Dated October __, 2014 Third Deed of Amendment ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD (FORMERLY VICTORY ELECTRONIC CIGARETTES CORPORATION) as Borrower MUST HAVE LIMITED as Guarantor JGB (CAYMAN) CAMBRIDGE LTD. as Senior Creditor JGB COLLATERAL...
Exhibit 10.4
Dated October __, 2014
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ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD (FORMERLY VICTORY ELECTRONIC CIGARETTES CORPORATION)
as Borrower
MUST HAVE LIMITED
as Guarantor
JGB (CAYMAN) CAMBRIDGE LTD.
as Senior Creditor
JGB COLLATERAL LLC
as Security Trustee for the Senior Creditor
THE PERSONS NAMED IN THE SCHEDULE
as Subordinated Creditors
AND
XXXXXX XXXXXX XXXXXX
as Security Trustee for the Subordinated Creditors
Contents
Clause
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1.
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Definitions and interpretation
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2
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2.
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Amendments to the Inter-Creditor Deed
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3
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3.
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Existing Security
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5
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4.
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Representations and warranties
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6
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5.
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Further Assurance
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6
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6.
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Miscellaneous
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6
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7.
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Third party rights
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7
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8.
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Governing law and jurisdiction
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7
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Schedule
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Schedule
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Subordinated creditors
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8
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THIS SECOND DEED OF AMENDMENT is dated October __, 2014
Parties
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(1)
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ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD (FORMERLY, VICTORY ELECTRONIC CIGARETTES CORPORATION), registered in the State of Nevada, USA under number C13461-2004 whose registered office is at 00000 Xxxxx Xxxxx, Xxxxxx Xxxx, Xxxxxxxx 00000, XXX ("Borrower");
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(2)
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MUST HAVE LIMITED, a limited liability company incorporated in England and Wales with company number 05101019 whose registered office is at Xxxx 00, Xxxx Xxxxxx Xxxxxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxxxxx X00 0XX (“Guarantor”).
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(3)
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JGB (CAYMAN) CAMBRIDGE LTD. incorporated in the Cayman Islands, whose registered office is Xxxxxxx Trust (Cayman) Ltd., Xxxxxxx House, 00 Xxxx Xxxxxx, XX Xxx 0000, Xxxxx Xxxxxx XX0-0000, Xxxxxx Xxxxxxx ("Senior Creditor").
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(4)
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JGB COLLATERAL LLC, a Delaware limited liability company whose registered address is Corporation Trust Center, 0000 Xxxxxx Xx., Xxxxxxxxxx, Xxxxxxxx 00000 XXX as security agent and trustee for the Senior Creditor (“Senior Security Trustee”).
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(5)
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The persons whose names and addresses are set out in column (1) of the Schedule ("Subordinated Creditors").
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(6)
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XXXXXX XXXXXX XXXXXX of 0, Xxxxxxxxx Xxxx, Xxxxxxxxxx, X00 0XX as security agent and trustee for the Subordinated Creditors ("Junior Security Trustee").
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Background
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(B)
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The obligations of the Borrower under the Convertible Note Documents (as defined in clause 1 of this deed) were guaranteed by the Guarantor by way of a guarantee dated 22 April 2014 between the Guarantor and Senior Creditor (“Senior Guarantee”) and were secured by way of a charge dated 22 April 2014 over the shares in the Guarantor between the Borrower and the Senior Security Trustee (“Senior Share Charge”). The obligations of the Borrower under the Convertible Note Documents (as defined in clause 1 of this deed) the Senior Guarantee and Senior Share Charge and the Inter-creditor Deed (as defined in recital (C)) were further secured by way of a debenture dated 22 April 2014 between the Guarantor and the Senior Security Trustee (“Senior Debenture”).
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1
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(C)
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The parties to this deed entered into an Inter-creditor Deed dated 22 April 2014 which governed the priority of the Senior Documents (as defined in clause 1 of this deed) to various documents to which the Subordinated Creditors and Junior Security Trustee were party (“Inter-creditor Deed”).
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(E)
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Pursuant to third amendment agreements (“Third Amendment Agreements”) the Borrower and the Senior Creditor have made amendments to the Securities Purchase Agreement and the Senior Convertible Loan Notes, respectively.
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(F)
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In contemplation of entry into the Third Amendment Agreements, the parties to this deed have agreed to further amend the Senior Security Documents as set out in this deed, to consent to the Third Amendment Agreements and the transactions contemplated thereunder and to confirm that the Senior Documents continue in full force and effect.
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(G)
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The Borrower and the Subordinated Creditors are party to a share purchase agreement dated 22 April 2014 for the sale (by the Subordinated Creditors) and acquisition (by the Borrower) of the whole of the issued share capital of the Guarantor (the “Must Have SPA”), as amended on 3 October 2014. The Borrower and the Subordinated Creditors have agreed to vary the Must Have SPA on the terms set out in this deed.
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(H)
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1.1
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Terms defined in the Inter-creditor Deed shall have the same meaning when used in this deed, unless defined below. In addition, the definitions below apply in this deed.
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Amended Security Documents: the Senior Security Documents, each as amended by the Previous Security Amendment Agreements and this deed.
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Convertible Note Documents: the Securities Purchase Agreement, the Senior Convertible Loan Notes, the Senior Convertible Loan Note Instrument and the Senior Registration Rights Agreement.
Finance Documents: has the meaning given in the Senior Debenture.
Further Extension Fee: has the meaning given in the new paragraph 4.6 of Part A of Schedule 8 of the Must Have SPA, as inserted pursuant to and in accordance with the provisions of clause 3.2 of this deed.
Guaranteed Obligations: has the meaning given in the Senior Guarantee.
Senior Documents: the Convertible Note Documents and the Senior Security Documents.
Senior Security Documents: the Senior Guarantee, the Senior Debenture, the Share Charge and the Inter-creditor Deed.
Third Amended Agreements: the Securities Purchase Agreement and the Senior Convertible Loan Notes as amended by the Previous Amendment Agreements and further amended by the Third Amendment Agreements.
Secured Liabilities: has the meaning given in the Senior Share Charge.
Secured Obligations: has the meaning given in the Senior Debenture.
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1.2
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The rules of interpretation of the Inter-Creditor Deed shall apply to this deed as if set out in this deed save that references in the Inter-Creditor Deed to "this deed" shall be construed as references to this deed.
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1.3
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Unless the context otherwise requires:
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(a)
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references in the Inter-creditor Deed and Senior Share Charge to "this deed";
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(b)
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references in the Senior Debenture to “this Deed”; and
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(c)
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references in the Senior Guarantee to “this Guarantee”,
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shall be (as the case may be) to the Inter-creditor Deed, Senior Share Charge, Senior Debenture and Senior Guarantee as amended by the Previous Security Amendment Agreements and this deed.
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1.4
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Without prejudice to the generality of clause 1.3, references in any of the Senior Security Documents to any of the Convertible Notes Documents and/or Senior Security Documents shall be to such documents as amended by the Previous Amendment Agreements, the Third Amendment Agreements, the Previous Security Amendment Agreements and/or this deed (as the case may be).
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1.5
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In this deed:
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(a)
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unless the context otherwise requires, any reference to a Senior Document is to that document as amended by the Previous Amendment Agreements, the Third Amendment Agreements, the Previous Security Amendment Agreements and/or this deed (as the case may be);
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3
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(b)
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any reference to a "clause" or "Schedule" is, unless the context otherwise requires, a reference to a clause or Schedule of this deed; and
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(c)
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clause and Schedule headings are for ease of reference only.
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1.6
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The Schedule forms part of this deed and shall have effect as if set out in full in the body of this deed. Any reference to this deed includes the Schedule.
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2.1
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The Inter-creditor Deed shall be amended with effect on and from the date of this deed as set out in this clause 2.
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2.2
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Clause 1.1 of the Inter-creditor Deed shall be amended by:
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(a)
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inserting a new definition of "Third Amendment Agreements" after the definition of “Subsidiary” as follows:
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Third Amendment Agreements: means: (i) the amendment agreement dated on or around 8 October 2014 between the Borrower, the Senior Creditor and, the Guarantor amending the Securities Purchase Agreement (as referred to in Part 1 of Schedule 2 of this deed); and (ii) the amendment agreement dated on or around 8 October 2014 between the Borrower and the Senior Creditor amending the Senior Convertible Loan Notes (as referred to in Part 1 of Schedule 2 of this deed).
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(b)
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inserting a new definition of "Deed of Variation and Acknowledgement" after the definition of “Debt Document” and before the definition of “Distressed Disposal” as follows:
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Deed of Variation and Acknowledgement: the deed of variation and acknowledgement in respect of the share purchase agreement dated 22 April 2014 and the loan note instrument dated 22 April 2014, entered into by the Borrower and the Subordinated Creditors on 3 October 2014.
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(c)
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deleting the definition of “Initial Period” in its entirety and replacing it with:
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Initial Period: the period from the date of this deed until 13 December 2014.
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2.3
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Clause 6.2 of the Inter-creditor Deed shall be deleted in its entirety and replaced with:
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6.2 No waiver or amendments of Senior Debt Documents
Except as set out and/or contemplated by the First Amendment Agreements, the Second Amendment Agreements and/or the Third Amendment Agreements, without prejudice to the generality of the provisions of clauses 3 and 4, neither the Borrower, the Guarantor nor any Senior Party shall agree any modification, waiver or amendment to, or make any other agreement (such modification, waiver, amendment or agreement being an “Amendment”) affecting, any Senior Debt Document, which would:
4
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(a)
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increase the amount of interest payable under a Senior Debt Document in excess of the amount payable under the Senior Convertible Loan Notes on the occurrence and continuance of an Event of Default (as defined in the Senior Convertible Loan Notes); or
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(b)
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extend the Maturity Date (as defined in the Senior Convertible Loan Notes) by more than six months or increase the amount of principal payable to the Senior Creditor under Senior Convertible Loan Notes.
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For the avoidance of doubt, the Borrower, the Guarantor and any Senior Party may, without the consent of the Subordinated Parties, agree or make any Amendment affecting any Senior Debt Document which would have any of the effects set out in sub-paragraphs (a) and (b) of this clause 6.2 where the purpose of the relevant Amendment is to set out the terms of and/or to constitute any Acquisition Loans or the relevant Amendment otherwise relates to any Acquisition Loans.
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2.4
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Clause 17.2(a) of the Inter-creditor Deed shall be deleted in its entirety and replaced with:
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(a)
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The terms of any refinancing of the Senior Debt shall not be more onerous for the Borrower and/or the Guarantor than the terms of the Senior Debt as at the date of the Third Amendment Agreements.
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3.
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Amendment of the Must Have SPA
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3.1
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With effect from the date of this deed and in accordance with clause 23.1 of the Must Have SPA, in consideration of the payment of £1.00 by the Borrower to the Subordinated Creditors (receipt of which is hereby acknowledged), the Must Have SPA shall be amended as set out in this clause 3.
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3.2
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The Parties hereby agree that the following new paragraph 4.6 shall be inserted after the existing paragraph 4.5 of Part A of Schedule 8 of the Must Have SPA:
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“4.6 In addition to the Extension Fee set out in paragraph 4.3 above, the Buyer shall pay to the Sellers (by same day telegraphic transfer of immediately available funds to the Sellers' Solicitors' Bank Account) a further extension fee of US$150,000 from an account of the Buyer (the Further Extension Fee), to be paid within three (3) Business Days of the date of execution of the deed of amendment in respect of insertion of this paragraph 4.6 of Part A of Schedule 8 of this agreement. For the purposes of this paragraph 4.6 and paragraph 4.3 above, no amount paid by the Buyer as the Extension Fee and/or the Further Extension Fee shall be subject to the provisions of Clause 26 (Withholding and Grossing Up) of the agreement. The Further Extension Fee shall be divided between the Sellers in the proportions specified alongside their respective names in Schedule 1.”
5
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3.3
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The parties agree that, other than the Borrower and the Subordinated Creditors, the other parties shall have no obligations under or pursuant to the Must Have SPA and/or in respect of the payment or the monitoring of receipt of the Further Extension Fee. The parties further agree that all provisions of this deed shall apply notwithstanding any failure or otherwise in respect of the payment of the Further Extension Fee and the sole remedy of the Subordinated Creditors thereof shall be a debt claim against the Borrower in respect of the Further Extension Fee in accordance with the terms of the Must Have SPA.
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3.4
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The parties agree that the amendment of the Must Have SPA set out in clause 3.2 above and the payment of the Further Extension Fee in accordance with the terms of the new paragraph 4.6 of Part A of Schedule 8 of the Must Have SPA shall not constitute a breach of any of the terms of the Inter-creditor Deed and the Senior Creditor and the Senior Security Trustee hereby waive any and all prohibitions and restrictions under the Inter-creditor Deed and (to the extent necessary or appropriate) under the Senior Debt Documents which would prevent (or may prevent) the payment of the Further Extension Fee pursuant to and in accordance with the variation to the Must Have SPA set out in clause 3.2 above. Other than in respect of the payment of the Further Extension Fee in accordance with the terms of the new paragraph 4.6 of Part A of Schedule 8 of the Must Have SPA, no waiver, consent, amendment or agreement is made in respect of any payment by any person to the Subordinated Creditors and/or the Junior Security Transferee to the extent that such payment would contravene or result in a breach of any the terms, conditions or provisions of the Inter-creditor Deed and/or any of the Senior Debt Documents.
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4.1
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Each of the parties confirms that:
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(a)
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it has received a copy of the Third Amendment Agreements and this deed and consents to the provisions of the Third Amended Agreements and the Amended Security Documents; and
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(b)
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the Inter-creditor Deed shall continue in full force and effect in all respects and the Inter-creditor Deed (as amended by the Previous Security Amendment Agreement) and this deed shall be read and construed together.
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4.2
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The Guarantor confirms that:
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(a)
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it consents to any amendment to the Guaranteed Obligations made by the Previous Amendment Agreements and the Third Amendment Agreements; and
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(b)
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the Senior Guarantee remains in full force and effect and that the Guaranteed Obligations include all obligations and liabilities of the primary obligor to the beneficiary under the Third Amended Agreements.
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4.3
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The Guarantor confirms that the Senior Debenture:
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6
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(a)
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ranks as a continuing security for the payment and discharge of the Secured Obligations including, without limitation, all present and future monies, obligations and liabilities owed by the Borrower or the Guarantor to the Senior Creditor or the Senior Security Trustee, whether actual or contingent and whether owed jointly or severally, as principal or surety and/or in any other capacity, under or in connection with the Finance Documents; and
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(b)
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shall continue in full force and effect in all respects and the Senior Debenture and this deed shall be read and construed together.
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4.4
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The Borrower confirms that the Senior Share Charge:
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(a)
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ranks as a continuing security for the payment and discharge of the Secured Liabilities including, without limitation, all present and future monies, obligations and liabilities owed by the Borrower to the Senior Creditor, whether actual or contingent and whether owed jointly or severally, as principal or surety and/or in any other capacity, under or in connection with the Convertible Note Documents (as defined in the Senior Share Charge); and
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(b)
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shall continue in full force and effect in all respects and the Senior Share Charge and this deed shall be read and construed together.
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5.
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Representations and warranties
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5.1
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Each of the Borrower and Guarantor represents and warrants to the Senior Creditor and the Senior Security Trustee on the date of this deed by reference to the facts and circumstances existing on that date that:
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(a)
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it has the power to enter into, deliver and perform, and has taken all necessary action to authorise its entry into, delivery and performance of, this deed and the transactions contemplated by it;
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(b)
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the entry into and performance by it of, and transactions contemplated by, this deed do not and will not contravene or conflict with:
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(i)
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its constitutional documents;
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(ii)
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any agreement or instrument binding on it or their assets; or
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(iii)
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any law or regulation or judicial or official order applicable to it;
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(c)
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it has obtained all required or desirable authorisations to enable it to enter into, exercise its rights and comply with its obligations in this deed and to make it admissible in its jurisdiction of incorporation. Any such authorisations are in full force and effect; and
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(d)
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subject to any general principles of law limiting its obligations, its obligations under this deed are legal, valid, binding and enforceable.
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5.2
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The Guarantor represents and warrants to the Senior Creditor and the Senior Security Trustee on the date of this deed by reference to the facts and circumstances existing on that date that all the representations and warranties contained in clause 8 of the Senior Debenture and clause 5 of the Senior Guarantee are true and accurate as if repeated on the date of this deed.
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7
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5.3
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The Borrower represents and warrants to the Senior Creditor and the Senior Security Trustee on the date of this deed by reference to the facts and circumstances existing on that date that all the representations and warranties contained in Part 1 of Schedule 2 of the Senior Share Charge are true and accurate as if repeated on the date of this deed.
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6.
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Further Assurance
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6.1
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Each party shall at the request of the Senior Creditor and/or the Senior Security Trustee execute and deliver such documents and perform such acts as may reasonably be required for the purpose of giving full effect to this deed.
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7.1
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The provisions of clauses 24, 25, 26, 29, 30.3 and 30.4 of the Inter-creditor Deed shall apply to this deed, as if set out in full and so that references in those provisions to "this deed" shall be construed as references to this deed and references to "party" or "parties" shall be construed as references to parties to this deed except that in clause 24 of the Inter-creditor Deed the words “or the Senior Security Trustee or both” shall be added after each reference to the “Senior Creditor.”
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8.1
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A person who is not a party to this deed shall not have any rights under the Contracts (Rights of Third Parties) Act 1999 to enforce, or enjoy the benefit of, any term of this deed. This does not affect any right or remedy of a third party which exists, or is available, apart from that Act.
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8.2
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The rights of the parties to rescind or agree any amendment or waiver under this deed are not subject to the consent of any other person.
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9.1
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This deed and any dispute or claim arising out of or in connection with it or its subject matter or formation (including non-contractual disputes or claims) shall be governed by and construed in accordance with the law of England and Wales.
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8
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9.2
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Each party irrevocably agrees that, subject as provided below, the courts of England and Wales shall have exclusive jurisdiction over any dispute or claim that arises out of or in connection with this deed or its subject matter or formation (including non-contractual disputes or claims). Nothing in this clause shall limit the right of the Senior Creditor or the Senior Security Trustee to take proceedings against any other party to this deed in any other court of competent jurisdiction, nor shall the taking of proceedings in any one or more jurisdictions preclude the taking of proceedings in any other jurisdictions, whether concurrently or not, to the extent permitted by the law of such other jurisdiction.
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This document has been executed as a deed and is delivered and takes effect on the date stated at the beginning of it.
9
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Name
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Address
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XXXXX XXXXXX XXXXX
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7 Xxxxxxx Xxxxx, Whitefield, Manchester M45 7UA
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XXXXXXX XXXXX
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0 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxxxxxxx X00 0XX
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XXXXXX XXXXXX XXXXXX
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0 Xxxxxxxxx Xxxx, Xxxxxxxxxx, X00 0XX.
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XXXXX XXXXX
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000 Xxxxxx Xxxx, Xxxxxx, Xxxxxxxxxx, XX0 0XX
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10
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Executed as a deed by ELECTRONIC CIGARETTES
INTERNATIONAL GROUP, LTD )
acting by ………………................ ................, )
a director, in the presence of:
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….....................................
Witness occupation:…….....................................
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........................................
Director
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Executed as a deed by MUST HAVE LIMITED )
acting by ………………................ ................, )
a director, in the presence of:
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….....................................
Witness occupation:…….....................................
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........................................
Director
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Executed as a deed by JGB COLLATERAL LLC )
as Senior Security Trustee, acting by
………………................ ................,
a director, in the presence of:
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….....................................
Witness occupation:…….....................................
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........................................
Director
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11
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Executed as a deed by JGB (CAYMAN) )
CAMBRIDGE LTD. )
acting by ………………................ ................, )
a director, in the presence of:
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….........................................
Witness occupation:…….....................................
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........................................
Director
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Executed as a deed by XXXXXX XXXXXX XXXXXX )
as Junior Security Trustee, in the presence of: )
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….........................................
Witness occupation:…….....................................
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........................................
Signature
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Executed as a deed by XXXXX XXXXX )
in the presence of: )
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….....................................
Witness occupation:…….....................................
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........................................
Signature
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12
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Executed as a deed by XXXXX XXXXXX XXXXX )
in the presence of: )
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….....................................
Witness occupation:…….....................................
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........................................
Signature
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Executed as a deed by XXXXXXX XXXXX )
in the presence of: )
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….....................................
Witness occupation:…….....................................
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........................................
Signature
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Executed as a deed by XXXXXX XXXXXX XXXXXX )
in the presence of )
Witness signature:…..….....................................
Witness name:……….….....................................
Witness address: .………....................................
………………………….....................................
Witness occupation:…….....................................
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........................................
Signature
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13
