying any such Taxes) furnish the original receipttherefore or a certified copy thereof to the Lender; provided however that theBorrower shall not be required to pay (1) any taxes imposed on or measured bythe income or capital of the Lender in the jurisdiction (or any politicalsubdivision of such jurisdiction) of incorporation of the Lender, or to whichthe Lender is subject, (2) any taxes imposed on or measured by the income orcapital of the Lender by the jurisdiction (or any political subdivision of suchjurisdiction) in which the principal place of business or residence of theLender is located, or (3) any other taxes imposed by any jurisdiction outsideof Venezuela (except for taxes arising under such jurisdiction as a result ofany action taken by the Borrower).  Asused herein,

 

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“Taxes” meanstaxes, levies, duties or charges of any nature now or hereafter imposed,levied, collected, withheld or assessed by the government of Venezuela or anypolitical subdivision or taxing authority thereof or therein.

 

(b)                                 Without limiting the foregoing, theBorrower will indemnify the Lender against, and reimburse the Lender upondemand for, any Taxes which the Lender shall be obligated to pay or shall havepaid with respect to any Promissory Note, the Loan or this Agreement.  Notwithstanding anything to the contrary(including, without limitation, the provisions set forth in Section 13, ifthe Lender pays any Taxes or other amounts reimbursable under thisSection 10 in a currency other than Dollars, the Dollar amount to bereimbursed hereunder by the Borrower shall be the Dollar amount disbursed bythe Lender on the date of payment of such Taxes or other amounts, to pay suchTaxes or other amounts.

 

(c)                                  All payments by the Borrower of interesthereunder and under the applicable Promissory Note are currently subject towithholding of Venezuelan income tax at a rate of 4.95%.  The Borrower will pay such amounts as may benecessary in order to ensure that the net amounts receivable by the holder ofeach Promissory Note after the above withholding, at the rate in effect at thetime of payment, shall equal the respective amount of interest which would havebeen receivable in respect of such Promissory Note in the absence of suchwithholding.  Other than as set forthabove, no withholding or similar taxes are required to be paid in respect of,or deducted from, any payment required to be made by the Borrower under thisAgreement or any Promissory Note.

 

**12.****                              ****Payment in the Event of a Foreign Exchange Restriction**.

 

In the event of any foreign exchange restriction orprohibition in Venezuela, any and all payments in respect of the Loan will bemade, to the extent permitted by such restriction or prohibition, in Dollarsthrough (i) the sale of Brady Bonds of any series or of any other publicor private bond issued in Dollars and traded in any international market in anamount and face value sufficient so that once sold for a price in Dollars inany international market other than Venezuela, at the Lender’s option, willyield, net of any taxes, expenses and commissions that will apply in connectionwith the sale of such securities, a sum in Dollars equal to the U.S. Dollaramount on the applicable Promissory Note or (ii) any other legal mechanism forthe acquisition of Dollars in any exchange market.  All costs, including any taxes, relative to such operations toobtain Dollars will be borne by the Borrower.

 

If, under such exchange control system, there existsan official controlled exchange rate and a free market exchange rate,including, in the case of a free market exchange rate, the possibility orrequirement of obtaining Dollars through the purchase of Brady Bonds or anyother public or private debt instruments, the Borrower shall be obligated topurchase Dollars in the most expeditious manner to meet its obligationshereunder, even if as a result of such obligation, the Borrower would need toobtain Dollars in the free market at a higher exchange rate than the officialcontrolled exchange rate, and even if the acquisition of Dollars would be, orcould be, effected through the purchase of such Brady Bonds or public orprivate debt instruments, and even of the acquisition of Dollars would be, orcould be, effected through the purchase of such Brady Bonds or public orprivate debt instruments.

 

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**13.****                              ****Law and Jurisdiction**.

 

This Agreement, the Promissory Notes and all otherrelated instruments and documents shall be governed by and construed andinterpreted in accordance with the laws of Puerto Rico.

 

              Eachof the parties hereto expressly submits to the non exclusive jurisdiction ofthe courts sitting in San Juan, Puerto and in addition, the Borrower expresslysubmits to the competent courts of the City of Caracas, Venezuela, for theresolution of all disputes about the interpretation, performance and enforcementof this Agreement, the applicable Promissory Note and the instruments anddocuments issued in connection herewith. The Borrower hereby waives to the fullest possible extent the defense ofan inconvenient forum.

 

**14.****                              ****Judgment Currency**.

 

If a judgment relating to any sum due hereunder orunder any related document is to be awarded in a currency (the “SecondCurrency”) other than Dollars, a conversion from the Second Currency intoDollars shall be made at the rate of exchange prevailing on the business daypreceding the day on which such judgment is given.  For purposes of this paragraph “rate of exchange,” meansthe rate at which the Borrower is able in accordance with normal borrowingpractices on such date to purchase Dollars in New York, New York, United Statesof America, or, if not possible, at any other place where the Borrower maycomplete the exchange of the Second Currency for Dollars.  In the event that there is a change in therate of exchange prevailing between the Business Day on which the conversionfor the purposes of obtaining judgment is made and the date on which payment ofthe amount due is in fact made, or if any premium or other charge is incurredunder exchange control or any other legislation or regulation on theconversion, the Borrower will pay such additional amount (if any) as may benecessary to ensure that the amount paid is, on the date of payment, the amountin the Second Currency that, when converted at the rate of exchange prevailingon the date of payment, equals the Dollar amount with respect to which judgmentwas given.  The Borrower shall furnishto the Lender a statement regarding the exchange rate in effect on the date ofpayment and the additional costs incurred by the Borrower.  Any amount due from the Borrower under thisparagraph will be due as a separate debt and will not be affected by judgmentbeing obtained for any other sums due under or in respect of the Loan or anyrelated document.  In the event thatafter making the conversion referred to in the second preceding sentence, theLender shall recover an amount greater than the amount then owing to it, itshall promptly refund such excess to the Borrower.

 

**15.****                              ****Increased Costs**.

 

(a)                                  If, due to either (i) the introductionof, or any change on, or after the date hereof (including, without limitation,any change by way of imposition or increase of reserve requirements, other thanany reserves referred to in paragraph (c) below) in or in the interpretation ofany law or regulation or (ii) the compliance with any request, guideline ordirective arising after the date hereof from any central bank or othergovernmental authority (whether or not having the force of law), there shall beany increase in the cost to the holder of any Promissory Note of holding,owning or maintaining such Promissory Note or any reduction in any amountreceived or receivable by such holder hereunder or under such Promissory Note,then upon written request therefore, the Borrower shall pay to such holder such

 

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additional amount oramounts as shall be sufficient to compensate such holder for such increasedcosts or reductions.  Such request(showing the amounts owed and setting forth in reasonable detail the basis forthe calculations thereof) shall, absent manifest error, be final and conclusiveand binding on all the parties hereto for all purposes.

 

(b)                                 If the adoption or introduction on, orafter the date hereof, of any change in any applicable law concerning capitaladequacy, or any change in interpretation or administration thereof by anygovernmental authority, central bank or comparable agency, in each caseintroduced or changed after the date hereof, will have the effect of increasingthe amount of capital required or expected to be maintained by the holder ofany Promissory Note or any corporation controlling such holder based on theexistence of such holder’s obligations hereunder, or shall have or would havethe effect of reducing the rate of return on such holder’s capital as a consequenceof holding such Promissory Note to a level below that which such holder couldhave obtained but for such adoption, change or compliance (taking intoconsideration such holder’s policies with respect to capital adequacy), then,upon written request therefore, the Borrower shall pay to such holder suchadditional amounts as shall be required to compensate such holder or such othercorporation for the increased cost to such holder or such other corporation forthe reduction in the rate of return to such holder or such other corporation asa result of such increase of capital. Such request (showing the amounts owed and setting forth in reasonabledetail the basis for the calculations thereof) shall, absent manifest error, befinal and conclusive and binding on all the parties hereto for all purposes.

 

(c)                                  The holder of the applicable PromissoryNote shall notify the Borrower of any event occurring after the date hereofentitling such holder to compensation under paragraph (a) or (b) of thisSection 14 as promptly as practicable, but in any event within 45 days, aftersuch holder obtains actual knowledge thereof; provided that if theholder of such Promissory Note fails to give such notice within 45 days afterit obtains actual knowledge of such an event, such holder shall, with respectto compensation payable pursuant to this Section 14 in respect of any costsresulting from such event, only be entitled to payment under this Section 14for costs incurred from and after the date 45 days prior to the date that suchholder does give such notice.  Theholder of the applicable Promissory Note will furnish to the Borrower acertificate setting forth in reasonable detail the basis and amount of eachrequest by such holder for compensation under paragraph (a) or (b) of thisSection 14.

 

**16.****                              ****Setoff**.

 

The Borrower agrees that, in addition to (and withoutlimitation of) any right of setoff, banker’s lien or counterclaim the Lendermay otherwise have, the Lender shall be entitled, at its option, to off-setbalances (general or special, time or demand, provisional or final) held by itfor the account of the Borrower at any of the Lender’s offices, in Dollars orin any other currency, against any amount payable by the Borrower under thisAgreement which is not paid when due (regardless of whether such balances arethen due to the Borrower), in which case it shall

 

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promptly notify Borrowerthereof, provided that the Lender’s failure to give such notice shallnot affect the validity thereof.

 

**17.****                              ****Assignment**.

 

This Agreement shall be binding upon, and shall inureto the benefit of, the Borrower, the Lender and their respective successors andassigns, except that the Borrower may not assign, delegate or transfer itsrights and/or obligations hereunder or under any Promissory Note; providedthat the Borrower may assign, delegate or transfer its rights and/orobligations hereunder and under any Promissory Note to an affiliate of theBorrower with the prior written consent of the Lender (which consent shall notbe unreasonably withheld).  The Lendermay assign all or part (in which case the assignee(s) shall become the Lenderhereunder), and, if in part, only if by other assignments the Lender isassigning 100% thereof, or sell participations in, all or any part of thisAgreement and any Promissory Note to any Participant.  The Lender may furnish any information concerning the Borrower inthe possession of the Lender from time to time to assignees and participants(including prospective assignees and participants); provided that theLender shall require any such prospective assignee or such participant(prospective or otherwise) to agree in writing to maintain the confidentialityof such information.

 

**18.****                              ****Amendments and Waivers**.

 

No amendment or waiver of any provision of thisAgreement, nor consent to any departure by the Borrower therefrom, shall in anyevent be effective unless the same shall be in writing and signed by the Lenderand then such waiver or consent shall be effective only in the specificinstance and for the specific purpose for which given.  No failure on the part of the Lender toexercise, and no delay in exercising, any right hereunder shall operate as awaiver thereof or preclude any other or further exercise thereof or theexercise of any other right.  Theremedies herein provided are cumulative and not exclusive of any remediesprovided by law.

 

All factual information (taken as a whole) heretoforeor contemporaneously furnished by the Borrower to the Lender for purposes of,or in connection with, this Agreement, the Promissory Notes or any transactioncontemplated herein, and all other such factual information (taken as a whole)hereafter furnished by the Borrower to the Lender was true and accurate in allmaterial respects on the date as of which such information is dated orcertified and not materially incomplete by omitting to state any fact necessaryto make such information (taken as a whole) not misleading at such time inlight of the circumstances under which such information was provided.

 

**20.****                               Useof Proceeds.**

 

The Borrower will use the proceeds of the Loan forgeneral corporate purposes.

 

**21.****                              ****Administration Fee****.**

 

The Borrower shall pay tothe Lender and administration fee equal to one percent (1%) per annum over theamount of the Loan, payable in arrears on each Interest Payment Date

 

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**22.****                              ****Costs and Expenses**.

 

The Borrower promptly shall reimburse the Lender forall reasonable expenses incurred by the Lender (including, without limitationthe amount of reasonable attorney’s fees, costs and expenses) in connectionwith the negotiation, preparation and execution of this Agreement.  The Borrower shall further pay upon demandall costs and expenses of the Lender (including, without limitation, attorney’sfees and expenses) incurred in connection with the preservation of any rightsof the Lender, or the enforcement of, or legal advise in respect of the rightsand responsibilities of the Lender under this Agreement, the Promissory Notesand the other instruments and documents to be delivered hereunder.  The Borrower shall further reimburse theLender on demand for any and all liabilities, obligations, losses, damages,penalties, judgments, and related costs, expenses or disbursements of any kindor nature whatsoever which may be imposed on or incurred by the Lenderhereunder; provided that the Borrower shall not be liable for any such amountresulting from the gross negligence or willful misconduct of the Lender.

 

The Borrower shall also pay the Lender on demand forall losses, costs and expenses incurred as a result of any repayment of theLoan, or any part thereof, other than on the Interest Payment Date.

 

**23.****                              ****Entire Agreement**.

 

This Agreement and the attachments hereto set forththe entire agreement of the Borrower and the Lender as to the scope of theobligations of the parties hereto and supersede all prior agreements,representations and understandings, if any, relating to the subject matterhereof.

 

**24.****                               Severability**.

 

Any provision of this Agreement or of any instrumentor document issued in connection herewith that is prohibited or unenforceablein any jurisdiction shall, as to such jurisdiction, be ineffective to theextent of such prohibition or unenforceability without invalidating theremaining provisions thereof or affecting the validity or enforceability ofsuch provision in any other jurisdiction. To the extent permitted by applicable law, the Borrower hereby waivesany provision of applicable law that renders any provision of this Agreement orof any instrument or document issued in connection herewith prohibited orunenforceable in any respect.

 

**25.****                              ****Notices**.

 

All communications and notices under this Agreement,including reports, shall be given in writing by personal delivery, telegram orfacsimile, in either English or Spanish addressed to the appropriate party atthe address set forth under its name on the signature page of this Agreement orat such other address as such party may designate in writing to the otherparty, and shall be deemed given when received by the recipient.

 

**26.****                              ****Headings**.

 

The headings of the sections of this Agreement are forthe convenience of reference only and in no way define, limit or affect thescope or meaning of this Agreement or of any of its provisions.

 

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**27.****                              ****Counterparts**.

 

This Agreement may be signed by the parties hereto inany number of separate counterparts, each of which shall be an original, withthe same effect as if the signatures thereto were upon the same instruments.

 

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