Exhibit 10.17(b)
________________________________________________________________________________
________________________________________________________________________________
SECOND AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of April 30, 1999
(Amending and Restating the Amended and Restated Credit Agreement,
dated as of April 29, 1998)
Among
GENERAL CIGAR CO., INC.,
as Borrower
GENERAL CIGAR HOLDINGS, INC.,
387 PAS CORP.,
CLUB MACANUDO, INC.,
CLUB MACANUDO (CHICAGO), INC.,
VILLAZON & COMPANY, INC., and
GCMM CO., XXX.xx Guarantors
and
THE LENDERS FROM TIME TO TIME PARTIES HERETO
------------------------------
THE CHASE MANHATTAN BANK,
as Administrative Agent
________________________________________________________________________________
________________________________________________________________________________
SECOND AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 30,
1999 (amending and restating the Amended and Restated Credit Agreement, dated as
of April 29, 1998 (the "FIRST AMENDED AND RESTATED AGREEMENT")) by and among
General Cigar Co., Inc., a Delaware corporation (the "BORROWER"), General Cigar
Holdings, Inc., a Delaware corporation ("HOLDINGS"), 387 PAS Corp., a New York
corporation ("387"), Club Macanudo, Inc., a New York corporation ("CLUB"), Club
Macanudo (Chicago), Inc., an Illinois corporation ("CLUB CHICAGO"), Villazon &
Company, Inc., a Delaware corporation ("NEW VILLAZON"), GCMM Co., Inc., a
Delaware corporation ("GCMM"), the several banks and other financial
institutions from time to time parties hereto (collectively, the "LENDERS"), and
The Chase Manhattan Bank, a New York banking corporation, as agent for the
Lenders hereunder (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H :
---------------------
WHEREAS, the Borrower has entered into a definitive Asset Purchase
Agreement dated as of March 26, 1999, by and between the Borrower and Swedish
Match North America, Inc. for the sale by the Borrower of its Mass-Market Cigar
Business (as such term is defined in the Sale Agreement);
WHEREAS, the Borrower has requested that the Lenders and the
Administrative Agent amend and restate the First Amended and Restated Agreement
and consent to the sale of the Mass-Market Cigar Business, and the Lenders and
the Administrative Agent are agreeable to such requests upon the terms and
subject to the conditions set forth herein;
NOW, THEREFORE, the parties hereto hereby agree that on the Second
Amendment and Restatement Effective Date (as herein defined), the First Amended
and Restated Agreement will be amended and restated in its entirety as follows:
SUBSECTIONS 1.1 THROUGH 10.7
----------------------------
Subsections 1.1 through 10.7 of the First Amended and Restated
Agreement, in each case with their respective existing subsection and Section
designations, are hereby incorporated herein by reference as if set forth in
full herein, except that for purposes of such incorporation by reference:
1. Section 1 of the First Amended and Restated Agreement shall be
deemed amended by deleting therefrom the definitions of "Consolidated Interest
Expense", "Holdings Loan Party Group", "Indebtedness" and "Restricted Payment"
and substituting in lieu thereof the following definitions:
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"CONSOLIDATED INTEREST EXPENSE": as to any Person for any
period, interest expense of such Person and its Restricted
Subsidiaries for such period, including without limitation, interest
payable with respect to Loans, the interest portion of all
obligations under Financing Leases and dividends payable on
preferred Capital Stock, all as determined on a consolidated basis
in accordance with GAAP; PROVIDED that for purposes of determining
compliance with subsection 6.1(c) for any period, Consolidated
Interest Expense for such period shall be reduced by the amount of
consolidated interest income of such Person and its Restricted
Subsidiaries for such period, but in no event shall the Consolidated
Interest Expense be deemed to be less than zero.
"HOLDINGS LOAN PARTY GROUP": the collective reference to
Holdings, the Borrower, 387, Club, Club Chicago, Villazon, GCMM and
each other Person that shall hereafter become a party to this
Agreement as a guarantor pursuant to the provisions of subsection
5.8.
"INDEBTEDNESS": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current
liabilities incurred in the ordinary course of business and payable
in accordance with customary trade practices) or which is evidenced
by a note, bond, debenture or similar instrument, (b) all
obligations (contingent or otherwise) of such Person under Financing
Leases, (c) all obligations (contingent or otherwise) of such Person
in respect of letters of credit, acceptances or similar obligations
issued or created for the account of such Person, (d) the
liquidation value of all redeemable preferred Capital Stock of such
Person, (e) all liabilities secured by any Lien on any property
owned by such Person even though such Person has not assumed or
otherwise become liable for the payment thereof and (f) any
withdrawal liability of such Person or a Commonly Controlled Entity
to a Multiemployer Plan. The Indebtedness of any Person shall
include any Indebtedness of any partnership in which such Person is
a general partner.
"RESTRICTED PAYMENT": any declaration or payment of a dividend
(other than dividends payable solely in common stock of Holdings)
on, making of any payment on account of, or setting apart of assets
for a sinking or other analogous fund for the purchase, redemption,
defeasance, retirement or other acquisition of, any shares of any
class of Capital Stock of Holdings or any warrants or options to
purchase any such stock (other than (a) payments on account of
Holdings' Capital Stock made by Holdings to its management employees
3
pursuant to any of its Plans to the extent that the aggregate amount
of such payments subsequent to the Closing Date does not exceed
$750,000 and (b) acquisitions of Capital Stock of Holdings from the
holders of stock options granted pursuant to said Plans in
consideration for the cancellation of such options to the extent
that the aggregate amount paid in respect of such acquisitions does
not exceed $1,000,000), whether now or hereafter outstanding, and
any making of any other distribution in respect thereof, either
directly or indirectly, whether in cash or property or in
obligations of Holdings or any Subsidiary of Holdings; PROVIDED that
for purposes of determining compliance with subsection 6.1(c) for
any period of four consecutive fiscal quarters, any amounts up to an
aggregate of $5,000,000 expended by Holdings during such period on
purchases of outstanding shares of Holdings' common stock shall not
be deemed Restricted Payments.
2. Section 1 of the First Amended and Restated Agreement shall be
deemed amended by inserting the following new definitions in correct
alphabetical order:
"FIRST AMENDED AND RESTATED AGREEMENT": as defined
in the recitals to this Second Amended and Restated
Agreement.
"GCMM PREFERRED STOCK": preferred stock issued by
GCMM as consideration for any investment made by GCMM
pursuant to subsection 6.9(e).
"MASS-MARKET CIGAR BUSINESS": as defined in the MMCB
Sale Agreement.
"MMCB CLOSING": the closing of the sale which is the
subject of the Sale Agreement.
"MMCB PURCHASE PRICE": as defined in subsection 6.5.
"MMCB SALE AGREEMENT": the Asset Purchase Agreement
dated as of March 26, 1999, by and between the Borrower and
Swedish Match North America, Inc.
"SECOND AMENDED AND RESTATED AGREEMENT": this Second
Amended and Restated Credit Agreement, as amended,
supplemented or modified from time to time.
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"SECOND AMENDMENT AND RESTATEMENT EFFECTIVE DATE":
the date on which each of the conditions precedent
specified in subsection 4.4 shall have been satisfied.
3. Subsection 2.9(b)(i) of the First Amended and Restated Agreement
is amended by inserting the following sentence at the end thereof:
"Notwithstanding anything contained in this subsection 2.9(b)(i),
the reduction in the Revolving Credit Commitments resulting from the
receipt of the Net Cash Proceeds from the sale of the Mass-Market
Cigar Business shall equal $42,500,000 and shall be allocated among
the Lenders so that, after giving effect thereto, their respective
Revolving Credit Commitments shall be as set forth on Schedule I
hereto."
4. Subsection 2.20 of the First Amended and Restated Agreement
entitied "Expansion Facility" is hereby deemed deleted in its entirety.
5. Subsections 3.1(a) and 3.2 of the First Amended and Restated
Agreement shall be deemed amended to read in their entirety as follows:
"3.1 FINANCIAL CONDITION. (a) Each of (i) the audited combined
balance sheets of Holdings as at November 28, 1998 and November 29,
1997 and the related audited combined statements of operations and
of cash flows for the fiscal years ended on November 28, 1998 and
November 29, 1997 (said financial statements having been audited by
PricewaterhouseCoopers LLP), copies of which have heretofore been
furnished to each Lender, are complete and correct and present
fairly the combined financial condition of Holdings as at such
dates, and the combined results of its operations and its combined
cash flows for the fiscal periods then ended. All such financial
statements, including the related schedules and notes thereto, have
been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such
accountants, and as disclosed therein). Neither Holdings nor any of
its Subsidiaries had, at the date of the balance sheets referred to
above, any material Guarantee Obligation, contingent liability or
liability for taxes, or any long-term lease or unusual forward or
long-term commitment, including, without limitation, any interest
rate or foreign currency swap or exchange transaction, which is not
reflected in the foregoing statements or in the notes thereto.
Except for the sale of the Mass-Market Cigar Business contemplated
to be completed in April 1999, during the period from November 28,
1998 to and including the date hereof there has been no sale,
4
transfer or other disposition by Holdings or any of its Subsidiaries
of any material part of its business or property, and no purchase or
other acquisition of any business or property (including any Capital
Stock of any other Person) material in relation to the combined
financial condition of Holdings and its Subsidiaries, taken as a
whole, at November 28, 1998."
"3.2 NO CHANGE. Except for the sale of the Mass-Market Cigar
Business contemplated to be completed in April 1999, since November
28, 1998 there has been no change, and no development or event
involving a prospective change, which has had or could reasonably be
expected to have a Material Adverse Effect, and Holdings and its
Subsidiaries have made no Restricted Payments."
6. Section 3 of the First Amended and Restated Agreement shall be
deemed amended by adding thereto the following new subsection 3.25:
"3.25 REPRESENTATIONS AND WARRANTIES ON SECOND AMENDMENT AND
RESTATEMENT EFFECTIVE DATE. The representations and warranties made
by the Borrower in subsections 3.1 through 3.24 are true and correct
in all material respects on and as of the Second Amendment and
Restatement Effective Date, as if made on and as of the Second
Amendment and Restatement Effective Date, except to the extent such
representations and warranties expressly relate to an earlier date."
7. Section 4 of the First Amended and Restated Agreement shall be
deemed amended by adding thereto the following new subsection 4.4:
"4.4 CONDITIONS TO SECOND AMENDMENT AND RESTATEMENT
EFFECTIVE DATE. The Second Amendment and Restatement
Effective Date shall be the date on which the following
conditions precedent are satisfied:
(a) the Administrative Agent shall have received a copy of
this Second Amended and Restated Agreement, duly executed and
delivered by the Borrower, Holdings, 387, Club, Club Chicago, New
Villazon, GCMM and the Lenders; and
(b) the Borrower shall have paid to each Lender the fees
separately agreed to by the Borrower with such Lender."
8. Subsection 6.1(b) and (c) of the First Amended and Restated
Agreement shall be deemed amended to read in their entirety as follows:
5
"(b) MAINTENANCE OF NET WORTH. Permit Consolidated Net Worth
of Holdings at any time to be less than the sum of (i) $280,000,000
plus (ii) 50% of cumulative Consolidated Net Income of Holdings
(without deduction for any losses during any quarterly period) for
the period commencing on November 29, 1998 and ending on the last
day of the then most recently ended fiscal period for which
financial statements shall have been delivered to the Lenders
pursuant to subsection 5.1(a) or (b); PROVIDED that for purposes of
this subsection 6.1(b), Consolidated Net Income of Holdings shall
not be deemed to include any net income gained or recognized by
Holdings from the sale of the Mass-Market Cigar Business as
calculated in accordance with GAAP and reported by Holdings in its
financial statements for the fiscal quarter ended May 28, 1999."
(c) FIXED CHARGE COVERAGE. Permit the ratio of (i)
Consolidated Operating Cash Flow of Holdings for any period of four
consecutive fiscal quarters less the sum of (x) Capital Expenditures
of Holdings during such period and (y) Restricted Payments during
such period to (ii) Consolidated Interest Expense of Holdings for
such period to be less than 2.5 to 1.0."
9. Subsection 6.2 of the First Amended and Restated Agreement is
amended by adding the following new clause (k) after the existing clause (j):
"(k) the GCMM Preferred Stock issued pursuant to
subsection 6.6(f)."
10. Subsection 6.5 of the First Amended and Restated Agreement is
amended by adding the following new clause (d) after the existing clause (c):
(d) the Borrower may consummate the sale of the Mass- Market
Cigar Business, provided that:
(i) at the MMCB Closing, the Borrower and GCMM will
receive at least $190,000,000 in cash on a pre-tax basis (such
amount to be prior to the application of such proceeds in accordance
with (ii) and (iv) below) (the "MMCB PURCHASE PRICE");
(ii) promptly upon receipt of the MMCB Purchase Price,
the Borrower shall apply the Net Cash Proceeds resulting therefrom
to prepay all then outstanding Revolving Credit Loans, including all
interest accrued thereon and fees payable to the date of such
prepayment;
6
(iii) the MMCB Closing shall have occurred within sixty
days of the Second Amendment and Restatement Effective Date; and
(iv) in connection with the MMCB Closing, each of the
following shall have been terminated: (a) the indebtedness and the
guaranty of the Borrower and Holdings with respect to the IRB
Indebtedness (as defined in the Sale Agreement) respecting the
Mass-Market Cigar Business facility in Dothan, Alabama and (b) the
indebtedness with respect to the Borrower's mortgage to GECC of its
transportation equipment.
11. Subsection 6.6 of the First Amended and Restated Agreement is
amended by adding the following new clause (f) after the existing clause (e):
"(f) the issuance of GCMM Preferred Stock in consideration for
debt securities purchased pursuant to subsection 6.9(e), PROVIDED
that the aggregate liquidation value of the GCMM Preferred Stock
does not exceed $6,000,000."
12. Subsection 6.9 of the First Amended and Restated Agreement shall
be deemed amended to read in its entirety as follows:
"6.9 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, or capital contribution to, or purchase any stock,
bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in,
any Person, except:
(a) extensions of trade credit in the ordinary
course of business;
(b) investments in Cash Equivalents;
(c) investments or advances by Holdings (other than
investments or advances made directly or indirectly for the purposes
of the development of real estate) in or to its Restricted
Subsidiaries and investments or advances by such Restricted
Subsidiaries in or to Holdings and in or to other Restricted
Subsidiaries of Holdings; and
(d) investments or advances by Holdings or any of its
Restricted Subsidiaries subsequent to April 30, 1999 in an amount
not to exceed $35,000,000 in the aggregate for the purpose of
acquiring assets (other than assets covered by subsection 6.11) or
7
businesses, PROVIDED, that, in the case of the acquisition of the
Capital Stock of any Material Subsidiary the provisions of
subsection 5.8 shall be complied with in connection therewith.
(e) in addition to investments otherwise expressly permitted
by this subsection 6.9, investments by GCMM subsequent to April 30,
1999 in debt securities in an aggregate amount (valued at cost) not
to exceed $25,000,000."
13. Schedules I through VI to the First Amended and Restated
Agreement shall each be deemed amended to read in their entirety as set forth in
Schedules I through VI attached hereto, respectively.
14. Exhibits G and H of the First Amended and Restated Agreement are
hereby deemed deleted in their entirety.
SUBSECTIONS 10.8 THROUGH 10.14
------------------------------
10.8 COUNTERPARTS. This Second Amended and Restated Agreement may be
executed by one or more of the parties to this Second Amended and Restated
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Second Amended and Restated Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Second Amended and Restated
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Second Amended and Restated Agreement, the
Notes and the other Loan Documents to which the Borrower is a party represent
the entire agreement of the Borrower, the Guarantors which are parties hereto,
the Administrative Agent and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises or representations by the
Borrower, any such Guarantor, the Administrative Agent or any Lender relative to
subject matter hereof or thereof not stated or referred to herein or in the
other Loan Documents.
10.11 GOVERNING LAW. THIS SECOND AMENDED AND RESTATED AGREEMENT AND
THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS SECOND
AMENDED AND RESTATED AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8
10.12 SUBMISSION TO JURISDICTION. Each of the Borrower and each
Guarantor which is a party hereto hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Second Amended and Restated Agreement, the
Notes and the other Loan Documents to which it is a party, or for
recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the courts of the State of New York
for New York County, the courts of the United States of America for the
Southern District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in
such courts and waives any objection that it may now or hereafter have to
the venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not
to plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower at its address set forth in subsection 10.2 or at such other
address of which the Administrative Agent shall have been notified
pursuant thereto; and
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to sue in any other jurisdiction.
10.13 WAIVER OF JURY TRIAL. THE BORROWER, THE GUARANTORS WHICH ARE
PARTIES HERETO, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS SECOND AMENDED AND RESTATED AGREEMENT OR THE NOTES OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.14 SCHEDULES AND EXHIBITS. Schedules VII through IX and Exhibits
A-1 through F of the First Amended and Restated Agreement are hereby
incorporated by reference as Schedules VII through IX and Exhibits A-1 through F
hereto, respectively.
9
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amended and Restated Agreement to be duly executed and delivered in New York,
New York by their proper and duly authorized officers as of the day and year
first above written.
GENERAL CIGAR CO., INC., as
Borrower
By /s/ X. Xxxx Xxxxxx
---------------------
Title: Secretary
GENERAL CIGAR HOLDINGS, INC., as a
Guarantor
By /s/ X. Xxxx Xxxxxx
---------------------
Title: Secretary
387 PAS CORP., as a Guarantor
By /s/ X. Xxxx Xxxxxx
---------------------
Title: Secretary
CLUB MACANUDO, INC., as a Guarantor
By /s/ X. Xxxx Xxxxxx
---------------------
Title: Secretary
10
CLUB MACANUDO (CHICAGO), INC., as a
Guarantor
By /s/ X. Xxxx Xxxxxx
---------------------
Title: Secretary
VILLAZON & COMPANY, INC., as a
Guarantor
By /s/ X. Xxxx Xxxxxx
---------------------
Title: Secretary
GCMM CO., INC., as a Guarantor
By /s/ X. Xxxx Xxxxxx
---------------------
Title: Secretary
11
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Lender
By /s/ [ILLEGIBLE]
---------------------
Title: Vice-President
THE BANK OF NOVA SCOTIA, as a
Lender
By /s/ [ILLEGIBLE]
---------------------
Title: Unit Head
FLEET NATIONAL BANK, as a Lender
By /s/ [ILLEGIBLE]
---------------------
Title: Senior Vice-President
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Schedule I
ADDRESSES AND COMMITMENTS OF LENDERS
------------------------------------
REVOLVING
CREDIT
ADDRESS COMMITMENT
------- ----------
The Chase Manhattan Bank .......................... $ 16,666,668
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxx
The Bank of Nova Scotia, New York Agency .......... $ 16,666,666
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxxx Xxxx
Fleet National Bank ............................... $ 16,666,666
000 Xxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Schedule II
MATERIAL SUBSIDIARIES OF GENERAL CIGAR HOLDINGS, INC.
-----------------------------------------------------
# OF SHARES
NAME PARENT OUTSTANDING
--------------------------------------------------------------------------
Club Macanudo, Inc. Holdings 100
Club Macanudo (Chicago), Inc. Holdings 100
General Cigar Co., Inc. Holdings 100
GCMM Co., Inc. General Cigar 100
387 PAS Corp. Holdings 100
387 PAS Enterprises 387 PAS Corp. N/A
Villazon & Co., Inc. General Cigar 1,000
NON-MATERIAL OR FOREIGN
SUBSIDIARIES OF GENERAL CIGAR HOLDINGS, INC.
--------------------------------------------
NAME PARENT
----------------------------------------------------------
Xxxxxxxxx Free Zone, Ltd. General Cigar
Xxxxxxxxx Y Cia, Ltd. General Cigar
C.T.P. Dominicana S.A. General Cigar
Club Macanudo (Services), Inc. Holdings
Culbro Dominicana S.A. General Cigar
Culbro International, S.A. General Cigar
Culbro Tobacco Sales Corporation General Cigar
Culbro Tobacco, Inc. Holdings
Culbro X.X. Tobacco, S.A. General Xxxxx
General Cigar Dominicana S.A. General Xxxxx
Gradiaz Xxxxx & Co., Inc. General Cigar
Honduras American Tabaco, S.A. de C.V. General Cigar
Industrial Buildings & Properties, Inc. General Cigar
Xxxx Xxxxxxxxx & Co. General Cigar
Macanudo Cigar Company, Inc. General Cigar
Xxxx Tool & Plastics Corp. General Cigar
Partagas Cigar Company, Inc. General Cigar
Twenty Seventh & Park, Inc. 387 PAS Corp.
General Cigar International General Cigar
Schedule III
GENERAL CIGAR HOLDINGS, INC.
SCHEDULE OF INDEBTEDNESS
AS OF APRIL 30, 1999
$(000'S)
Vehicle Leases ............................... $ 1,808.
Villazon Installment Notes ................... $10,000.
Schedule IV
GENERAL CIGAR HOLDINGS, INC.
SCHEDULE OF LIENS
AS OF APRIL 30, 1999
$(000'S)
None.
Schedule V
GENERAL CIGAR HOLDINGS, INC.
SCHEDULE OF SALE-LEASEBACK TRANSACTIONS
AS OF APRIL 30, 1999
None.
Schedule VI
GENERAL CIGAR HOLDINGS, INC.
SCHEDULE OF GUARANTEES
AS OF APRIL 30, 1999
Club Macanudo (Chicago) 5 Year Lease Ending 9/30/2001
Average Annual rental $200,000
Club Macanudo (New York) 10 Year Lease Ending 8/31/2005
Average annual Rental $250,000
General Cigar Co., Inc. Guarantee Villazon & Co., Inc.
$10,000,000 Seller Notes
Upper Saddle River (New Jersey) 4 Year Lease Ending 12/31/2000
Average Annual Rental $207,000
General Cigar International (Woking, 25 Year Sublease Ending 12/08/2018
England) but can be canceled with three month
notice by either party.
Average Annual Rental $42,000
