-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OsY3HY5Rl8gs5PW1tqbkZ1z2vHzmYCzm/eU931gUOP/F2hXf+TzGcs17+6mJGJ5Q 66aqGCDq97en4GPWWz1x4Q== 0001021408-02-003760.txt : 20020415 0001021408-02-003760.hdr.sgml : 20020415 ACCESSION NUMBER: 0001021408-02-003760 CONFORMED SUBMISSION TYPE: 8-A12B/A PUBLIC DOCUMENT COUNT: 3 FILED AS OF DATE: 20020319 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CHIQUITA BRANDS INTERNATIONAL INC CENTRAL INDEX KEY: 0000101063 STANDARD INDUSTRIAL CLASSIFICATION: AGRICULTURE PRODUCTION - CROPS [0100] IRS NUMBER: 041923360 STATE OF INCORPORATION: NJ FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-A12B/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-01550 FILM NUMBER: 02578199 BUSINESS ADDRESS: STREET 1: 250 E FIFTH ST CITY: CINCINNATI STATE: OH ZIP: 45202 BUSINESS PHONE: 5137848880 MAIL ADDRESS: STREET 1: CHIQUITA BRANDS INTERNATIONAL, INC. STREET 2: 250 EAST FIFTH STREET CITY: CINCINNATI STATE: OH ZIP: 45202 FORMER COMPANY: FORMER CONFORMED NAME: UNITED BRANDS CO DATE OF NAME CHANGE: 19900403 8-A12B/A 1 d8a12ba.txt FORM 8-A12B/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-A/A (Amendment No. 1) FOR REGISTRATION OF CERTAIN CLASSES OF SECURITIES PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 CHIQUITA BRANDS INTERNATIONAL, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) New Jersey 04-1923360 - ---------------------------------------- ------------------------------------ (State of incorporation or organization) (I.R.S. Employer Identification No.) 250 East Fifth Street, Cincinnati, Ohio 45202 - -------------------------------------------------------------------------------- (Address of principal executive offices)(Zip Code) Securities to be registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which to be so registered each class is to be registered - -------------------------------------- ------------------------------- Common Stock, par value $.01 per share New York Stock Exchange Warrants to subscribe for Common Stock New York Stock Exchange 10.56% Senior Notes due 2009 New York Stock Exchange Securities to be registered pursuant to Section 12(g) of the Act: None Page 1 of 73 pages. Exhibit list appears page 15. INFORMATION REQUIRED IN REGISTRATION STATEMENT This registration statement registers under Section 12(b) of the Securities Exchange Act of 1934 (the "Act") the following securities of Chiquita Brands International, Inc. (the "Company") being issued pursuant to the Company's Amended and Restated Plan of Reorganization (the "Plan") and upon the filing with the State of New Jersey of the Company's Third Restated Certificate of Incorporation (the "Certificate"): . common stock, par value $.01 per share ("Common Stock") which replaces the Company's prior common stock registered under Section 12(b) of the Act (which prior common stock is cancelled concurrently with the issuance of the Common Stock), . warrants to subscribe for shares of Common Stock ("Warrants"), and . 10.56% Senior Notes due 2009 ("Notes"). Item 1. Description of Registrant's Securities to be Registered. The descriptions which follow are qualified in their entirety by the full terms of each security, as set forth in the Exhibits to this registration statement which are incorporated by reference in this Item 1. DESCRIPTION OF COMMON STOCK Voting. Except as otherwise provided by the New Jersey Business Corporation Act (the "NJBCA") or the Certificate, and subject to the rights of holders of any outstanding shares of preferred stock, each holder of Common Stock has one vote for each share held on all matters submitted to a vote of the Company's shareholders. The Common Stock does not have cumulative voting rights. Generally, a majority of the votes cast at a meeting of shareholders by holders of shares entitled to vote on the proposal is required for shareholder action. However, the Certificate provides that the vote of at least two-thirds of the combined voting power of all outstanding shares of the Company eligible to vote in the election of directors is required to amend the provisions of the Certificate relating to limitations on liability and indemnification (ARTICLE NINE) in any manner adverse to those indemnified or to amend ARTICLE ELEVEN which imposes this vote requirement. Dividends. Except as otherwise provided by the NJBCA or the Certificate, and subject to all rights and preferences of holders of any outstanding shares of preferred stock, holders of Common Stock share ratably in all dividends and distributions, whether upon liquidation or dissolution or otherwise. 2 Other. The Common Stock is not convertible into, or exchangeable for, any other class or series of the Company's capital stock. Holders of Common Stock have no preemptive or other rights to subscribe for or purchase additional securities of the Company. As of the date of this registration statement, the Certificate contains no provisions modifying the voting or dividend rights of holders of Common Stock described above. There is no preferred stock outstanding. The Board of Directors of the Company is authorized to determine the relative rights, preferences and limitations of any class or series of preferred stock that may be issued. Shares of Common Stock are not subject to calls or assessments. No personal liability will attach to holders under the laws of the State of New Jersey (the Company's state of incorporation) or of the State of Ohio (the state in which the Company's principal place of business is located). DESCRIPTION OF WARRANTS General. Each Warrant entitles its holder to purchase one share of Common Stock at a price of $19.23 per share. The Warrants are exercisable for an aggregate of 13,333,333 shares of Common Stock. The Warrants expire seven years from the effective date of the Plan. Antidilution Provisions. If, at any time before the expiration date of the Warrants, the Company (1) declares or pays a dividend, or makes a distribution, on its Common Stock in shares of Common Stock, (2) subdivides or combines its outstanding shares of Common Stock or (3) reclassifies its Common Stock into other securities, the number of shares issuable on exercise of each Warrant and each Warrant's exercise price will be adjusted so that the holders of Warrants are entitled to receive the number and kind of shares of Common Stock or other securities which they would have received if their Warrants had been exercised immediately before the event (or, if applicable, the event's record date). If before the Warrants' expiration date the Company distributes to holders of Common Stock evidence of indebtedness, shares of another class of capital stock, assets (other than periodic cash dividends) or rights to subscribe to Common Stock, then, unless the Company reserves a proportionate amount of the distribution for holders of Warrants, the Warrants' exercise price will be decreased to reflect the value of the distribution. No adjustment in the exercise price of the Warrants is required if the adjustment, together with any prior adjustments not made, is less than 1% of the Warrants' exercise price. Reorganization, Consolidation, Merger or Sale. Prior to the consummation of any recapitalization, reorganization, consolidation, merger, sale of all or substantially all of the Company's assets or other transaction in which holders of Common Stock will receive stock, securities or assets in exchange for their Common Stock, the Company will make appropriate 3 provision to ensure that holders of Warrants have the right to receive, on exercise of their Warrants, the same stock, securities or assets as they would have been issued or paid in the transaction had their Warrants been exercised immediately before the event. Black Scholes Event. Additional provisions apply to the Warrants in the event of (a) the acquisition of 80% or more of the Common Stock in a tender offer or series of tender offers, (b) the acquisition of Common Stock in a tender offer or offers followed by a merger within three years of any such tender offer of the Company with the entity that consummated the tender offer, (c) a consolidation, merger or combination of the Company or (d) a sale of all or substantially all of the Company's assets, if in each case any part of the consideration paid or exchanged for the Common Stock consists of cash or property other than the regular common stock of the surviving entity or its parent (a "Black Scholes Event"). Within 30 days after the occurrence of a Black Scholes Event, the Company is required to offer to purchase all outstanding Warrants at a price per Warrant equal to the "Black Scholes Payment Amount." Any Warrants not tendered will remain outstanding. The Black Scholes Payment Amount will be determined by multiplying the Black Scholes value of a Warrant by a fractional amount calculated based upon both the value of the property received in the transaction other than the regular common stock of the surviving entity and the value of that regular common stock. If holders of Common Stock have the right to select a form of consideration, holders of Warrants will be deemed to have selected consideration in the same proportions as the holders of Common Stock. See Exhibit 3 for further information on the calculation of the Black Scholes Payment Amount. Other. If the Company is voluntarily or involuntarily dissolved or liquidated prior to the expiration date of the Warrants, each holder of Warrants is entitled to receive the cash or other property which the holder would have received had all of the holder's Warrants been exercised immediately prior to the event. DESCRIPTION OF NOTES General. The Notes are a series of senior debt securities issued under an Indenture dated as of March 15, 2002 (the "Indenture") between the Company and Wells Fargo Bank Minnesota, National Association, as trustee (the "Trustee"). The Notes are limited in aggregate principal amount to $300 million, of which $250 million is being issued initially; bear interest at the rate of 10.56% per annum (the "Senior Note Interest Rate"); and mature on March 15, 2009. Interest accrues from March 19, 2002 and is payable on March 15 and September 15 of each year, commencing September 15, 2002, to each registered holder at the close of business on the first day of the month in which the payment will be made. Interest is computed based on a 360-day year of twelve 30-day months. The Notes are issuable only in fully registered form in denominations of $1,000 and integral multiples of $1,000 and initially are issued in the form of one Global Note. The Notes are general unsecured 4 obligations of the Company and will rank equally with the Company's future senior unsecured indebtedness. Capitalized terms used without definition in this description of the Notes are defined in Exhibits 4 and 5. Optional Redemption. The Notes are redeemable at the option of the Company, in whole or in part, at one time or from time to time, on not less than 30 or more than 60 days' notice at the prices described below. Redemption Beginning in 2005. If the Company chooses to redeem the Notes on or after March 15, 2005, the amount that the Company will pay upon redemption will equal the percentage of the principal amount set forth below plus accrued and unpaid interest to, but not including, the redemption date. All Notes redeemed during the 12-month period beginning on March 15 of the years indicated below will be redeemed at the corresponding redemption amount: Year Percentage ---- ---------- 2005 105.28% 2006 103.96% 2007 102.64% 2008 100.00% Makewhole Redemption. In the case of redemption before March 15, 2005, the Company must pay a redemption price equal to the greater of (a) 100% of the principal amount of the Notes to be redeemed, or (b) the sum of the present value of (i) the redemption price of the Notes at March 15, 2005 (set forth in the table above under the caption "Redemption Beginning in 2005") and (ii) interest payments from the date of redemption through March 15, 2005, in each case discounted to the redemption date at a rate equal to the yield to maturity for comparable maturity U.S. Treasury securities plus 0.25 percent; plus, in the case of either clause (a) or (b) above, any accrued and unpaid interest to the redemption date. Redemption with the Proceeds of Public Equity Offerings. Before March 15, 2005, the Company may redeem, in the aggregate, up to a maximum of 35% of the original aggregate principal amount of the Notes with the proceeds of one or more public equity offerings, at a redemption price equal to 110.56% of the principal amount of Notes redeemed, plus accrued and unpaid interest, if any, to the redemption date. Any redemption must be made within 75 days of the applicable public equity offering. Notice of Redemption. The Company must provide each affected holder of Notes with notice of any redemption at least 30 but not more than 60 days before the date set for 5 redemption. The notice must specify the date fixed for redemption and the redemption price, except in a Makewhole Redemption, in which case the Company must certify to the Trustee the actual redemption price, calculated as described in the notice, at least two business days before the redemption date. Sinking Fund. The Notes will not be subject to any sinking fund payment obligations. Consolidation, Merger and Sale of Assets. The Company may not consolidate or merge with or into any other entity, or sell, lease or convey all or substantially all of its assets to any other entity unless the following principal conditions are met: (1) the surviving entity is organized under the laws of the United States of America or any state or the District of Columbia, the Bahamas, Barbados, Bermuda, the British Virgin Islands, the Cayman Islands, any of the Channel Islands or the Netherlands Antilles and expressly assumes all of the Company's obligations under the Notes and the Indenture; (2) immediately after the transaction, no Default or Event of Default under the Indenture has occurred and is continuing; (3) immediately after the transaction, either (a) the surviving entity would be able to incur at least $1.00 of additional Indebtedness under the Company's Fixed Charge Coverage Ratio, determined on a pro forma basis as if the transaction had occurred at the beginning of the immediately preceding four-quarter period, or (b) the Fixed Charge Coverage Ratio for the surviving entity, determined on a pro forma basis as if the transaction had occurred at the beginning of the immediately preceding four-quarter period, would be greater than the actual Fixed Charge Coverage Ratio for the Company for the most recently completed four-quarter period prior to the transaction; (4) if the surviving entity is organized in a jurisdiction other than the United States or any state or the jurisdiction in which the predecessor obligor on the Notes was organized immediately before the transaction, then (a) the obligations of the surviving entity relating to the Notes and under the Indenture must be enforceable under the laws of the new jurisdiction, subject to customary exceptions, (b) the U.S. federal income tax status of the holders of the Notes must not be adversely affected, (c) the surviving entity must agree in writing to submit to the jurisdiction of the courts of New York and appoint an agent for service of process there and (d) the board of directors of the surviving entity must determine in good faith that the transaction will not have a material adverse effect on the holders of Notes. Notwithstanding the foregoing, if the Company effects a consolidation, merger or sale, conveyance, assignment, transfer, lease or other disposition of substantially all of its assets, the condition set forth in clause (3) of the paragraph above will not apply to a transaction involving a surviving entity which is otherwise subject to the foregoing provisions if (i) the surviving entity (1) was formed for the purpose of effecting the transaction, (2) did not engage in any business prior to the transaction, (3) immediately prior to the transaction had no indebtedness or liabilities, contingent or otherwise, (4) immediately after the transaction had no additional "indebtedness" or "liabilities," contingent or otherwise, in excess of that which the Company had immediately prior to the transaction and (5) immediately after the transaction was engaged in the same business as the Company was engaged in immediately prior to the transaction and (ii) the holders of the outstanding voting shares of the Company immediately prior to the transaction own, directly or indirectly, the outstanding voting shares of the surviving entity immediately after the transaction in substantially the same proportion as before the transaction. 6 Certain Covenants Relating to the Notes. The Indenture contains the covenants summarized below, among others, relating to the Notes. Limitation on Indebtedness. The Company will not, and will not permit any Subsidiary to, create, incur, assume or guarantee the payment of any Indebtedness (including Acquired Indebtedness) other than Permitted Indebtedness or Refinancing Indebtedness and the Company will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of Disqualified Stock to any Person other than the Company or its Subsidiaries unless, after giving effect to the transaction, the Company's Fixed Charge Coverage Ratio for the four full fiscal quarters immediately preceding the transaction for which internal financial statements are available immediately preceding the date of the transaction, taken as a single period, is (a) if at the Calculation Date the most recent fiscal quarter for which internal financial statements are available ended on or prior to December 31, 2002, 2.0 to 1 or greater, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period and (b) if at the Calculation Date the most recent fiscal quarter for which internal financial statements are available ended on or after March 31, 2003, 2.5 to 1 or greater, determined on the same pro forma basis. Limitation on Liens. The Company will not, and will not permit any Subsidiary to, create, assume, incur or permit any Lien upon any of their assets without providing for the Notes to be secured equally and ratably with the Indebtedness or other obligations being secured by the Lien, except for (1) Permitted Liens and (2) Liens, not including Permitted Liens, which at any time secure Indebtedness in an amount up to $50 million; provided that the amount available for these Liens must be reduced by the aggregate "value" of Sale and Leaseback Transactions entered into and permitted by the covenant "Limitations on Sale and Leaseback Transactions," described below. In no case will the amount set forth in clause (2) be reduced below zero. Limitation on Asset Sales. The Company will not, and will not permit any of its Subsidiaries to, consummate an Asset Sale unless (1) the Company (or the Subsidiary, as the case may be) receives consideration at the time of the Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; (2) if the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of is greater than $25 million, the Asset Sale is approved by the Company's board of directors; and (3) at least 75% of the consideration received by the Company or the Subsidiary is in the form of cash. For purposes of this provision, each of the following will be deemed to be cash: (a) any liabilities of the Company or any Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of the assets, and (b) any securities, notes or other obligations received by the Company or the Subsidiary from the transferee that are converted by the Company or the Subsidiary into cash within 90 days thereafter (to the extent of the cash received in that conversion). Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company or any of its Subsidiaries may apply the Net Proceeds at their option (1) to permanently repay indebtedness under any credit facility of the Company or any of its Subsidiaries; (2) to 7 purchase, or commit to purchase, the assets of, or a majority of the voting Equity Interests of, a Food-Related Business; (3) to make, or commit to make, a capital expenditure; or (4) to acquire, or commit to acquire, other assets that are used or useful in, or ancillary to, a Food-Related Business that is owned by the Company or any of its Subsidiaries; provided that if a commitment terminates for any reason, the Company will, within 45 days, apply the Net Proceeds in accordance with the provisions of this or the following paragraph. Pending the final application of the Net Proceeds, the Company or any of its Subsidiaries may temporarily reduce revolving credit borrowings or otherwise invest the Net Proceeds in any manner that is not prohibited by the terms of the Notes. Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph, other than Net Proceeds held by a Subsidiary of the Company to the extent that the Subsidiary is restricted from transferring those Net Proceeds to the Company or any of its Subsidiaries, will constitute Excess Proceeds. When the aggregate amount of Excess Proceeds exceeds $25 million, the Company will make an offer (an "Asset Sale Offer") to all holders of Notes, and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this covenant "Limitation on Sale of Assets," to purchase the maximum principal amount of Notes and that other pari passu Indebtedness as may be purchased out of the Excess Proceeds. The offer price for the Notes in any Asset Sale Offer will be equal to 100% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, to the date of purchase, and will be payable in cash. If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use those Excess Proceeds for any purpose not otherwise prohibited by the terms of the Notes. If the aggregate principal amount of Notes and other pari passu Indebtedness tendered into the Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee will select the Notes and other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds will be reset at zero. Limitation on Sale and Leaseback Transactions. The Company will not, and will not permit any of its Subsidiaries to, enter into any Sale and Leaseback Transaction; except that the Company or any of its Subsidiaries may enter into a Sale and Leaseback Transaction if (1) the Company or Subsidiary, as applicable, could have (a) incurred Indebtedness under the Fixed Charge Coverage Ratio test in the covenant "Limitation on Indebtedness" in an amount equal to the Indebtedness required to be recorded under GAAP relating to the Sale and Leaseback Transaction and (b) incurred a Lien to secure the Indebtedness pursuant to the covenant "Limitation on Liens"; and (2) the gross cash proceeds of that Sale and Leaseback Transaction are at least equal to the fair market value of the property that is the subject of the Sale and Leaseback Transaction. Limitation on Restricted Payments. The Company will not, and will not permit any Subsidiary to, make any Restricted Payment unless, at the time and after giving effect to the Restricted Payment, the following conditions are met: (1) no Default or Event of Default under the Indenture will have occurred and be continuing (or would result), (2) at the time of and after giving effect to the Restricted Payment, the Company would be able to incur at least $1.00 of Indebtedness under the Fixed Charge Coverage Ratio test in the covenant "Limitation on 8 Indebtedness," (3) the payment, along with the aggregate amount of all Restricted Payments declared or made on or after the Effective Date may not exceed the sum of (a) 50% of the Company's total Consolidated Net Income accrued on a cumulative basis during the period beginning on the first day of the fiscal quarter in which the Effective Date occurs and ending on the last day of its last fiscal quarter ending prior to the date of the proposed Restricted Payment for which internal financial statements are available (or if that aggregate cumulative Consolidated Net Income is a loss, minus 100% of the loss); plus (b) the aggregate net cash proceeds received by the Company on or after the Effective Date (i) as capital contributions or (ii) from the issuance and sale of (x) Equity Interests of the Company to any Person or entity other than a Subsidiary, excluding the issuance or sale of Disqualified Stock or (y) any other securities of the Company which (A) are convertible into or exchangeable or exercisable for Equity Interests of the Company, other than Disqualified Stock and (B) have been converted, exchanged or exercised; plus (c) to the extent that any Restricted Investment that was made after the Effective Date is sold or redeemed for, or repaid in, cash, the lesser of (i) the cash return of (and on) capital with respect to the Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of the Restricted Investment; plus (d) the initial amount of any Restricted Investment(s) made after the Effective Date in an entity that subsequently becomes a Subsidiary. The provisions of the preceding paragraph do not prohibit the following (the "Excluded Payments"): (a) so long as no Default or Event of Default has occurred and is continuing (or would result), any Restricted Payment which, together with all other Restricted Payments made pursuant to this subsection (a) on or after the Effective Date, does not exceed $25 million; (b) the payment of any dividend, within 60 days after it was declared, if at the date it was declared, the payment would have been permitted; (c) the making of any Investment or the redemption, repurchase, retirement, defeasance or other acquisition of any Equity Interests of the Company (or subordinated Indebtedness of the Company or its Subsidiaries) in exchange for, or out of the proceeds of the sale (other than to a Subsidiary of the Company) of, any Equity Interests of the Company (other than any Disqualified Stock); except that, in each case, the amount of any net cash proceeds that are so utilized will be excluded from clause (3)(b) of the preceding paragraph; (d) the payment of any dividend by a Subsidiary of the Company to the holders of its common Equity Interests, or a redemption of its Equity Interests, on a pro rata basis; (e) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former director, officer, employee or agent of the Company (or any of its Subsidiaries) pursuant to any management equity subscription agreement, stock option agreement or other employee benefit plan or arrangement in effect on the Effective Date or adopted or approved thereafter by the Company's board of directors, provided that the aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests may not exceed $5 million in any twelve-month period; (f) the periodic purchase of Equity Interests of the Company for contribution to employee benefit plans not to exceed $5 million in any twelve-month period; (g) the purchase of Equity Interests of the Company deemed to occur upon the exercise of stock options or warrants if those Equity Interests represent all or a portion of the exercise price of (or taxes in respect of the exercise of) the options or warrants; (h) the payment of the Black Scholes Payment Amount (as defined in the Warrant Agreement); (i) the payment of the Subclass 4B Supplemental Distribution (as defined in the Plan); or (j) a 9 Subsidiary of the Company declaring or making payment of a dividend on, or making a distribution in respect of or repurchasing or redeeming, its Equity Interests on a basis that is not pro rata to all holders of its Equity Interests, provided that the dividend, distribution, repurchase or redemption is consistent with the priority and proportionate to the amount of the corresponding investment in the Subsidiary's Equity Interests. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company will not, and will not permit any of its Subsidiaries to, create or agree to any encumbrance or restriction on the ability of any Subsidiary to (1) pay dividends or make any other distributions on its capital stock to the Company or any of its Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or (2) pay any Indebtedness owed to the Company or any of its Subsidiaries which own, directly or indirectly, any of the Subsidiary's Equity Interests, or (3) make loans or advances to the Company or any of its Subsidiaries. However, the preceding restrictions will not apply to encumbrances or restrictions existing under or by reason of (1) existing Indebtedness as in effect on the Effective Date; (2) the Indenture and the Notes; (3) applicable law; (4) any agreement or instrument applicable to or binding on a Person acquired by the Company or any of its Subsidiaries as in effect at the time of the acquisition (except to the extent the agreement or instrument was entered into in connection with or in contemplation of the acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of the acquired Person's Indebtedness, the Indebtedness was permitted to be incurred by the terms of the Notes; (5) any agreement for the sale or other disposition of a Subsidiary that restricts distributions by the Subsidiary pending its sale or other disposition; (6) Refinancing Indebtedness if (A) the encumbrances or restrictions, taken as a whole, are not materially more restrictive than is customary in comparable financings, (B) any such encumbrances or restrictions will not materially adversely affect the Company's ability to make principal or interest payments on the Notes and (C) the Company delivers an Officer's Certificate to the Trustee stating that incurring such Refinancing Indebtedness complies with this clause; (7) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business; and (8) restrictions on cash or other deposits or net worth under contracts entered into in the ordinary course of business. Business Activities. The Company will not, and will not permit any Subsidiary to, engage in any business other than Food-Related Businesses. Payments for Consent. The Company will not, and will not permit any of its Subsidiaries to, pay or cause to be paid any consideration to or for the benefit of any holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless that consideration is offered and paid to all holders of the Notes that consent, waive or agree to amend those terms and provisions in the time frame set forth in the solicitation documents relating to the consent, waiver or agreement. Reports. Whether or not required by the Commission, so long as any Notes are outstanding, the Company will file with the Commission (or if the Commission will not accept 10 such filings, furnish to the Trustee) within the time periods specified in the Commission's rules and regulations all quarterly and annual financial information that would be required to be contained in filings with the Commission on Forms 10-Q and 10-K, and all current reports that would be required to be filed on Form 8-K, if the Company were required to file such reports. Transactions With Related Persons. The Company will not, and will not permit any Subsidiary to, enter into any transaction or series of related transactions with any Related Person unless: (1) the transaction or series of transactions are on terms as favorable to the Company or the Subsidiary as would be available in a comparable transaction with an unrelated third party; (2) if the transaction or series of transactions involves aggregate payments of $5 million or more, the Company, within 20 days, delivers an Officer's Certificate to the Trustee certifying that the transaction complies with clause (1) above; (3) if the transaction or series of transactions involves aggregate payments of $10 million or more, the transaction or series of transactions is approved by the Company's board of directors, including the approval of a majority of directors who are not Related Persons in connection with the transaction or transactions being approved; and (4) if the transaction or series of transactions involves aggregate payments of $25 million or more, the Company delivers to the Trustee an opinion as to the fairness from a financial point of view to the Company and its Subsidiaries, taken as a whole, of the transaction or series of transactions issued by an accounting, appraisal or investment banking firm of national standing. However, these provisions do not prohibit (1) any employment arrangement or transactions relating to benefit plans with any employee, consultant or director of the Company or any Subsidiary that is entered into by the Company or any Subsidiary in the ordinary course of business and consistent with past practices of the Company or the Subsidiary; (2) payment of reasonable directors' fees; (3) loans and advances to employees of the Company or any Subsidiary in the ordinary course of business otherwise permitted pursuant to the terms of the Notes; (4) Restricted Payments that are permitted by the terms of the Notes described under the caption "Limitation on Restricted Payments"; (5) issuances of Equity Interests by the Company; and (6) any transaction between or among the Company and one or more Subsidiaries of the Company or among one or more Subsidiaries of the Company entered into in the ordinary course of business. Purchase of Notes upon a Change of Control. If a Change of Control occurs, each holder of Notes will have the right, at the holder's option, to require the Company to purchase all or any part of the holder's Notes (in integral multiples of $1,000) at a Purchase Price of 101% of their principal amount, plus accrued and unpaid interest, if any, to the Purchase Date. A "Change of Control" means an event or series of events by which any of the following occurs: (1) any "Person" is or becomes the "beneficial owner" of more than 50% of the total voting power of all outstanding classes of voting capital stock of the Company; (2) the Company consolidates with or merges into another entity or conveys, transfers or leases all or substantially all of its assets in one or a series of transactions to any entity, or any entity consolidates with or merges into the Company and, in connection with the transaction, the outstanding voting shares of the Company are changed into or exchanged for cash, securities or other property, other than a transaction (a) between the Company and a Subsidiary or (b) in which the holders of the outstanding voting shares of the Company immediately prior to the 11 transaction own not less than a majority of the outstanding voting shares of the surviving entity immediately after the transaction in substantially the same proportion as before the transaction; (3) the Company or any Subsidiary purchases or otherwise acquires beneficial ownership of 40% or more of the Company's capital stock within any 12-month period; (4) the adoption of a plan relating to the liquidation or dissolution of the Company or (5) on any date, a majority of the Company's Board of Directors does not consist of Persons (a) who were directors at the Effective Date ("Continuing Directors") or (b) whose election or nomination as directors was approved by at least 2/3 of the directors then in office who are Continuing Directors or whose election or nomination was previously so approved. "Person" has the same meaning given to it in Sections 13(d) and 14(d) of the Exchange Act, and "beneficial owner" or "beneficially owned" have the same meaning given to these terms in Rules l3d-3 and l3d-5 under the Exchange Act, except that a Person is deemed to have "beneficial ownership" of all shares that Person has the right to acquire, whether the right is exercisable immediately or only after the passage of time. The Company is obligated to give notice to holders of Notes and the Trustee within 30 days following a Change of Control. The notice must specify (1) that a Change of Control has occurred and that the holder has the right to require the Company to purchase the holder's Notes at the Purchase Price, together with such information that the Company deems relevant or as may be required to be disclosed pursuant to applicable securities or other laws, (2) the place at which the Notes are to be presented and surrendered for purchase, (3) that interest accrued to the Purchase Date will be paid upon presentation and surrender, and (4) that interest will cease to accrue as of the Purchase Date on all Notes timely surrendered for purchase. Rating. If the Company fails to obtain a rating for the Notes from either Moody's Investor Services, Inc. or Standard & Poor's Corporation within one year of the Effective Date, the Senior Note Interest Rate will increase by 0.50% from the first anniversary of the Effective Date until the day a rating is obtained, at which time the interest rate will revert to the original annual rate. Events of Default. The following are "Events of Default" with respect to the Notes: (i) default in the payment of any installment of interest on the Notes for 30 days after becoming due; (ii) default in the payment of the principal of (or premium, if any, on) the Notes when due; (iii) default in the performance of any other covenant contained in the terms of the Notes or the Indenture for a period of 60 days after written notice of the failure, requiring the Company to remedy the same, has been given to the Company by the Trustee or to the Company and the Trustee by the holders of 25% in aggregate principal amount of then outstanding Notes; (iv) default under any agreements, indentures or instruments under which the Company or any of its Material Subsidiaries has outstanding Indebtedness in excess of $10 million in the aggregate and, if not already matured in accordance with its terms, the Indebtedness has been accelerated and the acceleration has not have rescinded or annulled or the Indebtedness discharged within ten days after notice to the Company by the Trustee or to the Company and the Trustee by the holders of at least 25% in aggregate principal amount of then outstanding Notes, provided, that if, prior to the entry of judgment in favor of the Trustee, the default under such indenture or instrument is remedied or cured by the Company or the Material Subsidiary, 12 or waived by the holders of the Indebtedness, then the Event of Default under the Indenture likewise will be deemed to have been remedied, cured or waived; and provided, further, that if the default results from an action of the United States government or a foreign government which prevents the Company or the Material Subsidiary from performing its obligations under the agreement, indenture or instrument, the default will not be an Event of Default under the Indenture; (v) entry against the Company or any Material Subsidiary of one or more judgments, orders or decrees for the payment of money in excess of $10 million, either individually or in the aggregate, which is not discharged, and the continuance of the judgment, order or decree for 60 days during which a stay of enforcement, by reason of an appeal or otherwise, is not in effect, and written notice of the default has been given to the Company by the Trustee or to the Company and the Trustee by the holders of 25% in aggregate principal amount of then outstanding Notes; (vi) certain events of bankruptcy, insolvency or reorganization with respect to the Company or any of its Material Subsidiaries occur; or (vii) failure by the Company to comply with its obligations under "Consolidation, Merger and Sale of Assets," "Purchase of Notes upon a Change of Control" or "Limitation on Sale of Assets." If an Event of Default occurs and is continuing, either the Trustee or the holders of at least 25% in principal amount of outstanding Notes may declare the entire principal amount of the Notes immediately due and payable. If an Event of Default specified in clause (vi) above occurs with respect to the Company, the entire principal amount of the Notes will ipso facto become due and payable. The Company is required to furnish the Trustee annually with a statement by certain officers of the Company to the effect that, to the best of their knowledge, the Company is not in default in the fulfillment of any of its obligations under the Indenture or, if there has been a default, specifying each known default. The holders of a majority in principal amount of outstanding Notes have the right, subject to certain limitations, to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee or exercising any trust or power conferred on the Trustee, and to waive certain defaults. If an Event of Default occurs, the Trustee must exercise such of its rights and powers under the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. Subject to these provisions, the Trustee is under no obligation to exercise any of its rights or powers under the Indenture at the request of any of the holders of Notes unless they have offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities it might incur in compliance with the request. Satisfaction and Discharge. The Indenture provides that the Company will be discharged from its obligations on the Notes (with certain exceptions) at any time prior to their stated maturity or redemption when (a) the Company has deposited with the Trustee, in trust, sufficient funds to pay the principal of (and premium, if any) and interest, if any, to stated maturity (or redemption) on the Notes, (b) the Company has paid all other sums payable with respect to the Notes and (c) certain other conditions are met. Upon such discharge, the holders of Notes no longer are entitled to the benefits of the Indenture, except for certain rights including registration of transfer and exchange, and may look only to the deposited funds. 13 Modification and Waiver. Certain modifications and amendments (which, generally, either benefit or do not adversely affect the holders of outstanding Notes) of the Indenture may be made by the Company and the Trustee without the consent of holders of the Notes. Other modifications and amendments of the Indenture or of the terms of the Notes require the consent of the holders of more than 50% in outstanding principal amount of the Notes. Further, no modification or amendment may, without the consent of the holder of each outstanding Note affected, (a) reduce the principal of or change the stated maturity of the Note, (b) reduce the rate of, or change the time for payment of interest on, the Note, (c) reduce the principal amount or any premium payable on redemption of the Note or change the time at which the Note may be redeemed, (d) change the place of payment, (e) impair the right of a holder to receive payment of principal of and interest on the Note on or after their due dates, (f) change the currency in which the principal of or any premium or interest on the Note is payable, (g) reduce the percentage in principal amount of the outstanding Notes, the consent of whose holders is required for any supplemental indenture or any waiver (of compliance with certain provisions of the Indenture or certain defaults thereunder and their consequences) provided for in the Indenture, (h) modify or change any provision of the Indenture or the related definitions affecting the ranking of any Note in a manner which adversely affects the holders in any material respect, or (i) make any change in the foregoing amendment and waiver provisions. The holders of not less than a majority in principal amount of the outstanding Notes may on behalf of the holders of all Notes waive compliance by the Company with certain restrictive provisions of the Indenture or the terms of the Notes. The holders of not less than a majority in principal amount of the outstanding Notes may on behalf of the holders of all Notes waive any past default under the Indenture, except a default in the payment of the principal of (or premium, if any) and interest, if any, on any Note or in respect of a provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Note affected. Defeasance of Certain Obligations. The terms of the Notes provide that the Company does not have to comply with the restrictive covenants described above under the headings Limitation on Indebtedness, Limitation on Liens, Limitation on Asset Sales, Limitation on Sale and Leaseback Transactions, Limitation on Restricted Payments, Dividend and Other Payment Restrictions Affecting Subsidiaries, Business Activities, Reports, Transactions with Related Persons, Purchase of Notes Upon a Change of Control, Rating and clause (3) of Consolidation, Merger and Sale of Assets if, among other conditions, the Company (1) deposits with the Trustee an amount of cash and U.S. government securities, in any combination, sufficient to pay all amounts owing on the Notes for unpaid principal, premium, if any, and interest to maturity or any applicable redemption date and (2) provides an opinion of independent tax counsel that holders of Notes will not be adversely affected for U.S. federal income tax purposes by the defeasance. If the Company does this, its obligations under the Indenture and the Notes other than in connection with the above covenants will remain in full force and effect. Compliance. The Indenture provides that the Trustee shall, within 90 days after the occurrence of a default (including, in most cases, an event which, after notice or lapse of time, would become an Event of Default), give the holders of the Notes notice of the default; 14 however, except in the case of a default in the payment of principal of (or premium, if any) or interest, if any, on the Notes, the Trustee may withhold notice if it in good faith determines that the withholding of notice is in the interest of the holders of the Notes. In addition the Company must furnish other annual and periodic reports and certificates to the Trustee and/or the holders of the Notes, as required by Section 314(a) of the Trust Indenture Act, the Indenture and, in connection with certain covenants and other matters, the terms of the Notes. Paying Agent. The registrar, paying and transfer agent for the Notes is American Security Transfer Company Limited Partnership d/b/a Securities Transfer Company, Cincinnati, Ohio. Securities Transfer Company is an affiliate of the Company. Item 2. Exhibits. The following exhibits are filed as part of this registration statement: *Exhibit 1-- Third Restated Certificate of Incorporation of Chiquita Brands International, Inc. *Exhibit 2-- Restated By-laws of Chiquita Brands International, Inc. Exhibit 3-- Warrant Agreement dated as of March 19, 2002 between Chiquita Brands International, Inc. and American Security Transfer Company Limited Partnership, as Warrant Agent Exhibit 4-- Certificate of Actions Taken by Steven G. Warshaw, President, Pursuant to Authority Delegated by the Board of Directors of Chiquita Brands International, Inc. and approved by the Court pursuant to the Plan in Approving the Terms of 10.56% Senior Notes due 2009, including the following exhibits: Exhibit A - Definitions Exhibit B - Redemption Provisions Exhibit C - Covenants Exhibit D - Form of Global Note *Exhibit 5-- Indenture dated as of March 15, 2002 between Chiquita Brands International, Inc. and Wells Fargo Bank Minnesota, National Association, Trustee * Previously filed. 15 SIGNATURE Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this amended registration statement to be signed on its behalf by the undersigned, thereto duly authorized. CHIQUITA BRANDS INTERNATIONAL, INC. /s/ William A. Tsacalis ----------------------------------- William A. Tsacalis Vice President and Controller March 18, 2002 16 EX-3 3 dex3.txt WARRANT AGREEMENT ---- COMMON STOCK ================================================================================ CHIQUITA BRANDS INTERNATIONAL, INC. and AMERICAN SECURITY TRANSFER COMPANY LIMITED PARTNERSHIP As Warrant Agent ---------------- Warrant Agreement -- Common Stock Dated as of March 19, 2002 ================================================================================ CHIQUITA BRANDS INTERNATIONAL, INC. COMMON STOCK WARRANT AGREEMENT THIS WARRANT AGREEMENT (this "Agreement"), dated as of March 19, 2002 is by --------- and between Chiquita Brands International, Inc., a New Jersey corporation (hereinafter called the "Company") and American Security Transfer Company ------- Limited Partnership, as Warrant Agent (subject to Section 1.1 hereof, the "Warrant Agent"). Capitalized terms used herein and not otherwise defined are ------------- defined in Article VII hereof. WHEREAS, in connection with the financial restructuring of the Company, pursuant to that certain Plan of Reorganization of the Company (the "Plan"), the ---- Company is issuing warrant certificates evidencing one or more warrants (the "Warrants" or individually a "Warrant") representing the right to purchase an -------- ------- aggregate of 13,333,333 shares of the Company's common stock, par value $0.01 per share (the "Common Stock", and the Common Stock issuable upon exercise of ------------ the Warrants being referred to herein as the "Warrant Shares"). Such warrant -------------- certificates and other warrant certificates issued pursuant to this Agreement are referred to herein as the "Warrant Certificates"; and -------------------- WHEREAS, the Company desires the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing to act, in connection with the issuance, exchange, exercise and replacement of the Warrant Certificates, and in this Agreement wishes to set forth, among other things, the form and provisions of the Warrant Certificates and the terms and conditions on which they may be issued, exchanged, exercised and replaced. NOW THEREFORE, in consideration of the premises and of the mutual agreements herein contained, the parties hereto agree as follows: ARTICLE I ISSUANCE OF WARRANTS AND EXECUTION AND DELIVERY OF WARRANT CERTIFICATES Section 1.1 Appointment of Warrant Agent. The Company hereby appoints ---------------------------- American Security Transfer Company Limited Partnership as Warrant Agent of the Company in respect of the Warrants and the Warrant Certificates upon the terms and subject to the conditions herein set forth, and American Security Transfer Company Limited Partnership hereby accepts such appointment, subject to such terms and conditions. Notwithstanding the foregoing, it is expressly understood and agreed that the Company shall retain the responsibilities of the "Warrant Agent" under this Agreement relating to the countersignature of Warrant Certificates, the transfer of Warrants and the maintenance of record books relating to the Warrants (including, but not limited to, Sections 1.3, 2.3 and Article V hereof); provided that the Company may delegate such responsibilities -------- ---- to American Security Transfer Company Limited Partnership (or any successor Warrant Agent appointed pursuant to Section 6.3 hereof) at any time or from time to time. Section 1.2 Issuance of Warrants. Upon issuance, each Warrant Certificate -------------------- shall evidence one or more Warrants. Each Warrant evidenced thereby shall represent the right, subject to the provisions contained herein and therein, to purchase one Warrant Share. Section 1.3 Execution and Delivery of Warrant Certificates. ---------------------------------------------- (a) Each Warrant Certificate, whenever issued, shall be in registered form substantially in the form set forth in Exhibit A attached hereto, shall be dated --------- as of March 19, 2002, and may have such letters, numbers, or other marks of identification or designation and such legends or endorsements printed, lithographed or engraved thereon as the officers of the Company executing the same may approve (with execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of this Agreement, or as may be required to comply with any law or with any rule or regulation made pursuant thereto or with any rule or regulation of any stock exchange on which the Warrants may be listed, or to conform to usage. The Warrant Certificates shall be executed on behalf of the Company by the Chairman of the Board, the Chief Executive Officer, the President, any Executive Vice President or any Senior Vice President or any Vice President and by the Secretary or any Assistant Secretary under its corporate seal reproduced thereon. Such signatures may be manual or facsimile signatures of such authorized officers and may be imprinted or otherwise reproduced in the Warrant Certificates. The seal of the Company may be in the form of a facsimile thereof and may be impressed, affixed, imprinted or otherwise reproduced on the Warrant Certificates. (b) No Warrant Certificates shall be valid for any purpose, and no Warrant evidenced thereby shall be exercisable, until such Warrant Certificate has been countersigned by the manual signature of the Warrant Agent. Such signature by the Warrant Agent upon any Warrant Certificate executed by the Company shall be conclusive evidence that the Warrant Certificate so countersigned has been duly issued hereunder. (c) In case any officer of the Company who shall have signed any of the Warrant Certificates either manually or by facsimile signature shall cease to be such officer before the Warrant Certificates so signed shall have been countersigned and delivered by the Warrant Agent, such Warrant Certificates may be countersigned and delivered notwithstanding that the person who signed such Warrant Certificates ceased to be such officer of the Company; and any Warrant Certificate may be signed on behalf of the Company by such persons as, at the actual date of the execution of such Warrant Certificate, shall be the proper officers of the Company, although at the date of the execution of this Agreement any such person was not such officer. (d) The term "holder" or "holder of a Warrant Certificate" as used herein ------ ------------------------------- shall mean any person in whose name at the time any Warrant Certificate shall be registered upon the books to be maintained by the Warrant Agent for that purpose. Section 1.4 Issuance of Warrant Certificates. Warrant Certificates -------------------------------- evidencing the right to purchase up to an aggregate amount not exceeding 13,333,333 Warrant Shares (except as provided in Article III and Sections 1.5, 2.3(c) and 5.1 hereof) may be executed by the Company and delivered to the Warrant Agent upon the execution of this Warrant Agreement or from time to time thereafter. The Warrant Agent shall, upon receipt of Warrant Certificates duly executed on behalf of the Company, deliver such Warrant Certificates representing the right to purchase up to 13,333,333 Warrant Shares to or upon the order of the Company. Subsequent to such issuance of the Warrant Certificates, the Warrant Agent shall countersign a Warrant Certificate only if the Warrant Certificate is issued in exchange or substitution for one or more previously -2- countersigned Warrant Certificates or in connection with their transfer, as hereinafter provided or as provided in Section 2.3(c) hereof. Section 1.5 Temporary Warrant Certificate. Pending the preparation of ----------------------------- definitive Warrant Certificates, the Company may execute, and upon the order of the Company, the Warrant Agent shall authenticate and deliver, temporary Warrant Certificates which are printed, lithographed, typewritten, mimeographed or otherwise produced substantially of the tenor of the definitive Warrant Certificates in lieu of which they are issued and with such appropriate insertions, omissions, substitutions and other variations as the officers executing such Warrant Certificates may determine, as evidenced by their execution of such Warrant Certificates. If temporary Warrant Certificates are issued, the Company will cause definitive Warrant Certificates to be prepared without unreasonable delay. After the preparation of definitive Warrant Certificates, the temporary Warrant Certificates shall be exchangeable for definitive Warrant Certificates upon surrender of the temporary Warrant Certificates at the corporate office of the Warrant Agent, without charge to the holder. Upon surrender for cancellation of any one or more temporary Warrant Certificates, the Company shall execute and the Warrant Agent shall authenticate and deliver in exchange therefor definitive Warrant Certificates representing the same aggregate number of Warrants. Until so exchanged, the temporary Warrant Certificates shall in all respects be entitled to the same benefits under this Agreement as the definitive Warrant Certificates. ARTICLE II WARRANT PRICE, DURATION AND EXERCISE OF WARRANTS Section 2.1 Warrant Price. During the period from the date hereof through -------------- and including March 19, 2009, the exercise price of each Warrant will be $19.23, subject to adjustment pursuant to Article III below. Such purchase price of a Warrant Share is referred to in this Warrant Agreement as the "Warrant Price." ------------- Warrants may be exercised by the holders thereof at any time at the Warrant Price then in effect. Section 2.2 Duration of Warrants. Each Warrant may be exercised in whole -------------------- at any time, as specified herein, on or after the Effective Date (as defined in the Plan) and at or before 5 P.M., New York City time, on March 19, 2009 or such later date as the Company may designate, by notice to the Warrant Agent and the holders of Warrant Certificates mailed to their addresses as set forth in the record books of the Warrant Agent (the "Expiration Date"). Each Warrant not --------------- exercised at or before 5 P.M., New York City time, on the Expiration Date shall become void, and all rights of the holder of the Warrant Certificate evidencing such Warrant under this Agreement shall cease. Section 2.3 Exercise of Warrants. -------------------- (a) During the period specified in Section 2.2, any whole number of Warrants may be exercised by delivering to the Warrant Agent the Warrant Certificate with the form of election to purchase Warrant Shares set forth on the reverse side of the Warrant Certificate properly completed and duly executed and by either (i) paying in full, by certified check or by bank wire -3- transfer, in each case in immediately available funds, the Warrant Price for each Warrant exercised (the "Aggregate Warrant Price"), to the Warrant Agent at ----------------------- its corporate office or (ii) delivering written notice to the Warrant Agent that the holder of the Warrant is exercising the Warrant (or a portion thereof) by authorizing the Company to withhold from issuance a number of Warrant Shares issuable upon such exercise of the Warrant which when multiplied by the Market Price of the Common Stock is equal to the Aggregate Warrant Price (and such withheld shares shall no longer be issuable under the Warrant (a "Cashless -------- Exercise"). The formula for determining the number of Warrant Shares to be - -------- issued in a Cashless Exercise is set forth on Exhibit B attached hereto. The --------- date on which the Warrant Certificate and payment in full of the Warrant Price or the notice described in clause (ii) above is received by the Warrant Agent shall be deemed to be the date on which the Warrant is exercised. The Warrant Agent shall deposit all funds received by it in payment of the Warrant Price in an account of the Company maintained with it and shall advise the Company by telephone at the end of each day on which a payment and/or wire transfer for the exercise of Warrants is received of the amount so deposited to its account. The Warrant Agent shall promptly confirm such telephone advice to the Company in writing. (b) The Warrant Agent shall, from time to time, as promptly as practicable, advise the Company of (i) the number of Warrants exercised, (ii) delivery of Warrant Certificates evidencing the balance, if any, of the Warrants remaining after such exercise and (iii) such other information as the Company shall reasonably require. (c) As promptly as practicable after the exercise of any Warrant, the Company shall issue, in authorized denominations to or upon the order of the holder of the Warrant Certificate evidencing such Warrant, the Warrant Shares to which such holder is entitled, in fully registered form, registered in such name or names as may be directed by such holder. If fewer than all of the Warrants evidenced by such Warrant Certificate are exercised, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, a new Warrant Certificate evidencing the number of such Warrants remaining unexercised. (d) The Company shall not be required to pay any stamp or other tax or other governmental charge required to be paid in connection with any transfer involved in the issue of the Warrant Shares, and in the event that any such transfer is involved, the Company shall not be required to issue or deliver any Warrant Shares until such tax or other charge shall have been paid or it has been established to the Company's satisfaction that no such tax or other charge is due. Section 2.4 No Fractional Shares to be Issued. Notwithstanding anything to --------------------------------- the contrary contained in this Agreement, if the number of shares of Common Stock purchasable on the exercise of each Warrant is not a whole number, the Company shall not be required to issue any fraction of a share of Common Stock or to distribute stock certificates that evidence fractional shares of Common Stock or to issue a Warrant Certificate representing a fractional Warrant upon exercise of any Warrants. If Warrant Certificates evidencing more than one Warrant shall be surrendered for exercise at one time by the same holder, the number of full shares which shall be issuable upon exercise thereof shall be computed on the basis of the aggregate number of Warrants so surrendered. If any fraction of a share of Common Stock would, except for the provisions of this Section 2.4, be issuable on the exercise of any Warrant or -4- Warrants, the Company shall purchase such fraction for an amount in cash equal to such fraction of the Market Price of a share of Common Stock. The Warrant holders, by their acceptance of the Warrant Certificates, expressly waive their right to receive any fraction of a share of Common Stock or a stock certificate representing a fraction of a share of Common Stock. Section 2.5 Covenant to Reserve Shares for Issuance on Exercise. The --------------------------------------------------- Company covenants that it will at all times reserve and keep available out of its authorized but unissued Common Stock, solely for the purpose of issue upon exercise of Warrants, the full number of Warrant Shares, if any, then issuable if all outstanding Warrants then exercisable were to be exercised. The Company covenants that all Warrant Shares, upon issuance following exercise of the Warrants in respect thereof in accordance with this Agreement, shall be duly and validly issued and fully paid and nonassessable shares of Common Stock. The Company hereby authorizes and directs its current and future transfer agents for the Common Stock and for any shares of the Company's (or any successor entity's) capital stock issuable upon the exercise of any of the Warrants at all times to reserve such number of authorized shares as shall be requisite for such purpose. The Company will supply such transfer agents with duly executed stock certificates for such purposes and will provide or otherwise make available any cash which may be payable as provided in this Article II. Section 2.6 Compliance with Governmental Requirements. Before taking any ----------------------------------------- action that would cause the Warrant Price to be adjusted below the then par value of any of the shares of Common Stock issuable upon exercise of the Warrants, the Company will take any corporate action that may, in the opinion of its counsel, be necessary in order that the Company may validly and legally issue fully paid and nonassessable shares of such Common Stock at such adjusted Warrant Price. Section 2.7 Rights upon Dissolution or Liquidation. Notwithstanding any -------------------------------------- other provision of this Agreement, in the event that, at any time after the date hereof and prior to the Expiration Date, there shall be a voluntary or involuntary dissolution, liquidation or winding up of the Company, then the Company shall give notice by first-class mail to each holder of an outstanding Warrant at such holder's address as it appears on the warrant register maintained by the Warrant Agent at the earliest practicable time (and, in any event, not less than twenty days before any date set for definitive action), of the date on which such dissolution, liquidation or winding up shall take place, as the case may be. Such notice shall also specify the date as of which the holders of the shares of record of Common Stock or other securities, if any, underlying the Warrants shall be entitled to exchange their shares for securities, money or other property deliverable upon such dissolution, liquidation or winding up, as the case may be, on which date each holder of outstanding Warrants shall receive cash or other property (taking into account the Warrant Price then if effect) which it would have been entitled to receive had the Warrants been exercisable and exercised immediately prior to such dissolution, liquidation or winding up and the rights to exercise the Warrants shall terminate. ARTICLE III -5- ADJUSTMENT OF WARRANT PRICE AND NUMBER OF SHARES OF COMMON STOCK PURCHASABLE Section 3.1 Adjustment for Change in Capital Stock. If the Company shall, -------------------------------------- at any time after the date hereof and prior to the Expiration Date, (i) declare or pay a dividend on its outstanding shares of Common Stock or make a distribution to holders of its Common Stock, in either case in shares of Common Stock, (ii) subdivide its outstanding shares of Common Stock into a greater number of shares of Common Stock, (iii) combine its outstanding shares of Common Stock into a smaller number of shares of Common Stock, or (iv) issue, by reclassification of its shares of Common Stock, other securities of the Company, then the number of shares of Common Stock issuable for each Warrant and the Warrant Price in effect immediately prior thereto shall be adjusted so that the holder of any Warrants thereafter exercised shall be entitled to receive the number and kind of shares of Common Stock or other securities that the holder would have owned or been entitled to receive after the happening of any of the events described above had such Warrants been exercised immediately prior to the happening of such event or any record date with respect thereto. An adjustment made pursuant to this Section 3.1 shall become effective on the date of the dividend payment, subdivision, combination or issuance retroactive to the record date with respect thereto, if any, for such event. Section 3.2 Distributions. If after the date hereof and prior to the ------------- Expiration Date the Company shall distribute to all holders of its shares of Common Stock evidences of its indebtedness, shares of another class of capital stock (other than a distribution otherwise constituting an Organic Change for purposes of Section 3.4 hereof) ("Other Shares"), assets (excluding cash ------------ distributions made as a periodic dividend and legally available for dividends under the New Jersey Business Corporation Act) or rights to subscribe to shares of Common Stock, then in each such case, unless the Company elects to reserve such indebtedness, assets, rights or shares for distribution to each holder of a Warrant upon the exercise of the Warrants so that such holder will receive upon such exercise, in addition to the shares of Common Stock to which such holder is entitled, the amount and kind of such indebtedness, assets, rights or shares which such holder would have received if such holder had, immediately prior to the record date for the distribution of such indebtedness, assets, rights or shares, exercised the Warrants and received Common Stock, the Warrant Price in effect immediately prior to such distribution shall be decreased to an amount determined by multiplying such Warrant Price by a fraction, the numerator of which is the Market Price of a share of Common Stock as of the close of business on the business day immediately preceding the record date for the determination of the shareholders entitled to receive such distribution less the fair value as of such record date of the evidences of indebtedness, Other Shares, assets or subscription rights as the case may be, so distributed (as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive, and described in a reasonably detailed statement filed with the Warrant Agent) and the denominator of which is the Market Price of a share of Common Stock as of the close of business on the business day immediately preceding the record date for the determination of the shareholders entitled to receive such distribution. Such adjustment shall be made whenever any such distribution is made, and shall become effective retroactively on the date immediately after the record date for the determination of stockholders entitled to receive such distribution. -6- Section 3.3 No De Minimis Adjustment. No adjustment in the Warrant Price ------------------------ shall be required unless such adjustment would require an increase or decrease of at least 1% in such Warrant Price; provided that any adjustments which by -------- ---- reason of this Section 3.3 are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Article III shall be made to the nearest cent or to the nearest .01 of a share, as the case may be, with one-half cent and .005 of a share, respectively, being rounded upward. Section 3.4 Reorganization, Consolidation, Merger or Sale. Any --------------------------------------------- recapitalization, reorganization, consolidation, merger, sale of all or substantially all of the Company's assets or other transaction, in each case which is effected at any time after the date hereof and prior to the Expiration Date in such a way that the holders of Common Stock are entitled to receive (either directly or upon subsequent liquidation) stock, securities or assets with respect to or in exchange for Common Stock is referred to herein as an "Organic Change." Prior to the consummation of any Organic Change, the Company -------------- shall make appropriate provision to insure that each of the registered holders of the Warrants shall thereafter have the right to acquire and receive upon exercise of such holder's Warrant, in lieu of or addition to (as the case may be) the shares of Common Stock immediately theretofore acquirable and receivable upon the exercise of such holder's Warrant, such shares of stock, securities or assets as may be issued or payable in the Organic Change with respect to or in exchange for the number of shares of Common Stock immediately theretofore acquirable and receivable upon exercise of such holder's Warrant had such Organic Change not taken place. The Company shall not effect any such Organic Change, unless prior to the consummation thereof, the successor entity (if other than the Company) resulting from such consolidation or merger or the entity purchasing such assets assumes by written instrument the obligation to deliver to each such holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, such holder may be entitled to acquire. For purposes of determining the Black Scholes Payment Amount, if holders of Common Stock have any right to select the form or type of consideration to be received in an Organic Change, each Warrant holder shall be deemed to have elected to receive the same proportion of Other Property and Qualifying Common Equity Securities that all holders of Common Stock in the aggregate elected to receive in such Organic Change. In any case, the Company shall make appropriate provision with respect to such holders' rights and interests to insure that the provisions of this Article III and Section 4.4 hereof shall thereafter be applicable to the Warrants. Section 3.5 Notices. ------- (a) Whenever the Warrant Price is adjusted as herein provided, the Company shall file with the Warrant Agent a certificate, signed by the Chairman of the Board, the Chief Executive Officer, the President, any Executive Vice President or any Vice President of the Company, setting forth the Warrant Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment, which certificate shall be conclusive evidence of the correctness of such adjustment; provided that the failure of the Company to file such officers' -------- ---- certificate shall not invalidate any corporate action by the Company. (b) Whenever the Warrant Price is adjusted as provided in Article III, the Company shall cause to be mailed to each holder of Warrants at its then registered address by first-class -7- mail, postage prepaid, a notice of such adjustment of the Warrant Price setting forth such adjusted Warrant Price and the effective date of such adjusted Warrant Price; provided that the failure of the Company to give such -------- ---- notice shall not invalidate any corporate action by the Company. (c) The Company shall give written notice to each registered holder of Warrants at least 10 days prior to the date on which the Company closes its books or takes a record (i) with respect to any dividend or distribution upon the Common Stock (other than cash distributions made as a periodic dividend and legally available for dividends under the New Jersey Business Corporation Act), (ii) with respect to any pro rata subscription offer to holders of Common Stock or (iii) for determining rights to vote with respect to any Organic Change, dissolution or liquidation. (d) The Company shall also give written notice to each registered holder of Warrants at least 10 days prior to the date on which any Organic Change, dissolution or liquidation shall take place. Section 3.6 Statements on Warrants. The form of Warrant Certificate need ---------------------- not be changed because of any adjustment made pursuant to this Article III, and Warrant Certificates issued after such adjustment may state the same Warrant Price and the same number of shares of Common Stock as are stated in the Warrant Certificates initially issued pursuant to this Agreement. The Company, however, may at any time in its sole discretion (which shall be conclusive) make any change in the form of Warrant Certificate that it may deem appropriate and that does not affect the substance thereof, and any Warrant Certificate thereafter issued or countersigned, whether in exchange or substitution for an outstanding Warrant Certificate or otherwise, may be in the form as so changed. ARTICLE IV OTHER PROVISIONS RELATING TO RIGHTS OF HOLDERS OF WARRANT CERTIFICATES Section 4.1 No Rights as Warrant Securityholder Conferred by Warrants or ------------------------------------------------------------ Warrant Certificates. No Warrant Certificates or Warrant evidenced thereby shall - -------------------- entitle the holder thereof to any of the rights of a holder of Warrant Shares, including, without limitation, the right to vote at, or to receive notice of, any meeting of the shareholders of the Company; no such holder, by reason of the ownership or possession of a Warrant or the Warrant Certificate representing the same, either at, before or after exercising such Warrant, shall have any right to receive any cash dividends, stock dividends, allotments or rights, or other distributions (except as specifically provided herein), paid, allotted or distributed or distributable to the shareholders of the Company prior to the date of the exercise of such Warrant; and no such holder shall have any right not expressly conferred by the Warrant or Warrant Certificate that such holder holds. Section 4.2 Lost, Stolen, Mutilated or Destroyed Warrant Certificates. --------------------------------------------------------- Upon receipt by the Warrant Agent of evidence reasonably satisfactory to it and the Company of the ownership of and the loss, theft, destruction or mutilation of any Warrant Certificate and of indemnity reasonably satisfactory to the Warrant Agent and the Company, and, in the case of mutilation, upon surrender thereof to the Warrant Agent for cancellation, then, in the absence of -8- notice to the Company or the Warrant Agent that such Warrant Certificate has been acquired by a bona fide purchaser, the Company shall execute, and an authorized officer of the Warrant Agent shall manually countersign and deliver, in exchange for or in lieu of the lost, stolen, destroyed or mutilated Warrant Certificate, a new Warrant Certificate of the same tenor and evidencing a like number of Warrants. Upon the issuance of any new Warrant Certificate under this Section 4.2, the Company may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other expenses (including the fees and expenses of the Warrant Agent) in connection therewith. Every substitute Warrant Certificate executed and delivered pursuant to this Section 4.2 in lieu of any lost, stolen or destroyed Warrant Certificate shall represent an additional contractual obligation of the Company, whether or not the lost, stolen or destroyed Warrant Certificate shall be at any time enforceable by anyone, and shall be entitled to the benefits of this Agreement equally and proportionately with any and all other Warrant Certificates duly executed and delivered hereunder. The provisions of this Section 4.2 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, lost, stolen or destroyed Warrant Certificates. Section 4.3 Holder of Warrant Certificate May Enforce Rights. ------------------------------------------------ Notwithstanding any of the provisions of this Agreement, any holder of a Warrant Certificate, without the consent of the Warrant Agent, the holder of any Warrant Shares or the holder of any other Warrant Certificate, may, in his or its own behalf and for his or its own benefit, enforce, and may institute and maintain any suit, action or proceeding against the Company suitable to enforce, or otherwise in respect of, his or its right to exercise the Warrants evidenced by his or its Warrant Certificate in the manner provided in his Warrant Certificate and in this Agreement. Section 4.4 Black Scholes Event. ------------------- (a) Within 30 days after the occurrence of any Black Scholes Event (the "Black Scholes Event Date"), the Company or the successor entity (if other than ------------------------ the Company) shall notify the Warrant Agent in writing of such occurrence and shall make an offer to purchase from all holders (the "Black Scholes Offer") all ------------------- outstanding Warrants (other than each holder's Carryover Warrants (if any)) at a purchase price equal to the Black Scholes Payment Amount on the Black Scholes Payment Date in accordance with the procedures set forth in this Section 4.4. (b) Within 30 days of the Black Scholes Event Date, the Company also shall (i) cause a notice of the Black Scholes Offer to be sent at least once to the Dow Jones News Service or similar business news service in the United States and (ii) cause the Warrant Agent to send by first-class mail, postage prepaid to each Warrant holder, at the address appearing in the warrant register, a notice stating: (i) that the Black Scholes Offer is being made pursuant to this Section 4.4 and that all Warrant Certificates tendered will be accepted for payment of the Black Scholes Payment Amount, and otherwise subject to the terms and conditions set forth herein; (ii) the Black Scholes Payment Amount and the purchase date (which shall be a business day no earlier than 20 business days and no later than 30 business days from the date such notice is mailed (the "Black Scholes Payment --------------------- Date")); - ---- -9- (iii) that any Warrant Certificate not tendered will remain outstanding; (iv) that Warrant holders accepting the offer to have their Warrants purchased pursuant to a Black Scholes Offer will be required to surrender the Warrant Certificates representing such Warrants to the Warrant Agent at the address specified in the notice prior to the close of business on the business day preceding the Black Scholes Payment Date; (v) that Warrant holders will be entitled to withdraw their acceptance if the Warrant Agent receives, not later than the close of business on the third business day preceding the Black Scholes Payment Date, a telegram, telex, facsimile transmission or letter setting forth the name of the holder, the number of Warrants delivered for purchase, and a statement that such holder is withdrawing his election to have such Warrants purchased; (vi) that holders whose Warrants are being purchased only in part will be issued new Warrant Certificates representing (1) the unpurchased portion of the Warrants surrendered and (2) the Carryover Warrants (if any); provided -------- that each such new Warrant Certificate issued shall be in denominations of 1 Warrant and integral multiples thereof; (vii) any other procedures that a holder must follow to accept a Black Scholes Offer or effect withdrawal of such acceptance; and (viii) the name and address of the Warrant Agent. On the Black Scholes Payment Date, the Company shall, to the extent lawful, (i) accept for payment Warrants tendered pursuant to the Black Scholes Offer and (ii) deposit with the Warrant Agent money sufficient to pay the Black Scholes Payment Amount for all Warrants (other than the Carryover Warrants (if any)) so tendered. The Warrant Agent shall promptly mail to each holder of Warrants so accepted payment in an amount equal to the applicable Black Scholes Payment Amount, and the Company shall execute and issue, and the Warrant Agent shall promptly authenticate and mail to such holder, a new Warrant Certificate equal to (1) any unpurchased portion of the Warrants surrendered and (2) the Carryover Warrants (if any); provided that each such new Warrant Certificate shall be -------- ---- issued denominations of 1 Warrant and integral multiples thereof. ARTICLE V EXCHANGE AND TRANSFER OF WARRANT CERTIFICATES Section 5.1 Exchange and Transfer of Warrant Certificates. Upon surrender --------------------------------------------- at the corporate office of the Warrant Agent, Warrant Certificates evidencing Warrants may be exchanged for Warrant Certificates in other denominations evidencing such Warrants or the transfer thereof may be registered in whole or in part; provided that such other Warrant Certificates evidence the same -------- ---- aggregate number of Warrants as the Warrant Certificates so surrendered. The Warrant Agent shall keep, at its corporate office, books in which, subject to such reasonable regulations as it may prescribe, it shall register Warrant Certificates and exchanges and transfers of outstanding Warrant Certificates, upon surrender of the Warrant Certificates to the Warrant Agent at its corporate office for exchange or registration of transfer, properly endorsed or accompanied by appropriate instruments of registration of transfer and -10- written instructions for transfer, all in form satisfactory to the Company and the Warrant Agent. No service charge shall be made for any exchange or registration of transfer of Warrant Certificates, but the Company may require payment of a sum sufficient to cover any stamp or other tax or other governmental charge that may be imposed in connection with any such exchange or registration of transfer. Whenever any Warrant Certificates are so surrendered for exchange or registration of transfer, an authorized officer of the Warrant Agent shall manually countersign and deliver to the person or persons entitled thereto a Warrant Certificate or Warrant Certificates duly authorized and executed by the Company, as so requested. The Warrant Agent shall not be required to effect any exchange or registration of transfer which will result in the issuance of a Warrant Certificate evidencing a fraction of a Warrant or a number of full Warrants and a fraction of a Warrant. All Warrant Certificates issued upon any exchange or registration of transfer of Warrant Certificates shall be the valid obligations of the Company, evidencing the same obligations, and entitled to the same benefits under this Agreement, as the Warrant Certificate surrendered for such exchange or registration of transfer. Section 5.2 Treatment of Holders of Warrant Certificates. The Company, the -------------------------------------------- Warrant Agent and all other persons may treat the holder of a Warrant Certificate as the owner thereof for any purpose and as the person entitled to exercise the rights represented by the Warrants evidenced thereby, any notice to the contrary notwithstanding. Section 5.3 Cancellation of Warrant Certificates. Any Warrant Certificates ------------------------------------ surrendered for exchange, registration of transfer or exercise of the Warrants evidenced thereby shall, if surrendered to the Company, be delivered to the Warrant Agent and all Warrant Certificates surrendered or so delivered to the Warrant Agent shall be promptly canceled by the Warrant Agent and shall not be reissued and, except as expressly permitted by this Agreement, no Warrant Certificate shall be issued hereunder in exchange or in lieu thereof. The Warrant Agent shall deliver to the Company from time to time or otherwise dispose of canceled Warrant Certificates in a manner satisfactory to the Company. ARTICLE VI CONCERNING THE WARRANT AGENT Section 6.1 Warrant Agent. The Warrant Agent shall have the powers and ------------- authority granted to and conferred upon it in the Warrant Certificates and hereby and such further powers and authority to act on behalf of the Company as the Company may hereafter grant to or confer upon it. All of the terms and provisions with respect to such powers and authority contained in the Warrant Certificates are subject to and governed by the terms and provisions hereof. Section 6.2 Conditions of Warrant Agent's Obligations. The Warrant Agent ----------------------------------------- accepts its obligations herein set forth upon the terms and conditions hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the holders from time to time of the Warrant Certificates shall be subject: (a) Compensation and Indemnification. The Company agrees promptly to pay -------------------------------- the Warrant Agent the compensation to be agreed upon with the Company for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including counsel fees) incurred by the Warrant Agent in connection with the services rendered -11- hereunder by the Warrant Agent. The Company also agrees to indemnify the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without negligence or bad faith on the part of the Warrant Agent, arising out of or in connection with its acting as Warrant Agent hereunder, as well as the costs and expenses of defending against any claim of such liability. (b) Agent for the Company. In acting under this Warrant Agreement and in --------------------- connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the holders of Warrant Certificates or beneficial owners of Warrants. (c) Counsel. The Warrant Agent may consult with counsel satisfactory to ------- it, and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel. (d) Documents. The Warrant Agent shall be protected and shall incur no --------- liability for or in respect of any action taken or thing suffered by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties. (e) Certain Transactions. The Warrant Agent, and its officers, directors -------------------- and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of holders of Warrant Shares or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. (f) No Liability for Interest. Unless otherwise agreed with the Company, ------------------------- the Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates. (g) No Liability for Invalidity. The Warrant Agent shall have no liability --------------------------- with respect to any invalidity of this Agreement or any of the Warrant Certificates (except as to the Warrant Agent's countersignature thereon). (h) No Responsibility for Representations. The Warrant Agent shall not be ------------------------------------- responsible for any of the recitals or representations herein or in the Warrant Certificates (except as to the Warrant Agent's countersignature thereon), all of which are made solely by the Company. (i) No Implied Obligations. The Warrant Agent shall be obligated to ---------------------- perform only such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be -12- accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of the Warrant Certificates. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in the Warrant Certificates or in the case of the receipt of any written demand from a holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law or otherwise or, except as provided in Section 8.2 hereof, to make any demand upon the Company. Section 6.3 Resignation and Appointment of Successor. The Company agrees, ---------------------------------------- for the benefit of the holders from time to time of the Warrant Certificates, that there shall at all times be a Warrant Agent hereunder until all the Warrants have been exercised or are no longer exercisable. (a) The Warrant Agent may at any time resign as such agent by giving written notice to the Company of such intention on its part, specifying the date on which its desired resignation shall become effective; provided that such date -------- ---- shall not be less than three months after the date on which such notice is given unless the Company otherwise agrees. The Warrant Agent hereunder may be removed at any time by the filing with it of an instrument in writing signed by or on behalf of the Company and specifying such removal and the date when it shall become effective. Such resignation or removal shall take effect upon the appointment by the Company, as hereinafter provided, of a successor Warrant Agent (which shall be a bank or trust company authorized under the laws of the jurisdiction of its organization to exercise corporate trust powers) and the acceptance of such appointment by such successor Warrant Agent. The obligation of the Company under Section 6.2(a) shall continue to the extent set forth therein notwithstanding the resignation or removal of the Warrant Agent. (b) In case at any time the Warrant Agent shall resign, or shall be removed, or shall become incapable of acting, or shall be adjudged as bankrupt or insolvent, or shall commence a voluntary case under the federal bankruptcy laws, as now or hereafter constituted, or under any other applicable federal or state bankruptcy, insolvency or similar law or shall consent to the appointment of or taking possession by a receiver, custodian, liquidator, assignee, trustee, sequestrator (or other similar official) of the Warrant Agent or its property or affairs, or shall make an assignment for the benefit of creditors, or shall admit in writing its inability to pay its debts generally as they become due, or shall take corporate action in furtherance of any such action, or a decree or order for relief by a court having jurisdiction in the premises shall have been entered in respect of the Warrant Agent in an involuntary case under the federal bankruptcy laws, as now or hereafter constituted, or any other applicable federal or state bankruptcy, insolvency or similar law; or a decree or order by a court having jurisdiction in the premises shall have been entered for the appointment of a receiver, custodian, liquidator, assignee, trustee, sequestrator (or similar official) of the Warrant Agent or of its property or affairs, or any public officer shall take charge or control of the Warrant Agent or of its property or affairs for the purpose of rehabilitation, conservation, winding up or liquidation, a successor Warrant Agent, qualified as aforesaid, shall be appointed by the Company by an instrument in writing, filed with the successor Warrant Agent. Upon the appointment as aforesaid of a successor Warrant Agent -13- and acceptance by the successor Warrant Agent of such appointment, the Warrant Agent shall cease to be Warrant Agent hereunder. (c) Any successor Warrant Agent appointed hereunder shall execute, acknowledge and deliver to its predecessor and to the Company an instrument accepting such appointment hereunder, and thereupon such successor Warrant Agent, without any further act, deed or conveyance, shall become vested with all the authority, rights, powers, trusts, immunities, duties and obligations of such predecessor with like effect as if originally named Warrant Agent hereunder, and such predecessor, upon payment of its charges and disbursements then unpaid, shall thereupon become obligated to transfer, deliver and pay over, and such successor Warrant Agent shall be entitled to receive, all monies, securities and other property on deposit with or held by such predecessor, as Warrant Agent hereunder. (d) Any corporation or other entity into which the Warrant Agent hereunder may be merged or converted or any corporation or other entity with which the Warrant Agent may be consolidated, or any corporation or other entity resulting from any merger, conversion or consolidation to which the Warrant Agent, or any corporation or other entity to which the Warrant Agent shall sell or otherwise transfer all or substantially all the assets and business of the Warrant Agent, shall become a party to this Agreement shall be the successor Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto. ARTICLE VII DEFINITIONS The following terms have meanings set forth below: "Affiliate" of any particular Person means (1) any other Person --------- controlling, controlled by or under common control with such particular Person, where "control" means the possession, directly or indirectly, of the power to ------- direct the management and policies of a Person whether through the ownership of voting securities, contract or otherwise or (2) any fellow member of a "group" with such Person (as the term "group" is used under Regulation 13D-G under the Securities Exchange Act of 1934). "Black Scholes Event" shall mean (i) the acquisition in a tender offer or a ------------------- series of related tender offers of 80% or more of the Common Stock, (ii) the acquisition of Common Stock in one or more tender offers and the subsequent merger, within three years of any such tender offer, of the Company with the Person (or an Affiliate or transferee of the Person) that consummated the tender offer, (iii) the consolidation, merger or combination of the Company with another Person (other than a Subsidiary of the Company) or (iv) a sale of all or substantially all of the Company's assets, in each of clauses (i) through (iv) in which any portion of the consideration paid or exchanged for Common Stock, or into which the Common Stock is converted, consists of Other Property. "Black Scholes Payment Amount" shall mean the product of (1) the Black ---------------------------- Scholes Value multiplied by (2) a fraction, (x) the numerator of which is the ---------- -- fair market value of the Other Property received in exchange for a share of Common Stock in a Black Scholes Event taken as a -14- whole as of the Black Scholes Event Date (as determined by an independent investment bank of national standing selected by the Company and determined by customary investment banking practices) and (y) the denominator of which is the Market Price of the Qualifying Common Equity Securities as of the Black Scholes Event Date and the fair market value as of the Black Scholes Event Date (as determined above) of the Other Property received in exchange for a share of Common Stock in a Black Scholes Event (such fraction referred to herein as the "Black Scholes Proportion"). ------------------------ For purposes of determining the Black Scholes Payment Amount, if holders of Common Stock are entitled to receive differing forms or types of consideration in any series of transactions contemplated by clauses (i) and (ii) of the definition of "Black Scholes Event", each Warrant holder shall be deemed to have ------------------- received the same proportion of Other Property and Qualifying Common Equity Securities that all holders of Common Stock in the aggregate elected to receive in such series of transactions. "Black Scholes Payment Date" is defined in Section 4.4(b) hereof. -------------------------- "Black Scholes Value" shall mean the value of a Warrant on a Black Scholes ------------------- Event Date as determined by the board of directors of the Company immediately prior to such Black Scholes Event (based upon the advice of an independent investment bank of national standing selected by the Company) and shall be determined by customary investment banking practices using the Black/Scholes model. For purposes of calculating such amount, (1) the term of the Warrants will be the time from the Black Scholes Event Date to the Expiration Date (or, for purposes of the transactions described in clauses (i) and (ii) of the definition of "Black Scholes Event", the time from the consummation of the ------------------- initial tender offer to the Expiration Date), (2) the assumed volatility will be 25%, (3) the assumed risk-free rate will equal the yield on U.S. Treasury securities with a term comparable to the term of the Warrant (as determined under clause (1) above) and (4) the share price for each share of Common Stock will be the fair market value (as determined by the board of directors of the Company immediately prior to such Black Scholes Event (based upon the advice of an independent investment bank of national standing selected by the Company) and determined by customary investment banking practices) of the Other Property and Qualifying Common Equity Securities received for each share of Common Stock (or, (a) for purposes of the transaction(s) described in clause (i) of the definition of "Black Scholes Event", the weighted average fair market value of the Other ------------------- Property and Qualifying Common Equity Securities received for each share of Common Stock in a series of tender offers (determined as of the date of each tender offer) and (b) for purposes of the transactions described in clause (ii) of the definition of "Black Scholes Event", the weighted average fair market ------------------- value of the Other Property and Qualifying Common Equity Securities received for each share of Common Stock in each tender offer and the subsequent merger (determined as of the date of such occurrence). For illustrative purposes only, an example of the determination of the Black Scholes Amount is attached hereto as Exhibit C. The example of the determination of the Black Scholes Value set --------- forth on Exhibit C shall not be binding on the board of directors or the investment bank selected by the Company in their determination of Black Scholes Value, it being understood that such investment bank's advice may result in a different calculation of Black Scholes Value, despite using the same assumptions set forth above. "Carryover Warrants" shall mean, for each Warrant, that portion of such ------------------ Warrant equal to 1 minus the Black Scholes Proportion. ----- "Common Stock" is defined in the preamble. ------------ -15- "Expiration Date" is defined in Section 2.2 hereof. --------------- "Market Price" means as to any security the average of the closing prices ------------ of such security's sales on the New York Stock Exchange, or, if there have been no sales on such exchange on any day, the average of the highest bid and lowest asked prices on all domestic securities exchanges at the end of such day, or, if on any day such security is not so listed, the average of the representative bid and asked prices quoted in the NASDAQ National Market System as of 4:00 P.M., New York time, on such day, or, if on any day such security is not quoted in the NASDAQ National Market System, the average of the highest bid and lowest asked prices on such day in the domestic over-the-counter market as reported by the NASDAQ National Market System or, if bid and asked prices for the security on each such day shall not have been reported through the NASDAQ National Market System, the average of the bid and asked prices for such date as furnished by any New York Stock Exchange member firm regularly making a market in such security selected for such purpose by the board of directors of the Company or a committee thereof or, if no such quotations are available, the fair market value of such security as determined by a New York Stock Exchange member firm regularly making a market in the Common Stock selected for such purpose by the board of directors of the Company or a committee thereof. In each such case, the average of closing prices of such security's sales shall be averaged over a period of 21 days consisting of the day as of which "Market Price" is being determined and the 20 consecutive business days prior to such day; provided that -------- ---- if such security is listed on any domestic securities exchange the term "business days" as used in this sentence means business days on which such exchange is open for trading. "Organic Change" is defined in Section 3.5 hereof. -------------- "Other Property" means any cash, property or other securities other than -------------- Qualifying Common Equity Securities. "Person" means an individual, a partnership, a joint venture, a ------ corporation, a limited liability company, a trust, an unincorporated organization and a government or any department or agency thereof. "Plan" is defined in the preamble. ---- "Qualifying Common Equity Securities" means the regular common stock of the ----------------------------------- surviving entity in a consolidation, merger, combination or the acquiring entity in a tender offer, except that if the surviving entity or acquiring entity has a parent corporation, it shall be the regular common stock of the parent corporation. Notwithstanding the foregoing, for purposes of the transaction described in clause (i) of the definition of "Black Scholes Event", the ------------------- securities described in the immediately preceding sentence shall constitute Other Property (and not Qualifying Common Equity Securities) unless the acquiring entity commits to consummate a merger with the Company, as promptly as practicable after the tender offer, in which the remaining outstanding shares of Common Stock are entitled to receive the same type and class of securities received in the preceding tender offer. "Warrant" is defined in the preamble. ------- "Warrant Agent" is defined in the preamble. ------------- -16- "Warrant Certificates" is defined in the preamble. -------------------- "Warrant Price" is defined in Section 2.1 hereof. ------------- "Warrant Shares" is defined in the preamble. -------------- ARTICLE VIII MISCELLANEOUS Section 8.1 Amendment. This Agreement may be amended by the Company with --------- the consent of the holders of a majority of the Warrants. This Agreement may also be amended by the Company (without the consent of the holder of any Warrant Certificate) for the purpose of curing any ambiguity, or curing, correcting or supplementing any defective provision contained herein, or making any other provisions with respect to matters or questions arising under this Agreement as the Company and the Warrant Agent may deem necessary or desirable; provided that -------- ---- such action shall not affect adversely the interests of the holders of the Warrant Certificates. Notwithstanding the foregoing, the Company may not increase the Warrant Price, shorten the duration of the Warrants, or change the securities or other property for which Warrants are exercisable without the consent of each of the holders affected thereby. Section 8.2 Payments for Consent. The Company shall not directly or -------------------- indirectly pay or cause to be paid any consideration, whether by way fee or otherwise, to any holder of any Warrants for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of this Agreement or the Warrant Certificates unless such consideration is offered to be paid or agreed to be paid to all holders of the Warrants which so consent, waive or agree to amend in the time frame set forth in solicitation documents relating to such consent, waiver or agreement. Section 8.3 Notices and Demands to the Company and Warrant Agent. If the ---------------------------------------------------- Warrant Agent shall receive any notice or demand addressed to the Company by the holder of a Warrant Certificate pursuant to the provisions of the Warrant Certificates, the Warrant Agent shall promptly forward such notice or demand to the Company. Section 8.4 Addresses. Any communication from the Company to the Warrant --------- Agent with respect to this Agreement shall be addressed to American Security Transfer Company Limited Partnership, One East Fourth Street, 12th Floor, Room 1201, Cincinnati, Ohio 45202 and any communication from the Warrant Agent to the Company with respect to this Agreement shall be addressed to Chiquita Brands International, Inc. 250 East Fifth Street, Cincinnati, Ohio 45202, Attention: General Counsel (or such other address as shall be specified in writing by the Warrant Agent or by the Company). Section 8.5 Applicable Law. The validity, interpretation and performance of -------------- this Agreement and each Warrant Certificate issued hereunder and of the respective terms and provisions thereof shall be governed by, and construed in accordance with, the laws of the State of New Jersey. Section 8.6 Obtaining of Governmental Approvals. The Company will, from ----------------------------------- time to time, take all action which may be necessary to obtain and keep effective any and all permits, -17- consents and approvals of governmental agencies and authorities and securities acts filings under United States Federal and State laws which may be or become requisite in connection with the issuance, sale, transfer, and delivery of the Warrant Shares issued upon exercise of the Warrant Certificates, the exercise of the Warrants, the issuance, sale, transfer and delivery of the Warrants or upon the expiration of the period during which the Warrants are exercisable. Section 8.7 Persons Having Rights Under Warrant Agreement. Nothing in this --------------------------------------------- Agreement shall give to any person other than the Company, the Warrant Agent and the holders of the Warrant Certificates any right, remedy or claim under or by reason of this Agreement. Section 8.8 Headings. The descriptive headings of the several Articles and -------- Sections of this Agreement are inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof. Section 8.9 Counterparts. This Agreement may be executed in any number of ------------ counterparts, each of which as so executed shall be deemed to be an original, but such counterparts shall together constitute but one and the same instrument. Section 8.10 Inspection of Agreement. A copy of this Agreement shall be ----------------------- available at all reasonable times at the principal corporate office of the Warrant Agent for inspection by the holder of any Warrant Certificate. The Warrant Agent may require such holder to submit his Warrant Certificate for inspection by it. * * * * * -18- IN WITNESS WHEREOF, the Company and the Warrant Agent have caused this Agreement to be signed by their respective duly authorized officers, and their respective corporate seals to be affixed hereunto, and the same to be attested by their respective Secretaries or one of their respective Assistant Secretaries, all as of the day and year first above written. CHIQUITA BRANDS INTERNATIONAL, INC. By: ________________________________ Name: ________________________________ Title:________________________________ Attest: __________________________ Title: AMERICAN SECURITY TRANSFER COMPANY LIMITED PARTNERSHIP By: ________________________________ Name: ________________________________ Title:________________________________ Attest: ___________________________ Title: EXHIBIT A FORM OF WARRANT CERTIFICATE [Face of Warrant Certificate] EXERCISABLE ONLY IF COUNTERSIGNED BY THE TRANSFER AGENT AND REGISTRAR AS PROVIDED HEREIN CHIQUITA BRANDS INTERNATIONAL, INC. WARRANTS TO SUBSCRIBE FOR COMMON STOCK VOID AFTER 5 P.M. NEW YORK CITY TIME ON MARCH 19, 2009 THIS CERTIFICATE IS TRANSFERABLE IN CINCINNATI, OHIO OR IN NEW YORK, NEW YORK No. ZQ WS __________ Warrants ------------ This certifies that _________________________________ or its registered assigns is the registered owner of the above indicated number of Warrants, each Warrant entitling such owner to purchase, at any time after March 19, 2002 and on or before 5 P.M., New York City time, on March 19, 2009, one share of Common Stock, par value $0.01 per share (collectively, the "Warrant Shares"), of -------------- Chiquita Brands International, Inc. (the "Company"). The exercise price for each ------- Warrant is initially $19.23 (the "Warrant Price"). No adjustment shall be made ------------- for any dividends on any Warrant Shares issuable upon exercise of any Warrant, as adjusted from time to time pursuant to the terms of the Warrant Agreement. The holder may exercise the Warrants evidenced hereby by providing certain information set forth on the back hereof and by paying in full in cash or by certified check or official bank check or by bank wire transfer, in each case, in immediately available funds, the Warrant Price for each Warrant exercised to the Warrant Agent (as hereinafter defined) and by surrendering this Warrant Certificate, with the purchase form on the back hereof duly executed, at the corporate office of American Security Transfer Company Limited Partnership d/b/a Securities Transfer Company, or its successor as warrant agent (the "Warrant ------- Agent"), currently at the address specified on the reverse hereof, and upon - ----- compliance with and subject to the conditions set forth herein and in the Warrant Agreement (as hereinafter defined). The term "holder" as used herein shall mean the person in whose name at the time this Warrant Certificate shall be registered upon the books to be maintained by the Company for that purpose pursuant to Section 5.1 of the Warrant Agreement. Any whole number of Warrants evidenced by this Warrant Certificate may be exercised to purchase Warrant Shares in registered form in denominations of one Warrant Share and any integral multiples thereof. Upon any exercise of fewer than all of the Warrants evidenced by this Warrant Certificate, there shall be issued to the holder hereof a new Warrant Certificate evidencing the number of Warrants remaining unexercised. This Warrant Certificate is issued under and in accordance with that certain Warrant Agreement, dated as of March 19, 2002 (the "Warrant Agreement") ----------------- by and between the Company and the Warrant Agent, and is subject to the terms and provisions contained in the Warrant Agreement, to all of which terms and provisions the holder of this Warrant Certificate consents by acceptance hereof. Copies of the Warrant Agreement are on file at the above-mentioned office of the Warrant Agent. After countersignature by the Transfer Agent and Registrar and prior to the expiration of this Warrant Certificate, this Warrant Certificate may be exchanged at the corporate office of the Warrant Agent for Warrant Certificates representing the same aggregate number of Warrants. This Warrant Certificate shall not entitle the holder hereof to any of the rights of a holder of the Warrant Shares. This Warrant Certificate shall not be valid or obligatory for any purpose until countersigned by the Transfer Agent and Registrar. Dated as of March ___, 2002 CHIQUITA BRANDS INTERNATIONAL, INC. By: __________________________ Name: __________________________ Title: __________________________ Attest: ______________________________ Title: Countersigned: CHIQUITA BRANDS INTERNATIONAL, INC. As Transfer Agent and Registrar By: _________________________ Authorized Signature -2- [Reverse of Warrant Certificate] Instructions for Exercise of Warrant To exercise the Warrants evidenced hereby, the holder must pay in cash or by certified check or official bank check or by bank wire transfer the Warrant Price in full for Warrants exercised to Chiquita Brands International, Inc., c/o Securities Transfer Company, One East Fourth Street, 12th Floor, Room 1201, Cincinnati, Ohio 45202, which payment and/or wire transfer in immediately available funds must specify the name of the holder and the number of Warrants exercised by such holder. In addition, the holder must complete the information required below and present this Warrant Certificate in person or by mail (certified or registered mail is recommended) to the Warrant Agent at the appropriate address set forth below. To Be Executed Upon Exercise of Warrant The undersigned hereby irrevocably elects to exercise [____________] Warrants, evidenced by this Warrant Certificate, to purchase [____________] shares of the Common Stock (the "Warrant Shares") of Chiquita Brands -------------- International, Inc. and represents that he or it has tendered payment for such Warrant Shares in cash or by certified check or official bank check or by bank wire transfer, in each case in immediately available funds to the order of Chiquita Brands International, Inc. c/o Securities Transfer Company, One East Fourth Street, 12th Floor, Room 1201, Cincinnati, Ohio 45202, Attn., in the amount of $[____________] in accordance with the terms hereof. The undersigned requests that said Warrant Shares be in fully registered form in the authorized denominations, registered in such names and delivered all as specified in accordance with the instructions set forth below. If the number of Warrants exercised is less than all of the Warrants evidenced hereby, the undersigned requests that a new Warrant Certificate representing the remaining Warrants evidenced hereby be issued and delivered to the undersigned unless otherwise specified in the instructions below. Dated: ____________________ Name___________________________ _____________________________ Address________________________ (Insert Social Security or Other Identifying Number of Holder) Signature Guaranteed Signature______________________ ____________________________ (Signature must conform in all respects to name of holder as specified on face of this Warrant Certificate and must bear a signature guarantee by a bank, trust company or member broker of the New York, Midwest or Pacific Stock Exchange) The Warrants evidenced hereby may be exercised by hand or mail at the following address: Chiquita Brands International, Inc. c/o Securities Transfer Company One East Fourth Street, 12/th/ Floor Room 1201 Cincinnati, OH 45202 -2- Assignment [Form of Assignment To Be Executed If Holder Desires To Transfer Warrants Evidenced Hereby] FOR VALUE RECEIVED ______________________________ hereby sells, assigns and transfers unto _____________________________________ ____________________________________ (Please print name) (Please insert social security or other identifying number) _____________________________________ (Address) _____________________________________ (City, including zip code) the Warrants represented by the within Warrant Certificate and does hereby irrevocably constitute and appoint [_______________] Attorney, to transfer said Warrant Certificate on the Books of the within named Company with full power of substitution in the premises. Dated: _________________________ ____________________________________ Signature (Signature must conform in all respects to name of holder as specified on the face of this Warrant Certificate and must bear a signature guarantee by a bank, trust company or member broker of the New York, Midwest or Pacific Stock Exchange) Signature Guaranteed ________________________________ EXHIBIT B If the Cashless Exercise method of purchasing Warrant Shares is elected by a holder, the Company will issue Warrant Shares in accordance with the following formula: X= Y(A-B) ------ A where X= the net number of Warrant Shares to be issued to the holder; Y= the number of Warrant Shares requested to be exercised (including the Warrant Shares evidenced by the portion of the Warrant surrendered to pay the Warrant Price); A= the current Market Price per share of Common Stock; and B= the Warrant Price. EXHIBIT C
--------------------------------------------------------------------------------------------------------------------- Black-Scholes Value per Warrant /(1)/ --------------------------------------------------------------------------------------------------------------------- Common Stock Price -------------- --------- --------- --------- --------- --------- ---------- --------- $10.00 $12.00 $14.39 $16.00 $18.00 $20.00 $22.00 $24.00 -------------- --------- --------- --------- --------- --------- ---------- --------- Remaining 7.0 $1.21 $1.98 $3.10 $3.94 $5.07 $6.28 $7.55 $8.86 Warrant 6.0 0.97 1.66 2.70 3.51 4.60 5.79 7.03 8.33 Term 5.0 0.72 1.33 2.28 3.04 4.10 5.25 6.48 7.77 (years) 4.0 0.48 0.98 1.83 2.54 3.54 4.66 5.87 7.14 3.0 0.27 0.64 1.35 1.99 2.93 4.01 5.19 6.46 2.0 0.10 0.32 0.85 1.38 2.23 3.26 4.43 5.70 1.0 0.06 0.32 0.68 1.39 2.35 3.52 4.82 ----------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------- Black-Scholes Value per Warrant /(2)/ - --------------------------------------------------------------------------------------------------------------------- Common Stock Price -------------- --------- --------- ---------- --------- --------- ---------- --------- $10.00 $12.00 $14.39 $16.00 $18.00 $20.00 $22.00 $24.00 -------------- --------- --------- ---------- --------- --------- ---------- --------- 7.0 $1.19 $1.96 $3.06 $3.90 $5.02 $6.23 $7.49 $8.80 Remaining 6.0 0.95 1.64 2.67 3.47 4.56 5.74 6.98 8.28 Warrant 5.0 0.71 1.31 2.25 3.01 4.06 5.20 6.43 7.71 Term 4.0 0.48 0.97 1.81 2.51 3.51 4.62 5.83 7.10 (years) 3.0 0.27 0.63 1.34 1.97 2.90 3.98 5.16 6.43 2.0 0.10 0.31 0.84 1.37 2.21 3.24 4.40 5.67 1.0 0.01 0.06 0.32 0.68 1.38 2.34 3.50 4.81 - ---------------------------------------------------------------------------------------------------------------
_____________________ /(1)/ Assumes risk-free rate of 4.84%. /(2)/ Assumes risk-free rate of 4.71%
- ----------------------------------------------------------------------------------------------------------------- Black-Scholes Value per Warrant/(3)/ - ----------------------------------------------------------------------------------------------------------------- Common Stock Price -------------- --------- --------- --------- --------- --------- ---------- --------- $10.00 $12.00 $14.39 $16.00 $18.00 $20.00 $22.00 $24.00 -------------- --------- --------- --------- --------- --------- ---------- --------- 7.0 $1.09 $1.80 $2.86 $3.66 $4.75 $5.92 $7.16 $8.44 Remaining 6.0 0.87 1.51 2.49 3.26 4.32 5.46 6.68 7.95 Warrant 5.0 0.65 1.21 2.11 2.84 3.85 4.97 6.17 7.43 Term 4.0 0.44 0.90 1.70 2.37 3.34 4.43 5.60 6.86 (years) 3.0 0.24 0.59 1.26 1.87 2.77 3.82 4.98 6.23 2.0 0.09 0.29 0.79 1.30 2.13 3.13 4.27 5.53 1.0 0.01 0.06 0.30 0.65 1.33 2.28 3.43 4.72 - -----------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------ Black-Scholes Value per Warrant/(4)/ - ------------------------------------------------------------------------------------------------------------------ Common Stock Price -------------- --------- --------- --------- ---------- --------- --------- --------- $10.00 $12.00 $14.39 $16.00 $18.00 $20.00 $22.00 $24.00 -------------- --------- --------- --------- ---------- --------- --------- --------- 7.0 $1.40 $2.24 $3.44 $4.33 $5.52 $6.78 $8.08 $9.43 Remaining 6.0 1.11 1.88 3.00 3.85 5.00 6.23 7.52 8.85 Warrant 5.0 0.83 1.50 2.52 3.33 4.44 5.64 6.91 8.23 Term 4.0 0.56 1.11 2.02 2.77 3.83 4.99 6.23 7.54 (years) 3.0 0.31 0.72 1.49 2.16 3.15 4.26 5.48 6.78 2.0 0.11 0.36 0.92 1.49 2.38 3.44 4.64 5.93 1.0 0.01 0.07 0.34 0.73 1.46 2.45 3.63 4.95 - -----------------------------------------------------------------------------------------------------------
- ----------------------------------- /(3)/ Assumes risk-free rate of 4.00%. /(4)/ Assumes risk-free rate of 6.00%. EX-4 4 dex4.txt FORM OF CERTIFICATE OF ACTIONS Form of Certificate of Actions Taken by Steven G. Warshaw, President Pursuant to Authority Delegated by the Board of Directors of Chiquita Brands International, Inc. and approved by the Court pursuant to the Plan in Approving the Terms of 10.56% Senior Notes due 2009 Steven G. Warshaw, President of Chiquita Brands International, Inc., pursuant to authority delegated by the Board of Directors and approved by the Court pursuant to the Plan, hereby approves the terms of the Company's 10.56% Senior Notes due 2009. This Certificate, referred to herein as a Certificate of Terms, shall constitute a "Board Resolution" as defined in the Indenture. The Company is authorized to issue, pursuant to its Second Amended Plan of Reorganization dated March 8, 2002 under Chapter 11 of the U.S. Bankruptcy Code (the "Plan") and in accordance with the Indenture dated as of March 15, 2002 (the "Indenture") between the Company and Wells Fargo Bank Minnesota, National Association, a national banking association, as Trustee (the "Trustee"), a series of senior debt securities with the following terms: (1) The title of the series of senior debt securities shall be 10.56% Senior Notes due 2009 (the "Notes"). (2) The aggregate principal amount of Notes which may be authenticated and delivered under the Indenture shall be $300,000,000; the aggregate principal amount of Notes being issued under the Plan which may be initially authenticated and delivered under the Indenture pursuant to this Certificate of Terms shall be $250,000,000 (the "Issued Notes"). Pursuant to the Plan, the aggregate principal amount of Issued Notes outstanding may be reduced as a result of undeliverable or unclaimed distributions as of March 19, 2003. To the extent such Issued Notes are undeliverable or unclaimed, they shall be retired to the status of unissued Notes and any interest previously paid with respect thereto shall be reimbursed to the Company. (3) The Notes shall mature on March 15, 2009. (4) Interest in respect of the Notes shall accrue at the rate of 10.56% per annum. Interest in respect of the Issued Notes shall accrue from March 19, 2002. Interest in respect of the Notes shall be payable on Interest Payment Dates of March 15 and September 15 of each year, commencing, in the case of the Issued Notes, September 15, 2002. The Regular Record Dates for interest payable on Interest Payment Dates shall be March 1 and September 1, respectively. This Certificate of Terms provides for the interest rate to increase in certain circumstances. (5) In addition to payment by means provided in the Indenture, and subject to the provisions of Section (12) below, payments in respect of the principal of, premium, if any, and interest on any Notes shall be payable at, and the Notes may be surrendered for registration of transfer or for exchange at, the office or agency of the Company maintained for such purposes, which initially shall be American Security Transfer Company, Limited Partnership d/b/a Securities Transfer Company, Cincinnati, Ohio. (6) Notices and demands to or upon the Company in respect of the Notes and the Indenture may be addressed to the Company at its principal executive offices, 250 East Fifth Street, Cincinnati, Ohio 45202, Attn: General Counsel. (7) Each of the definitions set forth in Exhibit A attached to this resolution shall apply to the Notes and shall be deemed to be incorporated by reference into and made a part of this Certificate of Terms and, with respect to the Notes, of the Indenture. (8) The Notes are subject to redemption on the terms set forth in Exhibit B attached to this Certificate of Terms, which shall be deemed to be incorporated by reference into and made a part of this Certificate of Terms and, with respect to the Notes, of the Indenture. The Notes may also be subject to purchase by the Company prior to maturity, at the option of Holders, pursuant to Section 1014 of Exhibit C attached to this Certificate of Terms. (9) The Company shall have no sinking fund or analogous obligations in respect of the Notes. (10) Each of the covenants set forth in Exhibit C attached to this Certificate of Terms shall apply to the Notes and shall be deemed to be incorporated by reference into and made a part of this Certificate of Terms and, with respect to the Notes, of the Indenture. (11) The Notes shall rank pari passu with other existing and future unsecured senior indebtedness of the Company. (12) The Notes initially shall be issued in the form of one Global Note held in book-entry form; however, beneficial ownership interests in the Notes may be held by purchasers ("Beneficial Owners") in amounts of $1,000 and integral multiples thereof. The Global Note shall be issued in permanent form and shall be deposited with the Depository Trust Company or its nominee ("DTC"), as U.S. Depositary. For so long as DTC serves as U.S. Depositary, the provisions of the Letter of Representations, entered into between the Company and DTC, shall be applicable to the Notes. Beneficial Owners of Notes evidenced by the Global Note will not be considered Holders thereof under the Indenture for any purpose, including with respect to the giving of any directions, instructions or approvals to the Trustee thereunder. (13) The Global Note representing the Notes shall be substantially in the form attached hereto as Exhibit D, with such changes as the officer executing the Global Note may approve, such approval to be conclusively evidenced by the execution thereof by manual or facsimile signature. (14) Claims against the Company in respect of principal and interest on the Notes will be prescribed after ten years (in the case of principal) and five years (in the case of interest) from the relevant payment due date. (15) Owners of book-entry interests in the Global Note will receive definitive registered Notes if DTC, Euroclear Bank S.A./N.V. and Clearstream Banking Luxembourg all notify the Company that they are unwilling or unable to continue as a clearing agency for the Global Note and the Company is not able to appoint at least one qualified successor clearing agent within 90 days. All capitalized terms used but not defined in this Certificate of Terms, including Exhibits A, B, C and D to this Certificate of Terms, shall have the meanings set forth in the Indenture. /s/ Steven G. Warshaw ---------------------------------- Steven G. Warshaw President Exhibit A Definitions "Acquired Indebtedness" means Indebtedness of a Person (i) existing at the time such Person becomes a Subsidiary or (ii) assumed in connection with the acquisition of assets of such Person. "Adjusted Consolidated Assets" on any date means the amount of all assets of the Company and its Subsidiaries on a consolidated basis (excluding applicable depreciation, amortization and other valuation reserves) less (1) all current liabilities of the Company and its Subsidiaries (excluding intercompany items) and (2) all goodwill, trade names, trademarks, patents, unamortized debt discount and expense and other like intangibles, in each case determined as of the last day of the immediately preceding fiscal quarter in accordance with GAAP. "Approved Bank" has the meaning set forth in the definition "Temporary Cash Investments." "Asset Sale" means: (1) the sale, conveyance or other disposition of any assets, other than (a) sales of inventory in the ordinary course of business consistent with past practices; (b) the sale, conveyance or other disposition of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole, or (c) any transaction described in the following paragraph] or (2) the issuance of Equity Interests by any of the Company's Subsidiaries or the sale of Equity Interests in any of its Subsidiaries, other than such an issuance or sale to the Company or one or more of its Subsidiaries. Notwithstanding the foregoing, the following transactions shall not be deemed to be Asset Sales: (1) any single transaction or series of related transactions that: (a) involves assets having a fair market value of less than $5.0 million; or (b) results in Net Proceeds to the Company and its Subsidiaries of less than $5.0 million; (2) a transfer of assets between or among the Company and any one or more of its Subsidiaries; (3) an issuance or transfer of Equity Interests by a Subsidiary to the Company or to another Subsidiary; (4) a Restricted Payment that is permitted by Section 1012; (5) an exchange of assets used in Food-Related Businesses that complies with clauses (1) and (2) of Section 1015(b), except to the extent of any cash when and as received by the Company or any Subsidiary; (6) contribution of assets or stock to, or a merger with, another entity that complies with clauses (1) and (2) of Section 1015(b), if immediately after such transaction the Company will own, directly or indirectly, more than 20% of the total stock or other Equity Interests of such entity, except to the extent of any Net Proceeds when and as received by the Company or any Subsidiary; (7) the sale of farm or other real property and improvements used in agricultural production that complies with clauses (1) and (2) of Section 1015(b), except to the extent of any Net Proceeds when and as received by the Company or any Subsidiary; and (8) sales of Temporary Cash Investments or other ordinary course cash management transactions. "Asset Sale Offer" has the meaning set forth in Section 1015. "Calculation Date" has the meaning specified in the definition "Fixed Charge Coverage Ratio." "Capital Lease Obligation" means, at the time any determination thereof is to be made, the amount of the liability in respect of a capital lease that would at that time be required to be capitalized on a balance sheet in accordance with GAAP. "Change of Control" means an event or series of events by which any of the following occurs: (1) any "Person" is or becomes the "beneficial owner" directly or indirectly, of more than 50% of the total voting power of all outstanding classes of voting capital stock of the Company; (2) the Company consolidates with or merges into another entity or conveys, transfers or leases all or substantially all of its assets in one or a series of transactions to any entity, or any entity consolidates with or merges into the Company and, in connection with the transaction, the outstanding voting shares of the Company are changed into or exchanged for cash, securities or other property, other than a transaction (a) between the Company and a Subsidiary or (b) in which the holders of the outstanding voting shares of the Company immediately prior to the transaction own, directly or indirectly, not less than a majority of the outstanding A-1 voting shares of the surviving entity immediately after the transaction in substantially the same proportion as before the transaction; (3) the Company or any Subsidiary purchases or otherwise acquires, directly or indirectly, beneficial ownership of 40% or more of the Company's capital stock within any 12-month period; (4) the adoption of a plan relating to the liquidation or dissolution of the Company; or (5) on any date, a majority of the Company's Board of Directors does not consist of Persons (a) who were directors at the Effective Date ("Continuing Directors") or (b) whose election or nomination as directors was approved by at least 2/3 of the directors then in office who are Continuing Directors or whose election or nomination was previously so approved. In the definition of Change of Control, "Person" has the same meaning given to it in Sections 13(d) and 14(d) of the Exchange Act, and "beneficial owner" or "beneficially owned" have the same meaning given to these terms in Rules l3d-3 and l3d-5 under the Exchange Act, except that a Person is deemed to have "beneficial ownership" of all shares that Person has the right to acquire, whether the right is exercisable immediately or only after the passage of time. "Common Stock" means the common stock, par value $0.01 per share, of the Company. "Comparable Treasury Issue" means a particular United States treasury security selected by the Company as having a maturity comparable to the earliest optional redemption of the Notes that would be utilized in accordance with customary financial practice, in pricing new issues of corporate debt securities. "Comparable Treasury Yield" means, with respect to any Redemption Date for a redemption under Paragraph 2 of Exhibit B: (a) the yield for the Comparable Treasury Issue (expressed as a yield to maturity) on the third business day preceding such Redemption Date, as set forth under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated "H.15(519)" (or any successor release) published by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States treasury securities adjusted to constant maturity under the caption "Treasury Constant Maturities" or (b) if that release (or any successor release) is not published or does not contain the applicable prices on the applicable business day, the yield to maturity for the Comparable Treasury Issue for that redemption date quoted to the Company by an independent investment banking firm of national standing selected by the Company. "Consolidated Cash Flow" means, with respect to any Person for any period, the Consolidated Net Income of such Person for such period plus: (1) an amount equal to any provision for taxes based on income or profits of such Person and its Subsidiaries for such period, to the extent that such provision for taxes was deducted in computing such Consolidated Net Income; plus (2) Consolidated Interest Expense of such Person and its Subsidiaries for such period, whether paid or accrued and whether or not capitalized (including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings and net payments, if any, pursuant to Hedging Obligations), to the extent that any such expense was deducted in computing such Consolidated Net Income; plus (3) depreciation, amortization (including amortization of goodwill and other intangibles but excluding amortization of prepaid cash expenses that were paid in a prior period) and other non-cash expenses, write-downs, charges or accruals of such Person and its Subsidiaries for such period to the extent that such depreciation, amortization and other non-cash expenses, write-downs, charges or accruals were deducted in computing such Consolidated Net Income; minus (4) non-cash items increasing such Consolidated Net Income for such period, other than items that were accrued in the ordinary course of business; minus (6) cash paid in such period to pay expenses for which non-cash reserves were established in a prior period, in each case, on a consolidated basis and determined in accordance with GAAP. "Consolidated Interest Expense" means for any period the sum of (i) the aggregate of the interest expense on Indebtedness of the Company and its Subsidiaries for such period, on a consolidated basis, plus (ii), without duplication, that portion of capital lease rentals of the Company and its Subsidiaries representative of the interest factor for such period, in each case as determined in accordance with GAAP. A-2 "Consolidated Net Income" means, with respect to any Person for any period, the aggregate of the Net Income of such Person and its Subsidiaries for such period, on a consolidated basis, determined in accordance with GAAP plus, with respect to the Company, all reorganization costs and fresh-start accounting charges recognized in each such period by the Company and deducted in computing Net Income of the Company in connection with its reorganization being consummated on the Effective Date; provided that: (1) the Net Income (but not -------- ---- loss) of any Person that is not a Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid in cash to the specified Person or a Subsidiary thereof; and (2) the cumulative effect of a change in accounting principles, any extraordinary gains or losses and any gains or losses realized in connection with an Asset Sale shall be excluded. Notwithstanding the foregoing, for purposes of Section 1012(a)(3) only, there shall be excluded from Consolidated Net Income that portion, if any, of the Net Income of any Subsidiary that is not permitted, directly or indirectly, to be paid by way of dividend, distribution or loan to stockholders of such Subsidiary by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Subsidiary or its stockholders. "Credit Agreement" means that certain Credit Agreement, dated as of March 7, 2001, by and among Chiquita Brands, Inc., as Borrower, each of the Lenders thereto and Foothill Capital Corporation, as Arranger and Administrative Agent, as amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time. "Default" means an event or circumstance which, upon notice or the passage of time, would constitute an Event of Default. "Disqualified Stock" means any capital stock that, by its terms (or by the terms of any security into which it is convertible, or for which it is exchangeable, in each case at the option of the holder thereof), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 91 days after the date on which the Notes are or become due. Notwithstanding the preceding sentence, any capital stock that would constitute Disqualified Stock solely because the holders thereof have the right to require the Company to repurchase such capital stock upon the occurrence of a Change of Control or an Asset Sale shall not constitute Disqualified Stock if the terms of such capital stock provide that the Company may not repurchase or redeem any such capital stock pursuant to such provisions until after the Company complies with Sections 1014 and 1015. "Effective Date" means the date on or as of which the Issued Notes are issued. "Equity Interests" means capital stock, limited liability company interests, partnership interests or other equity interests or equity securities, and all warrants, options or other rights to acquire such securities (but excluding any debt security that is convertible into, or exchangeable for, such equity interests or equity securities). "Excess Proceeds" has the meaning set forth in Section 1015(d). "Excluded Payments" has the meaning set forth in Section 1012. "Fixed Charge Coverage Ratio" means with respect to any specified Person for any period, the ratio of the Consolidated Cash Flow of such Person and its Subsidiaries for such period to the Fixed Charges of such Person for such period. In the event that the specified Person or any of its Subsidiaries incurs, assumes, guarantees, redeems or acquires any Indebtedness (other than revolving credit borrowings) or issues, redeems or acquires preferred stock subsequent to the commencement of the period for which the Fixed Charge Coverage Ratio is being calculated but prior to the date on which the event for which the calculation of the Fixed Charge Coverage Ratio is made (the "Calculation Date"), then the Fixed Charge Coverage Ratio shall be calculated giving pro forma effect to such incurrence, assumption, guarantee, A-3 redemption or acquisition of Indebtedness, or such issuance, redemption or acquisition of preferred stock, as if the same had occurred at the beginning of the applicable four-quarter reference period. In addition, for purposes of calculating the Fixed Charge Coverage Ratio (1) acquisitions that have been made by the specified Person or any of its Subsidiaries, including through the purchase of assets or stock, mergers, liquidations or consolidations and including any related financing transactions, during the four-quarter reference period or subsequent to such reference period and on or prior to the Calculation Date shall be deemed to have occurred on the first day of the four-quarter reference period and Consolidated Cash Flow for such reference period shall be calculated giving pro forma effect to the transactions taken and without giving effect to any cost savings realized or to be realized in connection therewith resulting from operational synergies; (2) the Consolidated Cash Flow attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded; (3) the Fixed Charges attributable to discontinued operations, as determined in accordance with GAAP, and operations or businesses disposed of prior to the Calculation Date, shall be excluded, but only to the extent that the obligations giving rise to such Fixed Charges will not be obligations of the specified Person or any of its Subsidiaries following the Calculation Date; and (4) with respect to any calculation involving any periods prior to the Effective Date, the determination of the Fixed Charge Coverage Ratio and the elements thereof shall be made on a pro forma basis as if the Notes had been issued, and all other transactions contemplated in connection with the consummation of the reorganization of the Company had occurred on, the first day of such period. "Fixed Charges" means, with respect to any Person for any period, the sum, without duplication, of (1) the Consolidated Interest Expense of such Person and its Subsidiaries for such period, whether paid or accrued; including, without limitation, amortization of debt issuance costs and original issue discount, non-cash interest payments, the interest component of any deferred payment obligations, the interest component of all payments associated with Capital Lease Obligations, commissions, discounts and other fees and charges incurred in respect of letter of credit or bankers' acceptance financings and net payments, if any, pursuant to Hedging Obligations; plus (2) the Consolidated Interest Expense of such Person and its Subsidiaries that was capitalized during such period; plus (3) all dividend payments on any series of preferred stock of such Person or any of its Subsidiaries, other than (a) dividend payments to the Company or its Subsidiaries or (b) dividend payments on such preferred stock payable solely in Equity Interests of such Person (other than Disqualified Stock), in each case on a consolidated basis and as determined in accordance with GAAP. "Food-Related Businesses" means businesses or operations involving food or food products, including any business related, ancillary or complementary thereto; provided that if in the case of any business acquired or joint venture -------- ---- entered into by the Company or any of its Subsidiaries after the Effective Date, such business or joint venture is primarily engaged in one or more Food-Related Businesses, then such acquired business or joint venture shall be deemed to be engaged in Food-Related Businesses. "GAAP" means generally accepted accounting principles as in effect in the United States on the Effective Date. "Hedging Obligations" means, with respect to any Person, the obligations of such Person under (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements; and (2) other agreements or arrangements designed to protect against fluctuations in interest rates, currency exchange rates or specific financial and other similar risks (including commodity risks). "Indebtedness" means, with respect to any specified Person, any indebtedness of such Person, contingent or otherwise, in respect of: (1) borrowed money; (2) evidenced by bonds, notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof); (3) banker's acceptances; (4) representing Capital Lease Obligations; (5) the balance deferred and unpaid of the purchase price of any property, except any such balance that constitutes an accrued expense or trade payable; or (6) representing any Hedging Obligations; if and to the extent any of the preceding (other than letters of credit and Hedging Obligations) would appear as a liability upon a balance sheet of the specified Person prepared in accordance with GAAP. In addition, the term "Indebtedness," with respect to any A-4 Person, includes (a) all Indebtedness of others secured by a Lien on any asset of the specified Person (whether or not such Indebtedness is assumed by the specified Person) (the amount of such Indebtedness as of any date being deemed to be the lesser of the value of such property or assets as of such date or the principal amount of such Indebtedness of such other Person) and, (b) to the extent not otherwise included, the guarantee by the specified Person of any Indebtedness of any other Person. The amount of any Indebtedness outstanding as of any date shall be: (1) the accreted value thereof, in the case of any Indebtedness issued with original issue discount; and (2) the principal amount thereof, together with any interest thereon that is more than 30 days past due, in the case of any other Indebtedness. "Intercompany Debt Obligations" means any Indebtedness of the Company or any of its Subsidiaries which is owed to a different member of the group of the Company and its Subsidiaries. "Investments" means, with respect to any Person, all investments by such Person in other Persons (including Affiliates) in the form of direct or indirect loans (including guarantees of Indebtedness or other obligations), advances or capital contributions (excluding commission, travel and similar advances to officers and employees made in the ordinary course of business), purchases or other acquisitions for consideration of Indebtedness, Equity Interests or other securities, to the extent that such items are or would be classified as investments on a balance sheet prepared in accordance with GAAP; provided, however, that the advancement of funds by the Company or any of its - -------- Subsidiaries in the ordinary course of business to growers or suppliers of food-related products as advances against payment for such products shall not constitute an Investment. Notwithstanding the foregoing, the interest of the Company or any of its Subsidiaries in an entity at the time that such entity ceases to be a Subsidiary of the Company shall not constitute an Investment. "Issued Notes" means $250,000,000 aggregate principal amount of Notes initially authenticated and delivered under the Indenture pursuant to this Certificate of Terms. "Makewhole Rate" means, for any redemption date, the annual rate equal to the yield to maturity, compounded semi-annually, of a selected Comparable Treasury Issue, assuming a yield for the selected Comparable Treasury Issue equal to the Comparable Treasury Yield for the particular redemption date. "Material Subsidiary" means Chiquita Brands, Inc., a Delaware corporation, Chiquita Processed Foods, L.L.C., a Delaware limited liability company, Chiquita International Limited, a Bermuda company, and Great White Fleet Ltd., a Bermuda company, any Subsidiary that controls any such Subsidiary, and any successor to any such entity resulting from the merger of such entity or the sale or transfer of all or substantially all of its assets, so long as such entity or successor is a Subsidiary of the Company. "Moody's" means Moody's Investors Services, Inc. "Net Income" means, with respect to any Person, the net income (loss) of such Person and its Subsidiaries, determined in accordance with GAAP and before any reduction in respect of preferred stock dividends. "Net Proceeds" means the aggregate cash proceeds received by the Company or any of its Subsidiaries in respect of any Asset Sale (including, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received in any Asset Sale), net of (a) the direct costs relating to such Asset Sale, including, without limitation, legal, accounting and investment banking fees, and sales commissions, (b) any relocation expenses incurred as a result thereof, (c) taxes paid or payable as a result thereof, in each case after taking into account any available tax credits or deductions and any tax sharing arrangements, and (d) amounts used to repay Indebtedness secured by a Lien on the asset or assets that were the subject of such Asset Sale. "Notes" means the Company's 10.56% Senior Notes due 2009 issued under the Indenture. A-5 "Permitted Indebtedness" means Indebtedness that falls into any of the following categories: (1) Indebtedness of the Company or any of its direct or indirect Subsidiaries outstanding on the Effective Date (including, for this purpose, the maximum amount of credit under the Credit Agreement and the maximum credit under any other revolving credit facility of any such Subsidiary, whether or not drawn on or available on such date) (other than Indebtedness described in clause (2) below); (2) the Issued Notes; (3) up to an aggregate of $250 million of Indebtedness of the Company or any of its Subsidiaries outstanding under revolving credit, term loan or other facilities (other than publicly traded or privately placed transferable securities issued by the Company, Chiquita Brands, Inc. or any direct or indirect parent of Chiquita Brands, Inc.), reduced by the maximum amount of Indebtedness that may be then borrowed under the Credit Agreement, as each may be amended, restated, modified, renewed, refunded, replaced or refinanced in whole or in part from time to time; provided that -------- ---- the proceeds of Indebtedness permitted under this clause (3) must be invested in, or used in connection with, Food-Related Businesses; (4) Acquired Indebtedness of a Subsidiary incurred in the acquisition of a Food-Related Business; provided that (a) the Company has not guaranteed it and is not -------- ---- otherwise legally liable for it; (b) such Indebtedness is not incurred in contemplation of the acquisition or in connection therewith, or to provide all or any portion of the funds or credit support used to consummate the transaction or series of transactions pursuant to which such Food-Related Business was acquired by the Company or one of its Subsidiaries; and (c) the Company's Fixed Charge Coverage Ratio for the four full fiscal quarters immediately preceding the acquisition, taken as a single period and adjusted to give pro forma effect to the acquisition, is not less than the Company's actual Fixed Charge Coverage Ratio for the same period; provided that this clause (c) shall not be applicable -------- ---- to the incurrence of Indebtedness of Exportadora Chiquita-Enza Chile Ltda. in the event that such entity becomes a Subsidiary of the Company; (5) Indebtedness of the Company or any Subsidiary which is either (a) denominated in or measured by the currency of any country other than the United States, and incurred for hedging purposes in the ordinary course of business consistent with past practice or (b) a guaranty or letter of credit support obligation, not incurred for borrowed money, for Subsidiary Indebtedness incurred for hedging purposes as described in clause (a); (6) Intercompany Debt Obligations between or among the Company and any of its Subsidiaries; provided that any Intercompany Debt -------- ---- Obligations of the Company incurred after the Effective Date other than in connection with Refinancing Indebtedness must be evidenced by an intercompany note; provided, further, that (i) any subsequent issuance or transfer of any -------- ------- Equity Interests that results in such Indebtedness being held by a Person other than the Company or a Subsidiary and (ii) any sale or other transfer of such Indebtedness to a Person other than the Company or a Subsidiary shall each be deemed to be an incurrence of Indebtedness by the obligor if and to the extent that it is the Company or a continuing Subsidiary of the Company; (7) guarantees by a Subsidiary of Indebtedness of an unrelated third party which is involved in a commercial relationship with the Company or a Subsidiary in the ordinary course of business, such as a supplier, customer or service-provider; provided -------- that (a) the Company has not guaranteed it and is not otherwise legally liable - ---- for it, (b) the indebtedness guaranteed under this clause (7) does not exceed an aggregate amount outstanding at any time of $15 million, and (c) the proceeds of the underlying Indebtedness are or have been used by the borrower in Food-Related Businesses; (8) Hedging Obligations that are incurred in the ordinary course of business for the purpose of fixing or hedging interest rate risk, foreign currency risk or specific financial and other similar risks (including commodity risks); and (9) additional Indebtedness (including Acquired Indebtedness) of the Company and its direct and indirect Subsidiaries up to a maximum aggregate amount outstanding at any time of $50 million. "Permitted Investments" means, for any Person, Investments made on or after the Effective Date consisting of: (i) Investments by the Company, or by any of its Subsidiaries, in the Company or a Subsidiary or in a Person, if as a result of such Investment (a) such Person becomes a Subsidiary of the Company or (b) such Person is merged, consolidated or amalgamated with or into, or transfers or conveys substantially all of its assets to, or is liquidated into, the Company or any of its Subsidiaries; (ii) Temporary Cash Investments; (iii) an Investment that is made as a result of the receipt of non-cash consideration from an asset sale (including the contribution of assets to a joint venture) that was made pursuant to, and in compliance with, Section 1015 by the Company or a Subsidiary or as consideration for the consummation of an asset sale that is otherwise permitted hereby; (iv) Investments consisting of (a) purchases and acquisitions of inventory, supplies, materials and equipment, or (b) licenses or leases of intellectual property and other assets, in each case in the ordinary course of business; (v) Investments consisting of (a) loans and advances to employees for reasonable travel, relocation and business expenses in the ordinary course of business not to exceed $5,000,000 in the aggregate at any one time outstanding, (b) loans to A-6 employees of the Company or its Subsidiaries for the sole purpose of purchasing equity of the Company; provided that the amount of any proceeds received by the -------- Company shall be excluded from Section 1012(a)(3)(B) to the extent that any loans relating to such proceeds have not been repaid to the Company, (c) extensions of trade credit in the ordinary course of business, (d) prepaid expenses incurred in the ordinary course of business, and (e) loans made pursuant to agreements and arrangements entered into in connection with the issuance of Common Stock pursuant to the Plan; (vi) Investments existing on the Effective Date; (vii) Investments of the Company in connection with hedging obligations that are incurred in the ordinary course of business for the purpose of fixing or hedging interest rate risk or foreign currency risk or other specific financial and other similar risks (including commodity risks); (viii) Investments consisting of endorsements for collection or deposit in the ordinary course of business; (ix) Investments in suppliers or customers that are in bankruptcy, receivership or similar proceedings or as a result of foreclosure on a secured Investment in a third party received in exchange for or cancellation of an existing obligation of such third party to the Company or a Subsidiary; (x) Investments paid for solely with Equity Securities (other than Disqualified Stock) of the Company; (xi) Investments paid for in cash in Food-Related Businesses (including Investments in Persons primarily engaged in one or more Food-Related Businesses or the holding of Investments therein), provided that -------- ---- such Investments along with the amount of all other Investments made pursuant to this clause (xi) shall not exceed 10% of Adjusted Consolidated Assets at the time any such Investment is made (with each such Investment being valued as of the date made and without regard to subsequent changes in values); (xii) Investments permitted pursuant to clause (7) of the definition of "Permitted Indebtedness"; (xiii) Investments (other than investments specified in clauses (i) through (xii) above); provided that such Investments along with the amount of all other Investments made pursuant to this clause (xiii) shall not exceed $10,000,000 (with each such Investment being valued as of the date made and without regard to subsequent changes in values). If a Permitted Investment made after the Effective Date pursuant to clause (xi) or (xiii) above is sold or redeemed for, or repaid in, cash, the "basket amount" set forth in the applicable clause shall be increased (replenished) by the lesser of (a) the cash return of (and on) capital with respect to such Permitted Investment and (b) the initial amount of such Permitted Investment. If a Permitted Investment made after the Effective Date pursuant to clause (xi) or (xiii) is in any Entity that subsequently becomes a Subsidiary, the "basket" amount set forth in the applicable clause shall thereupon be increased (replenished) by the initial amount of such Permitted Investment. "Permitted Liens" means Liens that fit into any of the following categories: (1) any Liens on assets of the Company or any Subsidiary existing on the Effective Date; (2) Liens on assets acquired after the Effective Date that were existing at the time of the acquisition by the Company or any Subsidiary thereof; provided that such liens were in existence prior to the contemplation -------- ---- of such acquisition; (3) Liens on assets to secure the purchase price of assets to be acquired, but only to the extent that such Liens cover the assets acquired with such Indebtedness; (4) Liens on properties of any Subsidiary which secure such Subsidiary's Indebtedness used for working capital purposes or capital expenditures relating to Food-Related Businesses which Indebtedness is permitted under Section 1011; (5) Liens securing Indebtedness of the Company or any Subsidiary to the extent permitted under clauses (3) and (5) of the definition of Permitted Indebtedness; (6) Liens on an entity or its assets existing at the time the entity becomes a Subsidiary or is merged with the Company or any of its Subsidiaries or assumed in connection with the acquisition of its assets; provided that such Liens were in existence prior to the contemplation of such - -------- ---- acquisition or merger and do not extend to any assets other than those (a) of the Person or Persons that become Subsidiaries or are merged with the Company or (b) acquired by the Company or a Subsidiary; (7) Liens on working capital assets which secure Indebtedness that is permitted under Section 1011; (8) carriers', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens (a) arising in the ordinary course of business and (b) for amounts (i) not overdue for more than 90 days or (ii) being contested in good faith by appropriate proceedings; (9) judgment Liens and other similar Liens arising in the ordinary course of business, provided that (a) the enforcement of the Liens is stayed, -------- ---- (b) the claims secured by the Liens are being actively contested, in good faith and by appropriate proceedings; and (c) the judgment would not otherwise constitute a Default or Event of Default under the Indenture; (10) Liens securing Intercompany Debt Obligations; (11) Liens for taxes not yet due and payable or being contested in good faith, provided that any reserve or other -------- ---- appropriate provision as shall be required in conformity with GAAP shall have been made therefor; (12) Liens on property of a foreign Subsidiary to secure A-7 Indebtedness of that foreign Subsidiary that is otherwise permitted under the terms of the Notes; (13) liens in accordance with customary banking practice to secure Indebtedness in connection with foreign trade; (14) easements, rights-of-way, restrictions and other similar encumbrances to the extent they are incurred in the ordinary course of business; (15) pledges or deposits made in the ordinary course of business in connection with workers' compensation, unemployment insurance and other social security legislation; (16) deposits to secure letters of credit and bank guarantees and the performance of bids, trade contracts (other than for borrowed money), leases, statutory obligations, surety and appeal bonds, performance bonds, interest rate, foreign exchange and commodity hedging transactions and other similar obligations incurred in the ordinary course of business; and (17) any extension, renewal or replacement, or successive extensions, renewals or replacements, in whole or in part, of any of the foregoing; provided that the Lien so extended, renewed or replaced does not extend to any additional property or assets unless otherwise permitted under Section 1009. "Plan" means the Plan of Reorganization of the Company under Chapter 11 of the United States Bankruptcy Code. "Public Equity Offering" means an underwritten primary public offering of the Company's Common Stock pursuant to an effective registration statement under the Securities Act. "Purchase Date" means a date fixed by the Company that is no earlier than 30 days and no later than 60 days after the mailing of notice to Holders of Notes of the occurrence of a Change of Control or after the mailing of an Asset Sale Offer, as the case may be. "Purchase Price" has the meaning set forth in Section 1015. "Refinancing" has the meaning specified in the definition "Refinancing Indebtedness." "Refinancing Indebtedness" means any renewals, extensions, deferrals, amendments, supplements, modifications, exchanges, refundings or other refinancings, whether or not by the same obligor (collectively, "Refinancing") of: (1) any Indebtedness of the Company or any of its Subsidiaries outstanding on the Effective Date, including for this purpose the maximum credit under the Credit Agreement or any other revolving credit facility of any such Subsidiary, whether or not drawn or available on such date or (2) other Indebtedness permitted to be incurred by the Company or any of its Subsidiaries pursuant to the terms of the Notes (including the Notes), but only to the extent that (a) the aggregate amount of Indebtedness represented thereby is not increased by the refinancing, (b) such Refinancing Indebtedness has a final maturity date not earlier than the final maturity date of and has a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being refinanced, (c) such Indebtedness (other than Indebtedness incurred in exchange for, refunding or refinancing of the Notes) is subordinated in right of payment to the Notes to the same extent as the Indebtedness being refinanced and (d) in the case of any Refinancing of the Notes, the Company is the sole obligor on such Refinancing Indebtedness. A "Related Party" means: (1) any individual or entity who directly or indirectly holds 10% or more of any class of the Company's capital stock, (2) any officer or director of the Company or (3) any relative of a Person described in (1) or (2) who is related by blood, marriage or adoption, not more remote than a first cousin. A "Restricted Investment" is an Investment made after the Effective Date other than a Permitted Investment. A "Restricted Payment" occurs if the Company or any of its Subsidiaries, directly or indirectly, does any of the following: (1) either (a) declares or pays any dividend on or makes any distribution in respect of the Company's or any of its Subsidiaries' Equity Interests or to the direct or indirect holders of the Company's or any of its Subsidiaries' Equity Interests in their capacity as such (other than dividends or distributions payable (i) in Equity Interests (other than Disqualified Stock) of the Company or any of its A-8 Subsidiaries or (ii) to the Company or any of its Subsidiaries) or (b) purchases, redeems or retires for value Equity Interests of the Company or any of its Subsidiaries (other than Equity Interests owned by the Company or any of its Subsidiaries); (2) make any principal payment on or with respect to, or redeems, repurchases, defeases or otherwise acquires or retires for value prior to its scheduled maturity, scheduled repayment or scheduled sinking fund payment, any Indebtedness that is subordinated to the Notes or (3) makes any Restricted Investment. "S&P" means Standard and Poor's Rating Services, a division of McGraw Hill, Inc. "Sale and Leaseback Transaction" means any arrangement with any Person providing for the lease by the Company or any of its Subsidiaries of property, which property has been or is to be sold or transferred by the Company or such Subsidiary to such Person in contemplation of such leasing; provided that the definition of "Sale and Leaseback Transaction" shall not include any transaction in which the Company or any of its Subsidiaries sells, and then leases back, (1) any assets with a lease term of three years or less and with the intent that the use of such assets by the Company or its Subsidiaries will be discontinued by the expiration of such period, (2) individual or related items of property that have an aggregate fair market value of $5 million or less, or (3) ships, trucks, containers or other similar equipment purchased by the Company or its Subsidiaries from a Person other than the Company or one its Subsidiaries if, within one hundred twenty (120) days of the such acquisition, a sale and leaseback is consummated. "Securities Act" means the Securities Act of 1933, as amended. "Surviving Entity" has the meaning specified in Section 801. "Temporary Cash Investments" means (i) investments in marketable direct obligations issued or guaranteed by the United States of America, or of any governmental agency or political subdivision thereof, maturing within 365 days of the date of purchase; (ii) investments in certificates of deposit issued by a bank organized under the laws of the United States of America or any state thereof or the District of Columbia, in each case having capital and unimpaired surplus totaling more than $500,000,000 and rated at least A by S&P and A-2 by Moody's (any such bank, an "Approved Bank") maturing within 365 days of purchase; (iii) repurchase obligations with a term of not more than seven (7) days for underlying securities of the types described in clauses (i) and (ii) above entered into with any Approved Bank, (iv) commercial paper or finance company paper issued by any Person incorporated under the laws of the United States or any state thereof and rated at least A by S&P and A-2 by Moody's, in each case maturing within 365 days of purchase; (v) Investments in money market funds that invest substantially all of such funds' assets in the Investments described in the preceding clauses (i) through (iv); and (vi) in the case of the Company's non-U.S. Subsidiaries, short-term investments made in the ordinary course of business and consistent with past practice. "Voting Shares" means stock of the class or classes having general voting power under ordinary circumstances to elect the board of directors, managers or trustees of a corporation (irrespective of whether or not at the time stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency). "Warrant Agreement" means that certain Warrant Agreement, dated as of March 19, 2002, by and between the Company and American Security Transfer Company, Limited Partnership, as Warrant Agent. "Weighted Average Life to Maturity" means, when applied to any Indebtedness at any date, the number of years calculated as a fraction, the numerator of which is a sum determined by adding, for each then remaining installment, sinking fund, serial maturity or other required payment of principal of such Indebtedness, including payment at final maturity, the product of (a) the amount of such payment times (b) the number of years (calculated to the nearest one-twelfth) that will elapse until the making of such payment; and the denominator of which is the then outstanding principal amount of such Indebtedness. A-9 Exhibit B Redemption Provisions The Notes are subject to redemption at the option of the Company, in whole or in part, upon not less than 30 nor more than 60 days' notice, as set forth below. The provisions of Article XI of the Indenture shall apply to any redemption described in Paragraphs 1, 2 or 3 below. 1. Redemption after March 15, 2005. On or after March 15, 2005 the Notes will be subject to redemption at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon to but not including the applicable Redemption Date, if redeemed during the twelve-month period beginning on March 15 of the years indicated below: Year Percentage ---- ---------- 2005 .......... 105.28% 2006 .......... 103.96% 2007 .......... 102.64% 2008 .......... 100.00% provided, however, that if the notice of redemption is mailed prior to an - -------- ------- Interest Payment Date but the Redemption Date falls after the same Interest Payment Date, then the applicable interest shall be paid on the Interest Payment Date and the accrued and unpaid interest to the Redemption Date shall be that interest accruing from the Interest Payment Date to the Redemption Date. 2. Makewhole Redemption. The Company may choose to redeem the Notes at any time prior to March 15, 2005 upon the terms and subject to the conditions set forth in this paragraph. The Company may redeem all or any portion of the Notes, at once or from time to time, after giving the required notice under the Indenture. To redeem the Notes prior to March 15, 2005, the Company must pay a Redemption Price equal to the greater of: (a) 100% of the principal amount of the Notes to be redeemed, and (b) the sum of the present values of (i) the Redemption Price of the Notes at March 15, 2005 (such Redemption Price being 105.28%, as set forth in Paragraph 1 of this Exhibit B to the Certificate of Terms) and (ii) any interest due on the Notes through March 15, 2005, in each case discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the Makewhole Rate plus 25 basis points, plus, in either case, accrued and unpaid interest, if any, to the Redemption Date; provided, however, that if the notice of redemption is mailed prior to an - -------- ------- Interest Payment Date but the Redemption Date falls after the same Interest Payment Date, then the applicable interest shall be paid on the Interest Payment Date and the accrued and unpaid interest to the Redemption Date shall be that interest accruing from the Interest Payment Date to the Redemption Date. Any notice to Holders of Notes of such a redemption shall include the appropriate calculation of the Redemption Price, but is not required to include the Redemption Price itself. The actual Redemption Price, calculated as described above, shall be set forth in an Officers' Certificate delivered to the Trustee no later than two business days prior to the Redemption Date. B-1 3. Equity Clawback. At any time and from time to time, prior to March 15, 2005, the Company may redeem up to a maximum of 35% of the original aggregate principal amount of the Notes with the proceeds of one or more Public Equity Offerings, at a Redemption Price equal to 110.56% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, to the Redemption Date; provided, however, -------- ------- that after giving effect to any such redemption, at least 65% of the original aggregate principal amount of the Notes remains outstanding. Any such redemption shall be made within 75 days of such Public Equity Offering upon not less than 30 nor more than 60 days' prior notice; provided, however, that if the notice of -------- ------- redemption is mailed prior to an Interest Payment Date but the Redemption Date falls after the same Interest Payment Date, then the applicable interest shall be paid on the Interest Payment Date and the accrued and unpaid interest to the Redemption Date shall be that interest accruing from the Interest Payment Date to the Redemption Date. B-2 Exhibit C Covenants SECTION 501A. Additional Events of Default. In addition to the provisions set forth in Section 501, the following shall constitute an "Event of Default": (10) a failure by the Company to comply with its obligations under Section 1014 and Section 1015. SECTION 803. Additional Provisions. In addition to the provisions set forth in Section 801: (a) The Company shall not consolidate with or merge into any other corporation or sell, convey, assign, transfer, lease or otherwise dispose of all or substantially all of its properties and assets as an entirety to any Person unless immediately after giving effect to such transaction (and treating any Indebtedness not previously an obligation of the Company or a Subsidiary which becomes the obligation of the Company or any of its Subsidiaries in connection with or as a result of such transaction as having been incurred at the time of such transaction), either (i) the Company (in the case of clause (i) of Section 801(1) of the Indenture) or the Surviving Entity (in the case of clause (ii) thereof) could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness or Refinancing Indebtedness) pursuant to Section 1011 determined on a pro forma basis as if such transaction had occurred at the beginning of the immediately preceding four-quarter period or (ii) the Fixed Charge Coverage Ratio of the Company (in the case of clause (i) of Section 801(1) of the Indenture) or of the Surviving Entity (in the case of clause (ii) thereof), determined on a pro forma basis as if such transaction had occurred at the beginning of the immediately preceding four-quarter period, would be greater than the actual Fixed Charge Coverage Ratio for the Company for the most recently completed four-quarter period prior to the transaction. (b) Notwithstanding the provisions of Section 803(a), if the Company effects a consolidation, merger or sale, conveyance, assignment, transfer, lease or other disposition of substantially all of its assets, the condition set forth in clause (a) above shall not apply to a transaction involving a Surviving Entity which is otherwise subject to the foregoing provisions if (i) the Surviving Entity (1) was formed for the purpose of effecting such transaction, (2) did not engage in any business prior to such transaction, (3) immediately prior to such transaction had no Indebtedness or liabilities, contingent or otherwise, of any kind whatsoever, (4) immediately after such transaction had no additional "Indebtedness" or "liabilities", contingent or otherwise, of any kind whatsoever in excess of that which the Company had immediately prior to such transaction and (5) immediately after such transaction was engaged in the same business as the Company was engaged in immediately prior to such transaction and (ii) the holders of the outstanding Voting Shares of the Company immediately prior to the transaction own, directly or indirectly, the outstanding Voting Shares of the Surviving Entity immediately after the transaction in substantially the same proportion as before the transaction. SECTION 902A. Supplemental Indentures with Consent of Holders. In addition to the provisions set forth in Section 902, no supplemental indenture shall, without the consent of the Holders of each Outstanding Note affected thereby: (12) make any change to Section 1014 after a Change of Control has occurred. SECTION 1009. Limitations on Liens. The Company will not, and will not permit any Subsidiary to, create, assume, incur or permit any Lien upon any of their respective assets without providing for all the Notes to be secured equally and C-1 ratably with the Indebtedness or other obligations secured by such Lien, so long as any such Indebtedness or other obligations shall be so secured, except for (i) Permitted Liens and (ii) Liens, not including Permitted Liens, which at any time secure Indebtedness in an amount up to $50 million; provided that the -------- ---- amount available for these Liens must be reduced by the aggregate "value" of Sale and Leaseback Transactions entered into and permitted pursuant to Section 1010(b); provided, further, that in no case will the amount set forth in clause -------- ------- (ii) be reduced below zero. SECTION 1010. Limitation on Sale and Leaseback Transactions. (a) The Company will not, and will not permit any of its Subsidiaries to, enter into any Sale and Leaseback Transaction. (b) Notwithstanding Section 1010(a), the Company or any of its Subsidiaries may enter into a Sale and Leaseback Transaction if (1) the Company or such Subsidiary, as applicable, could have (A) incurred Indebtedness under Section 1011(a) in an amount equal to the Indebtedness required to be recorded under GAAP relating to such Sale and Leaseback Transaction and (B) incurred a Lien to secure such Indebtedness pursuant to Section 1009; and (2) the gross cash proceeds of the Sale and Leaseback Transaction are at least equal to the fair market value of the property that is the subject of such Sale and Leaseback Transaction. In the case of any Sale and Leaseback Transaction of an individual item of property having a fair market value $10 million or more, such fair market value shall be set forth in an Officers' Certificate delivered to the Trustee. (c) The term "value" shall, for the purpose of this Section 1010 and Section 1009, mean, with respect to a Sale and Leaseback Transaction, as of any particular time, the amount equal to the greater of (i) the net proceeds of the sale of the property leased pursuant to such Sale and Leaseback Transaction or (ii) the fair market value of such property at the time of entering into such Sale and Leaseback Transaction, in each such case divided first by the number of full years of the term of the lease and then multiplied by the number of full years of such term remaining at the time of determination, without regard to any renewal or extension options contained in the lease. SECTION 1011. Limitation on Indebtedness. (a) The Company will not, and will not permit any Subsidiary to, create, incur, assume or guarantee the payment of any Indebtedness (including Acquired Indebtedness), and the Company will not issue any Disqualified Stock and will not permit any of its Subsidiaries to issue any shares of Disqualified Stock to any Person other than the Company or its Subsidiaries unless, after giving effect to the transaction, the Company's Fixed Charge Coverage Ratio for the four full fiscal quarters immediately preceding the transaction for which internal financial statements are available immediately preceding the date of such transaction, taken as a single period, is (1) if, at the Calculation Date (as defined in the definition of Fixed Charge Coverage Ratio), the most recent fiscal quarter for which internal financial statements are available ended on or prior to December 31, 2002, 2.0 to 1 or greater, determined on a pro forma basis (including a pro forma application of the net proceeds therefrom) as if the additional Indebtedness had been incurred or the Disqualified Stock had been issued, as the case may be, at the beginning of such four-quarter period and (2) if at the Calculation Date the most recent fiscal quarter for which internal financial statements are available ended on or after March 31, 2003, 2.5 to 1 or greater, determined on the same pro forma basis. (b) Notwithstanding Section 1011(a), the Company and its Subsidiaries may create or incur Permitted Indebtedness and Refinancing Indebtedness. (c) For the purposes of determining any particular amount of Indebtedness, there shall not be included the amount of any guarantees of (or obligations with respect to letters of credit supporting, or joint or joint and several obligations in respect of) Indebtedness, the amount of which is otherwise included. For purposes of determining compliance with Section 1011(b), in the event that an item of Indebtedness meets the criteria of more than one of the clauses of the definition of Permitted Indebtedness or Refinancing Indebtedness, the Company, in its sole discretion, shall classify such item of Indebtedness and shall be required to include the amount and type of such Indebtedness in only one of such clauses. C-2 SECTION 1012. Limitation on Restricted Payments. (a) The Company will not, and will not permit any Subsidiary, directly or indirectly, to make any Restricted Payment unless, at the time and after giving effect to the proposed Restricted Payment, the following conditions are met: (1) no Default or Event of Default under the Indenture shall have occurred and be continuing (or would result therefrom), (2) at the time of and after giving effect to any proposed Restricted Payment, the Company would be able to incur at least $1.00 of Indebtedness under Section 1011(a); and (3) such payment, along with the aggregate amount of all Restricted Payments declared or made on or after the Effective Date may not exceed the sum of (A) 50% of the Company's total Consolidated Net Income accrued on a cumulative basis during the period beginning on the first day of the fiscal quarter in which the Effective Date occurs and ending on the last day of its last fiscal quarter ending prior to the date of the proposed Restricted Payment for which internal financial statements are available (or if such aggregate cumulative Consolidated Net Income is a loss, minus 100% of such loss); plus (B) the aggregate net cash proceeds received by the Company on or after the Effective Date (i) as capital contributions or (ii) from the issuance and sale of (x) Equity Interests of the Company to any Person or entity other than a Subsidiary, excluding the issuance or sale of Disqualified Stock or (y) any other securities of the Company which (a) are convertible into or exchangeable or exercisable for Equity Interests of the Company, other than Disqualified Stock and (b) have been converted, exchanged or exercised; plus (C) to the extent that any Restricted Investment that was made after the Effective Date is sold or redeemed for, or repaid in, cash, the lesser of (i) the cash return of (and on) capital with respect to such Restricted Investment (less the cost of disposition, if any) and (ii) the initial amount of such Restricted Investment plus (D) the initial amount of any Restricted Investment(s) made after the Effective Date in an Entity that subsequently becomes a Subsidiary. If a Restricted Payment having a value in excess of $10 million is not made in cash, its value must be determined by the Company's board of directors, evidenced by a resolution of the board of directors. (b) The provisions of Section 1012(a) shall not prohibit the following (the "Excluded Payments"): (1) so long as no Default or Event of Default shall have occurred and be continuing (or would result therefrom), any Restricted Payment which, together with all other Restricted Payments made pursuant to this clause (1) on or after the Effective Date, does not exceed $25 million; (2) the payment of any dividend, within 60 days after it was declared, if at the date it was declared, the payment would have been permitted; (3) the making of any Investment or the redemption, repurchase, retirement, defeasance or other acquisition of any Equity Interests of the Company (or subordinated Indebtedness of the Company or its Subsidiaries) in exchange for, or out of the proceeds of the sale (other than to a Subsidiary of the Company) of, any Equity Interests of the Company (other than any Disqualified Stock); provided that, in -------- ---- each such case, the amount of any such net cash proceeds that are so utilized shall be excluded from clause (3)(B) of Section 1012(a); (4) the payment of any dividend by a Subsidiary of the Company to the holders of its common Equity Interests, or a redemption of its Equity Interests, on a pro rata basis; (5) the repurchase, redemption or other acquisition or retirement for value of any Equity Interests of the Company held by any current or former director, officer, employee or agent of the Company (or any of its Subsidiaries) pursuant to any management equity subscription agreement, stock option agreement or other employee benefit plan or arrangement in effect on the Effective Date or adopted or approved thereafter by the Company's board of directors; provided that the -------- ---- aggregate price paid for all such repurchased, redeemed, acquired or retired Equity Interests pursuant to this clause (5) shall not exceed $5 million in any twelve-month period; (6) the periodic purchase of Equity Interests of the Company for contribution to employee benefit plans not to exceed $5 million in any twelve-month period; (7) the purchase of Equity Interests of the Company deemed to occur upon the exercise of stock options or warrants if such Equity Interests represent all or a portion of the exercise price of (or taxes in respect of the exercise of) such options or warrants; (8) the payment of the Black Scholes Payment Amount (as defined in the Warrant Agreement); (9) the payment of the Subclass 4B Supplemental Distribution (as defined in the Plan); or (10) a Subsidiary of the Company declaring or making payment of a dividend on, or making of any distribution in respect of or repurchasing or redeeming, its Equity Interests on a basis that is not on a pro rata basis to all holders of its Equity Interests; provided that such dividend, distribution, repurchase -------- ---- or redemption is consistent with the priority and proportionate to the amount of the corresponding investment in such Subsidiary's Equity Interest. C-3 (c) Not later than five days after the making of a Restricted Payment (other than an Excluded Payment) which exceeds $5.0 million, the Company shall deliver to the Trustee an Officer's Certificate stating that the Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 1012 were computed. SECTION 1013. Transactions with Related Persons. (a) The Company will not, and will not permit any Subsidiary to, directly or indirectly enter into any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Related Person unless the following conditions are met: (1) the transaction or series of transactions must be on terms which are as favorable to the Company or the Subsidiary, as the case may be, as would be available in a comparable transaction with an unrelated third party; (2) if the transaction or series of transactions involves aggregate payments of $5 million or more, then the Company must, within 20 days, deliver an Officer's Certificate to the Trustee for the Notes certifying that the transaction complies with clause (1) above; (3) if the transaction or series of transactions involves aggregate payments of $10 million or more, then the transaction or series of transactions must be approved by the Company's board of directors, including the approval of a majority of directors who are not Related Persons in connection with the transaction or transactions being approved; and (4) if the transaction or series of transactions involves aggregate payments of $25 million or more, then the Company must deliver to the Trustee an opinion as to the fairness from a financial point of view to the Company and its Subsidiaries, taken as a whole, of such transaction or series of transactions issued by an accounting, appraisal or investment banking firm of national standing. (b) The provisions of Section 1013(a) shall not prohibit any employment arrangement or transactions relating to benefit plans with any employee, consultant or director of the Company or any Subsidiary that is entered into by the Company or any Subsidiary in the ordinary course of business and consistent with past practices of the Company or such Subsidiary; (2) payment of reasonable directors' fees; (3) loans and advances to employees of the Company or any Subsidiary in the ordinary course of business otherwise permitted pursuant to the term of the Notes; (4) Restricted Payments that are permitted pursuant to Section 1012; (5) issuances of Equity Interests by the Company; and (6) any transaction between or among the Company and one or more of its Subsidiaries or among one or more Subsidiaries of the Company entered into in the ordinary course of business. SECTION 1014. Purchase of Notes upon a Change of Control. (a) In the event that there occurs at any time a Change of Control, each Holder of Notes shall have the right, at such Holder's option, to require the Company to purchase all or any part (in integral multiples of $1,000) of such Holder's Notes on the Purchase Date at a purchase price (the "Purchase Price") payable in cash of 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the Purchase Date (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date), in accordance with the procedures set forth in Subsections (b) and (c) of this Section. (b) Within thirty days following any Change of Control, the Company shall send by first-class mail, postage prepaid, to the Trustee and to each Holder of Notes, at his address appearing in the Debt Security Register, a notice stating: (1) that a Change of Control has occurred and that such Holder has the right to require the Company to purchase such Holder's Notes at the Purchase Price (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date), together with such information as the Company deems relevant or as may be required to be disclosed pursuant to applicable securities or other laws regarding such Change of Control; (2) the Purchase Date; C-4 (3) the Purchase Price; (4) the place at which Notes are to be presented and surrendered for purchase; and (5) that interest accrued to the Purchase Date will be paid as specified in such notice and that, unless the Company shall default in payment of the Purchase Price, after the Purchase Date interest thereon will cease to accrue with respect to any Notes presented and surrendered for purchase. (c) Holders of Notes electing to have such Notes purchased will be required to surrender such Notes to the Company at the address specified in the notice by the close of business on the fifteenth day prior to the Purchase Date. Any such surrender of Notes for purchase by the Company shall be irrevocable. No Notes shall be deemed to have been presented and surrendered until such Notes are actually received by the Company or its designated agent. Holders of Notes whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered. (d) Notwithstanding anything to the contrary herein or in the Debt Securities of any series, the Company shall not be obligated to give notice to Holders of Debt Securities of any series or to purchase Debt Securities with respect to more than one Change of Control. SECTION 1015. Limitation on Sale of Assets. (a) The sale, conveyance or other disposition of all or substantially all of the assets of the Company and its Subsidiaries taken as a whole will be governed by the provisions of Section 1014 and/or the provisions of Section 801 and not by the provisions of this Section 1015. (b) The Company will not, and will not permit any of its Subsidiaries to, consummate an Asset Sale unless (1) the Company (or the Subsidiary, as the case may be) receives consideration at the time of such Asset Sale at least equal to the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of; (2) if the fair market value of the assets or Equity Interests issued or sold or otherwise disposed of is greater than $25 million, the Asset Sale is approved by the Company's board of directors; and (3) at least 75% of the consideration received by the Company or such Subsidiary for the assets or Equity Interests issued or sold is in the form of cash. For purposes of this Section 1015, each of the following shall be deemed to be cash: (a) any liabilities (as shown on the Company's or such Subsidiary's most recent balance sheet), of the Company or any Subsidiary (other than contingent liabilities and liabilities that are by their terms subordinated to the Notes) that are assumed by the transferee of any such assets; and (b) any securities, notes or other obligations received by the Company or any such Subsidiary from such transferee that are converted by the Company or such Subsidiary into cash within 90 days thereafter (to the extent of the cash received in that conversion). (c) Within 360 days after the receipt of any Net Proceeds from an Asset Sale, the Company or any of its Subsidiaries may apply such Net Proceeds at their option (1) to permanently repay indebtedness under any credit facility of the Company or any of its Subsidiaries; (2) to purchase, or commit to purchase, the assets of, or a majority of the voting Equity Interests of, a Food-Related Business; (3) to make, or commit to make, a capital expenditure; or (4) to acquire, or commit to acquire, other assets that are used or useful in, or ancillary to, a Food-Related Business that is owned by the Company or any of its Subsidiaries; provided that if any such commitment terminates for any -------- ---- reason, the Company shall, within 45 days after such termination, apply such Net Proceeds in accordance with the provisions of this Section 1015(c) or Section 1015(d). Pending the final application of any such Net Proceeds, the Company or any of its Subsidiaries may temporarily reduce revolving credit borrowings or otherwise invest such Net Proceeds in any manner that is not prohibited by the terms of the Notes. (d) Any Net Proceeds from Asset Sales that are not applied or invested as provided in the preceding paragraph, other than any such Net Proceeds held by a Subsidiary of the Company to the extent that such Subsidiary is restricted, by law, its charter or other governing instruments or any agreement, from C-5 transferring such Net Proceeds to the Company or any of its Subsidiaries, whether by dividend or otherwise, will constitute "Excess Proceeds." Within 15 days after the aggregate amount of Excess Proceeds exceeds $25 million, the Company will make an offer (an "Asset Sale Offer") to all holders of Notes, and all holders of other Indebtedness that is pari passu with the Notes containing provisions similar to those set forth in this Section 1015, to purchase the maximum principal amount of Notes and such other pari passu Indebtedness that may be purchased out of such Excess Proceeds. The offer price in any Asset Sale Offer with respect to the Notes will be equal to 100% of the aggregate principal amount outstanding plus accrued and unpaid interest, if any, to the date of purchase (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date), and will be payable in cash. (e) The Asset Sale Offer shall be made by first-class mail, postage prepaid, to the Trustee and to each Holder of Notes, at his address appearing in the Debt Security Register. The notice shall state: (1) that such Holder has the right to require the Company to purchase such Holder's Notes at the purchase price set forth above (subject to the right of Holders of record on the relevant record date to receive interest on the relevant interest payment date), together with such information as the Company deems relevant or as may be required to be disclosed pursuant to applicable securities or other laws regarding such Asset Sale Offer; (2) the purchase price set forth above; (3) the Purchase Date; (4) the place at which Notes are to be presented and surrendered for purchase; and (5) that interest accrued to the Purchase Date will be paid as specified in such notice and that, unless the Company shall default in payment of the purchase price, after the Purchase Date interest thereon will cease to accrue with respect to any Notes presented and surrendered for purchase. (f) Holders of Notes electing to have such Notes purchased will be required to surrender such Notes to the Company at the address specified in the notice by the close of business on the fifteenth day prior to the Purchase Date. Any such surrender of Notes for purchase by the Company shall be irrevocable. No Notes shall be deemed to have been presented and surrendered until such Notes are actually received by the Company or its designated agent. Holders of Notes whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered. (g) If any Excess Proceeds remain after consummation of an Asset Sale Offer, the Company may use such Excess Proceeds for any purpose not otherwise prohibited by the terms of the Notes. If the aggregate principal amount of Notes and such other pari passu Indebtedness tendered into such Asset Sale Offer exceeds the amount of Excess Proceeds, the Trustee shall select the Notes and such other pari passu Indebtedness to be purchased on a pro rata basis. Upon completion of each Asset Sale Offer, the amount of Excess Proceeds shall be reset at zero. SECTION 1016. Dividend and Other Payment Restrictions Affecting Subsidiaries. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, create or agree to any encumbrance or restriction on the ability of any Subsidiary to (a) pay dividends or make any other distributions on its capital stock to the Company or any of the Company's Subsidiaries, or with respect to any other interest or participation in, or measured by, its profits, or (b) pay any Indebtedness owed to the Company or any of the Company's Subsidiaries which own, directly or indirectly, any of such Subsidiary's Equity Interests or (c) make loans or advances to the Company or any of the Company's Subsidiaries; except for encumbrances or restrictions existing under or by reason of (1) existing Indebtedness as in effect on the Effective Date; (2) the Indenture and the Notes; (3) applicable law; (4) any C-6 agreement or instrument applicable to or binding on a Person acquired by the Company or any of its Subsidiaries as in effect at the time of such acquisition (except to the extent such agreement or instrument was entered into in connection with or in contemplation of such acquisition), which encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Person, or the property or assets of the Person, so acquired, provided that, in the case of such acquired Person's Indebtedness, -------- ---- such Indebtedness was permitted to be incurred by the terms of the Notes; (5) any agreement for the sale or other disposition of a Subsidiary that restricts distributions by such Subsidiary pending its sale or other disposition; (6) Refinancing Indebtedness if (A) the encumbrances or restrictions, taken as a whole, are not materially more restrictive than is customary in comparable financings (as determined in good faith by the Company); (B) any such encumbrances or restrictions will not materially adversely affect the Company's ability to make principal or interest payments on the Notes (as determined in good faith by the Company) and (C) the Company delivers an Officer's Certificate to the Trustee stating that the incurrence of such Refinancing Indebtedness complies with this clause; (7) provisions with respect to the disposition or distribution of assets or property in joint venture agreements and other similar agreements entered into in the ordinary course of business; and (8) restrictions on cash or other deposits or net worth under contracts entered into in the ordinary course of business. SECTION 1017. Business Activities. The Company will not, and will not permit any Subsidiary to, engage in any business other than Food-Related Businesses. SECTION 1018. Reports. Whether or not required by the Commission, so long as any Notes are outstanding, the Company will file with the Commission (or, if the Commission will not accept such filings, furnish to the Trustee) within the time periods specified in the Commission's rules and regulations (1) all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations" and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants; and (2) all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports. SECTION 1019. Rating. The Company shall use its reasonable best efforts to obtain a rating for the Notes from either Moody's or S&P. The Company shall notify the Trustee and Debt Security Registrar of such rating, including the date received, prior to the next succeeding Interest Payment Date. In the event that no such rating is obtained within one year following the Effective Date, the annual interest rate on the Notes shall increase by 0.50% from the first anniversary of the Effective Date until the day such rating is obtained, whereupon the interest rate will, from that day forward, revert to the original annual rate of the Notes. SECTION 1020. Payments for Consent. The Company will not, and will not permit any of its Subsidiaries to, directly or indirectly, pay or cause to be paid any consideration to or for the benefit of any Holder of Notes for or as an inducement to any consent, waiver or amendment of any of the terms or provisions of the Indenture or the Notes unless such consideration is offered to be paid and is paid to all Holders of the Notes that consent, waive or agree to amend such terms and provisions in the time frame set forth in the solicitation documents relating to such consent, waiver or agreement. C-7 SECTION 1021. Defeasance of Certain Obligations. The Company may omit to comply with any term, provision or condition set forth in Sections 803(a), 1009, 1010, 1011, 1012, 1013, 1014, 1015, 1016, 1017, 1018 and 1019 of this Certificate of Terms and any such omission with respect to such Sections shall not be an Event of Default, in each case with respect to the Notes, provided that the following conditions have been -------- ---- satisfied: (1) with respect to all Outstanding Notes not theretofore delivered to the Trustee for cancellation, the Company shall have deposited or caused to be deposited with the Trustee for the Notes as trust funds or obligations in trust an amount of cash, U.S. Government Obligations or a combination of cash and U.S. Government Obligations, in each case in an amount which, together with, as evidenced by a Certificate of a Firm of Independent Public Accountants delivered to such Trustee, the predetermined and certain income to accrue on any U.S. Government Obligations when due (without the consideration of any reinvestment thereof) is sufficient to pay and discharge when due the entire indebtedness on all such Outstanding Notes for unpaid principal and interest to the Stated Maturity or any Redemption Date, as the case may be; (2) such deposit will not result in a breach or violation of, or constitute a default under, the Indenture or any other agreement or instrument to which the Company is a party or by which it is bound; (3) no Event of Default or event which with the giving of notice or lapse of time, or both, would become an Event of Default with respect to the Notes shall have occurred and be continuing on the date of such deposit and no Event of Default under Section 501(6) or Section 501(7) of the Indenture or event which with the giving of notice or lapse of time, or both, would become an Event of Default under Section 501(6) or Section 501(7) of the Indenture shall have occurred and be continuing on the 91st day after such date; (4) the Company has delivered to the Trustee an Opinion of Counsel to the effect that the trust resulting from the deposit does not constitute, or is qualified as, a regulated investment company under the Investment Company Act of 1940; (5) the Company has delivered to the Trustee an Opinion of Counsel stating that the Holders will not recognize income, gain or loss for Federal income tax purposes as a result of such defeasance and will be subject to Federal income tax on the same amounts, in the same manner and at the same times as would have been the case if such defeasance had not occurred; and (6) the Company has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel, each stating that all conditions precedent herein provided for relating to the defeasance contemplated in this Section have been complied with. All the obligations of the Company under the Indenture with respect to the Notes, other than with respect to Section 803(a) and Sections 1009 through 1019 hereof, shall remain in full force and effect. Anything in this Section 1021 to the contrary notwithstanding, the Trustee for the Notes shall deliver or pay to the Company, from time to time upon Company Request, any money or U.S. Government Obligations held by it as provided in this Section 1021 which, as expressed in a Certificate of a Firm of Independent Public Accountants delivered to such Trustee, are in excess of the amount thereof which would then have been required to be deposited for the purpose for which such money or U.S. Government Obligations were deposited or received, provided such delivery can be made without liquidating any U.S. Government Obligations. C-8 EXHIBIT D Form of Global Note Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC"), to the Company or its agent for registration of transfer, exchange, or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. This Debt Security may not be transferred except as a whole by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary, unless and until this Debt Security is exchanged in whole or in part for Debt Securities in definitive form. Note No. _____ $250,000,000 CHIQUITA BRANDS INTERNATIONAL, INC. 10.56% SENIOR NOTE DUE 2009 CUSIP 170032 AN 6 CHIQUITA BRANDS INTERNATIONAL, INC., a New Jersey corporation (herein called the "Company") which term includes any successor corporation under an Indenture hereinafter referred to, for value received, hereby promises to pay to Cede & Co. or registered assigns upon presentation and surrender of this Senior Note the principal sum of TWO HUNDRED FIFTY MILLION DOLLARS (U.S. $250,000,000) on March 15, 2009, and to pay interest thereon on September 15, 2002 and thereafter on March 15 and September 15 in each year, accruing from March 19, 2002 or from the most recent Interest Payment Date to which interest has been paid or duly provided for, at the rate of 10.56% per annum, until the principal hereof is paid or duly provided for. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Senior Note (or one or more Predecessor Debt Securities) is registered at the close of business on a Regular Record Date for such interest which shall be the March 1 or September 1 (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date. Any such interest not so punctually paid or duly provided for, and interest on such Defaulted Interest at the then applicable interest rate borne by the Senior Notes, to the extent lawful, shall forthwith cease to be payable to the Holder on such Regular Record Date, and may be paid to the Person in whose name this Senior Note (or one or more Predecessor Debt Securities) is registered at the close of business on a Special Record Date to be fixed by the Trustee for the payment of such Defaulted Interest, notice whereof shall be given to Holders of Senior Notes not less than 10 days prior to such Special Record Date, or may be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Senior Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Payment of the principal of (and premium, if any) and interest on this Senior Note will be made at the office or agency of the Company maintained for that purpose in Cincinnati, Ohio, or at such other office or agency of the Company as may be maintained for such purpose, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Interest shall be computed on the basis of a 360-day year of four 90-day quarters or twelve 30-day months. This Senior Note (as defined herein) is one of a duly authorized issue of Senior Debt Securities of the Company (herein called the "Debt Securities") of the series hereinafter specified, which series is limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $300,000,000, all such Debt Securities issued and to be issued under the Indenture dated as of March 15, 2002, between the Company and Wells Fargo Bank Minnesota, National Association, as trustee (herein called the "Trustee," which term includes any successor Trustee under the Indenture), and by a Board D-1 Resolution dated March 18, 2002 (herein called the "Indenture"), to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the rights and limitations of rights thereunder of the Holders of the Debt Securities and of the rights, duties, obligations and immunities and the Company and the Trustee for each series of Debt Securities, and of the terms upon which the Debt Securities are, and are to be, authenticated and delivered. As provided in the Indenture, the Debt Securities may be issued in one or more series, which different series may be issued in various aggregate principal amounts, in various authorized denominations, may mature at different times, may bear interest, if any, at different rates, may be subject to different redemption provisions, if any, may be subject to different sinking funds, if any, may be subject to different covenants and Events of Default and may otherwise vary as in the Indenture provided or permitted. This Senior Note is one of a series of Debt Securities designated in the Indenture as 10.56% Senior Notes due 2009 (the "Senior Notes"). This Senior Note represents the $250,000,000 aggregate principal amount of Senior Notes initially issued on March 19, 2002. The Indenture contains provisions for defeasance at any time of (a) the entire principal amount of all of the Debt Securities, (b) certain restrictive covenants and (c) certain Events of Default, in each case upon compliance with certain conditions set forth therein. The Indenture provides that if the Company fails to obtain a rating for the Senior Notes within one year following the Effective Date, the annual interest rate on the Notes shall increase by 0.50% from the first anniversary of the Effective Date until the day such rating is obtained, whereupon the interest rate will, from that day forward, revert to the original annual rate of the Senior Notes. The Senior Notes are subject to redemption at the option of the Company, in whole (except as provided in paragraph (c), below) or in part, upon not less than 30 nor more than 60 days' notice, as set forth below and as further described in the Indenture. (a) On or after March 15, 2005 the Senior Notes are subject to redemption at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon to but not including the applicable redemption date (subject to the right of Holders of record on relevant record dates to receive interest due on an Interest Payment Date), if redeemed during the twelve-month period beginning on March 15 of the years indicated below: Year Percentage ---- ---------- 2005 105.28% 2006 103.96% 2007 102.64% 2008 100.00% (b) Prior to March 15, 2005, the Senior Notes are subject to redemption at a redemption price equal to the greater of: (i) 100% of the principal amount of the Senior Notes to be redeemed, or (ii) a discounted present value, calculated as specified in the Indenture, of the sum of the principal that would have been payable upon redemption on March 15, 2005, as set forth in the preceding paragraph, and any interest that would have accrued from the redemption date through March 15, 2005, together with accrued interest to the redemption date (subject to the right of Holders of record on relevant record dates to receive interest due on an Interest Payment Date). (c) Prior to March 15, 2005, up to a maximum of 35% of the original aggregate principal amount of the Senior Notes is subject to redemption with the proceeds of one or more underwritten public equity offerings by the Company of its common stock, as provided in the Indenture, at a redemption price equal to 110.56% of the principal amount of the Senior Notes, together with accrued interest to the redemption date (subject to the right of Holders of record on relevant record dates to receive interest due on an Interest Payment Date), provided that after giving effect to the redemption, at least 65% of the original aggregate principal amount of Senior Notes remains outstanding. If less than all of the Senior Notes are to be redeemed, the Trustee shall select the Notes or portions thereof to be redeemed by lot. D-2 If a Change of Control occurs at any time, each Holder of the Senior Notes shall have the right to require that the Company purchase such Holder's Senior Notes in whole or in part in integral multiples of $1,000 at a purchase price in cash in an amount equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, to the Purchase Date. In the case of a purchase of Senior Notes in connection with a Change of Control, interest accrued to the Purchase Date will be paid as specified in a notice from the Company and, unless the Company shall default in payment of the Purchase Price, after the Purchase Date interest will cease to accrue with respect to any Senior Notes presented and surrendered for purchase. Pursuant to the Plan, the aggregate principal amount of Issued Notes outstanding may be reduced as a result of undeliverable or unclaimed distributions as of March 19, 2003. To the extent such Issued Notes are undeliverable or unclaimed, they shall be retired to the status of unissued Notes and any interest payable with respect thereto shall be reimbursed to the Company. The Indenture requires that the Company may be required to make an Asset Sale Offer to repurchase outstanding Senior Notes at a repurchase price in cash in an amount equal to 101% of the principal amount thereof plus accrued and unpaid interest, if any, with the Excess Proceeds of Asset Sales. If an Event of Default with respect to the Senior Notes shall occur and be continuing, there may be declared due and payable in the manner and with the effect provided in the Indenture the principal of this Senior Note, plus all accrued and unpaid interest to and including the date the Senior Notes become due and payable. The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of any series of Debt Securities under the Indenture at any time by the Company and the Trustee of any series of Debt Securities with the consent of the Holders of more than 50% in the aggregate principal amount of the Outstanding Debt Securities of each series of Debt Securities to be affected thereby. The Indenture also contains provisions permitting the Holders of specified percentages in aggregate principal amount of the Debt Securities of any series at the time Outstanding, on behalf of the Holders of all the Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences with respect to such series. Any such consent or waiver by or on behalf of the Holder of this Senior Note shall be conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any Senior Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Senior Note. No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of (and premium, if any) and interest on this Senior Note at the times, place and rate herein prescribed. As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Senior Note is registrable on the Debt Security Register of the Company, upon surrender of this Senior Note for registration of transfer at the office or agency of the Company maintained for such purpose in Cincinnati, Ohio or at such other office or agency of the Company as may be maintained for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Debt Security Registrar duly executed by, the Holder hereof or his or her attorney duly authorized in writing, and thereupon one or more new Senior Notes, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees. The Senior Notes are issuable only in registered form without coupons; beneficial owners may hold denominations of $1,000 and any integral multiple thereof. As provided in the Indenture and subject to certain limitations therein set forth, the Senior Notes are exchangeable for a like aggregate principal amount of Senior Notes of a like tenor and of a different authorized denomination, as requested by the Holder or beneficial owner surrendering the same. D-3 No service charge shall be made to the Holders for any registration of transfer or exchange or redemption of Senior Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. Prior to and at the time of due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner hereof for all purposes, whether or not this Senior Note be overdue, and neither the Company, the Trustee nor any agent shall be affected by notice to the contrary. All terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture. This Senior Note shall be governed by and construed in accordance with the laws of the State of New York. Unless the certificate of authentication hereon has been duly executed by the Trustee by manual signature, this Senior Note shall not be entitled to any benefit under the Indenture, or be valid or obligatory for any purpose. IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. Dated: March __, 2002 CHIQUITA BRANDS INTERNATIONAL, INC. By:__________________________________ Name: Title: CERTIFICATE OF AUTHENTICATION This is one of the Debt Securities of the series designated herein described in the within mentioned Indenture. WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee By:__________________________________ Authorized Officer D-4 FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s) unto PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE ________________________________________________________________________________ Please print or typewrite name and address including postal zip code of assignee ________________________________________________________________________________ the within Senior Note of Chiquita Brands International, Inc. and does hereby irrevocably constitute and appoint____________________________________ to transfer the said Senior Note on the books of the Company, will full power of substitution in the premises. Dated:_________________________________ ________________________________________ NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular, without alteration or enlargement or any change whatever. D-5 -----END PRIVACY-ENHANCED MESSAGE-----