Exhibit 99.(b)(2)
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CREDIT AGREEMENT
Dated as of August 28, 2000
among
L&LR, INC.,
800-JR CIGAR, INC.
AND SUBSIDIARIES
as Co-Borrowers,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
THE CHASE MANHATTAN BANK,
as Administrative Agent, Arranger, Syndication Agent and Lender
and
FLEET BANK, N.A.,
as Documentation Agent and Lender
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is
attached but is inserted for convenience of reference only.
Page
1. AMOUNT AND TERMS OF CREDIT
1.1. Credit Facilities 2
1.2. Scheduled Repayment of Principal of Term Loan 5
1.3. Interest; Eurodollar Interest Periods; Applicable Margins 5
1.4. Use of Proceeds 8
1.5. Prepayments 9
1.6. Conversions 11
1.7. Fees 11
1.8. Method and Place of Payment 12
1.9. Application and Allocation of Payments 13
1.10. Indemnity 13
1.11. Taxes 15
1.12. Capital Adequacy; Increased Costs; Illegality 16
1.13 Single Loan 18
2. CONDITIONS PRECEDENT
2.1. Conditions to the Initial Loans 19
2.2. Further Conditions to Each Loan 20
3. REPRESENTATIONS AND WARRANTIES
3.1. Corporate Existence; Compliance with Law 21
3.2. Executive Offices 22
3.3. Corporate Power, Authorization, Enforceable Obligations 22
3.4. Financial Statements 22
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3.5. Pro Forma 22
3.6. Material Adverse Effect 23
3.7. Ownership of Property; Liens 23
3.8. Labor Matters 24
3.9. Ventures, Subsidiaries and Affiliates; Outstanding Stock
and Indebtedness 24
3.10. Government Regulation 24
3.11. Margin Regulations 25
3.12. Taxes 25
3.13. ERISA 25
3.14. No Litigation 26
3.15. Brokers 26
3.16. Intellectual Property 26
3.17. Full Disclosure 27
3.18. Environmental Matters 27
3.19. Insurance 28
3.20. Common Business Enterprise 28
3.21. Customer and Trade Relations 28
3.22. Agreements and Other Documents 28
3.23. Solvency 29
3.24. Year 2000 Problems 29
3.25. Related Transactions Documents 29
3.26. The Merger 29
3.27. The Pledge Agreements 29
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4. FINANCIAL STATEMENTS AND INFORMATION
4.1. Reports and Notices 30
4.2. Communication with Accountants 30
5. AFFIRMATIVE COVENANTS
5.1. Maintenance of Existence and Conduct of Business 30
5.2. Payment of Charges 30
5.3. Books, Records and Inspections 31
5.4. Insurance 31
5.5. Compliance with Laws 32
5.6. Supplemental Disclosure 32
5.7. Intellectual Property 32
5.8. Environmental Matters 32
5.9. Performance of Obligations 33
5.10. Further Assurances 33
5.11. ERISA Event 33
5.12. Ownership of Subsidiaries 34
5.13. Consummation of Merger 34
6. NEGATIVE COVENANTS
6.1. Mergers, Subsidiaries, Etc. 34
6.2. Investments; Loans and Advances 34
6.3. Indebtedness 35
6.4. Employee Loans and Affiliate Transactions 35
6.5. Capital Structure and Business 36
6.6. Guaranteed Indebtedness 36
6.7. Liens 36
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6.8. Sale of Stock and Assets 37
6.9. ERISA 37
6.10. Financial Covenants 37
6.11. Hazardous Materials 37
6.12. Sale-Leasebacks 37
6.13. Cancellation of Indebtedness 37
6.14. Restricted Payments 37
6.15. Change of Corporate Name or Location; Change of Fiscal
Year 37
6.16. No Impairment of Intercompany Transfers 37
6.17. No Speculative Transactions 38
6.18. Status of L&LR 38
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
7.1. Events of Default 38
7.2. Remedies 40
7.3. Waivers by Co-Borrowers 40
8. ASSIGNMENT AND PARTICIPATIONS
8.1. Assignment and Participations 41
9. THE ADMINISTRATIVE AGENT
9.1. Appointment of Administrative Agent 43
9.2. Nature of Duties 43
9.3. Lack of Reliance on the Administrative Agent 43
9.4. Reliance 44
9.5. Indemnification 44
9.6. The Administrative Agent in its Individual Capacity 44
9.7. Holders 45
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9.8. Documentation Agent; Syndication Agent 45
9.9. Resignation by the Administrative Agent 45
10. MISCELLANEOUS
10.1. Successors and Assigns 46
10.2. Complete Agreement; Modification of Agreement 46
10.3. Amendments and Waivers 47
10.4. Fees and Expenses 48
10.5. No Waiver 49
10.6. Remedies 50
10.7. Setoff and Sharing of Payments 50
10.8. Severability 50
10.9. Conflict of Terms 50
10.10. GOVERNING LAW
10.11. Notices 51
10.12. Section Titles 52
10.13. Counterparts 52
10.14. WAIVER OF JURY TRIAL
10.15. Press Releases 52
10.16. Reinstatement 53
10.17. Advice of Counsel 53
10.18. No Strict Construction 53
10.19. Survival of Obligations Upon Termination of
Financing Arrangements 53
10.20. Confidentiality 54
10.21 Effectiveness 54
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INDEX OF APPENDICES
Exhibit 1.1(a)(i) - Form of Notice of Revolving
Credit Loan
Exhibit 1.1(a)(ii) - Form of Revolving Credit Note
Exhibit 1.1(b)(ii) - Form of Term Note
Exhibit 1.1(e) - Form of Request for Letter of Credit
Exhibit 1.6 - Form of Notice of Conversion/Continuation
Exhibit 2.1(d)-1 - Form of L&LR Pledge Agreement
Exhibit 2.1(d)-2 - Form of Cigar Pledge Agreement
Exhibit 8.1(a) - Form of Assignment Agreement
Disclosure Schedule (1.4) - Use of Proceeds
Disclosure Schedule (3.2) - Executive Offices
Disclosure Schedule (3.5) - Pro Forma
Disclosure Schedule (3.7) - Real Estate
Disclosure Schedule (3.8) - Labor Matters
Disclosure Schedule (3.9) - Ventures, Subsidiaries and Affiliates;
Outstanding Stock and Indebtedness
Disclosure Schedule (3.12) - Taxes
Disclosure Schedule (3.13) - ERISA
Disclosure Schedule (3.14) - No Litigation
Disclosure Schedule (3.16) - Intellectual Property
Disclosure Schedule (3.18) - Environmental Matters
Disclosure Schedule (3.19) - Insurance
Disclosure Schedule (3.21) - Customer and Trade Relations
Disclosure Schedule (3.22) - Agreements and Other Documents
Disclosure Schedule (6.2(g)) - Investment Contracts
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Disclosure Schedule (6.3) - Indebtedness
Disclosure Schedule (6.4(a)) - Transactions with Affiliates
Annex A (Recitals) - Definitions
Annex B (Section 4.1(a)) - Financial Statements - Reporting
Annex C (Section 6.10) - Financial Covenants
Annex D (Section 11.10) - Notice Addresses
Annex E (from Annex A- - Commitments as of Closing Date
Commitments definition)
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CREDIT AGREEMENT ("Agreement"), dated as of August 28, 2000, among L&LR,
Inc., a Delaware corporation ("L&LR"), 800-JR CIGAR, Inc. a Delaware corporation
("Cigar"), J.R. Tobacco of America, Inc., a North Carolina corporation
("JR-America"); Santa Xxxxx, Inc., a North Carolina corporation ("JR-Santa
Xxxxx"); J.N.R. Grocery Corp., a New York corporation ("JR-Grocery"); J.R.
Tobacco NC, Inc., a North Carolina corporation ("JR-NC"); J&R Tobacco (New
Jersey) Corp., a New Jersey corporation ("JR-New Jersey"); J.R. Tobacco Company
of Michigan, Inc., a Michigan corporation ("JR-Michigan"); J.R.-46th Street,
Inc., a New York corporation ("JR-46th"); J.R. Tobacco Outlet, Inc., a New
Jersey corporation ("JR-Outlet"); J.R. Statesville, Inc., a North Carolina
corporation ("JR-Statesville"); J R Cigar (DC), Inc., a corporation organized
under the laws of the District of Columbia ("JR-DC"); J.R. Tobacco of
Burlington, Inc., a North Carolina corporation ("JR-Burlington"); Casa Xxxxxx,
Inc., a New Jersey corporation ("JR-Casa Xxxxxx"); xxxxxxxx.xxx, Inc., a North
Carolina corporation ("XX.XXX") (L&LR, Cigar, JR-America, JR-Santa Xxxxx,
JR-Grocery, JR-NC, JR-New Jersey, JR-Michigan, JR-46th, JR-Outlet,
JR-Statesville, JR-DC, JR-Burlington, JR-Casa Xxxxxx and XX.XXX together with
their successors and assigns, each individually, a "Co-Borrower" and,
collectively, the "Co-Borrowers"); each of the Lenders named under the caption
"Lenders" on the signature pages hereof (together with its successors and
assigns, individually, a "Lender" and, collectively, the "Lenders"); THE CHASE
MANHATTAN BANK, as Administrative Agent for the Lenders (the "Administrative
Agent"); and FLEET BANK, N.A., as Documentation Agent for the Lenders (the
"Documentation Agent").
RECITALS
WHEREAS, Co-Borrowers desire that Lenders extend revolving and term credit
facilities to Co-Borrowers of up to Fifty-Five Million Dollars ($55,000,000) in
the aggregate for the purpose of refinancing certain indebtedness and to provide
working capital, and for these purposes, Lenders are willing to make certain
loans and other extensions of credit to Co-Borrowers of up to such amount upon
the terms and conditions set forth herein; and
WHEREAS, capitalized terms used in this Agreement shall have the meanings
ascribed to them in Annex A. All Annexes, Disclosure Schedules, Exhibits and
other attachments (collectively, "Appendices") hereto, or expressly identified
to this Agreement, are incorporated herein by reference, and taken together,
shall constitute but a single agreement. These Recitals shall be construed as
part of the Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, and for other good and valuable consideration, the
parties hereto agree as follows:
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1. AMOUNT AND TERMS OF CREDIT
1.1. CREDIT FACILITIES.
(A) REVOLVING CREDIT FACILITY.
(i) Subject to the terms and conditions hereof, each Revolving
Credit Lender severally agrees to make revolving credit loans (each a "Revolving
Credit Loan" and collectively, the "Revolving Credit Loans") to the Co-Borrowers
in Dollars from time to time following consummation of the Merger until the
Commitment Termination Date in an aggregate principal amount at any one time
outstanding up to, but not exceeding, the amount of the Revolving Credit Loan
Commitment of such Lender as in effect from time to time. The aggregate
principal amount of all Revolving Credit Lenders' Revolving Credit Loans
outstanding shall not exceed at any time the Maximum Amount ("Borrowing
Availability"). The principal amount of each Lender's Revolving Credit Loan made
on a Borrowing Date shall be in an amount equal to its Pro Rata Share of all
Revolving Credit Loans made on such date, but shall not exceed (together with
all other outstanding Revolving Credit Loans of such Lender) such Lender's Pro
Rata Share of the Borrowing Availability. Until the Commitment Termination Date,
Co-Borrowers may from time to time borrow, repay and reborrow under this Section
1.1(a). Each Revolving Credit Loan shall be made on notice by Cigar, on behalf
of the Co-Borrowers, to the Administrative Agent at its Notice Office. Those
notices must be given at least one Business Day prior to the Borrowing Date of
the proposed Revolving Credit Loan, in the case of a Prime Rate Loan, or (2) no
later than 11:00 a.m. (New York time) on the date which is three (3) Business
Days prior to the Borrowing Date of the proposed Revolving Credit Loan, in the
case of a Eurodollar Loan. Each such notice (a "Notice of Revolving Credit
Loan") must be given in writing (by telecopy or overnight courier), shall be in
the form of Exhibit 1.1(a)(i), shall be signed by an Authorized Officer of Cigar
and shall include such information as may be reasonably required by
Administrative Agent. Each Revolving Credit Loan shall be either a Eurodollar
Loan having a Eurodollar Interest Period selected by Co-Borrowers pursuant to
Section 1.3 or a Prime Rate Loan.
(ii) Co-Borrowers shall execute and deliver to each Revolving Credit
Lender a note to evidence the Revolving Credit Loan Commitment of that Revolving
Credit Lender. Each note shall be in the principal amount of the Revolving
Credit Loan Commitment of the applicable Revolving Credit Lender, dated the
Closing Date and substantially in the form of Exhibit 1.1(a)(ii) (each a
"Revolving Credit Note" and, collectively, the "Revolving Credit Notes"). Each
Revolving Credit Note shall represent the joint and several obligations of
Co-Borrowers to pay the amount of each Revolving Credit Lender's Revolving
Credit Loan Commitment or, if less, the aggregate unpaid principal amount of all
Revolving Credit Loans made by each such Lender to Co-Borrowers together with
interest thereon as prescribed in Section 1.3.
(iii) The entire unpaid balance of the Revolving Credit Loans shall
be immediately due and payable in full in immediately available funds on the
Commitment Termination Date.
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(iv) The aggregate amount of Revolving Credit Loans to be made by
the Lenders to the Co-Borrowers on a Borrowing Date shall not be less than the
Minimum Borrowing Amount.
(B) TERM LOAN.
(i) Subject to the terms and conditions hereof, each Term Loan
Lender severally agrees to make a term loan on the Closing Date to Co-Borrowers
in the original principal amount of its Term Loan Commitment. The aggregate term
loans of all Term Loan Lenders shall be referred to collectively as the "Term
Loan."
(ii) The Term Loan shall be evidenced by promissory notes
substantially in the form of Exhibit 1.1(b)(ii) (each a "Term Note" and
collectively the "Term Notes"), and Co-Borrowers shall execute and deliver a
Term Note to each Term Lender. Each Term Note shall represent the obligation of
Co-Borrowers to pay the amount of the applicable Term Lender's respective Term
Loan Commitment, together with interest thereon as prescribed in Section 1.3.
(C) DISBURSEMENT OF REVOLVING CREDIT LOANS. No later than 1:00 P.M. (New
York time) on the date specified in each Notice of Revolving Credit Loan, each
Lender will make available its Pro Rata Share of each Borrowing requested to be
made on such date, in Dollars and in immediately available funds at the Payment
Office of the Administrative Agent. After receipt of such funds, subject to the
terms hereof, the Administrative Agent will make available to the Co-Borrowers
at the Payment Office in Dollars and in immediately available funds, the
aggregate of the amounts specified in the Notice of Revolving Credit Loan and
permitted hereunder prior to 2:00 P.M. (New York time) on such day. Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
Borrowing that such Lender does not intend to make available to the
Administrative Agent such Lender's portion of any Borrowing to be made on such
date, the Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on such date of Borrowing and the
Administrative Agent may, in reliance upon such assumption, make available to
the Co-Borrowers a corresponding amount. If such corresponding amount is not in
fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender without set-off, counterclaim or deduction of any kind.
The Administrative Agent shall also be entitled to recover on demand from such
Lender, interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent to
the Co-Borrowers until the date such corresponding amount is recovered by the
Administrative Agent, at a rate per annum equal to the overnight Federal Funds
Rate. Nothing in this Section 1.5 shall be deemed to relieve any Lender from its
obligation to make Loans hereunder or to prejudice any rights which the
Co-Borrowers may have against any Lender as a result of any failure by such
Lender to make Loans hereunder. To the extent the Administrative Agent advances
funds to Co-Borrowers on behalf of any Revolving Credit Lender and is not
reimbursed therefor by such Lender on the same Business Day as such Revolving
Credit Loan is made, Administrative Agent shall be entitled to set-off the
funding shortfall against such Lender's Pro Rata Share of all payments received
from Co-Borrowers.
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(D) PRO RATA BORROWINGS. All Borrowings under this Agreement shall be
incurred from the Lenders on the basis of their Commitments. It is understood
that no Lender shall be responsible for any default by any other Lender of
its obligation to make Loans hereunder and that each Lender shall be
obligated to make the Loans provided to be made by it hereunder, regardless
of the failure of any other Lender to make its Loans hereunder.
(E) LETTERS OF CREDIT. (i) Upon the terms and subject to the conditions
of this Agreement, including Section 2 hereof, from time to time on and after
the Closing Date prior to the Commitment Termination Date, Cigar, on behalf
of the Co-Borrowers may request that Chase (the "Issuing Bank") issue on its
behalf, standby letters of credit or commercial letters of credit
(individually, a "Letter of Credit" and, collectively, the "Letters of
Credit"), in an aggregate amount outstanding at any time not to exceed the
lesser of (x) $2,000,000 and (y) the Maximum Amount less the outstanding
principal balance of the Revolving Credit Loans. The term of any Letter of
Credit shall not exceed one year and shall not extend beyond the Commitment
Termination Date. Cigar, on behalf of the Co-Borrowers shall notify the
Issuing Bank in writing at least three (3) Business Days prior to the date on
which the Issuing Bank is requested to issue one or more Letters of Credit.
Each such notice shall be binding upon all Co-Borrowers irrevocable and
confirmed immediately by delivery to the Issuing Bank of a Request for Letter
of Credit substantially in the form of Exhibit 1.1(e) hereto. Upon issuance
of a Letter of Credit, the Issuing Bank shall promptly notify each other
Lender of the issuance and the terms thereof.
(ii) Each Revolving Credit Lender shall, upon the issuance of a
Letter of Credit, be deemed to have irrevocably and unconditionally purchased
from the Issuing Bank an undivided interest and participation in each such
Letter of Credit equal to such Revolving Credit Lender's Pro Rata Shares of
the Letter of Credit amount. In the event that Issuing Bank shall make any
payment on or pursuant to any Letter of Credit, such payment (a "Letter of
Credit Loan") shall then be deemed automatically to constitute a Revolving
Credit Loan under Section 1.1(a) of this Agreement (subject to all the terms
and conditions of this Agreement applicable to Revolving Credit Loans)
regardless of whether a Default or Event of Default shall have occurred and
be continuing and notwithstanding Co-Borrowers' failure to satisfy the
conditions precedent set forth in Section 2, and each Revolving Credit Lender
shall be obligated to pay its Pro Rata Share thereof in the same manner as
provided in this Agreement with respect to Revolving Credit Loans.
(iii) Any issuance of a Letter of Credit pursuant to this Section
1.1(e) shall reduce the available amount under the Lender's aggregate
Revolving Credit Loan Commitments and each Lender's Revolving Credit Loan
Commitment in an amount equal to such Lender's Pro Rata Share of such Letter
of Credit and the issuance of each such Letter of Credit shall be deemed to
be a use of each Lender's Revolving Credit Loan Commitment.
(iv) The obligation of the Co-Borrowers to repay each Letter of
Credit Loan in full, together with accrued interest thereon in accordance
with this Agreement, shall be absolute, unconditional and irrevocable, under
all circumstances whatsoever, and (without limiting the generality of the
foregoing) shall not be affected by:
(A) the use which may be made of the Letter of Credit Loan or any acts
or omissions of the drawer in connection therewith;
(B) the validity, sufficiency or genuineness of documents presented in
connection with a drawing, or of any endorsement thereon, even if such
documents should in fact prove to be in any and all respects invalid,
insufficient, fraudulent or forged, provided that such documents appear on
their face to comply with the terms of the Letter of Credit;
(C) any irregularity in the transaction with respect to which the
Letter of Credit is issued; or
(D) the existence of any claim, set-off, defense or other right which
the Co-Borrowers might have against the Lenders, or any of them, or any other
Person, whether in connection with the Letter of Credit, the transaction
contemplated by the Letter of Credit, or any unrelated transaction.
(v) the Co-Borrowers shall pay to the Issuing Bank for the benefit
of the Revolving Credit Lenders a fee (the "Letter of Credit Fee") in respect
of the undrawn portion of each Letter of Credit issued hereunder at a rate
per annum equal to the Applicable Eurodollar Margin in effect at the time
such Letter of Credit is issued multiplied by the maximum amount available
from time to time to be drawn under the applicable Letter of Credit. All
Letter of Credit Fees in respect of each Letter of Credit shall be paid to
Administrative Agent for the benefit of the Revolving Credit Lenders in
advance at the time of issuance of such Letter of Credit. In addition, the
Co-Borrowers shall pay directly to the Issuing Bank with respect to each
Letter of Credit issued for its account, all costs and expenses incurred by
the Issuing Bank in connection with any Letter of Credit, including without
limitation, all charges for the negotiation of any draft paid pursuant to any
Letter of Credit and any amendments or supplements thereto.
1.2 SCHEDULED REPAYMENT OF PRINCIPAL OF TERM LOAN.
(a) Co-Borrowers shall pay the principal amount of the Term Loan in twenty
(20) consecutive equal quarterly installments on the first day of January,
April, July and October of each year, commencing January 1, 2001, each in the
amount of $1,750,000. In any event, the aggregate outstanding principal balance
of the Term Loan shall be due and payable in full in immediately available funds
on October 1, 2005, if not sooner paid in full.
(b) Each payment of principal with respect to the Term Loan shall be paid
to Administrative Agent for the ratable benefit of each Term Loan Lender in
proportion to each such Term Loan Lender's respective Term Loan Commitment.
1.3. INTEREST; EURODOLLAR INTEREST PERIODS; APPLICABLE MARGINS.
(A) INTEREST. Co-Borrowers shall pay interest to Administrative Agent, for
the ratable benefit of Lenders in accordance with the various Loans being made
by each Lender, in arrears on each applicable Interest Payment Date, at the
following rates:
(i) with respect to the Revolving Credit Loans, the Prime Rate plus
the Applicable Prime Margin per annum or, at the election of Co-Borrowers, for
each Eurodollar Interest Period applicable thereto, the applicable Eurodollar
Rate plus the Applicable Eurodollar Margin per annum, based on the aggregate
Revolving Credit Loans outstanding from time to time; and
(ii) with respect to the Term Loan, the Prime Rate plus the
Applicable Prime Margin per annum or, at the election of Co-Borrowers, for each
Eurodollar Interest Period applicable thereto, the applicable Eurodollar Rate
plus the Applicable Eurodollar Margin per annum.
(B) EURODOLLAR INTEREST PERIODS. At least three (3) days prior to the
Closing Date in respect of the Term Loan, or at the time they give any Notice of
Revolving Credit Loan in respect of the making of any Eurodollar Loan or any
Notice of Conversion/Confirmation in respect of a Eurodollar Loan, or on the
third Business Day prior to the expiration of a Eurodollar Interest Period
applicable to a Eurodollar Loan, Cigar on behalf of itself and the other
Co-Borrowers shall have the right to elect, by giving the Administrative Agent
notice thereof, the interest period (each an "Eurodollar Interest Period")
applicable to such Eurodollar Loan, which Eurodollar Interest Period shall, at
the option of the Co-Borrowers, be a one, two or three month period provided
that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times have
the same Eurodollar Interest Period;
(ii) the initial Eurodollar Interest Period for any Borrowing of
Eurodollar Loans shall
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commence on the date of such Borrowing (including the date of any conversion
thereto from a Borrowing of Prime Rate Loans) and each Eurodollar Interest
Period occurring thereafter in respect of such Eurodollar Loans shall commence
on the day on which the next preceding Eurodollar Interest Period applicable
thereto expires;
(iii) if any Eurodollar Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in the
calendar month at the end of such Eurodollar Interest Period, such Eurodollar
Interest Period shall end on the last Business Day of such calendar month;
(iv) if any Eurodollar Interest Period would otherwise expire on a day
which is not a Business Day, such Eurodollar Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Eurodollar Interest
Period would otherwise expire on a day which is not a Business Day but is a day
of the month after which no further Business Day occurs in such month, such
Eurodollar Interest Period shall expire on the next preceding Business Day;
(v) no Eurodollar Interest Period shall extend beyond the Expiration Date
and any Eurodollar Interest Period that would otherwise extend beyond the
Expiration Date shall end two (2) Business Days prior to such date; and
(vi) Co-Borrowers shall select Eurodollar Interest Periods so that there
shall be no more than three (3) separate Eurodollar Loans in existence at any
one time. If upon the expiration of any Eurodollar Interest Period applicable to
a Borrowing of Eurodollar Loans, the Co-Borrower have failed to elect, or are
not permitted to elect, a new Eurodollar Interest Period to be applicable to
such Eurodollar Loans as provided above, the Co-Borrowers shall be deemed to
have elected to convert such Eurodollar Loans into Prime Rate Loans effective as
of the expiration date of such current Eurodollar Interest Period.
(C) APPLICABLE PRIME MARGIN AND APPLICABLE EURODOLLAR MARGIN. The
Applicable Prime Margin and Applicable Eurodollar Margin shall be 0% and 1.5%
per annum, respectively, as of the Closing Date. So long as no Event of Default
shall have occurred and be continuing, the Applicable Margins will be adjusted
prospectively on a quarterly basis by reference to Co-Borrowers' Financial
Statements for each Fiscal Quarter delivered pursuant to Section 4.1. The first
adjustment, if any, in the Applicable Margins shall be based upon Co-Borrowers'
Financial Statements for the Fiscal Quarter ended September 30, 2000.
Adjustments in the Applicable Margins will become effective, in the case of
Eurodollar Loans, on the first day of the first Eurodollar Interest Period to
occur at least two (2) Business Days after delivery of Co-Borrowers' quarterly
Financial Statements and, in the case of Prime Rate Loans , one (1) Business
Days after delivery of Co-Borrowers' quarterly Financial Statements. Adjustments
in Applicable Margins will be determined by reference to the following grids:
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LEVEL OF
IF LEVERAGE RATIO IS: APPLICABLE MARGINS:
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is greater than or = to 2.50:1 Level I
is greater than or = to 2.25:1,
but is less than 2.50:1 Level II
is less than 2.25:1 Xxxxx XXX
XXXXX X XXXXX XX XXXXX XXX
------- -------- ---------
Applicable .25% 0% 0%
Prime Margin
Applicable Eurodollar 1.75% 1.625% 1.50%
Margin
Concurrently with the delivery of the foregoing Financial Statements for
each Fiscal Quarter, Cigar shall deliver, on behalf of itself and the other
Co-Borrowers, to Administrative Agent and Lenders a certificate, signed by its
chief financial officer, setting forth in reasonable detail the basis for the
continuance of, or any change in, the Applicable Margins. Failure to timely
deliver such Financial Statements shall, in addition to any other remedy
provided for in this Agreement (including without limitation imposition of the
Default Rate), result in an increase in the Applicable Margins to the highest
level set forth in the foregoing grid, until the fifth Business Day following
the delivery of those Financial Statements demonstrating that such an increase
is not required. If a Default or an Event of Default shall have occurred or be
continuing at the time any reduction in the Applicable Margins is to be
implemented, that reduction shall be deferred until the fifth Business Day
following the date on which such Default or Event of Default is waived or cured,
if at all.
(D) COMPUTATIONS OF INTEREST. All computations of interest shall be made
by Administrative Agent on the basis of a three hundred and sixty (360) day
year, for the actual number of days occurring in the period for which such
interest is payable. Each determination by Administrative Agent of an interest
rate hereunder shall be conclusive, absent manifest error.
(E) DEFAULT RATE. Following the occurrence and during the continuation of
any Default or Event of Default, the interest rates applicable to the Loans
shall be increased by two percent (2%) per annum above the rates of interest
otherwise applicable hereunder ("Default Rate").
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Interest at the Default Rate shall accrue from the initial date of such Default
or Event of Default until that Default or Event of Default is cured or waived
and shall be payable upon demand. Overdue principal and, to the extent permitted
by law, overdue interest in respect of each Loan and any other overdue amount
payable hereunder shall, in each case, bear interest at a rate per annum equal
to Prime Rate plus 2%.
(F) MAXIMUM LAWFUL RATE. Notwithstanding anything to the contrary set
forth in this Section 1.3, if a court of competent jurisdiction determines in a
final order that the rate of interest payable hereunder exceeds the highest rate
of interest permissible under applicable law (the "Maximum Lawful Rate"), then
so long as the Maximum Lawful Rate would be so exceeded, the rate of interest
payable hereunder shall be equal to the Maximum Lawful Rate; provided, however,
that if at any time thereafter the rate of interest payable hereunder is less
than the Maximum Lawful Rate, Co-Borrowers shall continue to pay interest
hereunder at the Maximum Lawful Rate until such time as the total interest
received by Administrative Agent, on behalf of Lenders, is equal to the total
interest which would have been received had the interest rate payable hereunder
been (but for the operation of this paragraph) the interest rate payable since
the initial Borrowing Date as otherwise provided in this Agreement. Thereafter,
interest hereunder shall be paid at the rate(s) of interest and in the manner
provided in Sections 1.3(a) through (f) above, unless and until the rate of
interest again exceeds the Maximum Lawful Rate, and at that time this paragraph
shall again apply. In no event shall the total interest received by any Lender
pursuant to the terms hereof exceed the amount which such Lender could lawfully
have received had the interest due hereunder been calculated for the full term
hereof at the Maximum Lawful Rate. If the Maximum Lawful Rate is calculated
pursuant to this paragraph, such interest shall be calculated at a daily rate
equal to the Maximum Lawful Rate divided by the number of days in the year in
which such calculation is made.
1.4. USE OF PROCEEDS. Co-Borrowers shall utilize the proceeds of the Term
Loan and the Revolving Credit Loans solely to (i) repay and refinance the unpaid
obligations under the Existing Credit Agreement and (ii) to finance the
Co-Borrowers' ordinary working capital and general corporate needs (but
excluding in any event the making of any Restricted Payment not specifically
permitted by Section 6.14). Disclosure Schedule (1.4) contains a description of
Co-Borrowers' uses of Loans as of the Closing Date.
1.5. PREPAYMENTS; REDUCTION OF UNUTILIZED COMMITMENT.
(A) VOLUNTARY PREPAYMENTS; REDUCTION OF UNUTILIZED COMMITMENT.
(i) Co-Borrowers may at any time on at least three (3) Business
Days' prior written notice to Administrative Agent (a) voluntarily prepay all or
part of the Term Loan and/or (b) voluntarily prepay all or part of any Revolving
Credit Loan; provided that any such prepayments in each case shall be in a
minimum amount of $1,000,000 and integral multiples thereof and provided,
further, that no partial prepayment of any Revolving Credit Loan shall reduce
the outstanding amount of such Revolving Credit Loan to an amount less than the
Minimum Borrowing Amount. Any prepayment of a Loan shall also be accompanied by
payment in full of all accrued, unpaid interest on the amount being prepaid up
to and including the date of such prepayment. Any prepayment of a Revolving
Credit Loan shall be accompanied
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by the payment of any Eurodollar Loan funding breakage costs in accordance with
Section 1.10(b).
Each notice of partial prepayment shall designate the Loan or other Obligations
to which such prepayment is to be applied, provided that any partial prepayments
of the Term Loan made by Co-Borrowers shall be applied to prepay the scheduled
principal installments of the Term Loan in inverse order of maturity.
(ii) Co-Borrowers may at any time on at least three (3) Business Days' prior
written notice to Administrative Agent permanently reduce or terminate the
Unutilized Commitment, provided that upon any such termination all Loans and
other Obligations shall be immediately due and payable in full, and provided,
further, that any such voluntary reduction or termination of Unutilized
Commitment must be accompanied by the payment of the Fee required by Section
1.7, if any. Upon any such reduction or termination of the Unutilized
Commitment, Co-Borrowers right to request Revolving Credit Loans shall
simultaneously be permanently reduced or terminated, as the case may be.
(B) MANDATORY PREPAYMENTS.
(i) If at any time the aggregate outstanding balance of the
Revolving Credit Loan exceeds the Maximum Amount, Co-Borrowers shall immediately
repay the aggregate outstanding Revolving Credit Loans to the extent required to
eliminate such excess and at Co-Borrowers' option, such payment shall be applied
first to such Revolving Credit Loans which are Prime Rate Loans.
(ii) Promptly, but in any event within five (5) Business Days,
following receipt by any Co-Borrower of cash proceeds of any asset sale,
assignment, transfer, loss, casualty or other disposition (including
condemnation proceeds and insurance proceeds from loss unless such insurance
proceeds are otherwise used to restore, replenish or repair assets and such loss
does not exceed $1,000,000), but excluding proceeds of asset dispositions
permitted by Section 6.8(a), (c), (d), (e) or (f), Co-Borrowers shall prepay the
Loans in an amount equal to all such proceeds, net of (A) commissions and other
reasonable and customary transaction costs, fees and expenses properly
attributable to such transaction and payable by Co-Borrowers in connection
therewith (in each case, paid to non-Affiliates), (B) all sales, transfer and
recording taxes, (C) amounts payable to holders of senior Liens (to the extent
such Liens constitute Permitted Encumbrances hereunder), if any, (D) an
appropriate reserve for income taxes in accordance with GAAP in connection
therewith and (E) appropriate amounts to be provided by Co-Borrowers as a
reserve, in accordance with GAAP, against any liabilities associated with the
assets sold or disposed of in such asset disposition, including, without
limitation, pension and other post-employment benefit liabilities and
liabilities related to environmental matters or against any indemnification
obligations associated with the assets sold or disposed of in such asset
disposition; provided that to the extent any reserve, or part thereof, under
this Section 1.5(b)(ii) is reversed or is no longer applicable, such amount
shall be applied toward prepayment of the Loans as provided in this Section. Any
such prepayment shall be applied in accordance with clause (c) below.
-8-
(iii) If Cigar or any other Co-Borrower issues Stock or debt
securities permitted hereunder, no later than the Business Day following the
date of receipt of the proceeds thereof, Co-Borrower shall prepay the Loans in
an amount equal to all such cash proceeds, net of all discounts and commissions
or brokerage fees and other reasonable costs paid to non-Affiliates in
connection therewith and net of any transfer, recording or similar taxes. The
foregoing shall not apply to (A) sales of Stock pursuant to stock options or
incentive plans of Cigar, (B) intercompany equity and debt issuances permitted
hereunder between and among Cigar or any other Co-Borrower and (C) all
Indebtedness permitted under Section 6.3(a)(ii), (iv) or (vi) and any
refinancing thereof. Any such prepayment shall be applied in accordance with
clause (c) below.
(C) APPLICATION OF CERTAIN MANDATORY PREPAYMENTS. Any prepayments made by
Co-Borrowers pursuant to clauses (b)(ii), or (b)(iii) above shall be applied as
follows: first, to Fees and reimbursable expenses of the Administrative Agent
then due and payable pursuant to any of the Loan Documents; second, to interest
then due and payable on each of the Loans on a pro rata basis; third, to prepay
the scheduled principal installments of the Term Loan in inverse order of
maturity, until the Term Loan shall have been prepaid in full; and fourth, to
the outstanding principal balance of Revolving Credit Loans which are Prime Rate
Loans first, then to those which are Eurodollar Loans, until the same shall have
been paid in full. The Revolving Loan Commitment shall be permanently reduced by
the amount of any such prepayments applied to Revolving Credit Loans.
(D) APPLICATION OF PREPAYMENTS FROM INSURANCE PROCEEDS. Prepayments from
insurance proceeds in accordance with Section 1.5(b)(2) shall be applied in the
same manner as set forth in the preceding Section 1.5(c). The Revolving Credit
Loan Commitment shall be permanently reduced by the amount of any such
prepayments applied to Revolving Credit Loans.
(E) NO CONSENT. Nothing in this Section 1.5 shall be construed to
constitute Administrative Agent's or any Lender's consent to any transaction
referred to in clauses (b)(ii) and (b)(iii) above which is not permitted by
other provisions of this Agreement or the other Loan Documents.
1.6. CONVERSIONS. So long as no Default or Event of Default shall have
occurred and be continuing, and subject to the additional conditions precedent
set forth in Section 2.2, Co-Borrowers shall have the option to (i) convert at
any time all or a portion, equal to at least the Minimum Borrowing Amount and
multiples thereof, of any outstanding (A) Prime Rate Loan to a Eurodollar Loan,
or (B) Eurodollar Loan to a Prime Rate Loan, subject to payment of Eurodollar
Loan breakage costs in accordance with Section 1.10(b) if such conversion is
made prior to the expiration of the Eurodollar Interest Period applicable
thereto, or (ii) continue all or any portion of any Loan as a Eurodollar Loan
upon the expiration of the applicable Eurodollar Interest Period and the
succeeding Eurodollar Interest Period of that continued Loan shall commence on
the last day of the Eurodollar Interest Period of the Loan to be continued,
provided, that (i) no partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than the Minimum Borrowing Amount and (ii) no conversion
pursuant to this Section 1.6 shall result in a greater number of Borrowings of
Eurodollar Loans than is permitted under Section 1.3(b). Any such election must
be made by 11:00 a.m. (New York time) on the third (3rd) Business Day prior to
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(1) the end of each Eurodollar Interest Period with respect to any Eurodollar
Loans to be continued as such, or (2) the date on which Co-Borrowers wish to
convert any Prime Rate Loan to a Eurodollar Loan for a Eurodollar Interest
Period designated by Co-Borrowers in such election or (3) the date on which
Co-Borrowers wish to convert any Eurodollar Loan to a Prime Rate Loan. If no
election is received with respect to a Eurodollar Loan by 11:00 a.m. (New York
time) on the third (3rd) Business Day prior to the end of the Eurodollar
Interest Period with respect thereto (or if a Default or an Event of Default
shall have occurred and be continuing or the additional conditions precedent set
forth in Section 2.2 shall not have been satisfied), that Eurodollar Loan shall
be converted to a Prime Rate Loan at the end of its Eurodollar Interest Period.
Cigar, on behalf of the Co-Borrowers, must make such election by written notice
(a "Notice of Conversion/Continuation") to Administrative Agent in the form of
Exhibit 1.6.
1.7. FEES.
(A) FEE LETTER. Co-Borrowers shall pay to Chase, without duplication of
Fees previously paid pursuant thereto, the Fees specified in the Fee Letter at
the times specified for payment therein.
(B) COMMITMENT FEE. The Co-Borrowers shall pay to the Administrative
Agent for distribution to each Lender a commitment fee on the Unutilized
Commitments of the Lenders (the "Commitment Fee") for the period from and
including the Effective Date to but not including the Termination Date. The
Commitment Fee as of the Effective Date, shall be computed at a rate equal to
.325% per annum on the average daily Unutilized Commitment of such Lender.
The Commitment Fee shall be adjusted prospectively on a quarterly basis by
reference to Co-Borrowers' Financial Statements delivered for each Fiscal
Quarter pursuant to Section 4.1. The first adjustment, if any, in the
Commitment Fee shall be based upon Co-Borrowers' Financial Statements for the
Fiscal Quarter ended September 30, 2000. Adjustments in the Commitment Fee
will become effective two (2) Business Days after delivery of Co-Borrowers'
quarterly Financial Statements Adjustments in the Commitment Fee will be
determined by reference to the following grids:
IF LEVERAGE RATIO IS: APPLICABLE COMMITMENT FEE:
--------------------- --------------------------
is greater than or = to 2.50:1 Level I
is greater than or = to 2.25:1,
but is less than 2.50:1 Level II
is less than 2.25:1 Xxxxx XXX
-00-
XXXXX X XXXXX XX XXXXX XXX
------- -------- ---------
Applicable .475%* .40%* .325%*
Commitment Fee
* Rate per annum on the average daily Unutilized Commitment.
Failure to timely deliver the foregoing Financial Statements shall, in
addition to any other remedy provided for in this Agreement, result in an
increase in the applicable Commitment Fee to the highest level (I.E., Level I
above). Accrued Commitment Fees payable to the Lenders shall be payable on the
first Business Day of each month and the Termination Date.
(C) COMPUTATION. All computation of Fees shall be made by Administrative
Agent on the basis of a three hundred and sixty (360) day year, in each case for
the actual number of days occurring in the period for which such Fees are
payable. Each determination by Administrative Agent of Fees hereunder shall be
conclusive, absent manifest error.
1.8. METHOD AND PLACE OF PAYMENT.
(A) GENERAL. Except as otherwise specifically provided herein, all
payments under this Agreement or any Note shall be made to the Administrative
Agent for the account of the Lender or Lenders entitled thereto no later than
12:00 Noon (New York time) on the date when due and shall be made in immediately
available funds at the Payment Office of the Administrative Agent and in
Dollars.
(B) PAYMENTS ON NON-BUSINESS DAY. If any payment on any Loan becomes due
and payable on a day other than a Business Day, the maturity thereof will be
extended to the next succeeding Business Day (except as set forth in the
definition of Eurodollar Interest Period) and, with respect to payments of
principal, interest thereon shall be payable at the then applicable rate during
such extension.
1.9. APPLICATION AND ALLOCATION OF PAYMENTS.
(a) So long as no Default or Event of Default shall have occurred and be
continuing, (i) payments matching specific scheduled payments then due shall be
applied to those scheduled payments; (ii) voluntary prepayments shall be applied
as determined by Co-Borrowers, subject to the provisions of Section 1.5(a); and
(iii) mandatory prepayments shall be applied as set forth in Sections 1.5(c) and
1.3(d). All payments and prepayments applied to a particular Loan shall be
applied ratably to the portion thereof held by each Lender as determined by its
Pro Rata Share. As to each other payment, and as to all payments made when a
Default or Event or Default shall have occurred and be continuing or following
the Commitment Termination Date, Co-Borrowers hereby irrevocably waive the right
to direct the application of any and all payments received
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from or on behalf of Co-Borrowers, and Co-Borrowers hereby irrevocably agree
that Administrative Agent shall have the continuing exclusive right to apply any
and all such payments against the Obligations as Administrative Agent may deem
advisable notwithstanding any previous entry by Administrative Agent in any
books and records. In the absence of a specific determination by Administrative
Agent with respect thereto, payments shall be applied to amounts then due and
payable in the following order: (1) to Fees and Administrative Agent's expenses
reimbursable hereunder; (2) to interest on the Loans, ratably in proportion to
the interest accrued as to each Loan; (3) to principal payments on the Loans,
ratably to the aggregate, combined principal balance of the Loans; and (4) to
all other Obligations including expenses of Lenders to the extent reimbursable
under this Agreement.
(b) Administrative Agent is authorized to, and at its sole election may,
charge to the Revolving Credit Loan balance on behalf of Co-Borrowers and cause
to be paid all Fees, expenses, Charges, costs (including insurance premiums in
accordance with Section 5.4(a)) and interest and principal, other than principal
of the Revolving Credit Loans, owing by Co-Borrowers under this Agreement or any
of the other Loan Documents if and to the extent Co-Borrowers fail to promptly
pay any such amounts as and when due, even if such charges would cause the
aggregate balance of the Revolving Credit Loans to exceed Borrowing
Availability. At Administrative Agent's option and to the extent permitted by
law, any charges so made shall constitute part of the Revolving Credit Loans
hereunder.
1.10. INDEMNITY.
(a) Each Co-Borrower shall jointly and severally indemnify and hold
harmless each of the Administrative Agent, Lenders and their respective
Affiliates, and each such Person's respective officers, directors, employees,
attorneys, agents and representatives (each, an "Indemnified Person"), from and
against any and all suits, actions, proceedings, claims, damages, losses,
liabilities and expenses (including reasonable attorneys' fees and disbursements
and other costs of investigation or defense, including those incurred upon any
appeal) which may be instituted or asserted against or incurred by any such
Indemnified Person as the result of credit having been extended, suspended or
terminated under this Agreement and the other Loan Documents and the
administration of such credit, and in connection with or arising out of the
transactions contemplated hereunder and thereunder and any actions or failures
to act in connection therewith, including any and all Environmental Liabilities
and legal costs and expenses arising out of or incurred in connection with
disputes between or among any parties to any of the Loan Documents (other than
those solely among Lenders and/or Administrative Agent) (collectively,
"Indemnified Liabilities"); provided, that no such Co-Borrower shall be liable
for any indemnification to an Indemnified Person to the extent that any such
suit, action, proceeding, claim, damage, loss, liability or expense is
determined in the final, non-applicable judgment of a court of competent
jurisdiction to have resulted from that Indemnified Person's gross negligence or
willful misconduct. NO INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY
OTHER PARTY TO ANY LOAN DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY
BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY
THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES
WHICH MAY BE ALLEGED AS A RESULT OF CREDIT HAVING BEEN EXTENDED, SUSPENDED OR
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TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY OTHER TRANSACTION
CONTEMPLATED HEREUNDER OR THEREUNDER.
(b) To induce Lenders to provide the Eurodollar Rate option on the terms
provided herein, if (i) any Eurodollar Loans are repaid in whole or in part
prior to the last day of any applicable Eurodollar Interest Period (whether that
repayment is made pursuant to any provision of this Agreement or any other Loan
Document or is the result of acceleration, by operation of law or otherwise);
(ii) Co-Borrowers shall default in payment when due of the principal amount of
or interest on any Eurodollar Loan; (iii) Co-Borrowers shall default in making
any borrowing of, conversion into or continuation of Eurodollar Loans after
Co-Borrower has given notice requesting the same in accordance herewith; or (iv)
Co-Borrowers shall fail to make any prepayment of a Eurodollar Loan after
Co-Borrowers have given a notice thereof in accordance herewith, Co-Borrowers
shall indemnify and hold harmless each Lender from and against all losses, costs
and expenses resulting from or arising from any of the foregoing. Such
indemnification shall include any loss (including loss of margin) or expense
arising from the reemployment of funds obtained by it or from fees payable to
terminate deposits from which such funds were obtained. In the case of a
Eurodollar Loan, the loss to any Lender attributable to any such event shall be
deemed to include an amount determined by such Lender to be equal to the excess,
if any, of (i) the amount of interest that such Lender would pay for a deposit
equal to the principal amount of such Loan for the period from the date of such
payment, conversion, failure or assignment to the last day of the then current
Eurodollar Interest Period for such Loan (or, in the case of a failure to
borrow, convert or continue, the duration of the Eurodollar Interest Period that
would have resulted from such borrowing, conversion or continuation) if the
interest rate payable on such deposit were equal to the Eurodollar Rate for such
Eurodollar Interest Period, over (ii) the amount of interest that such Lender
would earn on such principal amount for such period if such Lender were to
invest such principal amount for such period at the interest rate that would be
bid by such Lender (or an affiliate of such Lender) for Dollar deposits from
other banks in the eurodollar market at the commencement of such period. For the
purpose of calculating amounts payable to a Lender under this subsection, each
Lender shall be deemed to have actually funded its relevant Eurodollar Loan
through the purchase of a deposit bearing interest at the Eurodollar Rate in an
amount equal to the amount of that Eurodollar Loan and having a maturity
comparable to the relevant Eurodollar Interest Period; provided, however, that
each Lender may fund each of its Eurodollar Loans in any manner it sees fit, and
the foregoing assumption shall be utilized only for the calculation of amounts
payable under this subsection. This covenant shall survive the termination of
this Agreement and the payment of the Notes and all other amounts payable
hereunder. As promptly as practicable under the circumstances, each Lender shall
provide Co-Borrowers with its written calculation of all amounts payable
pursuant to this Section 1.10, and such calculation shall be binding on the
parties hereto absent manifest error unless Co-Borrowers shall object in writing
within ten (10) Business Days of receipt thereof, specifying the basis for such
objection in detail.
1.11. TAXES.
(a) Any and all payments by Co-Borrowers under this Agreement or under the
Notes shall be made, in accordance with this Section 1.11, free and clear of and
without deduction for any and all present or future Taxes. If Co-Borrowers shall
be required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under the Notes, (i) the sum payable
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shall be increased as much as shall be necessary so that after making all
required deductions (including deductions applicable to additional sums
payable under this Section 1.11) Administrative Agent or Lenders, as
applicable, receive an amount equal to the sum they would have received had
no such deductions been made, (ii) Co-Borrowers shall make such deductions,
and (iii) Co-Borrowers shall pay the full amount deducted to the relevant
taxing or other authority in accordance with applicable law. Within thirty
(30) days after the date of any payment of Taxes, Co-Borrowers shall furnish
to Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof.
(b) Each Co-Borrower shall indemnify and, within ten (10) days of demand
therefor, pay Administrative Agent and each Lender for the full amount of Taxes
(including any Taxes imposed by any jurisdiction on amounts payable under this
Section 1.11) attributable to payments by or on behalf of the Co-Borrowers
hereunder or under any of the other Loan Documents paid by Administrative Agent
or such Lender, as appropriate, and any liability (including penalties, interest
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes were correctly or legally asserted.
(c) Each Lender organized under the laws of a jurisdiction outside the
United States (a "Foreign Lender") as to which payments to be made under this
Agreement or under the Notes are exempt from United States withholding tax under
an applicable statute or tax treaty shall provide to Co-Borrowers and
Administrative Agent a properly completed and executed IRS Form 4224 or Form
1001 or other applicable form, certificate or document prescribed by the IRS or
the United States certifying as to such Foreign Lender's entitlement to such
exemption (a "Certificate of Exemption"). Any foreign Person that seeks to
become a Lender under this Agreement shall provide a Certificate of Exemption to
Co-Borrowers and Administrative Agent prior to becoming a Lender hereunder. No
foreign Person may become a Lender hereunder if such Person is unable to deliver
a Certificate of Exemption.
(d) If any Lender shall become aware that it is entitled to receive a
refund or credit (such credit to include any increase in any foreign tax credit)
as a result of indemnified Taxes (including any penalties or interest with
respect thereto) as to which it has been indemnified by Co-Borrowers pursuant to
this Section 1.11, it shall promptly notify Co-Borrowers of the availability of
such refund or credit and shall, within 30 days after receipt of a request by
the Co-Borrowers, apply for such refund or credit at Co-Borrowers' expense, and
in the case of any application for such refund or credit by Co-Borrowers, shall,
if legally able to do so, deliver to Co-Borrowers such certificates, forms or
other documentation as may be reasonably necessary to assist Co-Borrowers in
such application. If any Lender receives a refund or credit (such credit to
include any increase in any foreign tax credit) in respect to any indemnified
Taxes as to which it has been indemnified by Co-Borrowers pursuant to this
Section 1.11, it shall promptly notify Co-Borrowers of such refund or credit and
shall, within 30 days after receipt of such refund or the benefit of such credit
(such benefit to include any reduction of the taxes for which any Lender would
otherwise be liable due to any increase in any foreign tax credit available to
such Lender), repay the amount of such refund or benefit of such credit (with
respect to the credit, as determined by the Lender in its sole judgment) to
Co-Borrowers to the extent of amounts that have been paid by Co-Borrowers under
this Section 1.11 with respect to indemnified Taxes giving rise to such refund
or credit), plus any interest received with respect thereto, net of all
reasonable out-of-pocket expenses of such Lender and without interest (other
than interest
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actually received from the relevant taxing authority or other Governmental
Authority with respect to such refund or credit); provided, however, that the
Co-Borrowers, upon the request of such Lender, agree to return the amount of
such refund or benefit of such credit (plus interest) to such Lender in the
event such Lender is required to repay the amount of such refund or benefit of
such credit to the relevant taxing authority or other Governmental Authority.
1.12. CAPITAL ADEQUACY; INCREASED COSTS; ILLEGALITY.
(a) If any Lender shall have determined that any law, treaty, governmental
(or quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy, reserve requirements or similar requirements or compliance by any
Lender with any request or directive regarding capital adequacy, reserve
requirements or similar requirements (whether or not having the force of law),
in each case, adopted after the Closing Date, from any central bank or other
Governmental Authority increases or would have the effect of increasing the
amount of capital, reserves or other funds required to be maintained by such
Lender or any Affiliate and reducing the rate of return on such Lender's capital
as a consequence of its obligations hereunder, then Co-Borrowers shall from time
to time upon demand by such Lender (with a copy of such demand to Administrative
Agent) pay to Administrative Agent, for the account of such Lender, additional
amounts sufficient to compensate such Lender for such reduction. A certificate
as to the amount of that reduction and showing the basis of the computation
thereof submitted by such Lender to Co-Borrowers and to Administrative Agent
shall, absent manifest error, be final, conclusive and binding for all purposes.
(b) If, due to either (i) the introduction of or any change in any law or
regulation (or any change in the interpretation thereof) or (ii) the compliance
with any guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), in each case adopted after
the Closing Date, there shall be any increase in the cost to any Lender of
agreeing to make or making, funding or maintaining any Loan, then Co-Borrowers
shall from time to time, upon demand by such Lender (with a copy of such demand
to Administrative Agent), pay to Administrative Agent for the account of such
Lender additional amounts sufficient to compensate such Lender for such
increased cost. A certificate as to the amount of such increased cost, submitted
to Co-Borrowers and to Administrative Agent by such Lender, shall be conclusive
and binding on Co-Borrowers for all purposes, absent manifest error. Each Lender
agrees that, as promptly as practicable after it becomes aware of any
circumstances referred to above which would result in any such increased cost,
the affected Lender shall, to the extent not inconsistent with such Lender's
internal policies of general application, use reasonable commercial efforts to
minimize costs and expenses incurred by it and payable to it by Co-Borrowers
pursuant to this Section 1.12.
(c) Notwithstanding anything to the contrary contained herein, if the
introduction of or any change in any law or regulation (or any change in the
interpretation thereof) shall make it unlawful, or any central bank or other
Governmental Authority shall assert that it is unlawful, for any Lender to agree
to make or to make or to continue to fund or maintain any Eurodollar Loan, then,
unless that Lender is able to make or to continue to fund or to maintain such
Eurodollar Loan at another branch or office of that Lender without, in that
Lender's opinion, adversely affecting it or its Loans or the income obtained
therefrom, on notice thereof and demand therefor by such Lender to Co-Borrowers
through Administrative Agent, (i) the obligation of such Lender
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to agree to make or to make or to continue to fund or maintain Eurodollar Loans
shall terminate and (ii) Co-Borrowers shall forthwith prepay in full all
outstanding Eurodollar Loans owing to such Lender, together with interest
accrued thereon, unless Co-Borrowers, within five (5) Business Days after the
delivery of such notice and demand, convert all such Loans into a Loan bearing
interest based on the Prime Rate.
(d) Within fifteen (15) days after receipt by Co-Borrowers of written
notice and demand from any Lender (an "Affected Lender") for payment of
additional amounts or increased costs as provided in Section 1.12(a), 1.12(b) or
1.11(a), Co-Borrowers may, at their option, notify Administrative Agent and such
Affected Lender of its intention to replace the Affected Lender. So long as no
Default or Event of Default shall have occurred and be continuing, Co-Borrowers,
with the consent of Administrative Agent, which shall not be unreasonably
withheld, may obtain, at Co-Borrowers' expense, a replacement Lender
("Replacement Lender") for the Affected Lender, which Replacement Lender must be
reasonably satisfactory to Administrative Agent. If Co-Borrowers obtain a
Replacement Lender within ninety (90) days following notice of their intention
to do so, the Affected Lender must sell and assign its Loans and Commitments to
such Replacement Lender for an amount equal to the principal balance of all
Loans held by the Affected Lender and all accrued interest and Fees with respect
thereto through the date of such sale, provided that Co-Borrowers shall have
reimbursed such Affected Lender for the additional amounts or increased costs
that it is entitled to receive under this Agreement through the date of such
sale and assignment.
Notwithstanding the foregoing, Co-Borrowers shall not have the right to
obtain a Replacement Lender if the Affected Lender rescinds its demand for
increased costs or additional amounts within fifteen (15) days following its
receipt of Co-Borrowers' notice of intention to replace such Affected Lender.
Furthermore, if Co-Borrowers give a notice of intention to replace and do not so
replace such Affected Lender within ninety (90) days thereafter, Co-Borrowers'
rights under this Section 1.12(d) with respect to such Affected Lender shall
terminate and Co-Borrowers shall promptly pay all increased costs or additional
amounts demanded by such Affected Lender pursuant to Sections 1.11(a), 1.12(a)
and 1.12(b).
(e) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section shall not constitute a waiver of such Lender's right to
demand such compensation; provided, that the Co-Borrowers shall not be required
to compensate a Lender (or such Lender's holding company) pursuant to this
Section for any increased costs or reductions incurred more than one hundred and
eighty (180) days prior to the date that such Lender notifies the Co-Borrowers
of the change in law or regulation (or change in interpretation thereof) giving
rise to such increased costs or reductions and of such Lender's intention to
claim compensation thereof; provided, further, that, if the change in law giving
rise to such increased costs or reductions is retroactive, then the 180-day
period referred to above shall be extended to include the period of retroactive
effect thereof.
1.13. SINGLE LOAN. All Loans to Co-Borrowers and all of the other
Obligations of Co-Borrowers arising under this Agreement and the other Loan
Documents shall constitute one general obligation of Co-Borrowers.
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2. CONDITIONS PRECEDENT
2.1. CONDITIONS TO THE INITIAL LOANS. No Lender shall be obligated to make
any Loan on the Closing Date, or to take, fulfill, or perform any other action
hereunder, until the following conditions have been satisfied or provided for on
or before November 30, 2000 in a manner satisfactory to Administrative Agent, or
waived in writing by Administrative Agent and Lenders:
(A) CORPORATE DOCUMENTS. The Administrative Agent shall have received the
following documents, each certified as indicated below:
(i) copies of the Certificates of Incorporation, as amended and in
effect, of the Co-Borrowers certified as of a recent date by the Secretary of
State of their respective jurisdictions of incorporation, and a certificate from
such Secretary of State dated as of a recent date as to the good standing of and
corporate documents filed by such Co-Borrower;
(ii) a certificate of the Secretary or an Assistant Secretary of
each of the Co-Borrowers, dated the Closing Date and certifying (A) that
attached thereto is a true and complete copy of the by-laws of such Co-Borrower
as amended and in effect at all times from the date on which the resolutions
referred to in clause (B) were adopted to and including the date of such
certificate, (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the board of directors of such Co-Borrower
authorizing the execution, delivery and performance of such of the Loan
Documents to which such Co-Borrower is a party, and the extensions of credit
hereunder, and that such resolutions have not been modified, rescinded or
amended and are in full force and effect, (C) that the Certificate of
Incorporation of such Co-Borrower has not been amended since the date of the
certification thereto furnished pursuant to subparagraph (i) above, and (D) as
to the incumbency and specimen signature of each officer of such Co-Borrower
executing the Loan Documents to which such Co-Borrower is a party (and the
Administrative Agent and each Lender may conclusively rely on such certificate
until it receives notice in writing from such Co-Borrower); and
(iii) a certificate of another officer of each of the Co-Borrowers
as to the incumbency and specimen signature of the Secretary or Assistant
Secretary, as the case may be, of the Co-Borrower.
(B) OFFICER'S CERTIFICATE. The Administrative Agent shall have received a
certificate of a senior officer of each Co-Borrower, dated the Closing Date,
stating that all of the applicable conditions set forth in this Section 2 have
been met.
(C) OPINION OF COUNSEL TO THE OBLIGORS. An opinion, dated the Closing
Date, of Xxxxxx, Xxxxx & Xxxxxxx LLP , counsel to the Co-Borrowers,
substantially in form and substance satisfactory to the Administrative Agent,
the Lenders and their counsel (and the Co-Borrowers hereby instruct such counsel
to deliver such opinion to the Lenders and the Administrative Agent).
(D) CREDIT AGREEMENT; PLEDGE AGREEMENTS; NOTES; LOAN DOCUMENTS. (i) This
Agreement shall have been duly executed by, and delivered to, each Co-Borrower,
the Administrative Agent and the Lenders; (ii) the Notes shall have been duly
authorized, executed and delivered; (iii) L&LR shall have duly authorized,
executed and delivered a second amended
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and restated pledge agreement substantially in the form of Exhibit 2.1(d)-1 (the
"L&LR Pledge Agreement"); (iv) Cigar shall have duly authorized, executed and
delivered a pledge agreement substantially in the form of Exhibit 2.1(d)-2 (the
"Cigar Pledge Agreement"); (v) each of L&LR and Cigar shall have (A) delivered
to the Collateral Agent all of the Pledged Stock referred to in the Pledge
Agreement to which it is a party together with executed and undated irrevocable
stock powers and such other instruments of transfer as shall be requested by the
Collateral Agent and (B) taken such other action to perfect the security
interests created thereunder as the Collateral Agent shall reasonably request;
and (vi) Administrative Agent shall have received such documents, instruments
and agreements as Administrative Agent shall reasonably request in connection
with the transactions contemplated by this Agreement and the other Loan
Documents, each in form and substance satisfactory to Administrative Agent.
(E) REPAYMENT OF EXISTING OBLIGATIONS. Administrative Agent shall have
received evidence that the principal of and interest on, and all other
amounts owing (including, without limitation, under the Existing Credit
Agreement and any contingent or other amounts payable in respect of letters
of credit) in respect of, any Indebtedness (other than the Loans and the
Permitted Indebtedness) shall have been (or shall be simultaneously) repaid
in full, that all agreements evidencing and such Indebtedness and all
commitments to extend credit thereunder shall have been canceled or
terminated and that any Liens securing any such Indebtedness shall have been
released (or arrangements for such release satisfactory to the Administrative
Agent shall have been made).
(F) APPROVALS. Administrative Agent shall have received (i) satisfactory
evidence that the Co-Borrowers have obtained all required material waivers,
consents and approvals of all Persons including all requisite Governmental
Authorities, to the execution, delivery and performance of this Agreement and
the other Loan Documents and the consummation of the transactions contemplated
hereby or (ii) an officer's certificate in form and substance satisfactory to
Administrative Agent affirming that no such waivers, consents or approvals are
required.
(G) PAYMENT OF FEES. Co-Borrowers shall have paid in full to the
Administrative Agent and the Lenders all costs, fees (including the Fees) and
expenses payable to the Administrative Agent and the Lenders to the extent then
due pursuant hereto and the Fee Letter.
(H) CONSUMMATION OF RELATED TRANSACTIONS. Lenders shall have received
fully executed copies of the Related Transactions Documents, each of which
shall be in form and substance satisfactory to Administrative Agent and its
counsel, it being understood that the forms of the Related Transactions
Documents, each dated the date hereof, are acceptable to Administrative
Agent. The Tender Offer Acquisition and the Merger shall have been
consummated or be contemporaneously consummated on the Closing Date
substantially in accordance with the terms of the Related Transactions
Documents and without waiver of any conditions (except as expressly permitted
thereunder) unless consented to by the Administrative Agent.
(I) NO LITIGATION. There shall exist no action, suit, investigation,
litigation or proceeding affecting the any Co-Borrower pending or, to the
knowledge of Co-Borrowers, threatened before
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any court, governmental agency or arbitration that could reasonably be expected
to have a Material Adverse Effect.
(J) FINANCIAL STATEMENTS. The Administrative Agent and each of the Lenders
shall have received (i) the consolidated income statements, statements of cash
flows and balance sheets of the Co-Borrowers for the year ended December 31,
1999, each prepared in accordance with GAAP and certified by Ernst & Young LLP,
(ii) a reliance letter from Ernst & Young LLP with respect to the audited
financial statements referred to in the preceding clause (i), and (iii) the
unaudited consolidated and, if available, consolidating income statements,
statements of cash flows and balance sheets of the Co-Borrowers for each Fiscal
Quarter to occur subsequent to December 31, 1999, each prepared in accordance
with GAAP, and each of such financial statements referred to in preceding
clauses (i) and (iii) and the reliance letter referred to in preceding clause
(ii) shall be satisfactory to the Administrative Agent and the Lenders.
(K) PRO FORMA FINANCIAL STATEMENTS. The Administrative Agent and each of
the Lenders shall have received the Pro Forma which shall be satisfactory to the
Lenders in their sole discretion.
(L) BUSINESS PLAN. The Administrative Agent and each of the Lenders shall
have received the business plan of Co-Borrowers for the Fiscal Years through
December 31, 2003, which business plan shall include a written analysis of the
business and prospects of the Co-Borrowers and shall be satisfactory in form and
substance to the Lenders in their sole discretion.
(M) LIEN SEARCH RESULTS. The Administrative Agent and each of the Lenders
shall have received completed requests for information showing all effective
financing statements, tax liens and judgments, filed against the Co-Borrowers,
and such requests shall reveal no Liens, security interests or encumbrances
against any assets of the Co-Borrowers other than Permitted Encumbrances or
liens discharged as of the Closing Date and no tax liens or judgments.
(N) TANGIBLE NET WORTH. The Co-Borrowers on a consolidated basis shall
have a Tangible Net Worth, after giving effect to Loans made on the Closing Date
and the Related Transactions, of no less than $30 million, which shall be
reflected on the Pro Forma.
(O) CLOSING DATE. The Closing Date shall have occurred on or prior to
September 30, 2000.
(P) MC MANAGEMENT AGREEMENT. The Administrative Agent shall have received
a copy of the MC Management Agreement executed by the parties thereto.
2.2. FURTHER CONDITIONS TO EACH LOAN. Except as otherwise expressly
provided herein, no Lender shall be obligated to fund any Loan, or convert or
continue any Loan, if, as of the date thereof:
(a) Any representation or warranty by any Co-Borrower contained herein or
in any of the other Loan Documents shall be untrue or incorrect in any material
respect (except for
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representations or warranties subject to a materiality or Material Adverse
Effect exception, which shall be true and correct in all respects) as of such
date, except to the extent that such representation or warranty expressly
relates to an earlier date and except for changes therein expressly permitted by
this Agreement; or
(b) Any event or circumstance having a Material Adverse Effect shall have
occurred since the date hereof; or
(c) (i) Any Event of Default shall have occurred and be continuing or
would result after giving effect to any Loan or (ii) a Default shall have
occurred and be continuing or would result after giving effect to any Loan, and
Administrative Agent or Required Lenders shall have determined not to make any
Loan so long as that Default is continuing; or
(d) After giving effect to any Revolving Credit Loan, the outstanding
aggregate principal amount of all Revolving Loans would exceed the Maximum
Amount. The request and acceptance by Co-Borrowers of the proceeds of any Loan,
or the conversion or continuation of any Loan, as the case may be, shall be
deemed to constitute, as of the date of such request or acceptance, a
representation and warranty by Co-Borrowers that the conditions in this Section
2.2 have been satisfied.
3. REPRESENTATIONS AND WARRANTIES
To induce Lenders to make the Loans, the Co-Borrowers, jointly and
severally, make the following representations and warranties to the
Administration Agent and each Lender with respect to all Co-Borrowers, each and
all of which shall survive the execution and delivery of this Agreement.
3.1. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Co-Borrower (a) is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation; (b) is duly qualified to conduct business
and is in good standing in each other jurisdiction where its ownership or lease
of property or the conduct of its business requires such qualification, except
where the failure to be so qualified would not result in a Material Adverse
Effect; (c) has the requisite corporate power and authority and the legal right
to own, pledge, mortgage or otherwise encumber and operate its properties, to
lease the property it operates under lease and to conduct its business as now,
heretofore and proposed to be conducted; (d) subject to specific representations
regarding Environmental Laws, has all licenses, permits, consents or approvals
from or by, and has made all filings with, and has given all notices to, all
Governmental Authorities having jurisdiction, to the extent required for such
ownership, operation and conduct and is in compliance with all such licenses,
permits, consents or approvals, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to have a Material Adverse
Effect; (e) is in compliance with its certificate or articles of incorporation
(or equivalent governing document) and by-laws; and (f) subject to specific
representations set forth herein regarding ERISA, Environmental Laws, tax and
other laws, is in compliance with all applicable provisions of law and all
rules, regulations and orders of any Governmental Authority, except where the
failure to comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect.
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3.2. EXECUTIVE OFFICES. As of the Closing Date, the current location of
each Co-Borrower's chief executive office and principal place of business is set
forth in Disclosure Schedule (3.2), and except as set forth on such Disclosure
Schedule (3.2), none of such locations have changed within the twelve (12)
months preceding the Closing Date.
3.3. CORPORATE POWER, AUTHORIZATION, ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by each Co-Borrower of the Loan Documents to
which it is a party (a) are within such Person's corporate power; (b) have been
duly authorized by all necessary or proper corporate and shareholder action; (c)
do not contravene any provision of such Person's certificate or articles of
incorporation (or similar governing documents) or bylaws; (d) do not violate any
law or regulation, or any order or decree of any court or Governmental
Authority; (e) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which such Person is a party or by which such
Person or any of its property is bound; (f) do not result in the creation or
imposition of any Lien, other than Liens created under the Loan Documents, upon
any of the property of such Person; and (g) do not require the consent or
approval of any Governmental Authority or any other Person. On or prior to the
Closing Date, each of the Loan Documents shall have been duly executed and
delivered by each Co-Borrower thereto and each such Loan Document shall then
constitute a legal, valid and binding obligation of such Co-Borrower enforceable
against it in accordance with its terms.
3.4. FINANCIAL STATEMENTS. All Financial Statements concerning
Co-Borrowers which are referenced below have been prepared in accordance with
GAAP consistently applied throughout the periods covered (except as disclosed
therein and except, with respect to unaudited Financial Statements, for the
absence of footnotes and normal year-end audit adjustments) and present fairly
in all material respects the financial position of the Persons covered thereby
as at the dates thereof and the results of their operations and cash flows for
the periods then ended:
(a) The audited consolidated balance sheets at December 31, 1999 and
the related statements of income and cash flows of Co-Borrowers for the Fiscal
Year then ended, certified by Ernst & Young LLP.
(b) The unaudited consolidated and, if available, consolidating
balance sheets at March 31, 2000 and the related statements of income and cash
flows of Co-Borrowers for the Fiscal Quarter then ended.
(c) The unaudited consolidated and, if available, consolidating
balance sheets at June 30, 2000 and the related statements of income and cash
flows of Co-Borrowers for the Fiscal Quarter then ended.
3.5. PRO FORMA. The Pro Forma delivered on the date hereof and attached
hereto as Disclosure Schedule (3.5) was prepared by Co-Borrowers giving pro
forma effect to the Loans on the Closing Date and the Related Transactions, was
based on the unaudited consolidated and consolidating balance sheets of
Co-Borrowers dated June 30, 2000, and was prepared in accordance with GAAP, with
only such adjustments thereto as would be required in accordance
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with GAAP, provided that such Pro Forma is updated immediately prior to the
Closing Date and is acceptable to Administrative Agent.
3.6. MATERIAL ADVERSE EFFECT. Between December 31, 1999 and the Closing
Date, (a) no Co-Borrower has incurred any obligations, contingent or
non-contingent liabilities, liabilities for Charges, long-term leases or unusual
forward or long-term commitments and there has been no decrease in the assets of
the Co-Borrowers, which are not reflected in the Pro Forma and which, alone or
in the aggregate, could reasonably be expected to have a Material Adverse
Effect, (b) no contract, lease or other agreement or instrument has been entered
into by any Co-Borrower or has become binding upon any Co-Borrower's assets and
no law or regulation applicable to any Co-Borrower has been adopted, which has
had or could reasonably be expected to have a Material Adverse Effect, (c) no
Co-Borrower is in default and to the best of each Co-Borrower's knowledge no
third party is in default under any material contract, lease or other agreement
or instrument, which alone or in the aggregate, could reasonably be expected to
have a Material Adverse Effect, and (d) no event has occurred, which alone or in
the aggregate, could reasonably be expected to have a Material Adverse Effect.
Between December 31, 1999 and the Closing Date no event, including, without
limitation, the commencement of any Litigation, has occurred, which alone or
together with other events, could reasonably be expected to have a Material
Adverse Effect.
3.7. OWNERSHIP OF PROPERTY; LIENS. As of the Closing Date, the real estate
("Real Estate") listed on Disclosure Schedule (3.7) constitutes all of the real
property owned, leased, subleased, or used by any Co-Borrower. Each Co-Borrower
owns good and marketable fee simple title to all of its owned real estate, and
valid and marketable leasehold interests in all of its leased Real Estate, all
as described on Disclosure Schedule (3.7), and copies of all such leases or a
summary of terms thereof satisfactory to Administrative Agent have been
delivered to Administrative Agent. Disclosure Schedule (3.7) further describes
any Real Estate with respect to which any Co-Borrower is a lessor or sublessor
as of the Closing Date. Each Co-Borrower also has good and marketable title to,
or valid leasehold interests in, all of its personal properties and assets. As
of the Closing Date, none of the properties and assets of any Co-Borrower are
subject to any Liens other than Permitted Encumbrances and Liens being released
on the Closing Date, and there are no facts, circumstances or conditions known
to any Co-Borrower that may result in any Liens (including Liens arising under
Environmental Laws) other than Permitted Encumbrances and Liens being released
on the Closing Date. Each Co-Borrower has received all deeds, assignments,
waivers, consents, bills of sale and other documents, and has duly effected all
recordings, filings and other actions necessary to establish, protect and
perfect such Co-Borrower's right, title and interest in and to all such Real
Estate and other properties and assets, except where the failure to do so,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect. Disclosure Schedule (3.7) also describes any purchase
options, rights of first refusal or other similar contractual rights to acquire
a fee simple interest in real property pertaining to any Real Estate. Except as
set forth in Disclosure Schedule (3.7), no portion of any Co-Borrower's Real
Estate has suffered any material damage by fire or other casualty loss which has
not heretofore been repaired and restored in all material respects to its
original condition or otherwise remedied. All permits required to have been
issued or appropriate to enable the Real Estate to be lawfully occupied and used
for all of the purposes for which they are currently occupied and used have been
lawfully issued and are in full force and
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effect, except where the failure to do so, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect.
3.8. LABOR MATTERS. As of the Closing Date (a) no strikes or other
material labor disputes against any Co-Borrower are pending or, to any
Co-Borrower's knowledge, threatened; (b) hours worked by and payment made to
employees of each Co-Borrower comply with the Fair Labor Standards Act and each
other federal, state, local or foreign law applicable to such matter; (c) all
payments due from any Co-Borrower for employee health and welfare insurance have
been paid or accrued as a liability on the books of such Co-Borrower; (d) except
as set forth in Disclosure Schedule (3.8), no Co-Borrower is a party to or bound
by any collective bargaining agreement or any management agreement, consulting
agreement or employment agreement involving annual payment in excess of $100,000
(and true and complete copies of any agreements described on Disclosure Schedule
(3.8) have been delivered to Administrative Agent); (e) there is no organizing
activity involving any Co-Borrower pending or, to any Co-Borrower's knowledge,
threatened by any labor union or group of employees; (f) there are no
representation proceedings pending or, to any Co-Borrower's knowledge,
threatened with the National Labor Relations Board, and no labor organization or
group of employees of any Co-Borrower has made a pending demand for recognition;
and (g) except as set forth in Disclosure Schedule (3.7), there are no
complaints or charges against any Co-Borrower pending or, to the knowledge of
any Co-Borrower, threatened to be filed with any Governmental Authority or
arbitrator based on, arising out of, in connection with, or otherwise relating
to the employment or termination of employment by any Co-Borrower of any
individual.
3.9. VENTURES, SUBSIDIARIES AND AFFILIATES; OUTSTANDING STOCK AND
INDEBTEDNESS. Except as set forth in Disclosure Schedule (3.9), no Co-Borrower
is engaged in any joint venture or partnership with any other Person. All of the
issued and outstanding Stock of each Co-Borrower (other than L&LR and Cigar) is
owned beneficially and of record by Cigar. Set forth in Disclosure Schedule
(3.9) is (i) a description of all the issued and outstanding shares of Stock of
each Co-Borrower before giving effect to the Tender Offer and the Merger (other
than shares of Cigar which are not owned of record or beneficially by the 1998
Trust, the Trusts, Xxxxx X. Xxxxxxx or XxXxxxx X. Xxxxxxx) and a description of
all the issued and outstanding shares of Stock of each Co-Borrower after giving
effect to the Merger and, in each case, a list of the record and beneficial
owners thereof and (ii) a list of each subsidiary of L&LR and each subsidiary of
Cigar and the direct and indirect ownership interests therein . After giving
effect to the Merger, all of the Stock of Cigar will be owned by L&LR. Except as
set forth in Disclosure Schedule (3.9), there are no outstanding rights to
purchase, options, warrants or similar rights or agreements pursuant to which
any Co-Borrower may be required to issue, sell, repurchase or redeem any of its
Stock or other equity securities or any Stock or other equity securities of its
Subsidiaries. All outstanding Indebtedness of each Co-Borrower as of the Closing
Date is described in Section 6.3 (including Disclosure Schedule (6.3)). L&LR
does not have any assets except, before giving effect to the Merger, Stock of
JRC and, after giving effect to the Merger, Stock of Cigar, nor any Indebtedness
or Guaranteed Indebtedness.
3.10. GOVERNMENT REGULATION. No Co-Borrower is an "investment company" or
an "affiliated person" of, or "promoter" or "principal underwriter" for, an
"investment company," as such terms are defined in the Investment Company Act of
1940 as amended. No Co-Borrower is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power
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Act, or any other federal or state statute that restricts or limits its ability
to incur Indebtedness or to perform its obligations hereunder. The making of the
Loans by Lenders to Co-Borrowers, the application of the proceeds thereof and
repayment thereof and the consummation of the Related Transactions will not
violate any provision of any such statute or any rule, regulation or order
issued by the Securities and Exchange Commission.
3.11. MARGIN REGULATIONS. No Co-Borrower is engaged, nor will it engage,
principally or as one of its important activities, in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin security" as
such terms are defined in Regulation U of the Federal Reserve Board as now and
from time to time hereafter in effect (such securities being referred to herein
as "Margin Stock"). No Co-Borrower owns any Margin Stock, and none of the
proceeds of the Loans or other extensions of credit under this Agreement will be
used, directly or indirectly, for the purpose of purchasing or carrying any
Margin Stock, for the purpose of reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any Margin Stock or for any other
purpose which might cause any of the Loans or other extensions of credit under
this Agreement to be considered a "purpose credit" within the meaning of
Regulation T, U or X of the Federal Reserve Board. No Co-Borrower will take or
permit to be taken any action which might cause any Loan Document to violate any
regulation of the Federal Reserve Board.
3.12. TAXES. All tax returns, reports and statements, including
information returns, required by any Governmental Authority to have been filed
by any Co-Borrower have been filed with the appropriate Governmental Authority
and all Charges have been paid prior to the date on which any fine, penalty,
interest or late charge may be added thereto for nonpayment thereof (or any such
fine, penalty, interest, late charge or loss has been paid), excluding Charges
or other amounts being contested in accordance with Section 5.2(b). Proper and
accurate amounts have been withheld by each Co-Borrower from its respective
employees for all periods in full and complete compliance with all applicable
federal, state, local and foreign law and such withholdings have been timely
paid to the respective Governmental Authorities. Disclosure Schedule (3.12)
lists those tax returns since 1996 that have been audited, and indicates those
tax returns that are currently the subject of audit and any assessments or
threatened assessments in connection with such audit, or otherwise currently
outstanding. Except as described on Disclosure Schedule (3.12) as of the Closing
Date, no Co-Borrower has executed or filed with the IRS or any other
Governmental Authority any agreement or other document extending, or having the
effect of extending, the period for assessment or collection of any Charges.
None of the Co-Borrowers and their respective predecessors are liable for any
Charges: (a) under any agreement (including any tax sharing agreements) or (b)
to each Co-Borrower's knowledge, as a transferee. As of the Closing Date, no
Co-Borrower has agreed or been requested to make any adjustment under IRC
Section 481(a), by reason of a change in accounting method or otherwise, which
would have a Material Adverse Effect. The Pro Forma delivered pursuant to
Section 3.5 reflects all estimated Taxes resulting from transactions
contemplated by the Related Transactions Documents and the Loans as of the
Closing Date.
3.13. ERISA.
(a) Disclosure Schedule (3.13) lists and separately identifies all Title
IV Plans, Multiemployer Plans, ESOPs and Retiree Welfare Plans. Copies of all
such listed plans, together
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with a copy of the latest IRS Form 5500 for each such plan, have been delivered
to Administrative Agent. Except with respect to Multiemployer Plans, each
Qualified Plan has been determined by the IRS to qualify under Section 401(a) of
the IRC, and the trusts created thereunder have been determined to be exempt
from tax under Section 501(a) of the IRC, and, other than the application to the
IRS made on January 22, 2000 under the IRS' Walk-in-CAP, to the Co-Borrowers'
knowledge, nothing has occurred which would cause the loss of such qualification
or tax-exempt status. Each Plan is in compliance with the applicable provisions
of ERISA and the IRC, including the filing of reports required under the IRC or
ERISA except to the extent that any failure to so comply would not have a
Material Adverse Effect. No Co-Borrower or ERISA Affiliate has failed to make
any contribution or pay any amount due as required by either Section 412 of the
IRC or Section 302 of ERISA or the terms of any Plan. No Co-Borrower or ERISA
Affiliate has engaged in a prohibited transaction, as defined in Section 4975 of
the IRC, in connection with any Plan, which would subject any Co-Borrower to a
material tax on prohibited transactions imposed by Section 4975 of the IRC.
(b) Except as set forth in Disclosure Schedule (3.13): (i) no Title IV
Plan has any Unfunded Pension Liability; (ii) no ERISA Event or event described
in Section 4062(e) of ERISA with respect to any Title IV Plan has occurred or is
reasonably expected to occur; (iii) there are no pending, or to the knowledge of
any Co-Borrower, threatened claims (other than claims for benefits in the normal
course), sanctions, actions or lawsuits, asserted or instituted against any Plan
or any Person as fiduciary or sponsor of any Plan; (iv) no Co-Borrower or ERISA
Affiliate has incurred or reasonably expects to incur any liability as a result
of a complete or partial withdrawal from a Multiemployer Plan; (v) within the
last five years no Title IV Plan with Unfunded Pension Liabilities has been
transferred outside of the "controlled group" (within the meaning of Section
4001(a)(14)(A) of ERISA) of any Co-Borrower or ERISA Affiliate; and (vi) no
liability under any Title IV Plan has been satisfied with the purchase of a
contract from an insurance company that is not rated AAA by the Standard &
Poor's Corporation or the equivalent by another nationally recognized rating
agency.
3.14. NO LITIGATION. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Co-Borrower, threatened
against any Co-Borrower, before any Governmental Authority or before any
arbitrator or panel of arbitrators (collectively, "Litigation"), (a) which
challenges any Co-Borrower's right or power to enter into or perform any of its
obligations under the Loan Documents to which it is a party, or the validity or
enforceability of any Loan Document or any action taken thereunder, or (b) which
has a reasonable risk of being determined adversely to any Co-Borrower and
which, if so determined, could have a Material Adverse Effect. Except as set
forth on Disclosure Schedule (3.14), as of the Closing Date there is no
Litigation pending or, to the knowledge of any Co-Borrower, threatened against
any Co-Borrower.
3.15. BROKERS. No broker or finder acting on behalf of any Co-Borrower
brought about the obtaining, making or closing of the Loans or the Related
Transactions, and no Co-Borrower has any obligation to any other Person in
respect of any finder's or brokerage fees in connection therewith.
3.16. INTELLECTUAL PROPERTY. As of the Closing Date, each Co-Borrower owns
or has rights to use all Intellectual Property necessary to continue to conduct
its business as now
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conducted by it, and each Patent, Trademark, Copyright and License is listed,
together with application or registration numbers, as applicable, in Disclosure
Schedule (3.16) hereto. All of the foregoing are in full force and effect, and
each of the Co-Borrowers is in substantial compliance with the foregoing without
any known conflict with the valid rights of others which has resulted, or
creates a risk of resulting, in any Material Adverse Effect. No event has
occurred which permits, or after notice or lapse of time or both would permit
the revocation or termination of any such right or which affects the rights of
any of the Co-Borrowers thereunder so as to result, or to create a reasonable
risk of resulting, in any Material Adverse Effect. No litigation or other
proceeding or dispute exists with respect to the validity or, where applicable,
the extension or renewal, of any of the foregoing which has resulted, or creates
a reasonable risk of resulting, in any Material Adverse Effect.
3.17. FULL DISCLOSURE. No information contained in this Agreement, any of
the other Loan Documents, any Financial Statements or other reports from time to
time delivered hereunder or any written statement furnished by or on behalf of
any Co-Borrower to Agent or any Lender pursuant to the terms of this Agreement
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
herein or therein not misleading in light of the circumstances under which they
were made; provided that, with respect to any projected financial information,
the Co-Borrowers represent only that such information was prepared in good faith
based upon assumptions believed to be reasonable at the time. Any forward
looking statements contained therein are inherently subject to risk and
uncertainties, many of which cannot be predicted with accuracy, and some of
which might not be anticipated. Future events and actual results, financial or
otherwise, could differ materially from those set forth therein or contemplated
by the forward looking statements contained therein.
3.18. ENVIRONMENTAL MATTERS.
(a) Except as set forth in Disclosure Schedule (3.18), as of the Closing
Date: (i) to the knowledge of the Co-Borrowers, the Real Estate is free of
contamination from any Hazardous Material except for such contamination that
would not adversely impact the value or marketability of such Real Estate and
which would not result in Environmental Liabilities which could reasonably be
expected to have a Material Adverse Effect; (ii) no Co-Borrower has caused or
suffered to occur any Release of Hazardous Materials on, at, in, under, above,
to, from or about any of its Real Estate; (iii) the Co-Borrowers are and have
been in compliance with all Environmental Laws, except for such noncompliance
which would not result in Environmental Liabilities which could reasonably be
expected to have a Material Adverse Effect; (iv) the Co-Borrowers have obtained,
and are in compliance with, all Environmental Permits required by Environmental
Laws for the operations of their respective businesses as presently conducted,
except where the failure to so obtain or comply with such Environmental Permits
would not result in Environmental Liabilities which could reasonably be expected
to have a Material Adverse Effect, and all such Environmental Permits are valid,
uncontested and in good standing; (v) no Co-Borrower is involved in operations
or knows of any facts, circumstances or conditions, including any Releases of
Hazardous Materials, that are likely to result in any Environmental Liabilities
of such Co-Borrower which could reasonably be expected to have a Material
Adverse Effect, and no Co-Borrower has permitted any current or former tenant or
occupant of the Real Estate to engage in any such operations; (vi) there is no
pending or, to the knowledge of any Co-
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Borrower, threatened Litigation arising under or related to any Environmental
Laws, Environmental Permits or Hazardous Material which seeks damages,
penalties, fines, costs or expenses in excess of $25,000 or injunctive relief
from any Co-Borrower, or which alleges criminal misconduct by any Co-Borrower;
(vii) no notice has been received by any Co-Borrower identifying it as a
"potentially responsible party" or requesting information under CERCLA or
analogous state statutes, and to the knowledge of the Co-Borrowers, there are no
facts, circumstances or conditions that would reasonably be expected to result
in any Co-Borrower being identified as a "potentially responsible party" under
CERCLA or analogous state statutes; and (viii) the Co-Borrowers have provided to
Administrative Agent copies of all existing environmental reports, reviews and
audits pertaining to actual or potential Environmental Liabilities, in each case
relating to any Co-Borrower.
(b) Each Co-Borrower acknowledges and agrees that Administrative Agent (i)
is not now, and, to the knowledge of the Co-Borrowers, has not ever been in
control of any of the Real Estate or any Co-Borrower's affairs, and (ii) does
not have the capacity through the provisions of the Loan Documents or otherwise
to influence any Co-Borrower's conduct with respect to the ownership, operation
or management of any of its Real Estate or compliance with Environmental Laws or
Environmental Permits.
3.19. INSURANCE. Disclosure Schedule (3.19) lists all insurance policies
of any nature maintained, as of the Closing Date, for current occurrences by
each Co-Borrower, as well as a summary of the terms of each such policy.
3.20. COMMON BUSINESS ENTERPRISE. Co-Borrowers are engaged in a common
business enterprise and are directly dependant upon each other for or in
connection with their respective business activities and their respective
financial resources. Each Co-Borrower will receive a direct economic and
financial benefit from the Obligations incurred under this Agreement by
Co-Borrowers, and the incurrence of such Obligations is in the best interests of
each Co-Borrower.
3.21. CUSTOMER AND TRADE RELATIONS. Except as set forth in Disclosure
Schedule (3.21), as of the Closing Date, there exists no actual or, to the
knowledge of any Co-Borrower, threatened termination or cancellation of, or any
material adverse modification or change in: the business relationship of any
Co-Borrower with any customer or group of customers whose purchases during the
preceding twelve (12) months caused them to be ranked among the ten largest
customers of such Co-Borrower; or the business relationship of any Co-Borrower
with any supplier material to its operations.
3.22. AGREEMENTS AND OTHER DOCUMENTS. As of the Closing Date, each
Co-Borrower has provided to Administrative Agent or its counsel, on behalf of
Lenders, accurate and complete copies (or summaries) of all of the following
agreements or documents to which it is subject and each of which are listed on
Disclosure Schedule (3.22): supply agreements and purchase agreements not
terminable by such Co-Borrower within sixty (60) days following written notice
issued by such Co-Borrower and involving transactions in excess of $100,000 per
annum; any lease of Equipment having a remaining term of one year or longer and
requiring aggregate rental and other payments in excess of $100,000 per annum;
any agreement (or group of related agreements) under which such Co-Borrower has
created, incurred, assumed, or guaranteed any Indebtedness in excess of
$100,000, including any Capital Lease Obligation; and instruments and
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agreements evidencing the issuance of any equity securities, warrants, rights or
options to purchase equity securities of such Co-Borrower.
3.23. SOLVENCY. Both before and after giving effect to (a) the Loans to be
made or extended on the Closing Date or such other date as Loans requested
hereunder are made or extended, (b) the disbursement of the proceeds of such
Loans pursuant to the instructions of Co-Borrowers, (c) the consummation of the
Related Transactions and (d) the payment and accrual of all transaction costs in
connection with the foregoing, each Co-Borrower is Solvent.
3.24. YEAR 2000 PROBLEMS. Each Co-Borrower has eliminated all Year 2000
Problems, except where the failure to correct the same could not reasonably be
expected to have a Material Adverse Effect, individually or in the aggregate.
3.25. RELATED TRANSACTIONS DOCUMENTS. As of the Closing Date, Co-Borrowers
have delivered to Administrative Agent complete and correct copies of the
Related Transactions Documents (including all schedules, exhibits, amendments,
supplements, modifications, assignments and all other documents delivered
pursuant thereto or in connection therewith). The total consideration payable to
consummate the Tender Offer Acquisition inclusive of all fees and costs does not
exceed the amount of the loan made by Existing Lenders to JRC and L&LR on the
Tender Offer Borrowing Date as defined in and pursuant to the Existing Credit
Agreement. The total consideration payable to consummate the Merger inclusive of
all fees and costs will not exceed the amount of the loan made by Existing
Lenders to JRC and L&LR on the Merger Borrowing Date as defined in and pursuant
to the Existing Credit Agreement. No Co-Borrower party thereto and, to the
knowledge of the Co-Borrowers, no other Person party thereto is in default in
the performance or compliance with any provisions of any Related Transactions
Documents. The Related Transactions Documents comply with, and the Tender Offer
Acquisition and Merger have been or will be, prior to any Loan hereunder,
consummated in accordance with, all applicable laws. The Related Transactions
Documents are in full force and effect, and have not been terminated, rescinded
or withdrawn. All requisite approvals by Governmental Authorities having
jurisdiction over any party thereto, with respect to the transactions
contemplated by the Related Transactions Documents, have been or will be, prior
to any Loan hereunder, obtained and no such approvals impose any conditions to
the consummation of the transactions contemplated by the Related Transactions
Documents or to the conduct by any Co-Borrower of its business thereafter. Each
of the representations and warranties in, and given by each party to the Merger
Agreement is true and correct in all material respects (except to the extent
that such representation or warranty expressly relates to an earlier date).
3.26. THE MERGER. Upon effectiveness of the Merger, all Obligations of,
and all loans and amounts due and owing by, JRC to the Existing Lenders pursuant
to the Existing Credit Agreement shall become the Obligations of Cigar. Each
Co-Borrower agrees and acknowledges that the full amount of such Obligations are
payable without defense, set-off, deduction or counterclaim for any reason
whatsoever.
3.27. THE PLEDGE AGREEMENTS. The provisions of the Pledge Agreements are
effective to create, upon effectiveness of the Merger, in favor of the
Collateral Agent for the benefit of the Lenders a legal, valid and enforceable
security interest in, and/or Lien on, all right, title and interest of L&LR and
Cigar in the Collateral described therein. The security interests created in
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favor of the Collateral Agent, as Pledgee, for the benefit of the Lenders under
the Pledge Agreements, upon delivery of the Pledged Stock to the Collateral
Agent, will constitute first priority perfected security interests in the
Pledged Stock described therein, subject to no security interests of any other
Person. No filings or recordings are required in order to perfect (or, assuming
the Collateral Agent's continuous possession of the Pledged Stock, maintain the
perfection or priority of) the security interests created in the Pledged Stock
and the proceeds thereof under the Pledge Agreements.
4. FINANCIAL STATEMENTS AND INFORMATION
4.1. REPORTS AND NOTICES. Each Co-Borrower hereby agrees that from and
after the Closing Date and until the Termination Date, it shall deliver to
Administrative Agent and/or Lenders, as required, the Financial Statements,
notices, and other information at the times, to the Persons and in the manner
set forth in Annex B.
4.2. COMMUNICATION WITH ACCOUNTANTS. Each Co-Borrower authorizes
Administrative Agent upon notice to Cigar and, so long as a Default or Event of
Default shall have occurred and be continuing, each Lender, to communicate
directly with its independent certified public accountants including Ernst &
Young LLP, and authorizes and shall instruct those accountants and advisors to
disclose and make available to Administrative Agent and each Lender any and all
Financial Statements and other supporting financial documents, schedules and
information relating to any Co-Borrower (including copies of any issued
management letters) with respect to the business, financial condition and other
affairs of any Co-Borrower.
5. AFFIRMATIVE COVENANTS
Each Co-Borrower jointly and severally agrees as to all Co-Borrowers that
from and after the date hereof and until the Termination Date:
5.1. MAINTENANCE OF EXISTENCE AND CONDUCT OF BUSINESS. Each Co-Borrower
shall: do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence (except as permitted by Section 6.1)
and its rights and franchises material to the conduct of the business of
Co-Borrowers taken as a whole; continue to conduct its business substantially as
now conducted or as otherwise permitted hereunder; at all times maintain,
preserve and protect all of its assets and properties used or useful in the
conduct of its business, and keep the same in good repair, working order and
condition in all material respects (taking into consideration ordinary wear and
tear) and from time to time make, or cause to be made, all necessary or
appropriate repairs, replacements and improvements thereto consistent with
industry practices; and transact business only in such corporate and trade names
as are set forth in Disclosure Schedule (5.1), as the same may be supplemented
from time to time by 30 days' advance written notice to Administrative Agent.
5.2. PAYMENT OF CHARGES.
(a) Subject to Section 5.2(b), each Co-Borrower shall pay and discharge or
cause to be paid and discharged promptly all Charges payable by it, including
(i) Charges imposed upon it, its income and profits, or any of its property
(real, personal or mixed) and all Charges with respect to tax, social security
and unemployment withholding with respect to its employees, and
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(ii) lawful claims for labor, materials, supplies and services or otherwise,
before any thereof shall become past due except as provided in (b) below.
(b) Each Co-Borrower may in good faith contest, by appropriate
proceedings, the validity or amount of any Charges or claims described in
Section 5.2(a); provided, that (i) adequate reserves with respect to such
contest are maintained on the books of such Co-Borrower, in accordance with
GAAP, (ii) no Lien (other than Permitted Encumbrances) shall be imposed upon any
properties or assets of any Co-Borrower (whether now owned or hereafter
acquired) and such contest is maintained and prosecuted continuously and with
diligence and operates to suspend collection or enforcement of such Charges, and
(iii) such Co-Borrower shall promptly pay or discharge such contested Charges or
claims and all additional charges, interest, penalties and expenses, if any, and
shall deliver to Administrative Agent evidence acceptable to Administrative
Agent of such compliance, payment or discharge, if such contest is terminated or
discontinued adversely to such Co-Borrower or the conditions set forth in this
Section 5.2(b) are no longer met.
5.3. BOOKS, RECORDS AND INSPECTIONS. Co-Borrowers will keep proper books
of record and account in which full, true and correct entries in conformity with
generally accepted accounting principles (or the comparable foreign equivalent
thereof) and all requirements of law shall be made of all material dealings and
transactions in relation to its business and activities. Co-Borrowers will
permit officers and designated representatives of the Administrative Agent or
any Lender to visit and inspect, during regular business hours and under
guidance of an officer of a Co-Borrower, any of the respective properties of
Co-Borrowers, and, subject to the foregoing requirements, to examine the books
of account of Co-Borrowers and discuss the affairs, finances and accounts of any
of the Co-Borrowers with, and be advised as to the same by, its and their
officers and independent accountants, all at such reasonable times and
intervals, upon such reasonable notice and to such reasonable extent as the
Administrative Agent or such Lender may request.
5.4. INSURANCE.
(a) The Co-Borrowers shall, at their sole cost and expense, maintain the
policies of insurance described on Disclosure Schedule (3.19) as in effect on
the date hereof, or otherwise in forms and amounts substantially similar to such
policies in effect on the date hereof and with insurers with an A.M. Best rating
of at least equivalent to that of Co-Borrowers' existing insurers. The
Co-Borrowers shall provide thirty (30) days advance notice to Administrative
Agent of any non-renewal, cancellation or amendment of such policies of
insurance. If any Co-Borrower at any time or times hereafter shall fail to
obtain or maintain any of the policies of insurance required above or to pay all
premiums relating thereto, Administrative Agent may at any time or times
thereafter obtain and maintain such policies of insurance and pay such premiums
and take any other action with respect thereto which Administrative Agent deems
advisable. Administrative Agent shall have no obligation to obtain insurance for
any Co-Borrower or pay any premiums therefor. By doing so, Administrative Agent
shall not be deemed to have waived any Default or Event of Default arising from
any Co-Borrower's failure to maintain such insurance or pay any premiums
therefor. All sums so disbursed, including attorneys' fees, court costs and
other charges related thereto, shall be payable on demand by Co-Borrowers to
Administrative Agent and shall be additional Obligations hereunder.
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(b) Administrative Agent reserves the right at any time upon any change in
any Co-Borrower's risk profile (including any change in the product mix
maintained by any Co-Borrower or any laws affecting the potential liability of
such Co-Borrower) to require additional forms and limits of insurance to, in
Administrative Agent's opinion, ensure that each Co-Borrower is protected by
insurance in amounts and with coverage customary for its industry. If requested
by Administrative Agent, each Co-Borrower shall deliver to Administrative Agent
from time to time a report of a reputable insurance broker, reasonably
satisfactory to Administrative Agent, with respect to its insurance policies.
5.5. COMPLIANCE WITH LAWS. Each Co-Borrower shall comply with all federal,
state, local and foreign laws and regulations applicable to it, including,
without limitation, those relating to ERISA and labor matters and Environmental
Laws and Environmental Permits, except to the extent that the failure to comply,
individually or in the aggregate, could not reasonably be expected to have a
Material Adverse Effect.
5.6. SUPPLEMENTAL DISCLOSURE. From time to time as may be requested by
Administrative Agent, the Co-Borrowers shall supplement each Disclosure Schedule
hereto, or any representation herein or in any other Loan Document, with respect
to any matter hereafter arising which, if existing or occurring at the date of
this Agreement, would have been required to be set forth or described in such
Disclosure Schedule or as an exception to such representation or which is
necessary to correct any information in such Disclosure Schedule or
representation which has been rendered inaccurate thereby (and, in the case of
any supplements to any Disclosure Schedule, such Disclosure Schedule shall be
appropriately marked to show the changes made therein); provided that (a) no
such supplement to any such Disclosure Schedule or representation shall be or be
deemed a waiver of any Default or Event of Default resulting from the matters
disclosed therein, except as consented to by Administrative Agent and Requisite
Lenders in writing; and (b) no supplement shall be required as to
representations and warranties that relate solely to the Closing Date.
5.7. INTELLECTUAL PROPERTY. Each Co-Borrower will conduct its business and
affairs without infringement of or interference with any Intellectual Property
of any other Person in any material respect.
5.8. ENVIRONMENTAL MATTERS. Each Co-Borrower shall and shall cause each
Person within its control to: (a) conduct its operations and keep and maintain
its Real Estate in compliance with all Environmental Laws and Environmental
Permits other than noncompliance which could not reasonably be expected to have
a Material Adverse Effect; (b) implement any and all investigation, remediation,
removal and response actions which are necessary to maintain the value of the
Real Estate or to otherwise comply with Environmental Laws and Environmental
Permits pertaining to the presence, generation, treatment, storage, use,
disposal, transportation or Release of any Hazardous Material on, at, in, under,
above, to, from or about any of its Real Estate other than where the failure to
implement such actions could not reasonably be expected to result in a Material
Adverse Effect; (c) notify Administrative Agent promptly after such Co-Borrower
becomes aware of any violation of Environmental Laws or Environmental Permits or
any Release on, at, in, under, above, to, from or about any Real Estate which is
reasonably likely to result in Environmental Liabilities having a Material
Adverse Effect; and (d) promptly forward to Administrative Agent a copy of any
order, notice, request for information or any
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communication or report received by such Co-Borrower in connection with any such
violation or Release or any other matter relating to any Environmental Laws or
Environmental Permits that could reasonably be expected to result in
Environmental Liabilities having a Material Adverse Effect in each case whether
or not the Environmental Protection Agency or any Governmental Authority has
taken or threatened any action in connection with any such violation, Release or
other matter. If Administrative Agent at any time has a reasonable basis to
believe that there may be a violation of any Environmental Laws or Environmental
Permits by any Co-Borrower or any Environmental Liability arising thereunder, or
a Release of Hazardous Materials on, at, in, under, above, to, from or about any
of its Real Estate, which, in each case, could reasonably be expected to have a
Material Adverse Effect, then each Co-Borrower shall, upon Administrative
Agent's written request (i) cause the performance of such environmental audits
including subsurface sampling of soil and groundwater, and preparation of such
environmental reports, at Co-Borrower's expense, as Administrative Agent may
from time to time reasonably request, which shall be conducted by reputable
environmental consulting firms reasonably acceptable to Administrative Agent and
shall be in form and substance reasonably acceptable to Administrative Agent,
and (ii) permit Administrative Agent or its representatives to have access to
all Real Estate for the purpose of conducting such environmental audits and
testing as Administrative Agent deems appropriate, including subsurface sampling
of soil and groundwater. Co-Borrowers shall reimburse Administrative Agent for
the reasonable costs of such audits and tests and the same will constitute a
part of the Obligations secured hereunder.
5.9 PERFORMANCE OF OBLIGATIONS. Each Co-Borrower will perform all of its
obligations under each material agreement, contract or instrument by which it is
bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect; provided
that the failure to pay any Indebtedness shall not constitute a breach of this
Section 5.9 unless it shall give rise to an Event of Default under Section
7.1(e).
5.10. FURTHER ASSURANCES. (a) Each Co-Borrower agrees that it shall, at
such Co-Borrower's expense and upon request of Administrative Agent, duly
execute and deliver, or cause to be duly executed and delivered, to
Administrative Agent such further instruments and do and cause to be done such
further acts as may be necessary or proper in the reasonable opinion of
Administrative Agent to carry out more effectively the provisions and purposes
of this Agreement or any other Loan Document.
(b) L&LR and Cigar will make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such conveyances,
financing statements, transfer endorsements, powers of attorney, certificates,
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Pledge Agreements as the Collateral Agent may
reasonably require to ensure the validity, enforceability, perfection or
priority of the Collateral Agent's security interest in the Collateral or to
enable the Collateral Agent to realize or exercise the rights and benefits
intended to be created by the Pledge Agreements.
5.11. ERISA EVENT. Each Co-Borrower shall, or shall cause (to the extent
it has such ability) an ERISA Affiliate to, notify the Administrative Agent
promptly, but in no event later than 10 days, following the occurrence of any
ERISA Event of the details of such ERISA Event
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and the course of action which such Co-Borrower or ERISA Affiliate intends to
take to correct such ERISA Event.
5.12. OWNERSHIP OF SUBSIDIARIES. Cigar will at all times, directly or
indirectly, own all of the issued and outstanding Stock of the other
Co-Borrowers (other than L&LR).
5.13. CONSUMMATION OF MERGER. Cigar will perform all of its obligations
pursuant to the Merger Agreement and will take all action necessary to
consummate the Merger.
6. NEGATIVE COVENANTS
Each Co-Borrower jointly and severally agrees as to all Co-Borrowers that,
without the prior written consent of Administrative Agent and the Requisite
Lenders, from and after the date hereof until the Termination Date:
6.1. MERGERS, SUBSIDIARIES, ETC. No Co-Borrower shall directly or
indirectly, by operation of law or otherwise (a) form or acquire any
Subsidiary (other than Subsidiaries in existence as of the date hereof or
Subsidiaries which, at the time of formation or acquisition, become a
Co-Borrower and the Stock of which is pledged as collateral security for the
Obligations arising hereunder under terms acceptable to the Administrative
Agent and Lenders), or (b) merge with (except for the Merger) or consolidate
with, acquire all or substantially all of the assets or (except as permitted
in preceding clause (a)) capital stock of, or otherwise combine with or
acquire, any Person or any division of any Person; provided, however, any
co-Borrower may merge or consolidate with, or sell its assets to, any other
Co-Borrower.
6.2. INVESTMENTS; LOANS AND ADVANCES. Except as otherwise expressly
permitted by this Section 6, no Co-Borrower shall make or permit to exist any
investment in, or make, accrue or permit to exist loans or advances of money to,
any Person, through the direct or indirect lending of money, holding of
securities or otherwise, except:
(a) investments consisting of: (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within one year from the date of acquisition thereof; (ii) commercial
paper maturing no more than one year from the date of creation thereof and
currently having an investment grade rating from either Standard & Poor's
Ratings Group or Xxxxx'x Investors Service, Inc.; and (iii) certificates of
deposit, bankers acceptances, time deposits, Eurocurrency deposits and similar
types of investments routinely offered by commercial banks with final maturities
of one year or less issued by commercial banks organized in the United States,
or foreign branches thereof, having capital and surplus in excess of
$300,000,000 or any commercial bank of any other country that is a member of the
Organization for Economic Cooperation and Development ("OECD") and has total
assets in excess of $300,000,000;
(b) receivables owing to Co-Borrowers and advances (including deposits) to
customers and receivables owing to suppliers, in each case if created, acquired
or made in the ordinary course of business and payable or dischargeable in
accordance with customary trade terms;
(c) investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in settlement of
delinquent obligations of, and
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other disputes with, customers and suppliers arising in the ordinary course of
business or upon foreclosure of any Lien in favor of the Co-Borrowers;
(d) to the extent permitted by Section 6.4, investments in Affiliates;
(e) guarantees permitted by Section 6.6;
(f) investments contemplated by the Related Transaction Documents;
(g) investments which the Co-Borrowers are contractually committed to make
pursuant to contracts existing on the Closing Date as set forth on Disclosure
Schedule (6.2(g));
(h) any Co-Borrower may make intercompany loans to or other investments in
any other Co-Borrower and any Co-Borrower may borrow money from any other
Co-Borrower if done in the ordinary course of and pursuant to the reasonable
requirements of such Co-Borrower's business and upon fair and reasonable terms
that are no less favorable to such Co-Borrower than would be obtained in a
comparable arm's length transaction with a Person who is not a Co-Borrower; and
(i) investments consisting of the transactions contemplated by Interest
Hedge Obligations permitted by Section 6.3(a).
6.3. INDEBTEDNESS.
(a) No Co-Borrower shall create, incur, assume or permit to exist any
Indebtedness, except (without duplication) the following ("Permitted
Indebtedness"): (i) Indebtedness secured by purchase money security interests
and Capitalized Leases permitted in clause (b) of Section 6.7, (ii) the Loans
and the other Obligations, (iii) unfunded pension fund and other employee
benefit plan obligations and liabilities to the extent they are permitted to
remain unfunded under applicable law, (iv) existing Indebtedness described in
Disclosure Schedule (6.3) and amendments or modifications thereof which do
not have the effect of increasing the principal amount thereof or changing
the amortization or expiration thereof and which are otherwise on terms and
conditions no less favorable to any Co-Borrower, as reasonably determined by
Administrative Agent, than the terms of the Indebtedness being amended or
modified, (v) Guarantees permitted by Section 6.6, and (vi) intercompany
indebtedness permitted by Section 6.2 hereof, and (vii) Indebtedness of
Co-Borrowers in a maximum aggregate amount of $20 million under Interest
Hedge Obligations incurred in connection with the Term Loan.
(b) No Co-Borrower shall, directly or indirectly, voluntarily purchase,
redeem, defease or prepay any principal of, premium, if any, interest or other
amount payable in respect of any Indebtedness, other than (i) the Obligations,
or (ii) Indebtedness secured by a Permitted Encumbrance.
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6.4. EMPLOYEE LOANS AND AFFILIATE TRANSACTIONS.
(a) No Co-Borrower shall enter into or be a party to any transaction with
any Affiliate thereof (other than an Affiliate which is another Co-Borrower to
the extent permitted by Section 6.2(h)) except in the ordinary course of and
pursuant to the reasonable requirements of such Co-Borrower's business and upon
fair and reasonable terms that are no less favorable to such Co-Borrower than
would be obtained in a comparable arm's length transaction with a Person not an
Affiliate of such Co-Borrower. In addition, if any such transaction or series of
related transactions involves payments in excess of $150,000 in the aggregate,
the terms of these transactions must be disclosed in advance to Administrative
Agent and Lenders. All transactions with Affiliates existing as of the date
hereof are described on Disclosure Schedule (6.4(a)).
(b) No Co-Borrower shall enter into any lending or borrowing transaction
with any employees of any Co-Borrower.
6.5. CAPITAL STRUCTURE AND BUSINESS. No Co-Borrower shall (a) change in
any material respect the nature of its business as conducted on the date hereof,
(b) make any change in its capital structure as described on Disclosure Schedule
(3.9), including the issuance of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms of its
outstanding Stock, or (c) amend its charter or bylaws in a manner which would
adversely affect Administrative Agent, Documentation Agent or Lenders or such
Co-Borrower's duty or ability to repay the Obligations. No Co-Borrower shall
engage in any business other than the businesses currently engaged in by it or
businesses which are complementary or reasonable extensions thereto.
6.6. GUARANTEED INDEBTEDNESS. No Co-Borrower shall create, incur, assume
or permit to exist any Guaranteed Indebtedness except (a) by endorsement of
instruments or items of payment for deposit to the general account of any
Co-Borrower, and (b) for Guaranteed Indebtedness incurred for the benefit of any
other Co-Borrower if the primary obligation is expressly permitted by this
Agreement.
6.7. LIENS. No Co-Borrower shall create, incur, assume or permit to
exist any Lien on or with respect to any of its properties or assets (whether
now owned or hereafter acquired) except for (a) Permitted Encumbrances; (b)
Liens created after the date hereof by conditional sale or other title
retention agreements (including Capital Leases) or in connection with
purchase money Indebtedness with respect to Equipment and Fixtures acquired
by any individual Co-Borrower or the Co-Borrowers collectively in the ordinary
course of business, involving the incurrence of an aggregate amount of
purchase money Indebtedness and Capital Lease Obligations of not more than
$150,000 (in the case of any individual Co-Borrower) or $500,000 (in the case
of the Co-Borrowers collectively) outstanding at any one time for all such
Liens (provided that such Liens in favor of the Term Loan Lenders attach only
to the assets, accessions, improvements and proceeds subject to such purchase
money debt and such Indebtedness is incurred at the time of such purchase and
does not exceed 100% of the purchase price of the subject assets or the cost
of construction or improvements); and (c) Liens on the Pledged Stock to
secure the Co-Borrowers' obligations under any Interest Hedge Obligation
permitted by Section 6.3(a) in favor of the Term Loan Lenders. In addition,
no Co-Borrower shall become a party to any agreement, note, indenture or
instrument, or take any other action, which would prohibit the creation of a
Lien on any of its properties or other assets in favor of Administrative
Agent, on behalf of itself, Documentation Agent and Lenders, as
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collateral for the Obligations, except for Liens listed in (a) and (b) above and
operating leases, Capital Leases or Licenses which prohibit Liens only upon the
assets that are subject thereto.
6.8. SALE OF STOCK AND ASSETS. No Co-Borrower shall sell, transfer,
convey, assign or otherwise dispose of any of its properties or other assets,
including the capital Stock of any of its Subsidiaries (whether in a public
or a private offering or otherwise) or any of their Accounts, other than (a)
the sale of Inventory in the ordinary course of business, (b) the sale,
transfer, conveyance or other disposition by a Co-Borrower of Equipment,
Fixtures or Real Estate that are obsolete or no longer used or useful in such
Co-Borrower's business having a value not exceeding $100,000 in the aggregate
in any Fiscal Year, provided the proceeds thereof are reinvested in the
business of the Co-Borrowers within 360 days thereafter, and if not so
reinvested, shall be applied as a mandatory prepayment pursuant to Section
1.5(b), (c) other Equipment and Fixtures having a value not exceeding
$100,000 in the aggregate in any Fiscal Year, provided the proceeds thereof
are reinvested in the business of the Co-Borrowers within 360 days
thereafter, and if not so reinvested, shall be applied as a mandatory
prepayment pursuant to Section 1.5(b), (d) cash and cash equivalents for fair
equivalent value in the ordinary course of business, (e) intercompany loans
and investments between Co-Borrowers permitted by Section 6.2(h) or (f)
Restricted Payments permitted by Section 6.14.
6.9. ERISA. No Co-Borrower shall, or shall cause or permit any ERISA
Affiliate to, cause or permit to occur an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or cause or permit to occur an ERISA Event.
6.10. FINANCIAL COVENANTS. The Co-Borrowers shall not breach or fail to
comply with any of the Financial Covenants (the "Financial Covenants") set forth
in Annex C.
6.11. HAZARDOUS MATERIALS. No Co-Borrower shall cause or permit a Release
of any Hazardous Material on, at, in, under, above, to, from or about any of the
Real Estate where such Release would (a) violate in any respect, or form the
basis for any Environmental Liabilities under, any Environmental Laws or
Environmental Permits or (b) otherwise adversely impact the value of any of the
Real Estate, other than such violations or Environmental Liabilities which could
not reasonably be expected to have a Material Adverse Effect.
6.12. SALE-LEASEBACKS. No Co-Borrower shall engage in any
sale-leaseback, synthetic lease or similar transaction in respect of any of
its assets.
6.13. CANCELLATION OF INDEBTEDNESS. No Co-Borrower shall voluntarily
cancel any claim or debt owing to it, except for reasonable consideration
negotiated on an arm's-length basis and in the ordinary course of its business
consistent with past practices.
6.14. RESTRICTED PAYMENTS. No Co-Borrower shall make any Restricted
Payment, except intercompany loans and advances to the extent permitted by
Section 6.2(h) above.
6.15. CHANGE OF CORPORATE NAME OR LOCATION; CHANGE OF FISCAL YEAR. No
Co-Borrower shall (a) change its corporate name, or (b) change its chief
executive office, principal place of business, corporate offices or warehouses
or locations at which it conducts business in
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any case without at least thirty (30) days prior written notice to
Administrative Agent. No Co-Borrower shall change its Fiscal Year.
6.16. NO IMPAIRMENT OF INTERCOMPANY TRANSFERS. No Co-Borrower shall
directly or indirectly enter into or become bound by any agreement, instrument,
indenture or other obligation (other than this Agreement and the other Loan
Documents) which could directly or indirectly restrict, prohibit or require the
consent of any Person with respect to the payment of dividends or the making of
other distributions or the making or repayment of intercompany loans by any
Co-Borrower to another Co-Borrower, except:
(a) customary non-assignment provisions in Licenses and leases entered
into in the ordinary course of business and consistent with past practices;
(b) purchase money obligations otherwise permitted hereunder for property
acquired in the ordinary course of business that impose restrictions on the
property so acquired;
(c) the refinancing of Indebtedness permitted by Section 6.3(a)(iv),
provided that the restrictions contained in the agreements governing such
refinancing Indebtedness are no more restrictive, taken as a whole, than those
contained in the agreements governing the Indebtedness being refinanced; and
(d) restrictions provided under the Loan Documents.
6.17. NO SPECULATIVE TRANSACTIONS. No Co-Borrower shall engage in any
transaction involving commodity options, futures contracts or similar
transactions, except solely to hedge against fluctuations in the prices of
commodities owned or purchased by it and the values of foreign currencies
receivable or payable by it and Interest Hedge Obligations permitted by
Section 6.3(a).
6.18. STATUS OF L&LR. After the consummation of the Merger, L&LR shall be
a company which shall not engage in any activities other than those associated
with being the sole shareholder of Cigar and, without limiting the foregoing,
shall not incur any liabilities of any nature whatsoever other than pursuant to
this Agreement, the other Loan Documents and Interest Hedge Obligations
permitted by Section 6.3(a).
7. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
7.1. EVENTS OF DEFAULT. The occurrence of any one or more of the following
events (regardless of the reason therefor) shall constitute an "Event of
Default" hereunder:
(a) Co-Borrowers (i) fail to make any payment of principal of the Loans
when due and payable, (ii) fail to make any payment of interest on, or Fees
owing in respect of, the Loans or any of the other Obligations when due and
payable, or (iii) fail to pay or reimburse Administrative Agent, Documentation
Agent or Lenders for any expense reimbursable hereunder or under any other Loan
Document within three (3) Business Days following Administrative Agent's demand
for such reimbursement or payment of expenses; or
(b) Any representation, warranty or statement made by any Co-Borrower
herein or in any other Loan Document or in any certificate delivered pursuant
thereto shall prove to be untrue in any material respect on the date of which
made or deemed made; or
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(c) Any Co-Borrower shall fail or neglect to perform, keep or observe any
of the provisions of Sections 1.4 or 6; or
(d) Any Co-Borrower shall fail or neglect to perform, keep or observe any
other provision of this Agreement or of any of the other Loan Documents (other
than any provision embodied in or covered by any other clause of this Section
7.1) and the same shall remain unremedied for ten (10) days or more after notice
thereof from the Administrative Agent; or
(e) A default or breach shall occur under any other agreement, document
or instrument to which any Co-Borrower is a party which is not cured within
any applicable grace period, and such default or breach (i) involves the
failure to make any payment when due in respect of any Indebtedness (other
than the Obligations) of any Co-Borrower in excess of $100,000 in the
aggregate or, when added together with all such defaults or breaches of the
Co-Borrowers collectively, results in the failure of the Co-Borrowers to make
payments when due in respect of Indebtedness (other than the Obligations) in
excess of $500,000 in the aggregate, or (ii) causes, or permits any holder of
such Indebtedness or a trustee to cause, Indebtedness or a portion thereof in
excess of $250,000 in the aggregate to become due prior to its stated
maturity or prior to its regularly scheduled dates of payment, regardless of
whether such default is waived, or such right is exercised, by such holder or
trustee; or
(f) A case or proceeding shall have been commenced against any Co-Borrower
seeking a decree or order in respect of any Co-Borrower (i) under Title 11 of
the United States Code, as now constituted or hereafter amended or any other
applicable federal, state or foreign bankruptcy or other similar law, (ii)
appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
(or similar official) for any Co-Borrower or of any substantial part of any such
Person's assets, or (iii) ordering the winding-up or liquidation of the affairs
of any Co-Borrower, and such case or proceeding shall remain undismissed or
unstayed for sixty (60) days or more or such court shall enter a decree or order
granting the relief sought in such case or proceeding; or
(g) Any Co-Borrower (i) shall file a petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended, or any
other applicable federal, state or foreign bankruptcy or other similar law, (ii)
shall fail to contest in a timely and appropriate manner or shall consent to the
institution of proceedings thereunder or to the filing of any such petition or
to the appointment of or taking possession by a custodian, receiver, liquidator,
assignee, trustee or sequestrator (or similar official) of any Co-Borrower or of
any substantial part of any such Person's assets, (iii) shall make an assignment
for the benefit of creditors, or (iv) shall take any corporate action in
furtherance of any of the foregoing, or (v) shall admit in writing its inability
to, or shall be generally unable to, pay its debts as such debts become due; or
(h) A final judgment or judgments for the payment of money in excess of
$50,000 in the aggregate at any time outstanding shall be rendered against any
Co-Borrower and the same shall not, within thirty (30) days after the entry
thereof, have been discharged or execution thereof stayed or bonded pending
appeal, or shall not have been discharged prior to the expiration of any such
stay; or
(i) Any material provision of any Loan Document shall for any reason cease
to be in force and effective (or any Co-Borrower shall challenge the
enforceability of any Loan Document or shall assert in writing, or engage in any
action or inaction based on any such assertion, that any provision of any of the
Loan Documents has ceased to be or otherwise is not valid, binding and
enforceable in accordance with its terms); or
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(j) At any time after the execution and delivery thereof, any of the
Pledge Agreements shall cease to be in full force and effect, or shall cease to
give the Collateral Agent for the benefit of the Lenders the Liens, rights,
powers and privileges purported to be created thereby (including, without
limitation, a perfected security interest in, and Lien on all of the
Collateral), in favor of the Collateral Agent, superior to and prior to the
rights of all third Persons, and subject to no other Liens (except as otherwise
expressly provided in the Pledge Agreements), or L&LR or Cigar shall default in
the due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to any of the Pledge Agreements; or
(k) An "event of default" shall occur pursuant to any Interest Hedge
Obligation permitted by Section 6.3(a); or
(l) Any Change of Control shall occur.
7.2. REMEDIES. (a) If any Event of Default shall have occurred and be
continuing, Administrative Agent may (and at the written request of the
Requisite Revolving Credit Lenders shall), without notice, suspend the Revolving
Credit Loan facility whereupon any further Revolving Credit Loans shall be made
or extended in Administrative Agent's sole discretion (or in the sole discretion
of the Requisite Revolving Credit Lenders, if such suspension occurred at their
direction) so long as such Default or Event of Default is continuing. If any
Default or Event of Default shall have occurred and be continuing,
Administrative Agent shall, in addition to all other rights and remedies,
without notice except as otherwise expressly provided herein, increase the rate
of interest applicable to the Loans to the Default Rate.
(b) If any Event of Default shall have occurred and be continuing,
Administrative Agent may (and at the written request of the Requisite Lenders
shall), without notice, (i) terminate the Revolving Credit Loan facility with
respect to further Revolving Credit Loans; (ii) declare all or any portion of
the Obligations, including all or any portion of any Loan to be forthwith due
and payable, all without presentment, demand, protest or further notice of any
kind, all of which are expressly waived by Co-Borrowers; (iii) enforce, as
Collateral Agent, all of the Liens and security interests created pursuant to
the Pledge Agreements; and (iv) exercise any rights and remedies provided to
Administrative Agent under the Loan Documents and/or at law or equity; provided,
however, that upon the occurrence of an Event of Default specified in Sections
7.1(f) or (g), the Revolving Credit Loan facility shall be immediately
terminated and all of the Obligations, including the Revolving Credit Loans and
the Term Loan, shall become immediately due and payable without declaration,
notice or demand by any Person.
7.3. WAIVERS BY CO-BORROWERS. Except as otherwise provided for in this
Agreement or by applicable law, each Co-Borrower waives: (a) presentment, demand
and protest and notice of presentment, dishonor, notice of intent to accelerate,
notice of acceleration, protest, default, nonpayment, maturity, release,
compromise, settlement, extension or renewal of any or all commercial paper,
accounts, contract rights, documents, instruments, chattel paper and guaranties
at any time held by Administrative Agent on which any Co-Borrower may in any way
be liable, and hereby ratifies and confirms whatever Administrative Agent may do
in this regard, and (b) the benefit of all valuation, appraisal, marshaling and
exemption laws.
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8. ASSIGNMENT AND PARTICIPATIONS
8.1. ASSIGNMENT AND PARTICIPATIONS.
(a) Each Lender may assign to any entity, at any time or times, the
Loans, the Loan Documents and any Commitment or of any portion thereof or
interest therein, including any Lender's rights, title, interests, remedies,
powers or duties thereunder, whether evidenced by a writing or not; provided,
however, that any assignment (other than to another Lender or to an Affiliate
of a Lender) shall (i) so long as no Event of Default shall have occurred and
be continuing, require the consent of the Co-Borrowers (which shall not be
unreasonably withheld or delayed); (ii) require the consent of Administrative
Agent (which shall not be unreasonably withheld or delayed); (iii) require
the execution of an assignment agreement (an "Assignment Agreement"
substantially in the form attached hereto as Exhibit 8.1(a) and otherwise in
form and substance satisfactory to, and acknowledged by, Administrative
Agent; (iv) be conditioned on such assignee Lender representing to the
assigning Lender and Administrative Agent that it is purchasing the
applicable Loans to be assigned to it for its own account, for investment
purposes and not with a view to the distribution thereof; (v) if a partial
assignment, be in an amount at least equal to $5,000,000 (unless otherwise
agreed to by Co-Borrowers and the Administrative Agent) and, after giving
effect to any such partial assignment, the assigning Lender shall have
retained Commitments in an amount at least equal to $5,000,000; and (vi)
include a payment to Administrative Agent of an assignment fee of $3,500. In
the case of an assignment by a Lender under this Section 8.1, the assignee
shall have, to the extent of such assignment, the same rights, benefits and
obligations as it would if it were a Lender hereunder. The assigning Lender
shall be relieved of its obligations hereunder with respect to its
Commitments or assigned portion thereof from and after the date of such
assignment. Co-Borrowers hereby acknowledge and agree that any assignment
will give rise to a direct obligation of Co-Borrowers to the assignee and
that the assignee shall be considered to be a "Lender". In all instances,
each Lender's liability to make Loans hereunder shall be several and not
joint and shall be limited to such Lender's pro rata share of the applicable
Commitment. In the event Administrative Agent or any Lender assigns or
otherwise transfers all or any part of the Obligations, Administrative Agent
or any such Lender shall so notify Co-Borrowers and Co-Borrowers shall, upon
the request of Administrative Agent or such Lender, execute new Notes in
exchange for the Notes, if any, being assigned. Notwithstanding the foregoing
provisions of this Section 8.1(a), any Lender may at any time pledge the
Obligations held by it and such Lender's rights under this Agreement and the
other Loan Documents to a Federal Reserve Bank, and any Lender that is an
investment fund may assign the Obligations held by it and such Lender's
rights under this Agreement and the other Loan Documents to another
investment fund managed by the same investment advisor; provided, however,
that no such pledge to a Federal Reserve Bank shall release such Lender from
such Lender's obligations hereunder or under any other Loan Document.
(b) Each Lender may sell or assign participations in, at any time or
times, the Loans without the consent of the Co-Borrowers. Any participation by a
Lender of all or any part of its Commitments shall be made with the
understanding that all amounts payable by Co-Borrowers hereunder shall be
determined as if that Lender had not sold such participation. Although any
Lender may grant participations in its rights hereunder, such Lender shall
remain a "Lender" for all purposes hereunder and the participant shall not
constitute a "Lender" hereunder. Without
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limiting the foregoing, any participation by a Lender of all or any part of its
Commitments shall be made with the understanding that the holder of any such
participation shall not be entitled to approve any amendment to or waiver of
this Agreement or any other Loan Document pursuant to Section 10.3 except to the
extent such amendment or waiver would extend the final scheduled maturity of any
Loan or Note, or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with a waiver of applicability of any
past-default increase in interest rates), or reduce the principal amount
thereof. Solely for purposes of Sections 1.10, 1.11 (assuming the Lender
complies with the provisions applicable to a foreign Lender), 1.12 (but not
higher than that which the Lender who granted the applicable participation would
have been entitled to receive) and 10.7, Co-Borrowers acknowledge and agree that
a participation shall give rise to a direct obligation of Co-Borrowers to the
participant and the participant shall be considered to be a "Lender". Except as
set forth in the preceding sentence no Co-Borrower shall have any obligation or
duty to any participant. Neither Administrative Agent nor any Lender (other than
the Lender selling a participation) shall have any duty to any participant and
may continue to deal solely with the Lender selling a participation as if no
such sale had occurred.
(c) Except as expressly provided in this Section 8.1, no Lender shall, as
between Borrower and that Lender, or Administrative Agent and that Lender, be
relieved of any of its obligations hereunder as a result of any sale,
assignment, transfer or negotiation of, or granting of participation in, all or
any part of the Loans, the Notes or other Obligations owed to such Lender.
(d) Each Co-Borrower shall assist any Lender permitted to sell assignments
or participations under this Section 7.1 as reasonably required to enable the
assigning or selling Lender to effect any such assignment or participation,
including the execution and delivery of any and all agreements, notes and other
documents and instruments as shall be requested. Until the completion of the
syndication of the Loans hereunder, as reasonably determined by Administrative
Agent, in its sole discretion, each Co-Borrower executing this Agreement shall
(i) assist in the preparation of informational materials for, and the
participation of management in meetings with, potential assignees or
participants, and (ii) certify the correctness, completeness and accuracy of all
descriptions of the Co-Borrowers and their affairs contained in any selling
materials provided by it and all other information provided by it and included
in such materials.
(e) A Lender may furnish any information concerning Co-Borrowers in the
possession of such Lender from time to time to assignees and participants
(including prospective assignees and participants).
9. THE ADMINISTRATIVE AGENT
9.1. APPOINTMENT OF ADMINISTRATIVE AGENT. Chase is hereby appointed to act
on behalf of all Lenders as the Administrative Agent (for purposes of this
Section 9, the term "Administrative Agent" shall include Chase in its capacity
as Administrative Agent and as Collateral Agent pursuant to the Pledge
Agreements and any Lending Affiliate of Chase performing any of the duties or
functions of the Administrative Agent hereunder or under any other Loan
Document) to act as specified herein and in the other Loan Documents. Each
Lender hereby irrevocably authorizes, and each holder of any Note by the
acceptance of such Note shall be deemed irrevocably to authorize, the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement, the other Loan Documents and any other instruments
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and agreements referred to herein or therein and to exercise such powers and to
perform such duties hereunder and thereunder as are specifically delegated to or
required of the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
9.2. NATURE OF DUTIES. The Administrative Agent shall not have any duties
or responsibilities except those expressly set forth in this Agreement and in
the other Loan Documents. Neither the Administrative Agent nor any of its
respective officers, directors, agents, employees or affiliates shall be liable
for any action taken or omitted by it or them hereunder or under any other Loan
Document or in connection herewith or therewith, unless determined by the
non-appealable final judgment of a court of competent jurisdiction to have been
caused by its or their gross negligence or willful misconduct. The duties of the
Administrative Agent shall be mechanical and administrative in nature; the
Administrative Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any Lender or the holder of
any Note; and nothing in this Agreement or any other Loan Document, expressed or
implied, is intended to or shall be so construed as to impose upon the
Administrative Agent any obligations in respect of this Agreement or any other
Loan Document except as expressly set forth herein or therein.
9.3. LACK OF RELIANCE ON THE ADMINISTRATIVE AGENT. Independently and
without reliance upon the Administrative Agent, each Lender and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of Co-Borrowers and statements, information and representations made by
Co-Borrowers in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of Co-Borrowers and, except as expressly
provided in this Agreement, the Administrative Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Lender
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. The Administrative Agent shall not be responsible
to any Lender or the holder of any Note for any recitals, statements,
information, representations or warranties herein or in any document,
certificate or other writing delivered in connection herewith or for the
execution, effectiveness, genuineness, validity, enforceability, perfection,
collectability, priority or sufficiency of this Agreement or any other Loan
Document or the financial condition of Co-Borrowers or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Loan Document, or the
financial condition of Co-Borrowers or the existence or possible existence of
any Default or Event of Default.
9.4. RELIANCE. The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Administrative Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Loan Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Administrative Agent. No Lender or the holder of any Note shall
have any right of action
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whatsoever against the Administrative Agent as a result of the Administrative
Agent acting or refraining from acting hereunder or under any other Loan
Document in accordance with the instructions of the Requisite Revolving Credit
Lenders, or Requisite Lenders, as the case may be.
9.5. INDEMNIFICATION. (a) To the extent the Administrative Agent is not
reimbursed and indemnified by the Co-Borrowers, the Lenders will reimburse and
indemnify the Administrative Agent, in proportion to their respective Pro Rata
Shares, for and against any and all liabilities, obligations, losses, damages,
penalties, claims, actions, judgments, costs, expenses or disbursements of
whatsoever kind or nature which may be imposed on, asserted against or incurred
by the Administrative Agent in performing its respective duties hereunder or
under any other Loan Document, in any way relating to or arising out of this
Agreement or any other Loan Document; provided that no Lender shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
determined by a final non-appealable judgment of a court of competent
jurisdiction to have resulted from the Administrative Agent's gross negligence
or willful misconduct. Without limiting the foregoing, each Lender agrees to
reimburse the Administrative Agent promptly upon demand for its ratable share of
any out-of-pocket expenses (including counsel fees) incurred by Administrative
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Administrative Agent is not reimbursed for such expenses by
Co-Borrowers.
(b) The Administrative Agent shall be fully justified in failing or
refusing to take any action hereunder and under any other Loan Document (except
actions expressly required to be taken by it hereunder or under the Loan
Documents) if such action would, in the opinion of the Administrative Agent, be
contrary to law or the terms of this Agreement or any other Loan Document.
9.6. THE ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to
its obligation to make Loans under this Agreement, the Administrative Agent
shall have the rights and powers specified herein for a "Lender" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Lenders," "Requisite Lenders," "holders of
Notes" or any similar terms shall, unless the context clearly otherwise
indicates, include the Administrative Agent in its individual capacity. The
Administrative Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Co-Borrower or
any Affiliate of any Co-Borrower as if it were not performing the duties
specified herein, and may accept fees and other consideration from the
Co-Borrowers for services in connection with this Agreement and otherwise
without having to account for the same to the Lenders.
9.7. HOLDERS. The Administrative Agent may deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case
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may be, of such Note or of any Note or Notes issued in exchange therefor.
9.8. DOCUMENTATION AGENT; SYNDICATION AGENT. (a) Nothing in this
Agreement shall impose on the Documentation Agent or the Syndication Agent,
in each case in such capacity, any duties or obligations.
(b) To the extent the Documentation Agent is not reimbursed and
indemnified by the Co-Borrowers, the Lenders will reimburse and indemnify the
Documentation Agent, in proportion to their respective Pro Rata Shares, for
and against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or incurred by the
Documentation Agent in acting as such hereunder or under any other Loan
Document, in any way relating to or arising out of this Agreement or any
other Loan Document; provided that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent determined
by a final non-appealable judgment of a court of competent jurisdiction to
have resulted from the Documentation Agent's gross negligence or willful
misconduct.
9.9. RESIGNATION BY THE ADMINISTRATIVE AGENT. (a) The Administrative Agent
may resign from the performance of all its functions and duties hereunder and/or
under the other Loan Documents at any time by giving 15 Business Days' prior
written notice to the Co-Borrowers and the Lenders. Such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Requisite Lenders shall
appoint a successor Administrative Agent hereunder and under the other Loan
Documents who shall be a Lender, a commercial bank or a trust company in each
case reasonably acceptable to the Co-Borrowers.
(c) If a successor Administrative Agent shall not have been so appointed
within such 15 Business Day period, the Administrative Agent, with the consent
of the Co-Borrowers (which shall not be unreasonably withheld), shall then
appoint a successor Administrative Agent who shall serve as Administrative Agent
hereunder and under the other Loan Documents until such time, if any, as the
Requisite Lenders appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 30th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Lenders shall thereafter perform all
the duties of the Administrative Agent hereunder and/or under any of the Loan
Documents until such time, if any, as the Requisite Lenders appoint a successor
Administrative Agent as provided above.
(e) Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall succeed to and become vested with all the rights, powers, privileges
and duties of the resigning Administrative Agent.
(f) Upon the earlier of the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent or the
effective date of the resigning Administrative Agent's resignation, the
resigning Administrative Agent shall be discharged from its duties and
obligations under this Agreement and the other Loan Documents, except that any
indemnity rights or other rights in favor of such resigning Administrative Agent
shall continue. After any resigning Administrative Agent's resignation
hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Administrative Agent
under this Agreement and the other Loan Documents.
(g) Anything in this Agreement to the contrary notwithstanding, each
Lender hereby agrees with each other Lender that no Lender shall take any action
to protect or enforce its rights arising out of this Agreement or the Notes
(including exercising any rights of set-off) without first obtaining the prior
written consent of Administrative Agent and Requisite Lenders, it being
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the intent of Lenders that any such action to protect or enforce rights under
this Agreement and the Notes shall be taken in concert and at the direction or
with the consent of Administrative Agent.
10. MISCELLANEOUS
10.1. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of each Co-Borrower,
Administrative Agent, Documentation Agent, Lenders and their respective
successors and assigns (including, in the case of any Co-Borrower, a
debtor-in-possession on behalf of such Co-Borrower), except as otherwise
provided herein or therein. No Co-Borrower may assign, transfer, hypothecate or
otherwise convey its rights, benefits, obligations or duties hereunder or under
any of the other Loan Documents without the prior express written consent of
Administrative Agent and Lenders. Any such purported assignment, transfer,
hypothecation or other conveyance by any Co-Borrower without the prior express
written consent of Administrative Agent and Lenders shall be void. The terms and
provisions of this Agreement are for the purpose of defining the relative rights
and obligations of each Co-Borrower, Administrative Agent, Documentation Agent
and Lenders with respect to the transactions contemplated hereby and no Person
shall be a third party beneficiary of any of the terms and provisions of this
Agreement or any of the other Loan Documents.
10.2. COMPLETE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan Documents
constitute the complete agreement between the parties with respect to the
subject matter thereof and may not be modified, altered or amended except as set
forth in Section 10.3 below. Any letter of interest, commitment letter and/or
fee letter (other than the Fee Letter) between any Co-Borrower and either
Administrative Agent or any Lender or any of their respective affiliates,
predating this Agreement and relating to a financing of substantially similar
form, purpose or effect shall be superseded by this Agreement.
10.3. AMENDMENTS AND WAIVERS. (a) Except for actions expressly
permitted to be taken by Administrative Agent, no amendment, modification,
termination or waiver of any provision of this Agreement or any of the Notes,
or any consent to any departure by any Co-Borrower therefrom, shall in any
event be effective unless the same shall be in writing and signed by
Administrative Agent and Co-Borrowers, and by Requisite Lenders, Requisite
Revolving Credit Lenders or all affected Lenders, as applicable. Except as
set forth in clauses (b) and (c) below, all such amendments, modifications,
terminations or waivers requiring the consent of any Lenders shall require
the written consent of Requisite Lenders.
(b) No amendment, modification, termination or waiver of or consent with
respect to any provision of this Agreement which waives compliance with the
conditions precedent set forth in Section 2.2 to the making of any Loan shall be
effective unless the same shall be in writing and signed by Administrative
Agent, Documentation Agent, all Lenders and Co-Borrowers. Notwithstanding
anything contained in this Agreement to the contrary, no waiver or consent with
respect to any Default (if in connection therewith Administrative Agent or
Requisite Revolving Credit Lenders, as the case may be, have exercised its or
their right to suspend the making or incurrence of further Revolving Credit
Loans pursuant to Section 7.2) or any Event of Default shall be effective for
purposes of the conditions precedent to the making of Loans set forth in
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Section 2.2 unless the same shall be in writing and signed by Administrative
Agent, all Lenders and Co-Borrowers.
(c) No amendment, modification, termination or waiver shall, unless in
writing and signed by Administrative Agent, Documentation Agent and each
Lender directly affected thereby, do any of the following: (i) increase the
principal amount of any Lender's Commitment (which action shall be deemed to
directly affect all Lenders); (ii) reduce the principal of, rate of interest
on or Fees payable with respect to any Loan of any affected Lender; (iii)
extend any scheduled payment date or final maturity date of the principal
amount of any Loan of any affected Lender; (iv) waive, forgive, defer, extend
or postpone any payment of interest or Fees as to any affected Lender; (v)
change the percentage of the Commitments or of the aggregate unpaid principal
amount of the Loans which shall be required for Lenders or any of them to
take any action hereunder (which action shall be deemed to directly affect
all Lenders); and (vi) amend or waive this Section 10.3 or the definitions of
the terms "Requisite Lenders" or "Requisite Revolving Credit Lenders" insofar
as such definitions affect the substance of this Section 10.3 (which action
shall be deemed to directly affect all Lenders). Furthermore, no amendment,
modification, termination or waiver affecting the rights or duties of the
Administrative Agent under this Agreement or any other Loan Document shall be
effective unless in writing and signed by the Administrative Agent, in
addition to Lenders required hereinabove to take such action. Each amendment,
modification, termination or waiver shall be effective only in the specific
instance and for the specific purpose for which it was given. No amendment,
modification, termination or waiver of any provision of any Note shall be
effective without the written concurrence of the holder of that Note. No
notice to or demand on any Co-Borrower in any case shall entitle such
Co-Borrower or any other Co-Borrower to any other or further notice or demand
in similar or other circumstances. Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 10.3 shall be
binding upon each holder of the Notes at the time outstanding and each future
holder of the Notes.
(d) If, in connection with any proposed amendment, modification, waiver
or termination (a "Proposed Change") requiring the consent of all affected
Lenders, the consent of Requisite Lenders is obtained, but the consent of
other Lenders whose consent is required is not obtained (any such Lender
whose consent is not obtained being referred to as a "Non-Consenting
Lender"), then, so long as Administrative Agent is not a Non-Consenting
Lender, at Co-Borrowers' request Administrative Agent, or a Person acceptable
to Administrative Agent, shall have the right with Administrative Agent's
consent and in Administrative Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lenders, and such
Non-Consenting Lenders agree that they shall, upon Administrative Agent's
request, sell and assign to Administrative Agent or such Person, all of the
Commitments of such Non-Consenting Lender for an amount equal to the
principal balance of all Loans held by the Non-Consenting Lender and all
accrued interest and Fees, the amounts, if any, required to be paid pursuant
to Section 1.10(b) (it being understood that such sale and assignment of any
Eurodollar Loan shall constitute a repayment of such Loan) and other payments
required hereunder with respect thereto through the date of sale, such
purchase and sale to be consummated pursuant to an executed Assignment
Agreement.
(e) Notwithstanding anything set forth herein to the contrary, a Lender
that fails to fund any payments or Revolving Credit Loans required under this
Agreement and the other Loan Documents, shall not have any voting or consent
rights under or with respect to any Loan Document or constitute a "Lender" or
"Revolving Credit Lender" (or be included in the calculation of "Requisite
Lenders" or "Requisite Revolving Credit Lenders" hereunder) for any
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voting or consent rights under or with respect to any Loan Document if such
failure to fund exists as at the time of the required voting action.
10.4. FEES AND EXPENSES. Co-Borrowers shall reimburse the Administrative
Agent for all of its out-of-pocket expenses incurred in connection with the
preparation of the Loan Documents (including the reasonable fees and expenses of
all of its special loan counsel, advisors, consultants and auditors retained in
connection with the Loan Documents and the Related Transactions and advice in
connection therewith). Co-Borrowers shall reimburse Administrative Agent (and,
with respect to clauses (c), (d) and (e) below, each Lender) for all of its
respective fees, costs and expenses, including the reasonable fees, costs and
expenses of counsel or other advisors (including environmental and management
consultants and appraisers) for advice, assistance, or other representation in
connection with:
(a) the forwarding to Co-Borrowers or any other Person on behalf of
Co-Borrowers by Administrative Agent of the proceeds of the Loans;
(b) any amendment, modification or waiver of, or consent with respect to,
any of the Loan Documents or Related Transactions Documents or advice in
connection with the administration of the Loans made pursuant hereto or its
rights hereunder or thereunder;
(c) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by Administrative Agent, any Lender, Co-Borrowers or any other
Person) in any way relating to any of the Loan Documents or any other agreement
to be executed or delivered in connection therewith or herewith, whether as
party, witness, or otherwise, including any litigation, contest, dispute, suit,
case, proceeding or action, and any appeal or review thereof, in connection with
a case commenced by or against Co-Borrowers or any other Person that may be
obligated to Administrative Agent by virtue of the Loan Documents; including any
such litigation, contest, dispute, suit, proceeding or action arising in
connection with any work-out or restructuring of the Loans during the pendency
of one or more Events of Default; provided that in the case of reimbursement of
counsel for Lenders other than Administrative Agent, such reimbursement shall be
limited to one counsel for all such Lenders;
(d) any attempt to enforce any remedies of Administrative Agent or any
Lender against any or all of the Co-Borrowers or any other Person (but excluding
Administrative Agent or any Lender including any successor or assign thereof)
that may be obligated to Administrative Agent or any Lender by virtue of any of
the Loan Documents; including any such attempt to enforce any such remedies in
the course of any work-out or restructuring of the Loans during the pendency of
one or more Events of Default; provided that in the case of reimbursement of
counsel for Lenders other than Administrative Agent, such reimbursement shall be
limited to one counsel for all such Lenders;
(e) any work-out or restructuring of the Loans during the pendency of one
or more Events of Default;
(f) efforts to (i) monitor the Loans or any of the other Obligations and
(ii) evaluate, observe or assess any of the Co-Borrowers or their respective
affairs, including, as to each of clauses (a) through (f) above, all reasonable
attorneys' and other professional and service
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providers' fees arising from such services, including those in connection with
any appellate proceedings; and all reasonable expenses, costs, charges and other
reasonable fees incurred by such counsel and others in any way or respect
arising in connection with or relating to any of the events or actions described
in this Section 10.4 shall be payable, on demand, by Co-Borrowers to
Administrative Agent. Without limiting the generality of the foregoing, such
expenses, costs, charges and fees may include: fees, costs and expenses of
accountants, environmental advisors, appraisers, investment bankers, management
and other consultants and paralegals; court costs and expenses; photocopying and
duplication expenses; court reporter fees, costs and expenses; long distance
telephone charges; air express charges; telegram or telecopy charges;
secretarial overtime charges; and expenses for travel, lodging and food paid or
incurred in connection with the performance of such legal or other advisory
services.
10.5. NO WAIVER. Neither Administrative Agent's nor any Lender's failure,
at any time or times, to require strict performance by the Co-Borrowers of any
provision of this Agreement or any of the other Loan Documents shall not waive,
affect or diminish any right of Administrative Agent or such Lender thereafter
to demand strict compliance and performance therewith. Any suspension or waiver
of an Event of Default shall not suspend, waive or affect any other Event of
Default whether the same is prior or subsequent thereto and whether the same or
of a different type. Subject to the provisions of Section 10.3, none of the
undertakings, agreements, warranties, covenants and representations of any
Co-Borrower contained in this Agreement or any of the other Loan Documents and
no Default or Event of Default by any Co-Borrower shall be deemed to have been
suspended or waived by Administrative Agent or any Lender, unless such waiver or
suspension is by an instrument in writing signed by an officer of or other
authorized employee of such Administrative Agent and the applicable required
Lenders and directed to Borrower specifying such suspension or waiver.
10.6. REMEDIES. Administrative Agent's and each Lenders' rights and
remedies under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies which Administrative Agent or any Lender may have under any
other agreement, including the other Loan Documents, by operation of law or
otherwise.
10.7. SETOFF AND SHARING OF PAYMENTS. In addition to any rights now or
hereafter granted under applicable law and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Lender and each holder of any Note is hereby authorized at any time or from
time to time, without notice to any Co-Borrower or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all balances held by it at any of its offices for the account of
Co-Borrower (regardless of whether such balances are then due to Co-Borrower)
and any other properties or assets at any time held or owing by that Lender or
that holder to or for the credit or for the account of Co-Borrower against and
on account of any of the Obligations which are not paid when due. Any Lender or
holder of any Note exercising a right to set off or otherwise receiving any
payment on account of the Obligations in excess of its Pro Rata Share thereof
shall purchase for cash (and the other Lenders or holders shall sell) such
participations in each such other Lender's or holder's Pro Rata Share of the
Obligations as would be necessary to cause such Lender to share the amount so
set off or otherwise received with each other Lender or holder in accordance
with their respective Pro Rata Shares. Co-Borrowers agree, to the fullest extent
permitted by law, that (a) any Lender or holder may exercise its right to set
off with respect to
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amounts in excess of its Pro Rata Share of the Obligations and may sell
participations in such amount so set off to other Lenders and holders and (b)
any Lender or holders so purchasing a participation in the Loans made or other
Obligations held by other Lenders or holders may exercise all rights of set-off,
bankers' lien, counterclaim or similar rights with respect to such participation
as fully as if such Lender or holder were a direct holder of the Loans and the
other Obligations in the amount of such participation. Notwithstanding the
foregoing, if all or any portion of the set-off amount or payment otherwise
received is thereafter recovered from the Lender that has exercised the right of
set-off, the purchase of participations by that Lender shall be rescinded and
the purchase price restored without interest.
10.8. SEVERABILITY. Wherever possible, each provision of this Agreement
and the other Loan Documents shall be interpreted in such a manner as to be
effective and valid under applicable law, but if any provision of this Agreement
shall be prohibited by or invalid under applicable law, such provision shall be
ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement.
10.9. CONFLICT OF TERMS. Except as otherwise provided in this Agreement or
any of the other Loan Documents by specific reference to the applicable
provisions of this Agreement, if any provision contained in this Agreement is in
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and control.
10.10. GOVERNING LAW. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE
LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY
AND PERFORMANCE, THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY,
AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE CONFLICT OF LAWS PRINCIPLES THEREOF) AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA (EXCEPT TO THE EXTENT THAT THE
LAWS OF ANOTHER STATE GOVERN THE CREATION OR PERFECTION OF LIENS UNDER ANY LOAN
DOCUMENT). EACH CO-BORROWER HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN THE STATES OF NEW YORK OR NEW JERSEY SHALL HAVE EXCLUSIVE
JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
CO-BORROWERS, ADMINISTRATIVE AGENT, DOCUMENTATION AGENT AND LENDERS PERTAINING
TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING
OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS,
PROVIDED, THAT ADMINISTRATIVE AGENT, DOCUMENTATION AGENT, LENDERS AND THE
CO-BORROWERS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD
BY A COURT LOCATED OUTSIDE OF NEW YORK OR NEW JERSEY AND, PROVIDED, FURTHER
NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE ADMINISTRATIVE
AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION
TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ADMINISTRATIVE AGENT.
EACH CO-BORROWER EXPRESSLY SUBMITS AND CONSENTS IN
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ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND EACH CO-BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH CO-BORROWER MAY HAVE
BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS
AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS
DEEMED APPROPRIATE BY SUCH COURT. EACH CO-BORROWER HEREBY WAIVES PERSONAL
SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR
SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY
BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CO-BORROWER AT THE
ADDRESS SET FORTH IN ANNEX D OF THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH CO-BORROWER'S ACTUAL RECEIPT THEREOF
OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
10.11. NOTICES. Except as otherwise provided herein, whenever it is
provided herein that any notice, demand, request, consent, approval, declaration
or other communication shall or may be given to or served upon any of the
parties by any other parties, or whenever any of the parties desires to give or
serve upon any other parties any communication with respect to this Agreement,
each such notice, demand, request, consent, approval, declaration or other
communication shall be in writing and shall be deemed to have been validly
served, given or delivered (a) upon the earlier of actual receipt and three (3)
Business Days after deposit in the United States Mail, registered or certified
mail, return receipt requested, with proper postage prepaid, (b) upon
transmission, when sent by telecopy or other similar facsimile transmission
(with such telecopy or facsimile promptly confirmed by delivery of a copy by
personal delivery or United States Mail as otherwise provided in this Section
10.11), (c) one (1) Business Day after deposit with a reputable overnight
courier with all charges prepaid or (d) when delivered, if hand-delivered by
messenger, all of which shall be addressed to the party to be notified and sent
to the address or facsimile number indicated on Annex D or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
The giving of any notice required hereunder may be waived in writing by the
party entitled to receive such notice. Failure or delay in delivering copies of
any notice, demand, request, consent, approval, declaration or other
communication to any Person (other than Co-Borrowers or Administrative Agent)
designated on Annex D to receive copies shall in no way adversely affect the
effectiveness of such notice, demand, request, consent, approval, declaration or
other communication.
10.12. SECTION TITLES. The Section titles and Table of Contents contained
in this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.
10.13. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
10.14. WAIVER OF JURY TRIAL. BECAUSE DISPUTES ARISING IN CONNECTION WITH
COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN
EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL
LAWS TO APPLY
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(RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE
RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE
BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE
PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR
PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, AMONG AGENTS, LENDERS AND ANY CO-BORROWER ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN
CONNECTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS RELATED THERETO.
10.15. PRESS RELEASES. Each Co-Borrower executing this Agreement agrees
that neither it nor its Affiliates will in the future issue any press releases
or other public disclosure using the name of Chase or any of their respective
affiliates or referring to this Agreement, the other Loan Documents or the
Related Transactions Documents without at least two (2) Business Days' prior
notice to Chase and without the prior written consent of Chase unless (and only
to the extent that) such Co-Borrower or Affiliate is required to do so under law
and then, in any event, such Co-Borrower or Affiliate will consult with Chase
before issuing such press release or other public disclosure. Each Co-Borrower
consents to the publication by Administrative Agent or any Lender of a tombstone
or similar advertising material relating to the financing transactions
contemplated by this Agreement with the prior consent of Co-Borrowers, which
shall not be unreasonably withheld or delayed. Administrative Agent or such
Lender shall provide a draft of any such tombstone or similar advertising
material to each Co-Borrower for review and comment prior to the publication
thereof. Administrative Agent reserves the right to provide to industry trade
organizations information necessary and customary for inclusion in league table
measurements with Co-Borrowers' consent which shall not be unreasonably withheld
or delayed.
10.16. REINSTATEMENT. This Agreement shall remain in full force and effect
and continue to be effective should any petition be filed by or against
Co-Borrowers for liquidation or reorganization, should Co-Borrowers become
insolvent or make an assignment for the benefit of any creditor or creditors or
should a receiver or trustee be appointed for all or any significant part of
Co-Borrowers' assets, and shall continue to be effective or to be reinstated, as
the case may be, if at any time payment and performance of the Obligations, or
any part thereof, is, pursuant to applicable law, rescinded or reduced in
amount, or must otherwise be restored or returned by any obligee of the
Obligations, whether as a "voidable preference," "fraudulent conveyance," or
otherwise, all as though such payment or performance had not been made. In the
event that any payment, or any part thereof, is rescinded, reduced, restored or
returned, the Obligations shall be reinstated and deemed reduced only by such
amount paid and not so rescinded, reduced, restored or returned.
10.17. ADVICE OF COUNSEL. Each of the parties represents to each other
party hereto that it has discussed this Agreement and, specifically, the
provisions of Sections 10.10 and 10.14, with its counsel.
10.18. NO STRICT CONSTRUCTION. The parties hereto have participated
jointly in the negotiation and drafting of this Agreement. In the event an
ambiguity or question of intent or interpretation arises, this Agreement shall
be construed as if drafted jointly by the parties hereto
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and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any provisions of this Agreement.
10.19. SURVIVAL OF OBLIGATIONS UPON TERMINATION OF FINANCING ARRANGEMENTS.
Except as otherwise expressly provided for in the Loan Documents, no termination
or cancellation (regardless of cause or procedure) of any financing arrangement
under this Agreement shall in any way affect or impair the obligations, duties
and liabilities of the Co-Borrowers or the rights of Administrative Agent,
Documentation Agent and Lenders relating to any unpaid portion of the Loans or
any other Obligations, due or not due, liquidated, contingent or unliquidated or
any transaction or event occurring prior to such termination, or any transaction
or event, the performance of which is required after the Commitment Termination
Date or Termination Date, as applicable. Except as otherwise expressly provided
herein or in any other Loan Document, all undertakings, agreements, covenants,
warranties and representations of or binding upon the Co-Borrowers, and all
rights of Administrative Agent, Documentation Agent and each Lender, all as
contained in the Loan Documents, shall not terminate or expire, but rather shall
survive any such termination or cancellation and shall continue in full force
and effect and in all events the provisions of Section 10, and the indemnities
contained in the Loan Documents shall survive the Termination Date.
10.20. CONFIDENTIALITY. The Administrative Agent and each Lender agree to
use commercially reasonable efforts (equivalent to the efforts such Agent or
such Lender applies to maintain the confidentiality of its own confidential
information) to maintain as confidential all confidential information provided
to them by the Co-Borrowers and designated as confidential for a period of two
(2) years following receipt thereof, except that Administrative Agent and each
Lender may disclose such information (a) to Persons employed or engaged by such
Agent or such Lender in evaluating, approving, structuring or administering the
Loans and the Commitments provided that such Persons shall be subject to the
provisions of this Section 10.20 to the same extent as such Administrative Agent
or Lender; (b) to any bona fide assignee or participant or potential assignee or
participant that has agreed to comply with the covenant contained in this
Section 10.20 (and any such bona fide assignee or participant or potential
assignee or participant may disclose such information to Persons employed or
engaged by them as described in clause (a) above); (c) as required or requested
by any Governmental Authority or reasonably believed by Administrative Agent or
such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of Administrative Agent's
or such Lender's counsel, required by law; (e) in connection with the exercise
of any right or remedy under the Loan Documents or in connection with any
litigation to which Administrative Agent or such Lender is a party; or (f) which
ceases to be confidential through no fault of such Agent or Administrative
Lender.
10.21. EFFECTIVENESS. Anything herein to the contrary notwithstanding
(including, without limitation, Section 10.19 hereof or any reference herein
or therein to a date prior to the Effective Date) this Agreement shall not
become effective unless and until the Effective Date shall have occurred as
provided below. In furtherance of the foregoing, each of the parties hereto
acknowledges and agrees that the obligations, duties, liabilities,
undertakings, agreements, covenants, warranties and representations of each
of the parties hereto set forth herein shall not become valid, binding or
enforceable unless and until the occurrence of the Effective Date nor shall
any party hereto have any liability hereunder for any failure of the
Effective Date to occur. For purposes hereof, the "Effective Date" shall mean
the next Business Day immediately following the date on which the Merger is
consummated and each Lender, the Administrative Agent, the Documentation
Agent and each Co-Borrower shall have signed a copy hereof (whether the same
or different copies) and shall have delivered the same to the Administrative
Agent.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
CO-BORROWERS:
L&LR, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
800-JR CIGAR, Inc.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: Chief Executive Officer
J.R. TOBACCO OF AMERICA, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
SANTA XXXXX, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
J.N.R. GROCERY CORP.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
J.R. TOBACCO NC, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
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J&R TOBACCO (NEW JERSEY) CORP.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
J.R. TOBACCO COMPANY OF MICHIGAN, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
J.R.-46TH STREET, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
J.R. TOBACCO OUTLET, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
J.R. STATESVILLE, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
J R CIGAR (DC) INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
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X.X. XXXXXXX XX XXXXXXXXXX, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
CASA XXXXXX, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
XXXXXXXX.XXX, INC.
/s/ Xxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
LENDERS:
THE CHASE MANHATTAN BANK,
as Administrative Agent and Lender
/s/ Xxxx Xxxxxx
------------------------------
By: Xxxx Xxxxxx
Title: Vice President
FLEET BANK, N.A.,
as Documentation Agent and Lender
/s/ Xxxxxxx Xxxxxxxxxx
------------------------------
By: Xxxxxxx Xxxxxxxxxx
Title: Senior Vice President
LENDERS:
EUROPEAN AMERICAN BANK, as Lender
/s/ Xxxxxx X. Xxxxxxx
------------------------------
By: Xxxxx X. Xxxxxxx
Title: Vice President
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ANNEX A (RECITALS)
TO
CREDIT AGREEMENT
DEFINITIONS
Capitalized terms used in the Loan Documents shall have (unless otherwise
provided elsewhere in the Loan Documents) the following respective meanings and
all Section references in the following definitions shall refer to Sections of
the Agreement:
"Accounts" shall mean all "accounts," as such term is defined in the Code,
now owned or hereafter acquired by any Co-Borrower.
"Administrative Agent" shall mean Chase or its successor appointed
pursuant to Section 9.9.
"Affiliate" shall mean, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially, or as a trustee,
guardian or other fiduciary, five percent (5%) or more of the Stock having
ordinary voting power in the election of directors of such Persons, (b) each
Person that controls, is controlled by or is under common control with such
Person, (c) each of such Person's officers, directors, joint venturers and
partners and (d) in the case of Co-Borrowers, the immediate family members,
spouses and lineal descendants of individuals who are Affiliates of
Co-Borrowers. For the purposes of this definition, "control" of a Person shall
mean the possession, directly or indirectly, of the power to direct or cause the
direction of its management or policies, whether through the ownership of voting
securities, by contract or otherwise; provided, however, that the term
"Affiliate" shall specifically exclude each Administrative Agent and each
Lender.
"Agent" shall mean the Administrative Agent or the Documentation Agent.
"Agreement" shall mean the Credit Agreement by and among Co-Borrowers,
Chase, as Administrative Agent, Arranger, Syndication Agent and Lender, Fleet
Bank, N.A., as Documentation Agent and Lender and the other Lenders signatory
from time to time to the Agreement.
"Appendices" shall have the meaning assigned to it in the recitals to
the Agreement.
"Applicable Margins" means collectively the Applicable Prime Margin and
the Applicable Eurodollar Margin.
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"Applicable Prime Margin" shall mean the per annum interest rate margin
from time to time in effect and payable in addition to the Prime Rate applicable
to Prime Rate Loans, as determined by reference to Section 1.3 of the Agreement.
"Applicable Eurodollar Margin" shall mean the per annum interest rate from
time to time in effect and payable in addition to the Eurodollar Rate applicable
to the Eurodollar Loans, as determined by reference to Section 1.3 of the
Agreement.
"Assignment Agreement" shall have the meaning assigned to it in Section
8.1(a).
"Authorized Officer" shall mean any of the Chief Executive Officer,
President, the Chief Financial Officer, the Treasurer, the Controller, any
Assistant Treasurer, any Vice-President, the Secretary or the General Counsel of
such Co-Borrower or any other officer of such Co-Borrower which is designated in
writing to the Administrative Agent by any of the foregoing officers of such
Co-Borrower as being authorized to give such notices under this Agreement.
"Borrowing" shall mean a borrowing of Loans by the Co-Borrowers from the
Lenders on a given date (or resulting from a conversion or conversions on such
date) and, in the case of Eurodollar Loans, having the same Eurodollar Interest
Period.
"Borrowing Availability" shall have the meaning assigned to it in
Section 1.1(a)(i).
"Borrowing Date" shall mean any date on which the Lenders shall make
Revolving Credit Loans hereunder.
"Budget" shall mean the operating budget of the Co-Borrowers as adopted or
approved by the board of directors of Cigar.
"Business Day" shall mean any day that is not a Saturday, a Sunday or a
day on which banks are required or permitted to be closed in the State of New
York and in reference to Eurodollar Loans shall mean any such day that is also a
Eurodollar Business Day.
"Capital Expenditures" shall mean, with respect to any Person, all
expenditures (by the expenditure of cash or the incurrence of Indebtedness) by
such Person during any measuring period for any fixed assets or improvements or
for replacements, substitutions or additions thereto, that have a useful life of
more than one year and that are required to be capitalized under GAAP.
"Capital Lease" shall mean, with respect to any Person, any lease of any
property (whether real, personal or mixed) by such Person as lessee that, in
accordance with GAAP, would be required to be classified and accounted for as a
capital lease on a balance sheet of such Person.
"Capital Lease Obligation" shall mean, with respect to any Capital Lease
of any Person, the amount of the obligation of the lessee thereunder that, in
accordance with GAAP, would appear on a balance sheet of such lessee in respect
of such Capital Lease.
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"Change of Control" shall mean (i) Xxxxx Xxxxxxx, XxXxxxx Xxxxxxx and the
1998 Trust shall cease to own, directly or indirectly, 100% of the outstanding
equity interests of Co-Borrowers, or (ii) Xxxxx Xxxxxxx shall cease to be the
Chief Executive Officer of Cigar.
"Charges" shall mean all federal, state, county, city, municipal, local,
foreign or other governmental taxes (including taxes owed to the PBGC at the
time due and payable), levies, assessments, charges, liens, claims or
encumbrances upon or relating to (a) the Obligations, (b) the employees,
payroll, income or gross receipts of any Co-Borrower, (c) any Co-Borrower's
ownership or use of any properties or other assets, or (d) any other aspect of
any Co-Borrower's business.
"Chase" means The Chase Manhattan Bank.
"Cigar" shall mean 800-JR CIGAR, Inc., a Delaware corporation.
"Cigar Pledge Agreement" shall have the meaning assigned to it in
Section 2.1(d).
"Closing Date" shall mean the date on which each of the conditions
precedent in Sections 2.1 and 2.2 are satisfied or waived by Administrative
Agent in accordance with the terms of this Agreement and the funding of the Term
Loan occurs.
"Co-Borrower" and "Co-Borrowers" shall have the meanings assigned
thereto in the Agreement.
"Code" shall mean the Uniform Commercial Code as the same may, from time
to time, be enacted and in effect in the State of New York; provided, however,
in the event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of Administrative Agent's, Documentation
Agent's or any Lender's security interest in any Collateral is governed by the
Uniform Commercial Code as enacted and in effect in a jurisdiction other than
the State of New York, the term "Code" shall mean the Uniform Commercial Code as
enacted and in effect in such other jurisdiction solely for purposes of the
provisions hereof relating to such attachment, perfection or priority and for
purposes of definitions related to such provisions.
"Collateral" shall mean all property with respect to which any security
interests have been, or are to be, granted (or purported to be granted) pursuant
to any Pledge Agreement.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders pursuant to the Pledge Agreements and the other
Collateral Documents.
"Collateral Documents" shall mean all documents delivered and to be
delivered under the Agreement to create, perfect or maintain a security interest
in, and/or Lien on, the Collateral, including, without limitation, the Pledge
Agreements.
"Commitment Termination Date" shall mean the earliest of (a) , 2003, (b)
the date of termination of Lenders' obligations to make Revolving Credit Loans
or permit existing Revolving Credit Loans to remain outstanding pursuant to
Section 7, and (c) the date of
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prepayment in full by Co-Borrowers of the Revolving Credit Loans and the
permanent reduction of the Revolving Credit Loan Commitment to zero dollars
($0).
"Commitments" shall mean (a) as to any Lender, the aggregate of such
Lender's Revolving Credit Loan Commitment and Term Loan Commitment as set forth
on Annex E to the Agreement or in the most recent Assignment Agreement executed
by such Lender and (b) as to all Lenders, the aggregate of all Lenders'
Revolving Credit Loan Commitments and Term Loan Commitments, which aggregate
commitment shall be Fifty-Five Million Dollars ($55,000,000) on the Closing
Date, as to each of clauses (a) and (b), as such Commitments may be reduced,
amortized or adjusted from time to time in accordance with the Agreement.
"Copyright License" shall mean any and all rights now owned or hereafter
acquired by any Co-Borrower under any written agreement granting any right to
use any Copyright or Copyright registration.
"Copyrights" shall mean all of the following now owned or hereafter
acquired by any Co-Borrower: (a) all copyrights and general intangibles of like
nature (whether registered or unregistered), now owned or existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connections therewith, including all registrations, recordings
and applications in the United States Copyright Office or in any similar office
or agency of the United States, any state or territory thereof, or any other
country or any political subdivision thereof, and (b) all reissues, extensions,
or renewals thereof.
"Default" shall mean any event which, with the passage of time or notice
or both, would, unless cured or waived, become an Event of Default.
"Default Rate" shall have the meaning assigned to it in Section 1.3(f).
"Disclosure Schedules" shall mean the Schedules prepared by Co-Borrowers
and denominated as Disclosure Schedules (1.4) through 6.4(a)) in the Index to
the Agreement.
"Documentation Agent" shall mean Fleet Bank, N.A. or its successor.
"Documents" shall mean any "documents," as such term is defined in the
Code, now owned or hereafter acquired by any Co-Borrower, wherever located.
"Dollars" or "$" shall mean lawful currency of the United States of
America.
"EBITDA" shall mean, with respect to any Person for any fiscal period, an
amount equal to (a) consolidated net income of such Person for such period,
minus (b) the sum of (i) income tax credits, (ii) gain from extraordinary items
for such period, (iii) any aggregate net gain (but not any aggregate net loss)
during such period arising from the sale, exchange or other disposition of
capital assets by such Person (including any fixed assets, whether tangible or
intangible, all inventory sold in conjunction with the disposition of fixed
assets and all securities), and (iv) any other non-cash gains, in each instance
in this clause (b), which have been added in determining consolidated net
income, in each case to the extent included in the calculation of consolidated
net income of such Person for such period in accordance with GAAP, but without
duplication, plus (c) the sum of (i) any provision for income taxes, (ii)
Interest
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Expense, (iii) loss from extraordinary items for such period, (iv) the amount of
non-cash charges (including depreciation and amortization) for such period, and
(v) amortized debt discount for such period. For purposes of this definition,
the following items shall be excluded in determining consolidated net income of
a Person: (1) the income (or deficit) of any other Person (other than a
Subsidiary) in which such Person has an ownership interest, except to the extent
any such income has actually been received by such Person in the form of cash
dividends or distributions; (2) the undistributed earnings of any Subsidiary of
such Person to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any contractual obligation or requirement of law applicable to such
Subsidiary; (3) any restoration to income of any contingency reserve, except to
the extent that provision for such reserve was made out of income accrued during
such period or a prior period; (4) any write-up of any asset; (5) any net gain
from the collection of the proceeds of life insurance policies; (6) any net gain
arising from the acquisition of any securities, or the extinguishment, under
GAAP, of any Indebtedness, of such Person, (7) in the case of a successor to
such Person by consolidation or merger or as a transferee of its assets, any
earnings of such successor prior to such consolidation, merger or transfer of
assets, (8) any deferred credit representing the excess of equity in any
Subsidiary of such Person at the date of acquisition of such Subsidiary over the
cost to such Person of the investment in such Subsidiary, and (9) any fees,
expenses, costs, or other charges incurred or paid arising out of the Related
Transactions, including under this Agreement and relating to the retirement or
repayment of Indebtedness on the Closing Date.
"Environmental Laws" shall mean all applicable federal, state, local and
foreign laws, statutes, ordinances, codes, rules, standards and regulations, now
or hereafter in effect, and in each case as amended or supplemented from time to
time, any applicable binding judicial or administrative order, interpretation,
consent decree, order or judgment, imposing liability or standards of conduct
for or relating to the regulation and protection of human health, safety, the
environment and natural resources (including ambient air, surface water,
groundwater, wetlands, land surface or subsurface strata, wildlife, aquatic
species and vegetation). Environmental Laws include the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980 (42 U.S.C.
Sections 9601 et seq.) ("CERCLA"); the Hazardous Materials Transportation
Authorization Act of 1994 (49 U.S.C. Sections 5101 et seq.); the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections 136 et seq.); the
Solid Waste Disposal Act (42 U.S.C. Sections 6901 et seq.); the Toxic Substances
Control Act (15 U.S.C. Sections 2601 et seq.); the Clean Air Act (42 U.S.C.
Sections 7401 et seq.); the Federal Water Pollution Control Act (33 U.S.C.
Sections 1251 et seq.); the Occupational Safety and Health Act (29 U.S.C.
Sections 651 et seq.); and the Safe Drinking Water Act (42 U.S.C. Sections
300(f) et seq.), each as from time to time amended, and any and all regulations
promulgated thereunder, and all analogous state, local and foreign counterparts
or equivalents and any transfer of ownership notification or approval statutes.
"Environmental Liabilities" shall mean, with respect to any Person, all
liabilities, obligations, responsibilities, response, remedial and removal
costs, investigation and feasibility study costs, capital costs, operation and
maintenance costs, losses, damages, punitive damages, property damages, natural
resource damages, consequential damages, treble damages, costs and expenses
(including all reasonable fees, disbursements and expenses of counsel, experts
and consultants), fines, penalties, sanctions and interest incurred as a result
of or related to any claim,
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suit, action, investigation, proceeding or demand by any Person, whether based
in contract, tort, implied or express warranty, strict liability, criminal or
civil statute or common law, arising under or related to any Environmental Laws,
Environmental Permits, or in connection with any Release or threatened Release
or presence of a Hazardous Material whether on, at, in, under, from or about or
in the vicinity of any real or personal property.
"Environmental Permits" shall mean all permits, licenses, authorizations,
certificates, approvals or registrations required by any Governmental Authority
under any Environmental Laws.
"Equipment" shall mean all "equipment," as such term is defined in the
Code, now owned or hereafter acquired by any Co-Borrower, wherever located and,
in any event, including all such Co-Borrower's machinery and equipment,
including processing equipment, conveyors, machine tools, data processing and
computer equipment with software and peripheral equipment (other than software
constituting part of the Accounts), and all engineering, processing and
manufacturing equipment, office machinery, furniture, materials handling
equipment, tools, attachments, accessories, automotive equipment, trailers,
trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
equipment of every kind and nature, trade fixtures and fixtures not forming a
part of real property, all whether now owned or hereafter acquired, and wherever
situated, together with all additions and accessions thereto, replacements
therefor, all parts therefor, all substitutes for any of the foregoing, fuel
therefor, and all manuals, drawings, instructions, warranties and rights with
respect thereto, and all products and proceeds thereof and condemnation awards
and insurance proceeds with respect thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974 (or
any successor legislation thereto), as amended from time to time, and any
regulations promulgated thereunder.
"ERISA Affiliate" shall mean, with respect to any Co-Borrower, any trade
or business (whether or not incorporated) which, together with such Co-Borrower,
are treated as a single employer within the meaning of Sections 414(b) or (c) of
the IRC, and for the purpose of Section 302 of ERISA and/or Section 412, 4971,
4977 and/or each "applicable section" under Section 414(t)(2) of the IRC, within
the meaning of Section 414(b), (c), (m) or (o) of the IRC.
"ERISA Event" shall mean, with respect to any Co-Borrower or any ERISA
Affiliate, (a) any event described in Section 4043(c) of ERISA with respect to a
Title IV Plan, other than those events as to which the 30-day notice period is
waived; (b) the withdrawal of any Co-Borrower or ERISA Affiliate from a Title IV
Plan subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (c) the
complete or partial withdrawal of any Co-Borrower or any ERISA Affiliate from
any Multiemployer Plan; (d) the filing of a notice of intent to terminate a
Title IV Plan or the treatment of a plan amendment as a termination under
Section 4041 of ERISA; (e) the institution of proceedings to terminate a Title
IV Plan or Multiemployer Plan by the PBGC; (f) the failure by any Co-Borrower or
ERISA Affiliate to make when due required contributions to a Multiemployer Plan
or Title IV Plan unless such failure is cured within 30 days; (g) any other
event or condition which might reasonably be expected to constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Title IV Plan or Multiemployer
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Plan or for the imposition of liability under Section 4069 or 4212(c) of ERISA;
(h) the termination of a Multiemployer Plan under Section 4041A of ERISA or the
reorganization or insolvency of a Multiemployer Plan under Section 4241 of
ERISA; (i) the loss of a Qualified Plan's qualification or tax exempt status; or
(j) the termination of a Plan described in Section 4064 of ERISA.
"ESOP" shall mean a Plan which is intended to satisfy the requirements
of Section 4975(e)(7) of the IRC.
"Eurodollar Business Day" shall mean a Business Day on which banks in the
city of London are generally open for interbank or foreign exchange
transactions.
"Eurodollar Loan" shall mean a Loan or any portion thereof bearing
interest by reference to the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans bearing interest by reference to the
Eurodollar Rate.
"Eurodollar Interest Period" shall have the meaning assigned to it in
Section 1.3.
"Eurodollar Rate" shall mean for each Eurodollar Period, a rate of
interest determined by Administrative Agent equal to:
(a) the offered rate for deposits in United States Dollars for the
applicable Eurodollar Period which appears on Telerate Page 3750 as of 11:00
a.m., London time, on the second full Eurodollar Business Day next preceding the
first day of each Eurodollar Period (unless such date is not a Business Day, in
which event the next succeeding Business Day will be used); divided by
(b) a number equal to 1.0 minus the aggregate (but without duplication) of
the rates (expressed as a decimal fraction) of reserve requirements in effect on
the day which is two (2) Eurodollar Business Days prior to the beginning of such
Eurodollar Period (including basic, supplemental, marginal and emergency
reserves under any regulations of the Board of Governors of the Federal Reserve
system or other governmental authority having jurisdiction with respect thereto,
as now and from time to time in effect) for Eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of such Board which
are required to be maintained by a member bank of the Federal Reserve System.
If such interest rates shall cease to be available from Telerate News
Service, the Eurodollar Rate shall be determined from such financial reporting
service or other information as shall be mutually acceptable to Administrative
Agent and Co-Borrowers.
"Event of Default" shall have the meaning assigned to it in Section 7.1.
"Existing Credit Agreement" shall mean that certain Credit Agreement,
dated August 28, 2000, among JRC and L&LR, as Co-Borrowers, Chase, as
administrative agent and lender, Fleet Bank as documentation agent and lender
and the lenders signatory thereto.
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"Existing Credit Facility" shall mean the credit facility pursuant to the
Existing Credit Agreement.
"Existing Lenders" shall mean the lenders under the Existing Credit
Agreement.
"Expiration Date" shall mean August 28, 2003.
"Federal Funds Rate" shall mean, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Administrative Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.
"Fee Letter" shall mean the letter dated June 12, 2000 from Chase to Cigar
providing for certain fees relating to the Agreement and the transactions
contemplated thereby.
"Fees" shall mean any and all fees payable to Administrative Agent or
Lenders pursuant to the Agreement, the Fee Letter or any of the other Loan
Documents.
"Financial Statements" shall mean the consolidated and consolidating
income statements, statements of cash flows and balance sheets of the
Co-Borrowers delivered in accordance with Section 3.4 of the Agreement and Annex
B to the Agreement.
"Fiscal Month" shall mean any of the monthly accounting periods of
Co-Borrowers.
"Fiscal Quarter" shall mean any of the quarterly accounting periods of
Co-Borrowers, ending on March 31, June 30, September 30 and December 31 of each
year.
"Fiscal Year" shall mean any of the annual accounting periods of
Co-Borrowers ending on December 31 of each year.
"Fixed Charges" shall mean, with respect to any Person for any fiscal
period, (a) the aggregate of all Interest Expense paid or accrued during such
period without duplication if previously paid or accrued in a prior fiscal
period plus (b) scheduled payments of principal with respect to Indebtedness
during such period, plus (c) the aggregate amount of all Taxes paid or
accrued during such period.
"Fixed Charge Coverage Ratio" shall mean, with respect to any Person for
any fiscal period, the ratio of (i) EBITDA less Capital Expenditures paid to
(ii) Fixed Charges. In computing Fixed Charges for any fiscal period, interest
and principal payments that are due within one week after the end of that fiscal
period, without duplication, shall be deemed to have been paid on the last day
of that fiscal period.
"Fixtures" shall mean any "Fixtures" as such term is defined in the Code,
now owned or hereafter acquired by an Co-Borrower.
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"Funded Debt" shall mean, with respect to any Person, all Indebtedness for
borrowed money evidenced by notes, bonds, debentures, or similar evidences of
Indebtedness and which by its terms matures more than one year from, or is
directly or indirectly renewable or extendible at such Person's option under a
revolving credit or similar agreement obligating the lender or lenders to extend
credit over a period of more than one year from the date of creation thereof,
and specifically including Capital Lease Obligations, current maturities of
long-term debt, revolving credit and short-term debt extendible beyond one year
at the option of the debtor, and also including the Loans and, without
duplication, Guaranteed Indebtedness consisting of guaranties of Funded Debt of
other Persons. Solely for purposes of calculating the Leverage Ratio, the
outstanding amount of the Revolving Credit Loan for the purposes of determining
the amount of Funded Debt shall be the lesser of (a) the actual outstanding
amount of the Revolving Credit Loan as of the measurement date or (b) the
outstanding amount of the Revolving Loan at the end of each Fiscal Month for the
12 most recently ended Fiscal Months divided by 12.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, consistently applied, as such term is further defined in
Annex C to the Agreement.
"Governmental Authority" shall mean any nation or government, any state or
other political subdivision thereof, and any agency, department or other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Guaranteed Indebtedness" shall mean, as to any Person, any obligation of
such Person guaranteeing any indebtedness, lease, dividend, or other obligation
("primary obligations") of any other Person (the "primary obligor") in any
manner, including any obligation or arrangement of such Person (a) to purchase
or repurchase any such primary obligation, (b) to advance or supply funds (i)
for the purchase or payment of any such primary obligation or (ii) to maintain
working capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet condition of the primary
obligor, (c) to purchase property, securities or services primarily for the
purpose of assuring the owner of any such primary obligation of the ability of
the primary obligor to make payment of such primary obligation, or (d) to
indemnify the owner of such primary obligation against loss in respect thereof.
The amount of any Guaranteed Indebtedness at any time shall be deemed to be an
amount equal to the lesser at such time of (x) the stated or determinable amount
of the primary obligation in respect of which such Guaranteed Indebtedness is
made and (y) the maximum amount for which such Person may be liable pursuant to
the terms of the instrument embodying such Guaranteed Indebtedness; or, if not
stated or determinable, the maximum reasonably anticipated liability (assuming
full performance) in respect thereof.
"Hazardous Material" shall mean any substance, material or waste which is
regulated by or forms the basis of liability now or hereafter under, any
Environmental Laws, including any material or substance which is (a) defined as
a "solid waste," "hazardous waste," "hazardous material," "hazardous substance,"
"extremely hazardous waste," "restricted hazardous waste," "pollutant,"
"contaminant," "hazardous constituent," "special waste," "toxic substance" or
other similar term or phrase under any Environmental Laws, (b) petroleum or any
fraction or by-product thereof, asbestos, polychlorinated biphenyls (PCB's), or
any radioactive substance.
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"Indebtedness" of any Person shall mean without duplication (a) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property payment for which is deferred six (6) months or more, but
excluding obligations to trade creditors incurred in the ordinary course of
business that are not overdue by more than six (6) months unless being contested
in good faith, (b) all reimbursement and other obligations with respect to
letters of credit, bankers' acceptances and surety bonds, whether or not
matured, (c) all obligations evidenced by notes, bonds, debentures or similar
instruments, (d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to property acquired by such
Person (even though the rights and remedies of the seller or lender under such
agreement in the event of default are limited to repossession or sale of such
property), (e) all Capital Lease Obligations and the present value (discounted
at the Index Rate as in effect on the Closing Date) of future rental payments
under all synthetic leases, (f) all obligations of such Person under commodity
purchase or option agreements or other commodity price hedging arrangements, in
each case whether contingent or matured, (g) all obligations of such Person
under any foreign exchange contract, currency swap agreement, interest rate
swap, cap or collar agreement or other similar agreement or arrangement designed
to alter the risks of that Person arising from fluctuations in currency values
or interest rates, in each case whether contingent or matured, (h) all
Indebtedness referred to above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property or other assets (including accounts and contract
rights) owned by such Person, even though such Person has not assumed or become
liable for the payment of such Indebtedness, and (i) the Obligations.
"Indemnified Liabilities" shall have the meaning assigned to it in
Section 1.10.
"Intellectual Property" shall mean any and all Licenses, Patents,
Copyrights, Trademarks, trade secrets and customer lists.
"Intercompany Notes" shall have the meaning assigned to it in Section
6.3.
"Interest Expense" shall mean, with respect to any Person for any fiscal
period and net of interest income, interest expense payable in cash (excluding
any original issue discount, interest paid in kind and amortized debt discount)
of such Person determined in accordance with GAAP for the relevant period ended
on such date, including, in any event, interest expense with respect to any
Funded Debt of such Person and interest expense for the relevant period that has
been capitalized on the balance sheet of such Person.
"Interest Hedge Obligations" shall mean, with respect to any Person,
the obligations of such Person pursuant to any interest rate swap agreement,
interest rate cap, collar or floor agreement or other similar agreement or
arrangement designed to protect against or manage such Person's or any of its
Subsidiaries' exposure to fluctuations and interest rates; provided that such
Interest Hedge Obligations are not speculative in nature.
"Interest Payment Date" means (a) as to any Prime Rate Loan, the first
Business Day of each month to occur while such Loan is outstanding, (b) as to
any Eurodollar Loan, the last day of the applicable Eurodollar Interest Period
and (c) in respect of each Loan, on any repayment or prepayment (on the amount
repaid or prepaid), at maturity (whether by acceleration or otherwise and, after
such maturity, on demand.
"Inventory" shall mean any "inventory," as such term is defined in the
Code, now or hereafter owned or acquired by any Co-Borrower, wherever located,
and in any event including inventory, merchandise, goods and other personal
property which are held by or on behalf of any Co-Borrower for sale or lease or
are furnished or are to be furnished under a contract of service,
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or which constitute raw materials, work in process or materials used or consumed
or to be used or consumed in such Co-Borrower's business or in the processing,
production, packaging, promotion, delivery or shipping of the same, including
other supplies.
"IRC" shall mean the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time, and any regulations
promulgated thereunder.
"IRS" shall mean the Internal Revenue Service, or any successor thereto.
"JRC" means JRC Acquisition Corp., a Delaware corporation.
"Lenders" shall mean Chase, the other Lenders named on the signature page
of the Agreement, and, if any such Lender shall decide to assign all or any
portion of the Obligations, such term shall include such assignee.
"Leverage Ratio" shall mean, with respect to Co-Borrowers, on a
consolidated basis, the ratio of (a) Funded Debt as of any date of
determination, to (b) the sum of EBITDA less Capital Expenditures for the twelve
months ending on that date of determination.
"License" shall mean any Copyright License, Patent License, Trademark
License or other license of rights or interests now held or hereafter acquired
by any Co-Borrower.
"Lien" shall mean any mortgage or deed of trust, pledge, hypothecation,
assignment, deposit arrangement, lien, charge, claim, security interest,
easement or encumbrance, or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any lease
or title retention agreement, any financing lease having substantially the same
economic effect as any of the foregoing, and the filing of, or agreement to
give, any financing statement perfecting a security interest under the Code or
comparable law of any jurisdiction).
"Litigation" shall have the meaning assigned to it in Section 3.13.
"L&LR" means L&LR, Inc., a Delaware corporation.
"L&LR Pledge Agreement" shall have the meaning assigned to it in
Section 2.1(d).
"Loan" shall mean each of the Revolving Credit Loans and the Term Loan.
"Loans" shall mean the Revolving Credit Loans and the Term Loan,
collectively.
"Loan Documents" shall mean the Agreement, the Notes, the Pledge
Agreements and all other agreements, instruments, documents and certificates
executed and delivered to, or in favor of, Administrative Agent, Documentation
Agent, Collateral Agent and/or Lenders in connection therewith and including all
other pledges, stock powers, powers of attorney, consents, assignments,
contracts, notices, and all other written matter whether heretofore, now or
hereafter executed by or on behalf of any Co-Borrower, or any employee of any
Co-Borrower, and delivered to Administrative Agent, Collateral Agent or any
Lender in connection with the Agreement or the transactions contemplated
thereby, but shall not include the Swap Agreement.
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Any reference in the Agreement or any other Loan Document to a Loan Document
shall include all appendices, exhibits or schedules thereto, and all amendments,
restatements, supplements or other modifications thereto, and shall refer to
such Agreement as the same may be in effect at any and all times such reference
becomes operative.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of the
Co-Borrowers considered individually or as a whole, (b) Co-Borrowers' ability to
pay any of the Loans or any of the other Obligations in accordance with the
terms of the Agreement, (c) the Co-Borrowers' ability to consummate the
transactions contemplated by the Agreement; or (d) either the Administrative
Agent's or any Lender's rights and remedies under the Agreement and the other
Loan Documents.
"Maximum Amount" shall mean, at any particular time, an amount equal to
the aggregate Revolving Credit Loan Commitments of all Lenders.
"MC Management Agreement" shall mean that certain Management Agreement
by and between and Cigar, dated .
"Merger" shall mean the merger of JRC with and into Cigar pursuant to and
in accordance with the terms and conditions of the Merger Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger, dated
as of August 28, 2000, by and among L&LR, JRC and Cigar.
"Minimum Borrowing Amount" shall mean (i) with respect to Revolving Credit
Loans that are Eurodollar Loans, $1,000,000 and (ii) with respect to Revolving
Credit Loans that are Prime Rate Loans, $1,000,000.
"Multiemployer Plan" shall mean a "multiemployer plan" as defined in
Section 4001(a)(3) of ERISA, and to which any Co-Borrower or ERISA Affiliate is
making, is obligated to make, has made or been obligated to make within the five
year period immediately preceding the Closing Date, contributions on behalf of
participants who are or were employed by any of them.
"Net Income" shall mean, for any Person in any period the excess, if any
of (i) the gross revenues and other proper income credits for such period
determined in accordance with GAAP, PROVIDED, HOWEVER, that in any event there
shall not be included in such gross revenues and income credits any of the
following items:
(a) any proceeds of any life insurance policy;
(b) any gain or loss arising from any write-up or write-off of capital
assets or from the acquisition or retirement or sale of securities of such
Person; or
(c) any restoration of any contingency reserve to income unless such
contingency reserve was taken during such period, over (ii) an amount equal to
the aggregate of all expenses and other proper income charges for such period,
determined in accordance with GAAP, but in any event including the following
items:
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(a) amortization of debt discount and expenses and amortization of all
other deferred charges properly subject to amortization;
(b) provision for all taxes in respect of property and in respect of
income, excess profits and otherwise;
(c) provision for all contingency reserves, whether general or special;
and
(d) provision for depreciation, depletion, obsolescence, and amortization
(including amortization of leasehold improvements) in amounts not less than
those actually charged against income on its books, and, if not yet actually
charged on such books, then in an amount not less than at the rates and not less
than the amounts which would be charged in accordance with GAAP.
"1998 Trust" shall mean the Xxxxx Xxxxxx Xxxxxxx 1998 Trust #1 u/a/d
November 10, 1998.
"Notes" shall mean the Revolving Notes and the Term Note, collectively.
"Notice Office" shall mean the office of The Chase Manhattan Bank located
at 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 or such other office or
offices as the Administrative Agent may designate to Co-Borrowers and Lenders.
"Notice of Conversion/Continuation" shall have the meaning assigned to
it in Section 1.6.
"Notice of Revolving Credit Loan" shall have the meaning assigned to it in
Section 1.1.
"Obligations" shall mean all loans, advances, debts, liabilities and
obligations, for the performance of covenants, tasks or duties or for payment of
monetary amounts (whether or not such performance is then required or
contingent, or such amounts are liquidated or determinable) owing by any
Co-Borrower to either Agent or any Lender, and all covenants and duties
regarding such amounts, of any kind or nature, present or future, whether or not
evidenced by any note, agreement or other instrument, arising under the
Agreement or any of the other Loan Documents. This term includes all principal,
interest (including all interest which accrues after the commencement of any
case or proceeding in bankruptcy after the insolvency of, or for the
reorganization of any Co-Borrower, whether or not allowed in such proceeding),
Fees, Charges, expenses, attorneys' fees and any other sum chargeable to any
Co-Borrower under the Agreement or any of the other Loan Documents, and solely
for purposes of the Collateral Documents (other than the Guaranty), owing to any
Lender (or any Affiliate of any Lender).
"Patents" shall mean all of the following in which any Co-Borrower now
holds or hereafter acquires any interest: (a) all letters patent of the United
States or any other country, all registrations and recordings thereof, and all
applications for letters patent of the United States or any other country,
including registrations, recordings and applications in the United States Patent
and Trademark Office or in any similar office or agency of the United States,
any State or Territory thereof, or any other country, and (b) all reissues,
continuations, continuations-in-part or extensions thereof.
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"Payment Office" shall mean the office of The Chase Manhattan Bank located
at 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 or such other office or
offices as the Administrative Agent may designate to Co-Borrowers and Lenders.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Encumbrances" shall mean the following encumbrances: (a) Liens
for taxes or assessments or other governmental Charges not yet due and payable
or are being contested in good faith in compliance with Section 5.2(b); (b)
pledges or deposits of money securing statutory obligations under workmen's
compensation, unemployment insurance, social security or public liability laws
or similar legislation (excluding Liens under ERISA); (c) pledges or deposits of
money securing bids, tenders, contracts (other than contracts for the payment of
money) or leases to which any Co-Borrower is a party as lessee made in the
ordinary course of business; (d) workers', mechanics' or similar liens arising
in the ordinary course of business, so long as such Liens attach only to
Equipment, Fixtures and/or Real Estate; (e) carriers', warehousemen's,
suppliers' or other similar possessory liens arising in the ordinary course of
business and securing liabilities in an outstanding aggregate amount not in
excess of $100,000 at any time, so long as such Liens attach only to Inventory;
(f) any attachment or judgment lien not constituting an Event of Default under
Section 7.1(h); (g) zoning restrictions, easements, licenses, or other
restrictions on the use of any Real Estate or other minor irregularities in
title (including leasehold title) thereto, so long as the same do not materially
impair the use, value, or marketability of such Real Estate; (h) hereafter
created Liens in favor of Administrative Agent, on behalf of itself,
Documentation Agent and Lenders; (i) customary landlord Liens pursuant to leases
entered into in the ordinary course of business which apply to property or
assets of the lessee located at the premises and those landlord Liens imposed by
law, and (j) any and all Liens (including without limitation, mortgages, deeds
of trust and/or ground leases) affecting any Real Estate with respect to which
any Co-Borrower is a tenant or subtenant, to the extent such Lien(s) were not
created or granted by such Co-Borrower.
"Permitted Indebtedness" shall have the meaning assigned to it in
Section 6.3.
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association, corporation,
limited liability company, institution, public benefit corporation, other entity
or government (whether federal, state, county, city, municipal, local, foreign,
or otherwise, including any instrumentality, division, agency, body or
department thereof).
"Plan" shall mean an employee benefit plan, as defined in Section 3(3) of
ERISA, which any Co-Borrower maintains, contributes to or has an obligation to
contribute to on behalf of participants who are or were employed by any
Co-Borrower.
"Pledge Agreement" shall mean each of the L&LR Pledge Agreement and the
Cigar Pledge Agreement.
"Pledge Agreements" shall mean the L&LR Pledge Agreement and the Cigar
Pledge Agreement.
"Pledged Stock" shall have the meaning provided in the Pledge
Agreements.
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"Prime Rate" shall mean the rate of interest publicly announced from time
to time by the Administrative Agent as its prime rate in effect at its principal
office in New York City, changing when and as the prime rate changes, each
change to be effective on the date such change is publicly announced by the
Administrative Agent.
"Prime Rate Loan" shall mean a Loan or portion thereof bearing interest by
reference to the Prime Rate.
"Proceeds" shall mean "proceeds," as such term is defined in the Code and,
in any event, shall include (a) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to any Co-Borrower from time to time
with respect to any of the Collateral, (b) any and all payments (in any form
whatsoever) made or due and payable to any Co-Borrower from time to time in
connection with any requisition, confiscation, condemnation, seizure or
forfeiture of all or any part of the Collateral by any Governmental Authority
(or any Person acting under color of governmental authority), (c) any claim of
any Co-Borrower against third parties (i) for past, present or future
infringement of any Patent or Patent License, or (ii) for past, present or
future infringement or dilution of any Copyright, Copyright License, Trademark
or Trademark License, or for injury to the goodwill associated with any
Trademark or Trademark License, (d) any recoveries by any Co-Borrower against
third parties with respect to any litigation or dispute concerning any of the
Collateral, and (e) any and all other amounts from time to time paid or payable
under or in connection with any of the Collateral, upon disposition or
otherwise.
"Pro Forma" means the unaudited consolidated and consolidating balance
sheets of Co-Borrowers as of June 30, 2000 after giving pro forma effect to the
Loans as of the Closing Date and the Related Transactions.
"Pro Rata Share" shall mean with respect to all matters relating to any
Lender (a) with respect to Revolving Credit Loans the percentage obtained by
dividing (i) the Revolving Credit Loan Commitment of that Lender by (ii) the
aggregate Revolving Credit Loan Commitments, as any such percentages may be
adjusted by assignments pursuant to Section 8, (b) with respect to the Term
Loan, the percentage obtained by dividing (i) the Term Loan Commitment of that
Lender by (ii) the aggregate Term Loan Commitments of all Lenders, as any such
percentages may be adjusted by assignments permitted pursuant to Section 8.1,
(c) with respect to all Loans, the percentage obtained by dividing (i) the
aggregate Commitments of that Lender by (ii) the aggregate Commitments of all
Lenders, and (d) with respect to all Loans on and after the Commitment
Termination Date, the percentage obtained by dividing (i) the aggregate
outstanding principal balance of the Loans held by that Lender, by (ii) the
outstanding principal balance of the Loans held by all Lenders.
"Public Stock" shall mean the issued and outstanding shares of common
stock of Cigar which are not owned of record or beneficially by Xxxxx X. Xxxxxxx
and/or XxXxxxx X. Xxxxxxx, the 1998 Trust or the Trusts.
"Qualified Plan" shall mean a Plan which is intended to be tax-qualified
under Section 401(a) of the IRC.
"Real Estate" shall have the meaning assigned to it in Section 3.6.
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"Related Transactions" means the (i) Tender Offer Acquisition, (ii) the
Merger and (iii) the payment of all fees, costs and expenses associated with all
of the foregoing and the execution and delivery of all of the Related
Transactions Documents.
"Related Transactions Documents" shall mean the Tender Offer Documents
and the Merger Documents.
"Release" shall mean any release, spill, emission, leaking, pumping,
pouring, emitting, emptying, escape, injection, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Material in the indoor or
outdoor environment, including the movement of Hazardous Material through or in
the air, soil, surface water or ground water.
"Requisite Lenders" shall mean Lenders having (a) prior to the Closing
Date, sixty-six and two-thirds percent (66 2/3%) or more of the Commitments of
all Lenders, or (b) after the Closing Date, sixty-six and two-thirds percent (66
2/3%) or more of the sum of (i) outstanding Revolving Credit Loan Commitments
plus (ii) the aggregate outstanding amount of the Term Loans, or (c) if the
Commitments have been terminated, sixty-six and two-thirds percent (66-2/3%) or
more of the aggregate outstanding amount of the Loans.
"Requisite Revolving Credit Lenders" shall mean Lenders having (a)
sixty-six and two-thirds percent (66 2/3%) or more of the Revolving Credit Loan
Commitments of all Lenders, or (b) if the Commitments have been terminated,
sixty-six and two-thirds percent (66 2/3%) or more of the aggregate outstanding
amount of the Revolving Credit Loans.
"Restricted Payment" shall mean (a) the declaration or payment of any
dividend or the incurrence of any liability to make any other payment or
distribution of cash or other property or assets in respect of a Person's
Stock, (b) any payment on account of the purchase, redemption, defeasance,
sinking fund or other retirement of a Person's Stock or any other payment or
distribution made in respect thereof, either directly or indirectly, (c) any
payment made to redeem, purchase, repurchase or retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
Stock of such Person now or hereafter outstanding; (d) any payment of a claim
for the rescission of the purchase or sale of, or for material damages
arising from the purchase or sale of, any shares of such Person's Stock or of
a claim for reimbursement, indemnification or contribution arising out of or
related to any such claim for damages or rescission; (e) any payment, loan,
contribution, or other transfer of funds or other property to any Stockholder
of such Person other than payment of compensation in the ordinary course to
stockholders who are employees of such Person; and (f) any payment of
management fees (or other fees of a similar nature) by such Person to any
Stockholder of such Person or their Affiliates other than pursuant to the MC
Management Agreement.
"Retiree Welfare Plan" shall mean, at any time, a Plan that is a "welfare
plan" as defined in Section 3(1) of ERISA, that provides for continuing coverage
or benefits for any participant or any beneficiary of a participant after such
participant's termination of employment, other than continuation coverage
provided pursuant to Section 4980B of the IRC and at the sole expense of the
participant or the beneficiary of the participant or under any comparable state
law.
"Revolving Credit Lender" shall mean, as of any date of determination,
each Lender having a Revolving Credit Loan Commitment.
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"Revolving Credit Lenders" shall mean, as of any date of determination,
Lenders having a Revolving Credit Loan Commitment.
"Revolving Credit Loan" shall have the meaning assigned to it in Section
1.1(a) hereof.
"Revolving Credit Loans" shall have the meaning assigned to it in Section
1.1(a) hereof.
"Revolving Credit Loan Commitment" shall mean (a) as to any Revolving
Credit Lender, the aggregate commitment of such Revolving Credit Lender to make
Revolving Credit Loans as set forth on Annex E to the Agreement or in the most
recent Assignment Agreement executed by such Revolving Credit Lender and (b) as
to all Revolving Credit Lenders, the aggregate commitment of all Revolving
Credit Lenders to make Revolving Credit Loans which aggregate commitment shall
be Twenty Million Dollars ($20,000,000) on the Closing Date, as such amount may
be adjusted, if at all, from time to time in accordance with the Agreement.
"Revolving Credit Note" shall have the meaning assigned to it in
Section 1.1(a)(ii).
"Revolving Credit Notes" shall have the meaning assigned to it in
Section 1.1(a)(ii).
"Solvent" shall mean, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of such
Person; (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probably liability of such
Person on its debts as they become absolute and matured; (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature taking
into account the timing and the amounts of cash to be received by such Person or
its Subsidiaries from any source and the timing of and amounts of cash to be
payable in respect of or in connection with the debts and liabilities of such
Person and its Subsidiaries; and (d) such Person is not engaged in a business or
transaction, and is not about to engage in a business or transaction, for which
such Person's property would constitute an unreasonably small capital taking
into account the particular capital requirements of such Person and its
projected capital requirement and availability. The amount of contingent
liabilities (such as litigation, guarantees and pension plan liabilities) at any
time shall be computed as the amount which, in light of all the facts and
circumstances existing at the time, represents the amount which can be
reasonably be expected to become an actual or matured liability.
"Stock" shall mean all shares, options, warrants, general or limited
partnership interests or other equivalents (regardless of how designated) of or
in a corporation, partnership or equivalent entity whether voting or nonvoting,
including common stock, preferred stock or any other "equity security" (as such
term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated
by the Securities and Exchange Commission under the Securities Exchange Act of
1934, as amended).
"Subsidiary" shall mean, with respect to any Person, (a) any corporation
of which an aggregate of more than fifty percent (50%) of the outstanding Stock
having ordinary voting power to elect a majority of the board of directors of
such corporation (irrespective of whether, at the time, Stock of any other class
or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly,
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owned legally or beneficially by such Person and/or one or more Subsidiaries of
such Person, or with respect to which any such Person has the right to vote or
designate the vote of fifty percent (50%) or more of such Stock whether by
proxy, agreement, operation of law or otherwise, and (b) any partnership or
limited liability company in which such Person and/or one or more Subsidiaries
of such Person shall have an interest (whether in the form of voting or
participation in profits or capital contribution) of more than fifty percent
(50%) or of which any such Person is a general partner or may exercise the
powers of a general partner.
"Tangible Net Worth" shall mean , for any Person, the excess of total
assets over total liabilities as reflected in Co-Borrowers' Financial Statements
for the relevant period, EXCLUDING, HOWEVER, from the determination of total
assets (i) all assets which would be classified as intangible assets under GAAP,
including, without limitation, goodwill, patents, trademarks, trade names,
copyrights, franchises, and deferred charges (including, without limitation,
unamortized debt discount and expense, organization cost, and research and
development costs), and (ii) if any, cash set apart and held in a sinking or
other analogous fund established for the purpose of redemption or other
retirement of capital stock.
"Taxes" shall mean taxes, levies, imposts, deductions, Charges or
withholdings, and all liabilities with respect thereto, excluding taxes imposed
on or measured by the net income or net profits of a Lender of the
Administrative Agent or a Lender by the jurisdictions under the laws of which
Agents and Lenders are organized or any political subdivision thereof or in
which its principal office is located or in which its principal lending office
is located.
"Tender Offer" shall mean the offer of JRC to tender for the
outstanding shares of common stock of Cigar made pursuant to the Offer to
Purchase dated August 29, 2000, as amended.
"Tender Offer Acquisition" shall mean the acquisition by JRC of Public
Stock pursuant to and in accordance with the terms and conditions of the Tender
Offer.
"Tender Offer Documents" shall mean all documentation related to the
Tender Offer, including all public filings made with the Securities and Exchange
Commission.
"Term Loan" shall have the meaning assigned to it in Section 1.1(b).
"Term Loan Lender" shall mean each Lender having a Term Loan Commitment.
"Term Loan Lenders" shall mean those Lenders having a Term Loan
Commitment.
"Term Loan Commitment" shall mean (a) as to any Term Loan Lender, the
commitment of such Term Loan Lender to make its Pro Rata Share of the Term Loan
as set forth on Annex E to the Agreement or in the most recent Assignment
Agreement executed by such Term Loan Lender, and (b) as to all Term Loan
Lenders, the aggregate commitment of all Term Loan
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Lenders to make the Term Loan on the Closing Date, which aggregate commitment
shall be Thirty-Five Million Dollars ($35,000,000) on the Closing Date.
"Term Note" shall have the meaning assigned to it in Section 1.1(b).
"Term Notes" shall have the meaning assigned to it in Section 1.1(b).
"Termination Date" shall mean the date on which the Loans have been repaid
in full and all other Obligations under the Agreement and the other Loan
Documents have been completely discharged and Co-Borrowers shall not have any
further right to borrow any monies under the Agreement.
"Third Party Interactives" shall mean all Persons with whom any
Co-Borrower exchanges data electronically in the ordinary course of business,
including, without limitation, customers, suppliers, third-party vendors,
subcontractors, processors-converters, shippers and warehousemen.
"Title IV Plan" shall mean an employee pension benefit plan, as defined in
Section 3 (2) of ERISA (other than a Multiemployer Plan), which is covered by
Title IV of ERISA, and which any Co-Borrower or ERISA Affiliate maintains,
contributes to or has an obligation to contribute to on behalf of participants
who are or were employed by any of them.
"Trademarks" shall mean all of the following now owned or hereafter
acquired by any Co-Borrower: (a) all trademarks, trade names, corporate names,
business names, trade styles, service marks, logos, other source or business
identifiers, prints and labels on which any of the foregoing have appeared or
appear, designs and general intangibles of like nature (whether registered or
unregistered), now owned or existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any similar office or agency of the
United States, any state or territory thereof, or any other country or any
political subdivision thereof; (b) all reissues, extensions or renewals thereof;
and (c) all goodwill associated with or symbolized by any of the foregoing.
"Trust" shall mean each of the Trusts.
"Trusts" shall mean collectively (i) that certain trust f/b/o Xxxxx
Xxxxxxx created under a trust agreement dated November 1, 1994, Xxxxx X.
Xxxxxxx, Grantor, (ii) that certain trust f/b/o Xxxxx Xxxxxxx created under a
trust agreement dated November 1, 1994, Xxxxx X. Xxxxxxx, Grantor, (iii) that
certain trust f/b/o Xxxxxxxx Xxxxxxx created under a trust agreement dated
November 1, 1994, Xxxxx X. Xxxxxxx, Grantor, and (iv) that certain trust f/b/o
Xxxx Xxxxxxx created under a trust agreement dated November 1, 1994, Xxxxx X.
Xxxxxxx, Grantor.
"Unfunded Pension Liability" shall mean the aggregate amount, if any, of
the sum of (a) the amount by which the present value of all accrued benefits
under each Title IV Plan exceeds the fair market value of all assets of such
Title IV Plan allocable to such benefits in accordance with Title IV of ERISA,
all determined as of the most recent valuation date for each such Title IV Plan
using the actuarial assumptions for funding purposes in effect under such Title
IV Plan, and (b) for a period of five (5) years following a transaction which
might reasonably be expected
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to be covered by Section 4069 of ERISA, the liabilities (whether or not accrued)
that could be imposed upon any Co-Borrower or any ERISA Affiliate as a result of
such transaction.
"Unutilized Commitment" shall mean (i) with respect to any Revolving
Credit Lender at any time (A) such Lender's Revolving Credit Loan Commitment
at such time, if any, less (B) the aggregate outstanding Revolving Credit
Loans including Letter of Credit Loans (as defined in Section 1.1(e)) made by
such Lender, and (ii) with respect to all Revolving Credit Lenders at any
time (x) all Lenders' Revolving Credit Loan Commitments at such time, if any,
less (y) the aggregate outstanding Revolving Credit Loans including Letter of
Credit Loans (as defined in Section 1.1(e)) made by all such Lenders.
"Year 2000 Date-Sensitive System/Component" shall mean, as to any Person,
any em software, network software, applications software, data base, computer
file, embedded microchip, firmware or hardware that accepts, creates,
manipulates, sorts, sequences, calculates, compares or outputs calendar-related
data accurately; such systems and components shall include, without limitation,
mainframe computers, file server/client systems, computer workstations, routers,
hubs, other network-related hardware, and other computer-related software,
firmware or hardware and information processing and delivery systems of any kind
and telecommunications systems and other communications processors, security
systems, alarms, elevators and HVAC systems.
"Year 2000 Problems" shall mean, with respect to each Co-Borrower,
limitations on the capacity or readiness of any such Co-Borrower's Year 2000
Date-Sensitive Systems/Components to accurately accept, create, manipulate,
sort, sequence, calculate, compare or output calendar date information with
respect to calendar year 1999 or any subsequent calendar year beginning on or
after January 1, 2000 (including leap year computations), including, without
limitation, exchanges of information among Year 2000 Date-Sensitive
Systems/Components of the Co-Borrowers and exchanges of information among the
Co-Borrowers and Year 2000 Date-Sensitive Systems/Components of Third Party
Interactives and functionality of peripheral interfaces, firmware and embedded
microchips.
All other undefined terms contained in any of the Loan Documents shall,
unless the context indicates otherwise, have the meanings provided for by the
Code as in effect in the State of New York to the extent the same are used or
defined therein. Unless otherwise specified, references in the Agreement or any
of the Appendices to a Section, subsection or clause refer to such Section,
subsection or clause as contained in the Agreement. The words "herein," "hereof"
and "hereunder" and other words of similar import refer to the Agreement as a
whole, including all Annexes, Exhibits and Schedules, as the same may from time
to time be amended, restated, modified or supplemented, and not to any
particular section, subsection or clause contained in the Agreement or any such
Annex, Exhibit or Schedule.
Wherever from the context it appears appropriate, each term stated in
either the singular or plural shall include the singular and the plural, and
pronouns stated in the masculine, feminine or neuter gender shall include the
masculine, feminine and neuter genders. The words "including", "includes" and
"include" shall be deemed to be followed by the words "without limitation";
references to Persons include their respective successors and assigns (to the
extent and only to the extent permitted by the Loan Documents) or, in the case
of governmental Persons, Persons succeeding to the relevant functions of such
Persons; and all references to
-75-
statutes and related regulations shall include any amendments of the same and
any successor statutes and regulations. Whenever any provision in any Loan
Document refers to the knowledge (or an analogous phrase) of any Co-Borrower,
such words are intended to signify that such Co-Borrower has actual knowledge or
awareness of a particular fact or circumstance or that such Co-Borrower, if it
had exercised reasonable diligence, would have known or been aware of such fact
or circumstance.
-76-
ANNEX B (SECTION 4.1(a))
TO
CREDIT AGREEMENT
FINANCIAL STATEMENTS -- REPORTING
Co-Borrowers shall deliver or cause to be delivered to Administrative
Agent or to Administrative Agent and Lenders, as indicated, the following:
(a) QUARTERLY FINANCIALS. To Administrative Agent and Lenders, within
forty-five (45) days after the end of each of the first three Fiscal Quarters of
each Fiscal Year, consolidated and, if available, consolidating financial
information regarding Co-Borrowers certified by the Chief Financial Officer of
Co-Borrowers, including (i) unaudited balance sheets as of the close of such
Fiscal Quarter and the related statements of income and cash flow for that
portion of the Fiscal Year ending as of the close of such Fiscal Quarter and
(ii) unaudited statements of income and cash flows for such Fiscal Quarter, in
each case setting forth in comparative form the figures for the corresponding
period in the prior year all prepared in accordance with GAAP (subject to normal
year-end adjustments and the absence of footnotes). Such financial information
shall be accompanied by (A) a statement in reasonable detail (each, a
"Compliance Certificate") showing the calculations used in determining
compliance with each of the financial covenants set forth on Annex C which is
tested on a quarterly basis and (B) the certification of the Chief Financial
Officer of Co-Borrowers that (i) such financial information presents fairly in
accordance with GAAP (subject to normal year-end adjustments) the financial
position, results of operations and statements of cash flows of Co-Borrowers, on
both a consolidated and, if available, consolidating basis, as at the end of
such Fiscal Quarter and for the period then ended, and (ii) that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default. In
addition, Co-Borrowers shall deliver to Administrative Agent and Lenders, within
forty-five (45) days after the end of each Fiscal Quarter, a management
discussion and analysis which includes a comparison of performance for that
Fiscal Quarter to the corresponding period in the prior year;
(b) ANNUAL AUDITED FINANCIALS. To Administrative Agent and Lenders, within
ninety (90) days after the end of each Fiscal Year, audited Financial Statements
for Co-Borrowers on a consolidated and, if available, (unaudited) consolidating
basis, consisting of balance sheets and statements of income and retained
earnings and cash flows, setting forth in comparative form in each case the
figures for the previous Fiscal Year, which Financial Statements shall be
prepared in accordance with GAAP, certified without qualification, by Ernst &
Young, LLP or other independent certified public accounting firm of national
standing or otherwise acceptable to Administrative Agent. Such Financial
Statements shall be accompanied by (i) a statement prepared in reasonable detail
showing the calculations used in determining compliance with each of the
financial covenants set forth on Annex C, (ii) a report from such accounting
firm to the effect that, in connection with their audit examination, nothing has
come to their attention to cause them to believe that a Default or Event of
Default has occurred (or specifying those Defaults and Events of Default that
they became aware of) which report may be limited to the
-77-
extent required by accounting rules or guidelines, it being understood that such
audit examination extended only to accounting matters and that no special
investigation was made with respect to the existence of Defaults or Events of
Default, (iii) a letter addressed to Administrative Agent, on behalf of itself
and Lenders, in form and substance reasonably satisfactory to Administrative
Agent and subject to standard qualifications taken by nationally recognized
accounting firms, signed by such accounting firm acknowledging that
Administrative Agent and Lenders are entitled to rely upon such accounting
firm's certification of such audited Financial Statements, (iv) the annual
letters to such accountants in connection with their audit examination detailing
contingent liabilities and material litigation matters, and (v) the
certification of the Chief Executive Officer or Chief Financial Officer of
Co-Borrowers that all such Financial Statements present fairly in accordance
with GAAP the financial position, results of operations and statements of cash
flows of Co-Borrowers on a consolidated and, if available, consolidating basis,
as at the end of such year and for the period then ended, and that there was no
Default or Event of Default in existence as of such time or, if a Default or
Event of Default shall have occurred and be continuing, describing the nature
thereof and all efforts undertaken to cure such Default or Event of Default;
(c) MANAGEMENT LETTERS. To Administrative Agent and Lenders, within five
(5) Business Days after receipt thereof by any Co-Borrower, copies of all
management letters, exception reports or similar letters or reports received by
such Co-Borrower from its independent certified public accountants;
(d) DEFAULT NOTICES. To Administrative Agent and Lenders, as soon as
practicable, and in any event within five (5) Business Days after an executive
officer of Co-Borrowers has actual knowledge of the existence of any Default,
Event of Default or other event which has had a Material Adverse Effect,
telephonic or telecopied notice specifying the nature of such Default or Event
of Default or other event, including the anticipated effect thereof, which
notice, if given telephonically, shall be promptly confirmed in writing on the
next Business Day;
(e) SUPPLEMENTAL SCHEDULES. To Administrative Agent, supplemental
disclosures, if any, required by Section 5.6 of the Agreement;
(f) LITIGATION. To Administrative Agent in writing, promptly upon learning
thereof, notice of any Litigation commenced or threatened against any
Co-Borrower that (i) seeks damages in excess of $100,000 whether or not covered
by insurance, (ii) seeks injunctive relief, (iii) is asserted or instituted
against any Plan, its fiduciaries or its assets or against any Co-Borrower or
ERISA Affiliate in connection with any Plan, (iv) alleges criminal misconduct by
any Co-Borrower, or (v) alleges the violation of any law regarding, or seeks
remedies in connection with, any Environmental Liabilities;
(g) INSURANCE NOTICES. To Administrative Agent, disclosure of losses or
casualties required by Section 5.4 of the Agreement;
(h) LEASE AMENDMENTS. To Administrative Agent, copies of all material
amendments to real estate leases involving annual payments of more than
$100,000; and
-78-
(i) OTHER DOCUMENTS. To Administrative Agent and Lenders, such other
financial and other information respecting any Co-Borrower's business or
financial condition, including without limitation, Co-Borrower's annual Budget,
as Agent or any Lender shall, from time to time, request.
-79-
ANNEX C (SECTION 6.10)
TO
CREDIT AGREEMENT
FINANCIAL COVENANTS
Co-Borrowers shall not breach or fail to comply with any of the following
financial covenants, each of which shall be calculated in accordance with GAAP
consistently applied:
(a) MINIMUM FIXED CHARGE COVERAGE RATIO. Co-Borrowers shall have on a
consolidated basis at the end of each Fiscal Quarter, a Fixed Charge Coverage
Ratio for the 12-month period then ended of not less than 1.15:1.00.
(b) MINIMUM TANGIBLE NET WORTH. Co-Borrowers on a consolidated basis shall
have, at the end of each Fiscal Quarter commencing with the Fiscal Quarter ended
September 30, 2000, Tangible Net Worth of no less than the sum of (i) the amount
of Tangible Net Worth as at the end of the immediately preceding Fiscal Quarter
plus (ii) 50% of the amount of the current Fiscal Quarter's Net Income.
(c) MAXIMUM LEVERAGE RATIO. Co-Borrowers on a consolidated basis shall
have, at the end of each Fiscal Quarter, a Leverage Ratio as of the last day of
such Fiscal Quarter and for the 12-month period then ended of not more than the
2.75: 1.00.
Unless otherwise specifically provided herein, any accounting term used in
the Agreement shall have the meaning customarily given such term in accordance
with GAAP, and all financial computations hereunder shall be computed in
accordance with GAAP consistently applied. That certain items or computations
are explicitly modified by the phrase "in accordance with GAAP" shall in no way
be construed to limit the foregoing. If any "Accounting Changes" (as defined
below) occur and such changes result in a change in the calculation of the
financial covenants, standards or terms used in the Agreement or any other Loan
Document, then Co-Borrowers, Administrative Agent and Lenders agree to enter
into negotiations in order to amend such provisions of the Agreement so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating Co-Borrowers' financial condition shall be the same
after such Accounting Changes as if such Accounting Changes had not been made;
provided, however, that the agreement of Requisite Lenders to any required
amendments of such provisions shall be sufficient to bind all Lenders.
"Accounting Changes" means (a) changes in accounting principles required by the
promulgation of any rule, regulation, pronouncement or opinion by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants (or successor thereto or any agency with similar functions), (b)
changes in accounting principles concurred in by Co-Borrowers' certified public
accountants; (c) purchase accounting adjustments under A.P.B. 16 and/or 17 and
EITF 88-16, and the application of the accounting principles set forth in FASB
109, including the establishment of reserves pursuant thereto and any subsequent
reversal (in whole or in part) of such reserves; and (d) the reversal of any
reserves established as a result of purchase accounting adjustments. All such
adjustments resulting from expenditures made subsequent to the Closing Date
(including capitalization of costs and expenses or payment of pre-Closing Date
liabilities) shall be treated as expenses in the
-80-
period the expenditures are made and deducted as part of the calculation of
EBITDA in such period. If Administrative Agent, Co-Borrowers and Requisite
Lenders agree upon the required amendments, then after appropriate amendments
have been executed and the underlying Accounting Change with respect thereto has
been implemented, any reference to GAAP contained in the Agreement or in any
other Loan Document shall, only to the extent of such Accounting Change, refer
to GAAP, consistently applied after giving effect to the implementation of such
Accounting Change. If Administrative Agent, Borrower and Requisite Lenders
cannot agree upon the required amendments within thirty (30) days following the
date of implementation of any Accounting Change, then all Financial Statements
delivered and all calculations of financial covenants and other standards and
terms in accordance with the Agreement and the other Loan Documents shall be
prepared, delivered and made without regard to the underlying Accounting Change.
-81-
ANNEX D (SECTION 11.10)
TO
CREDIT AGREEMENT
NOTICE ADDRESSES
(A) If to Administrative Agent, at
The Chase Manhattan Bank
000 Xxxxx 00 Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
XxXxxxxx & English, LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(B) If to Documentation Agent, at
Fleet Bank, N.A.
000 Xxxxxxxxxx Xxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-82-
(C) If to Lenders, at
The Chase Manhattan Bank
000 Xxxxx 00 Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
Fleet Bank, N.A.
000 Xxxxxxxxxx Xxxx
Xxxx Xxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
European American Bank
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with Copies to:
XxXxxxxx & English, LLP
Four Gateway Center
000 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(D) If to Co-Borrowers, at
800-JR CIGAR, Inc.
000 Xxxxx 00 Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-83-
With copies to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx III, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-84-
ANNEX E (FROM ANNEX A - COMMITMENTS DEFINITION)
TO
CREDIT AGREEMENT
Lender(s):
THE CHASE MANHATTAN BANK
Revolving Credit Loan Commitment: Lesser of (i) $20,000,000 and(ii)
$20,000,000 MINUS the aggregate amount of
Revolving Credit Loans made by the other
Lenders
Term Loan Commitment: Lesser of (i) $35,000,000 and (ii)
$35,000,000 MINUS the aggregate amount of
Term Loans made by the other Lenders
FLEET BANK, N.A.
Revolving Credit Loan Commitment: .3636364 of the aggregate Revolving
Credit Loan Commitments of all Lenders
Term Loan Commitment: .3636364 of the aggregate Term Loan
Commitments of all Lenders
EUROPEAN AMERICAN BANK
Revolving Credit Loan Commitment: .1818182 of the aggregate Revolving
Credit Loan Commitments of all Lenders
Term Loan Commitment: .1818182 of the aggregate Term Loan
Commitments of all Lenders
-85-
EXHIBIT 1.1(a)(i)
NOTICE OF REVOLVING CREDIT LOAN
Pursuant to Section 1.1(a)(i) of the Credit Agreement (the "Credit
Agreement") dated as of August __, 2000 by and among 800-JR CIGAR, Inc., a
Delaware corporation ("Cigar"); L&LR, Inc., a Delaware corporation ("L&LR");
J.R. Tobacco of America, Inc., a North Carolina corporation ("JR-America");
Santa Xxxxx, Inc., a North Carolina corporation ("JR-Santa Xxxxx"); J.N.R.
Grocery Corp., a New York corporation ("JR-Grocery"); J.R. Tobacco NC, Inc., a
North Carolina corporation ("JR-NC"); J&R Tobacco (New Jersey) Corp., a New
Jersey corporation ("JR-New Jersey"); J.R. Tobacco Company of Michigan, Inc., a
Michigan corporation ("JR-Michigan"); J.R.-46th Street, Inc., a New York
corporation ("JR-46th"); J.R. Tobacco Outlet, Inc., a New Jersey corporation
("JR-Outlet"); J.R. Statesville, Inc., a North Carolina corporation
("JR-Statesville"); J R Target (DC), Inc., a corporation organized under the
laws of the District of Columbia ("JR-DC"); J.R. Tobacco of Burlington, Inc., a
North Carolina corporation ("JR-Burlington"); Casa Xxxxxx, Inc., a New Jersey
corporation ("JR-Casa Xxxxxx"); xxxxxxxx.xxx, Inc., a North Carolina corporation
("XX.XXX") (Cigar, L&LR, JR-America, JR-Santa Xxxxx, JR-Grocery, JR-NC, JR-New
Jersey, JR-Michigan, JR-46th, JR-Outlet, JR-Statesville, JR-DC, JR-Burlington,
JR-Casa Xxxxxx and XX.XXX, collectively the "Co-Borrowers"), The Chase Manhattan
Bank, as Agent for the Lenders party to the Credit Agreement, the several
Lenders and Fleet Bank, N.A., as Documentation Agent. Terms defined in the
Credit Agreement are being used herein as therein defined unless otherwise
defined herein. The undersigned, the [Authorized Officer] of Cigar, hereby
requests on behalf of the Co-Borrowers a Revolving Credit Loan in the amount of
$__________ to be made available to the Co-Borrowers on ___________.
The Co-Borrowers hereby elect that such requested Revolving Credit
Loan shall be a _______________ [Eurodollar] [Prime Rate] Loan [and the
Eurodollar Interest Period applicable to such Loan shall be __________.]
The undersigned hereby certifies that:
(i) the Co-Borrowers are in compliance with all of
the terms, covenants and conditions of the Loan Documents;
(ii) the representations and warranties set forth in the Loan
Documents, including without limitation, the Collateral Documents, are
true and correct in all material respects on and as of the date hereof,
with the same effect as though such representations and warranties had
been made on the date hereof;
(iii) no Event of Default has occurred and is
continuing;
(iv) there has been no material adverse change in the
financial position, operations, business or Property of the Co-Borrowers
since the execution of the Credit Agreement and the other Loan Documents;
and
(v) the amount of Revolving Credit Loans which will be
outstanding after
making the Revolving Credit Loan(s) pursuant to this Notice of Revolving
Credit Loan will not exceed the Maximum Amount.
800-JR CIGAR, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
DATE:
-2-
EXHIBIT 1.1(a)(ii)
REVOLVING CREDIT NOTE
$_______________ , New Jersey
August __, 2000
800-JR CIGAR, Inc., a Delaware corporation ("Cigar"); L&LR, Inc., a
Delaware corporation ("L&LR"); J.R. Tobacco of America, Inc., a North Carolina
corporation ("JR-America"); Santa Xxxxx, Inc., a North Carolina corporation
("JR-Santa Xxxxx"); J.N.R. Grocery Corp., a New York corporation ("JR-Grocery");
J.R. Tobacco NC, Inc., a North Carolina corporation ("JR-NC"); J&R Tobacco (New
Jersey) Corp., a New Jersey corporation ("JR-New Jersey"); J.R. Tobacco Company
of Michigan, Inc., a Michigan corporation ("JR-Michigan"); J.R.-46th Street,
Inc., a New York corporation ("JR-46th"); J.R. Tobacco Outlet, Inc., a New
Jersey corporation ("JR-Outlet"); J.R. Statesville, Inc., a North Carolina
corporation ("JR-Statesville"); J R Cigar (DC), Inc., a corporation organized
under the laws of the District of Columbia ("JR-DC"); J.R. Tobacco of
Burlington, Inc., a North Carolina corporation ("JR-Burlington"); Casa Xxxxxx,
Inc., a New Jersey corporation ("JR-Casa Xxxxxx"); xxxxxxxx.xxx, Inc., a North
Carolina corporation ("XX.XXX") (Cigar, L&LR, JR-America, JR-Santa Xxxxx,
JR-Grocery, JR-NC, JR-New Jersey, JR-Michigan, JR-46th, JR-Outlet,
JR-Statesville, JR-DC, JR-Burlington, JR-Casa Xxxxxx and XX.XXX together with
their successors and assigns, each individually, a "Co-Borrower" and
collectively, the "Co-Borrowers"), for value received, hereby promise, jointly
and severally, to pay to the order of ("Lender") at the office of The Chase
Manhattan Bank, 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, on
_____________, 2003, in lawful money of the United States of America and in
immediately available funds, the principal sum of ________________________
DOLLARS ($__________), or such lesser unpaid principal amount as shall be
outstanding hereunder, together with interest from the date hereof on the unpaid
principal balance of this Revolving Credit Note (the "Revolving Credit Note"),
payable on the dates and at the rate or rates provided for in the Credit
Agreement dated as of August __, 2000, by and among the Co-Borrowers, the
Lender, the other lenders party thereto, The Chase Manhattan Bank, as Agent, and
Fleet Bank, N.A., as Documentation Agent, as the same may be amended from time
to time (the "Agreement"). In no event shall the interest rate payable hereon
exceed the maximum rate of interest permitted by law. Capitalized terms used
herein not otherwise defined herein which are defined in the Agreement shall
have the meanings therein defined.
The holder of this Revolving Credit Note is authorized, but shall
not be required, to record, the date and principal amount of each Revolving
Credit Loan made by the Lender and each payment or prepayment of principal made
by the Co-Borrowers with respect thereto on the schedule annexed hereto and
constituting a part hereof, or on a continuation thereof which shall be attached
hereto and made a part hereof, which endorsement shall constitute presumptive
evidence of the accuracy of the information endorsed, provided that the failure
of the Lender to make such recordation or endorsement shall not affect the
obligations of the Co-Borrowers
hereunder or under the Agreement. The aggregate unpaid principal amount of all
Revolving Credit Loans set forth in such schedule or as evidenced by the books
and records of the Lender shall be presumptive evidence of the principal amount
owing and unpaid on this Revolving Credit Note. The Lender may attach one or
more continuations to such schedule as and when required.
This Revolving Credit Note is one of the Revolving Credit Notes
referred to in the Agreement, and is entitled to the benefits and is subject to
the terms of the Agreement. The principal of this Revolving Credit Note is
prepayable in the amounts and under the circumstances, and its maturity is
subject to acceleration upon the terms, set forth in the Agreement. Except as
otherwise provided in the Agreement, if any payment on this Revolving Credit
Note becomes due and payable on a day which is not a Business Day, the due date
thereof shall be extended to the next Business Day, and interest shall be
payable at the rate or rates specified in the Agreement during such extension
period.
Presentment for payment, demand, notice of dishonor, protest, notice
of protest and all other demands and notices in connection with the delivery,
performance and enforcement of this Revolving Credit Note are hereby waived.
Upon the occurrence of any Event of Default specified in the
Agreement, all amounts then remaining unpaid on this Revolving Credit Note shall
become, or may be declared to be, immediately due and payable, all as and to the
extent provided in the Agreement. This Revolving Credit Note is entitled to the
benefits of the Collateral Documents which are referred to in the Agreement.
Reference is made to each of the foregoing instruments for a description of the
Collateral provided thereby and the rights of the Lender thereunder and in
respect of Collateral.
This Revolving Credit Note shall be construed and enforceable in
accordance with, and be governed by the internal laws of, the State of New York
without regard to principles of conflict of laws.
This Revolving Credit Note may not be changed orally, but only by an
instrument in writing executed pursuant to the provisions of Article X of the
Agreement.
800-JR CIGAR, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-2-
L&LR, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco of America, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Santa Xxxxx, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.N.R. Grocery Corp.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco NC, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-3-
J&R Tobacco (New Jersey) Corp.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco Company of Michigan, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R.-46th Street, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco Outlet, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Statesville, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-4-
J R Cigar (DC), Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco of Burlington, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Casa Xxxxxx, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
xxxxxxxx.xxx, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
-5-
REVOLVING CREDIT LOANS AND PAYMENTS OF PRINCIPAL
------------------------------------------------
AMOUNT OF
PRINCIPAL UNPAID
PAID OR PRINCIPAL
DATE AMOUNT OF LOAN PREPAID AMOUNT NOTATION MADE BY
---- -------------- ------- ------ ----------------
-6-
EXHIBIT 1.1(b)(ii)
TERM NOTE
$_______________ , New Jersey
August __, 2000
800-JR CIGAR, Inc., a Delaware corporation ("Cigar"); L&LR, Inc., a
Delaware corporation ("L&LR"); J.R. Tobacco of America, Inc., a North Carolina
corporation ("JR-America"); Santa Xxxxx, Inc., a North Carolina corporation
("JR-Santa Xxxxx"); J.N.R. Grocery Corp., a New York corporation ("JR-Grocery");
J.R. Tobacco NC, Inc., a North Carolina corporation ("JR-NC"); J&R Tobacco (New
Jersey) Corp., a New Jersey corporation ("JR-New Jersey"); J.R. Tobacco Company
of Michigan, Inc., a Michigan corporation ("JR-Michigan"); J.R.-46th Street,
Inc., a New York corporation ("JR-46th"); J.R. Tobacco Outlet, Inc., a New
Jersey corporation ("JR-Outlet"); J.R. Statesville, Inc., a North Carolina
corporation ("JR-Statesville"); J R Cigar (DC), Inc., a corporation organized
under the laws of the District of Columbia ("JR-DC"); J.R. Tobacco of
Burlington, Inc., a North Carolina corporation ("JR-Burlington"); Casa Xxxxxx,
Inc., a New Jersey corporation ("JR-Casa Xxxxxx"); and xxxxxxxx.xxx, Inc., a
North Carolina corporation ("XX.XXX") (Cigar, L&LR, JR-America, JR-Santa Xxxxx,
JR-Grocery, JR-NC, JR-New Jersey, JR-Michigan, JR-46th, JR-Outlet,
JR-Statesville, JR-DC, JR-Burlington, JR-Casa Xxxxxx and XX.XXX together with
their successors and assigns, each individually, a "Co-Borrower" and
collectively, the "Co-Borrowers"), for value received, hereby promise, jointly
and severally, to pay the order of _____ (the "Lender"), at the office of The
Chase Manhattan Bank, 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000, in lawful
money of the United States of America and in immediately available funds, the
principal sum of _________ DOLLARS ($_________), in twenty consecutive equal
quarterly installments, each in the amount of [Lender's share of $1,750,000,]
payable on the first Business Day of January, April, July and October of each
year, commencing January 1, 2001 with the final installment and outstanding
unpaid principal balance hereof due and payable on October 1, 2005, together
with interest from the date hereof on the unpaid principal balance of this Term
Note, at the rate or rates provided for in the Credit Agreement, dated August
__, 2000, by and among the Co-Borrowers, the Lender, the other lenders party
thereto, The Chase Manhattan Bank, as Agent and Fleet Bank, N.A., as
Documentation Agent, as the same may be amended form time to time (the
"Agreement"). In no event shall the interest rate payable hereon exceed the
maximum rate of interest permitted by law. Capitalized terms used herein which
are defined in the Agreement shall have the meanings therein defined.
This Term Note is one of the Term Notes referred to in the Agreement, and
is entitled to the benefits and is subject to the terms of the Agreement. The
principal of this Term Note is prepayable in the amounts and under the
circumstances, and its maturity is subject to acceleration upon the terms, set
forth in the Agreement. Except as otherwise provided in the Agreement, if any
payment on this Term Note becomes due and payable on a day which is not a
Business Day, the due date thereof shall be extended to the next Business Day,
and interest shall be payable at the rate or rates specified in the Agreement
during such extension period.
Presentment for payment, demand, notice of dishonor, protest, notice of
protest and all other demands and notices in connection with the delivery,
performance and enforcement of this Term Note are hereby waived.
Upon the occurrence of any Event of Default specified in the Agreement,
all amounts then remaining unpaid on this Term Note shall become, or may be
declared to be, immediately due and payable, all as provided in the Agreement.
This Term Note is entitled to the benefits of the Collateral Documents which are
referred to in the Agreement. Reference is made to each of the foregoing
instruments for a description of the Collateral provided thereby and the rights
of the Lender thereunder and in respect of such Collateral.
This Term Note shall be construed and enforceable in accordance with, and
be governed by, the internal laws of the State of New York without regard to
principles of conflict of laws.
This Term Note may not be changed orally, but only by an instrument in
writing executed pursuant to the provisions of Article X of the Agreement.
800-JR CIGAR, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
L&LR, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco of America, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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Santa Xxxxx, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.N.R. Grocery Corp.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco NC, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J&R Tobacco (New Jersey) Corp.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco Company of Michigan, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R.-46th Street, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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J.R. Tobacco Outlet, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Statesville, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J R Cigar (DC), Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
J.R. Tobacco of Burlington, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Casa Xxxxxx, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
xxxxxxxx.xxx, Inc.
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
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EXHIBIT 1.1(e)
REQUEST FOR LETTER OF CREDIT
Pursuant to Section 1.1(e) of the Credit Agreement by and among L&LR,
Inc., 800-JR CIGAR, INC. ("Cigar") and their Subsidiaries (L&LR, Inc., Cigar and
such Subsidiaries, each individually, a "Co-Borrower" and, collectively, the
"Co-Borrowers"), The Chase Manhattan Bank, as Administrative Agent, Fleet Bank,
N.A., as Documentation Agent, and the Lenders party thereto, dated August ___,
2000 (the "Agreement"), Cigar, on behalf of the Co-Borrowers, hereby requests
that a Letter of Credit in the amount of $________ be issued for the benefit of
____________ on _______________. Capitalized terms used herein which are defined
in the Agreement shall have the meanings herein defined.
The Co-Borrowers hereby elect that drawings under such Letter of Credit
shall be deemed a [Eurodollar Loan] [Prime Rate Loan] [and the Interest Period
applicable to such Revolving Credit Loan shall be ____________.]
The Co-Borrowers, jointly and severally, certify that:
(i) the Co-Borrowers are in compliance with all of the terms,
covenants and conditions of the Agreement, the Notes, the Collateral
Documents and the other Loan Documents;
(ii) the conditions contained in Section 2 of the Agreement in respect of
the making of Loans are satisfied in full with the same effect as though
issuance of the Letter of Credit constituted the making of a Loan; and
(iii) no event has occurred and is continuing which constitutes an Event
of Default or with the giving of notice or lapse of time would constitute an
Event of Default under the Agreement.
800-JR CIGAR, INC.
By:_____________________________
Dated:
EXHIBIT 1.6
NOTICE OF CONVERSION/CONTINUATION
TO: The Chase Manhattan Bank, as Agent for the Lenders party to the Credit
Agreement dated as of August __, 2000 (as from time to time amended,
extended, restated, modified or supplemented, the "Credit Agreement")
among 800-JR CIGAR, Inc., a Delaware corporation ("Cigar"); L&LR, Inc.,
a Delaware corporation ("L&LR"); J.R. Tobacco of America, Inc., a North
Carolina corporation ("JR-America"); Santa Xxxxx, Inc., a North
Carolina corporation ("JR-Santa Xxxxx"); J.N.R. Grocery Corp., a New
York corporation ("JR-Grocery"); J.R. Tobacco NC, Inc., a North
Carolina corporation ("JR-NC"); J&R Tobacco (New Jersey) Corp., a New
Jersey corporation ("JR-New Jersey"); J.R. Tobacco Company of Michigan,
Inc., a Michigan corporation ("JR-Michigan"); J.R.-46th Street, Inc., a
New York corporation ("JR-46th"); J.R. Tobacco Outlet, Inc., a New
Jersey corporation ("JR-Outlet"); J.R. Statesville, Inc., a North
Carolina corporation ("JR-Statesville"); J R Cigar (DC), Inc., a
corporation organized under the laws of the District of Columbia
("JR-DC"); J.R. Tobacco of Burlington, Inc., a North Carolina
corporation ("JR-Burlington"); Casa Xxxxxx, Inc., a New Jersey
corporation ("JR-Casa Xxxxxx"); xxxxxxxx.xxx, Inc., a North Carolina
corporation ("XX.XXX") (Cigar, L&LR, JR-America, JR-Santa Xxxxx,
JR-Grocery, JR-NC, JR-New Jersey, JR-Michigan, JR-46th, JR-Outlet,
JR-Statesville, JR-DC, JR-Burlington, JR-Casa Xxxxxx and XX.XXX,
collectively, the "Co-Borrowers"), the Agent, the several Lenders and
Fleet Bank, N.A., as Documentation Agent.
Ladies and Gentlemen:
The undersigned 800-JR CIGAR, Inc., on behalf of the Co-Borrowers, refers
to the Credit Agreement, the terms defined therein being used herein as therein
defined, and hereby gives notice, pursuant to Section 1.6 of the Credit
Agreement, of the Co-Borrowers' desire to convert or continue the Loans
specified below:
(1) $___________ of the presently outstanding principal amount of the Term
Loan presently being maintained as [a Prime Rate Loan] [a Eurodollar Loan] be
[converted into] [continued as] [a Eurodollar Loan having a Eurodollar Interest
Period of [one] [two] [three] months] [a Prime Rate Loan].
(2) $___________ of the presently outstanding principal amount of the
Eurodollar Loan presently being maintained as a Eurodollar Loan with an Interest
Period ending on __________ be [converted into] [continued as] [a Eurodollar
Loan having a Eurodollar Interest Period of [one] [two] [three] months] [a Prime
Rate Loan].
The undersigned represents and warrants that conversions and continuations
requested hereby comply with the requirements of Section 1.6 of the Credit
Agreement.
800-JR CIGAR, INC.
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
Exhibit 2.1(d)-1
SECOND AMENDED AND RESTATED PLEDGE AGREEMENT
--------------------------------------------
(by L&LR, Inc. of Capital Stock of 800-JR CIGAR, Inc.
in connection with Permanent Loan Agreement)
THIS PLEDGE AGREEMENT (the "Agreement") dated August __, 2000 by L&LR,
Inc. (the "Pledgor"), in favor of The Chase Manhattan Bank as agent (the
"Agent") for the benefit of the lenders which are from time to time parties
to that certain Credit Agreement (the "Credit Agreement") of even date among
the Pledgor, 800-JR CIGAR, Inc., the other Co-Borrowers, such lenders, the
Agent and Fleet Bank, N.A., as Documentation Agent.
RECITALS
A. The Pledgor is the owner of all the shares of the capital stock
of 800-JR CIGAR, Inc., a Delaware corporation (the "Issuer");
B. To secure the obligations of Pledgor under that certain Credit
Agreement (the "Existing Credit Agreement") dated August __, 2000 among the
Pledgor, JRC Acquisition Corp., the Agent and the lenders which are a party
thereto, Pledgor has previously amended and restated its grant of a security
interest in all the shares of the capital stock of the Issuer to the Agent for
the ratable benefit of the lenders which are a party to the Existing Credit
Agreement;
C. A portion of the loan proceeds to be disbursed under the Credit
Agreement will be used to satisfy the obligations of the Pledgor under the
Existing Credit Agreement;
D. Under the terms of the Credit Agreement, the Pledgor is required to
further amend and restate its prior grant to the Agent of a perfected security
interest in all of the shares of capital stock of the Issuer now owned or
hereafter acquired by the Pledgor;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor agrees as follows:
SECTION 1. DEFINITIONS.
Capitalized terms whose meaning is not otherwise defined herein shall have
the meaning assigned in the Credit Agreement. The following terms, as used
herein, have the following respective meanings:
"AGENT" has the meaning assigned to such term in the Preamble to this
Agreement.
"AGREEMENT" means this Pledge Agreement and any modifications or
amendments thereof.
"COLLATERAL" has the meaning assigned to such term in SECTION 3.
"CREDIT AGREEMENT" has the meaning assigned to such term in the
Preamble to this Agreement.
"ISSUER" has the meaning assigned to such term in the Recitals.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction in respect of
any of the foregoing).
"PERSON" means an individual, partnership, corporation, business trust,
joint stock company, limited liability company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"PLEDGED STOCK" means all of the capital stock of the Issuer.
"PLEDGOR" has the meaning assigned to such term in the Preamble.
"SECURED OBLIGATIONS" means all present and future obligations of the
Pledgor to the Lenders and the Agent, which may arise out of, under or in
connection with the Credit Agreement, this Agreement or the Loan Documents
including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding.
"SECURITY INTERESTS" means the security interests in the Collateral
granted in favor of the Agent hereunder securing the Secured Obligations.
Unless otherwise defined herein, or unless the context otherwise requires,
all terms used herein which are defined in the New York Uniform Commercial Code
as in effect on the date hereof shall have the meanings therein stated.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Pledgor represents and warrants as follows:
A. TITLE TO COLLATERAL; NO RESTRICTIONS ON TRANSFER. The Pledgor owns
directly all of the Pledged Stock, free and clear of any Lien other than the
Security Interests. There is no restriction on the pledge or transfer of any of
the Pledged Stock, other than restrictions referenced on the face of any
certificates evidencing the Pledged Stock delivered to the Agent.
B. PLEDGED STOCK. None of the Pledged Stock is subject to any option to
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purchase or similar rights of any Person nor is it subject to any legal or
equitable claim or interest whatsoever. The Pledgor is not nor will it become a
party to or otherwise bound by any agreement, other than this Agreement, which
restricts in any manner the rights of any present or future holder of any of the
Pledged Stock with respect thereto.
C. VALIDITY, PERFECTION AND PRIORITY OF SECURITY INTERESTS. Upon the
delivery to the Agent of all certificates evidencing the Pledged Stock, the
Agent will have a valid and perfected security interest in the Collateral
subject to no prior Lien. No registration, recordation or filing with any
governmental body, agency or official is required in connection with the
execution or delivery of this Agreement or necessary for the validity or
enforceability hereof or for the perfection or enforcement of the Security
Interests. The Pledgor has not performed nor will it perform any acts which
might prevent the Agent from enforcing any of the terms and conditions of this
Agreement or which would limit the Agent in any such enforcement.
D. NO OTHER LIENS. The Pledgor will not grant nor suffer to exist any
Liens on the Collateral, other than those permitted under this Agreement.
SECTION 3. THE SECURITY INTERESTS.
In order to secure the full and punctual payment of the Secured
Obligations of the Pledgor in accordance with the terms thereof, and to secure
the performance of all the obligations of the Pledgor hereunder:
X. XXXXX OF SECURITY INTERESTS. The Pledgor grants to the Agent for the
ratable benefit of the Lenders a security interest in the Pledged Stock, and all
of its rights and privileges with respect thereto, including all proceeds,
income and profits thereon, and all interest, dividends and other payments and
distributions with respect thereto (the "Collateral").
B. ADDITIONAL PLEDGED STOCK. In the event that the Issuer at any time
issues any additional or substitute shares of capital stock of any class, the
Pledgor will immediately deliver, or cause to be immediately delivered, to the
Agent certificates representing all such shares as additional security for the
Secured Obligations. All such shares shall constitute Pledged Stock and are
subject to all provisions of this Agreement.
SECTION 4. DELIVERY.
All certificates representing Pledged Stock will be delivered to the Agent
by the Pledgor pursuant hereto and shall be in suitable form for transfer by
delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, with signatures appropriately guaranteed, and accompanied
by any required transfer tax stamps, all in form and substance satisfactory to
the Agent.
SECTION 5. FILING; FURTHER ASSURANCES.
The Pledgor agrees that it will, at its expense and in such manner and
form as the Agent may require, execute, deliver, file and record any financing
statement, specific assignment or
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other paper and take any other action that may be necessary or desirable, or
that the Agent may reasonably request, in order to create, preserve, perfect or
validate the Security Interests in the Collateral or to enable the Agent to
exercise and enforce its rights hereunder with respect to any of the Collateral.
To the extent permitted by applicable law, the Pledgor hereby authorizes the
Agent to execute and file, in the name of Pledgor or otherwise, Uniform
Commercial Code financing statements (which may be carbon, photographic,
photostatic or other reproductions of this Agreement or of a financing statement
relating to this Agreement) which the Agent in its sole discretion may deem
necessary or appropriate to further perfect the Security Interests.
SECTION 6. RECORD OWNERSHIP OF PLEDGED STOCK; NOTICES.
The Agent may at any time or from time to time, in its sole discretion,
provided an Event of Default shall have occurred and be continuing, cause any or
all of the Pledged Stock to be transferred of record into the name of the Agent
or its nominee. The Pledgor will promptly give to the Agent copies of any
notices or other communications received by it with respect to Pledged Stock
registered in the name of the Pledgor and the Agent will promptly give to the
Pledgor copies of any notices and communications received by the Agent with
respect to Pledged Stock registered in the name of the Agent or its nominee.
SECTION 7. RIGHT TO RECEIVE DISTRIBUTIONS ON COLLATERAL.
Except as otherwise provided in the Credit Agreement, all dividends and
distributions (including without limitation all distributions which constitute a
return of capital, that is, a partial or complete liquidation) made upon or with
respect to the Collateral shall be delivered to the Agent as Collateral in the
same form as received (with any necessary endorsement).
SECTION 8. RIGHT TO VOTE PLEDGED STOCK.
Unless an Event of Default shall have occurred and be continuing, the
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to any or all of the Pledged Stock.
If an Event of Default shall have occurred and be continuing, the Agent
shall have the right, to the extent permitted by law, and the Pledgor shall take
all such action as may be necessary or appropriate to give effect to such right,
to vote and to give consents, ratifications and waivers, and take any other
action, with respect to any or all of the Pledged Stock with the same force and
effect as if the Agent were the absolute and sole owner thereof.
SECTION 9. GENERAL AUTHORITY.
The Pledgor hereby irrevocably appoints the Agent its true and lawful
attorney, with full power of substitution, in the name of the Pledgor, the Agent
or otherwise, for the sole use and benefit of the Agent, but at the expense of
the Pledgor, to the extent permitted by law to exercise, if and Event of Default
shall have occurred and be continuing, all or any of the following powers with
respect to all or any of the Collateral:
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A. to demand, xxx for, collect, receive and give acquittance for any and
all monies due or to become due upon or by virtue thereof,
B. to settle, compromise, prosecute or defend any action or proceeding
with respect thereto,
C. to sell, transfer, assign or otherwise deal in or with the same or the
proceeds or avails thereof, as fully and effectually as if the Agent were the
absolute owner thereof, and
D. to extend the time of payment of any or all thereof and to make any
allowance and other adjustments with reference thereto;
PROVIDED that the Agent shall give the Pledgor not less than ten days
prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral. The Agent and the Pledgor agree that such
notice constitutes "reasonable notification" within the meaning of Section
9-504(3) of the Uniform Commercial Code.
SECTION 10. REMEDIES UPON EVENT OF DEFAULT.
A. SALE. If any Event of Default shall have occurred and be continuing,
the Agent may exercise all the rights of a secured party under the Uniform
Commercial Code (whether or not in effect in the jurisdiction where such rights
are exercised) and, in addition, the Agent may, without being required to give
any notice, except as herein provided or as may be required by mandatory
provisions of law, (i) apply the cash, if any, then held by it as Collateral as
specified in SECTION 12 and (ii) if there shall be no such cash or if such cash
shall be insufficient to pay all of the Secured Obligations in full, sell such
Collateral or any part thereof at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery, and at such price or prices as the Agent may deem satisfactory and
apply the proceeds thereof as specified in SECTION 12. The Agent may be the
purchaser of any or all of the Collateral so sold at any public sale. The
Pledgor covenants and agrees that it will execute and deliver such documents and
take such other action as the Agent deems necessary or advisable in order that
any such sale may be made in compliance with law. Upon any such sale the Agent
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor which may be
waived, and the Pledgor, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter adopted.
B. PRIVATE SALE. The Pledgor further acknowledges that the Agent may deem
it impracticable to effect a public sale of any part of the securities included
in the Collateral, and therefore authorizes the Agent in connection with any
such private sale, if the Agent deems it advisable to do so, (i) to restrict the
prospective bidders on or purchasers of any of the Pledged Stock to a limited
number of sophisticated investors who will represent and agree that they are
purchasing for their own account for investment and not with a view to the
distribution or sale of any of such securities, (ii) to cause to be placed on
certificates for any or all of the Pledged Stock
-5-
or on any other securities pledged hereunder a legend to the effect that such
security has not been registered under the Securities Act of 1933 and may not be
disposed of in violation of the provisions of said Act, and (iii) to impose such
other limitations or conditions in connection with any such sale as the Agent
deems necessary or advisable in order to comply with said Act or any other law.
C. NOTICE. The notice (if any) of such sale required by SECTION 9 shall
(i) in case of a public sale, state the time and place fixed for such sale, (ii)
in case of sale at a broker's board or on a securities exchange, state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof so being sold, will first be offered for sale
at such board or exchange, and (iii) in the case of a private sale, state the
day after which such sale may be consummated. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or places
as the Agent may fix in the notice of such sale. At any such sale, the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Agent may determine. The Agent shall not be obligated to make any such sale
pursuant to any such notice. The Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned. In case
of any sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Agent until the selling
price is paid by the purchaser thereof, but the Agent shall not incur any
liability in case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may again
be sold upon like notice.
D. OTHER REMEDIES. The Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
SECTION 11. EXPENSES.
The Pledgor agrees that it will forthwith upon demand pay to the Agent:
A. the amount of any taxes which the Agent may have been required to pay
by reason of the Security Interests with respect to the Collateral or to free
any of the Collateral from any Lien thereon, and
B. the amount of any and all reasonable out-of-pocket expenses, including
the reasonable fees and disbursements of counsel and of any other experts, which
the Agent may incur in connection with (i) the administration or enforcement of
this Agreement with respect to the Collateral, including such expenses as are
incurred to preserve the value of the Collateral and the validity, perfection,
rank and value of any Security Interests therein, (ii) the collection, sale or
other disposition of any of the Collateral, (iii) the exercise by the Agent of
any of the rights conferred upon it hereunder with respect to the Collateral or
(iv) any Default or Event of Default.
Any such amount not paid on demand shall bear interest for each day until
paid at an
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interest rate of 15% per annum.
SECTION 12. APPLICATION OF PROCEEDS.
Upon the occurrence and during the continuance of an Event of Default, the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in respect thereof shall be applied by the Agent in
the following order of priorities:
FIRST, to payment of the reasonable expenses of such sale or other
realization, including reasonable compensation to agents and counsel for the
Agent, and all expenses, liabilities and advances incurred or made by the Agent
in connection therewith, and any other expenses for which the Agent is to be
reimbursed pursuant to SECTION 11 hereof;
SECOND, to the payment of accrued but unpaid interest on the Secured
Obligations;
THIRD, to the payment of unpaid principal of the Secured Obligations;
FOURTH, to the payment of all other Secured Obligations, until all
Secured Obligations shall have been paid in full; and
FINALLY, to payment to the Pledgor or its successors or assigns, or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 13. GENERAL TERMS.
A. NOTICES. All notices, communications and distributions to any party
hereunder shall be in writing and shall be given to such party in the manner
specified in the Credit Agreement.
B. WAIVERS, NON-EXCLUSIVE REMEDIES. No failure on the part of the Agent to
exercise, and no delay in exercising and no course of dealing with respect to,
any right under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise by the Agent of any right under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement are cumulative and are not exclusive of any
other remedies provided by law.
C. SUCCESSORS AND ASSIGNS. This Agreement is for the benefit of the Agent
and its successors and assigns. This Agreement shall be binding on the Pledgor
and its successors and assigns.
D. CHANGES IN WRITING. Neither this Agreement nor any provision hereof may
be changed, waived, discharged or terminated orally.
E. LAW. This Agreement shall be construed in accordance with and governed
by the laws of the State of New York (without giving effect to the conflict of
laws principles thereof) except to the extent that the laws of another state
govern the creation or perfection of the
-7-
security interest hereunder.
F. SEVERABILITY. If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Agent in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or enforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
SECTION 14. AGENT.
The Pledgor acknowledges that the rights and responsibilities of the Agent
under this Agreement with respect to any action taken by the Agent or the
exercise or non-exercise by the Agent of any option, right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as among the Agent and the Lenders, be governed by the Credit
Agreement and such other agreements with respect thereto as may exist from time
to time among them but, as between the Agent and the Pledgor, the Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and Pledgor shall not be under any
obligation or entitlement to make any inquiry respecting such authority.
SECTION 15. SUBMISSION TO JURISDICTION; WAIVERS.
THE PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
A. SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATES OF NEW JERSEY AND NEW YORK, THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE DISTRICT OF NEW JERSEY AND
APPELLATE COURTS FROM ANY THEREOF; and
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.
SECTION 16. WAIVERS OF JURY TRIAL.
THE PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the
-8-
day and year first above written.
L&LR, Inc.
By:
-----------------------------------------
Xxxxx X. Xxxxxxx
President
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Exhibit 2.1(d)-2
PLEDGE AGREEMENT
(by 800 JR CIGAR, Inc. of the stock of Subsidiaries
in connection with Permanent Loan Agreement)
THIS PLEDGE AGREEMENT (the "Agreement") dated August __, 2000 by 800-JR
CIGAR, Inc. (the "Pledgor"), in favor of The Chase Manhattan Bank as agent
(the "Agent") for the benefit of the lenders which are from time to time
parties to that certain Credit Agreement (the "Credit Agreement") of even
date among the Pledgor, L&LR, Inc., the other Co Borrowers, such lenders, the
Agent and Fleet Bank N.A., as Documentation Agent.
RECITALS
A. The Pledgor is the owner of all the shares of the capital stock
of each of the entities listed on Exhibit A ("Issuers"); and
B. Under the terms of the Credit Agreement, the Pledgor is required to
grant to the Agent a perfected security interest in all of the shares of capital
stock of Issuers now owned or hereafter acquired by the Pledgor.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Pledgor agrees as follows:
SECTION 1. DEFINITIONS.
Capitalized terms whose meaning is not otherwise defined herein shall have
the meaning assigned in the Credit Agreement. The following terms, as used
herein, have the following respective meanings:
"AGENT" has the meaning assigned to such term in the Preamble to this
Agreement.
"AGREEMENT" means this Pledge Agreement and any modifications or
amendments thereof.
"COLLATERAL" has the meaning assigned to such term in SECTION 3.
"CREDIT AGREEMENT" has the meaning assigned to such term in the
Preamble to this Agreement.
"ISSUERS" has the meaning assigned to such term in the Recitals.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any
conditional sale or other title retention agreement, any financing lease having
substantially the same economic effect as any of the foregoing, and the filing
of any financing statement under the Uniform Commercial Code or comparable law
of any jurisdiction in respect of any of the foregoing).
"PERSON" means an individual, partnership, corporation, business trust,
joint stock company, limited liability company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"PLEDGED STOCK" means all of the capital stock of each of the Issuers.
"PLEDGOR" has the meaning assigned to such term in the Preamble.
"SECURED OBLIGATIONS" means all present and future obligations of the
Pledgor to the Lenders and the Agent, which may arise out of, under or in
connection with the Credit Agreement, this Agreement or the Loan Documents
including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding.
"SECURITY INTERESTS" means the security interests in the Collateral
granted hereunder securing the Secured Obligations.
Unless otherwise defined herein, or unless the context otherwise requires,
all terms used herein which are defined in the New York Uniform Commercial Code
as in effect on the date hereof shall have the meanings therein stated.
SECTION 2. REPRESENTATIONS AND WARRANTIES.
The Pledgor represents and warrants as follows:
A. TITLE TO COLLATERAL; NO RESTRICTIONS ON TRANSFER. The Pledgor owns
directly all of the Pledged Stock, free and clear of any Lien other than the
Security Interests. There is no restriction on the pledge or transfer of any of
the Pledged Stock, other than restrictions referenced on the face of any
certificates evidencing the Pledged Stock delivered to the Agent.
B. PLEDGED STOCK. None of the Pledged Stock is subject to any option to
purchase or similar rights of any Person nor is it subject to any legal or
equitable claim or interest whatsoever. The Pledgor is not nor will it become a
party to or otherwise bound by any agreement, other than this Agreement, which
restricts in any manner the rights of any present or future holder of any of the
Pledged Stock with respect thereto.
C. VALIDITY, PERFECTION AND PRIORITY OF SECURITY INTERESTS. Upon the
delivery to the Agent of all certificates evidencing the Pledged Stock, the
Agent will have a valid and perfected security interest in the Collateral
subject to no prior Lien. No registration, recordation or filing with any
governmental body, agency or official is required in connection with the
execution or delivery of this Agreement or necessary for the validity or
enforceability hereof or
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for the perfection or enforcement of the Security Interests. The Pledgor has not
performed nor will it perform any acts which might prevent the Agent from
enforcing any of the terms and conditions of this Agreement or which would limit
the Agent in any such enforcement.
D. NO OTHER LIENS. The Pledgor will not grant nor suffer to exist any
Liens on the Collateral, other than those permitted under this Agreement.
SECTION 3. THE SECURITY INTERESTS.
In order to secure the full and punctual payment of the Secured
Obligations of the Pledgor in accordance with the terms thereof, and to secure
the performance of all the obligations of the Pledgor hereunder:
X. XXXXX OF SECURITY INTERESTS. The Pledgor grants to the Agent for the
ratable benefit of the Lenders a security interest in the Pledged Stock, and all
of its rights and privileges with respect thereto, including all proceeds,
income and profits thereon, and all interest, dividends and other payments and
distributions with respect thereto (the "Collateral").
B. ADDITIONAL PLEDGED STOCK. In the event that the Issuer at any time
issues any additional or substitute shares of capital stock of any class, the
Pledgor will immediately deliver, or cause to be immediately delivered, to the
Agent certificates representing all such shares as additional security for the
Secured Obligations. All such shares shall constitute Pledged Stock and are
subject to all provisions of this Agreement.
SECTION 4. DELIVERY.
All certificates representing Pledged Stock shall be delivered to the
Agent by the Pledgor pursuant hereto and shall be in suitable form for transfer
by delivery, or shall be accompanied by duly executed instruments of transfer or
assignment in blank, with signatures appropriately guaranteed, and accompanied
by any required transfer tax stamps, all in form and substance satisfactory to
the Agent.
SECTION 5. FILING; FURTHER ASSURANCES.
The Pledgor agrees that it will, at its expense and in such manner and
form as the Agent may require, execute, deliver, file and record any financing
statement, specific assignment or other paper and take any other action that may
be necessary or desirable, or that the Agent may request, in order to create,
preserve, perfect or validate the Security Interests in the Collateral or to
enable the Agent to exercise and enforce its rights hereunder with respect to
any of the Collateral. To the extent permitted by applicable law, the Pledgor
hereby authorizes the Agent to execute and file, in the name of Pledgor or
otherwise, Uniform Commercial Code financing statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or of a
financing statement relating to this Agreement) which the Agent in its sole
discretion may deem necessary or appropriate to further perfect the Security
Interests.
SECTION 6. RECORD OWNERSHIP OF PLEDGED STOCK; NOTICES.
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The Agent may at any time or from time to time, in its sole discretion,
provided an Event of Default shall have occurred and be continuing, cause any or
all of the Pledged Stock to be transferred of record into the name of the Agent
or its nominee. The Pledgor will promptly give to the Agent copies of any
notices or other communications received by it with respect to Pledged Stock
registered in the name of the Pledgor and the Agent will promptly give to the
Pledgor copies of any notices and communications received by the Agent with
respect to Pledged Stock registered in the name of the Agent or its nominee.
SECTION 7. RIGHT TO RECEIVE DISTRIBUTIONS ON COLLATERAL.
Except as otherwise provided in the Credit Agreement, all dividends and
distributions (including without limitation all distributions which constitute a
return of capital, that is, a partial or complete liquidation) made upon or with
respect to the Collateral shall be delivered to the Agent as Collateral in the
same form as received (with any necessary endorsement).
SECTION 8. RIGHT TO VOTE PLEDGED STOCK.
Unless an Event of Default shall have occurred and be continuing, the
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to any or all of the Pledged Stock.
If an Event of Default shall have occurred and be continuing, the Agent
shall have the right, to the extent permitted by law, and the Pledgor shall take
all such action as may be necessary or appropriate to give effect to such right,
to vote and to give consents, ratifications and waivers, and take any other
action, with respect to any or all of the Pledged Stock with the same force and
effect as if the Agent were the absolute and sole owner thereof.
SECTION 9. GENERAL AUTHORITY.
The Pledgor hereby irrevocably appoints the Agent its true and lawful
attorney, with full power of substitution, in the name of the Pledgor, the Agent
or otherwise, for the sole use and benefit of the Agent, but at the expense of
the Pledgor, to the extent permitted by law to exercise, if an Event of Default
shall have occurred and is continuing, all or any of the following powers with
respect to all or any of the Collateral:
a. to demand, xxx for, collect, receive and give acquittance for any and
all monies due or to become due upon or by virtue thereof,
b. to settle, compromise, prosecute or defend any action or proceeding
with respect thereto,
c. to sell, transfer, assign or otherwise deal in or with the same or the
proceeds or avails thereof, as fully and effectually as if the Agent were the
absolute owner thereof, and
d. to extend the time of payment of any or all thereof and to make any
allowance
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and other adjustments with reference thereto;
PROVIDED that the Agent shall give the Pledgor not less than ten days
prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral. The Agent and the Pledgor agree that such
notice constitutes "reasonable notification" within the meaning of Section
9-504(3) of the Uniform Commercial Code.
SECTION 10. REMEDIES UPON EVENT OF DEFAULT.
A. SALE. If any Event of Default shall have occurred and be continuing,
the Agent may exercise all the rights of a secured party under the Uniform
Commercial Code (whether or not in effect in the jurisdiction where such rights
are exercised) and, in addition, the Agent may, without being required to give
any notice, except as herein provided or as may be required by mandatory
provisions of law, (i) apply the cash, if any, then held by it as Collateral as
specified in SECTION 12 and (ii) if there shall be no such cash or if such cash
shall be insufficient to pay all of the Secured Obligations in full, sell such
Collateral or any part thereof at public or private sale or at any broker's
board or on any securities exchange, for cash, upon credit or for future
delivery, and at such price or prices as the Agent may deem satisfactory and
apply the proceeds thereof as specified in SECTION 12. The Agent may be the
purchaser of any or all of the Collateral so sold at any public sale. The
Pledgor covenants and agrees that it will execute and deliver such documents and
take such other action as the Agent deems necessary or advisable in order that
any such sale may be made in compliance with law. Upon any such sale the Agent
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor which may be
waived, and the Pledgor, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter adopted.
B. PRIVATE SALE. The Pledgor further acknowledges that the Agent may deem
it impracticable to effect a public sale of any part of the securities included
in the Collateral, and therefore authorizes the Agent in connection with any
such private sale, if the Agent deems it advisable to do so, (i) to restrict the
prospective bidders on or purchasers of any of the Pledged Stock to a limited
number of sophisticated investors who will represent and agree that they are
purchasing for their own account for investment and not with a view to the
distribution or sale of any of such securities, (ii) to cause to be placed on
certificates for any or all of the Pledged Stock or on any other securities
pledged hereunder a legend to the effect that such security has not been
registered under the Securities Act of 1933 and may not be disposed of in
violation of the provisions of said Act, and (iii) to impose such other
limitations or conditions in connection with any such sale as the Agent deems
necessary or advisable in order to comply with said Act or any other law.
C. NOTICE. The notice (if any) of such sale required by SECTION 9 shall
(i) in case of a public sale, state the time and place fixed for such sale, (ii)
in case of sale at a broker's board or on a securities exchange, state the board
or exchange at which such sale is to be made and the day on which the
Collateral, or the portion thereof so being sold, will first be offered for
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sale at such board or exchange, and (iii) in the case of a private sale, state
the day after which such sale may be consummated. Any such public sale shall be
held at such time or times within ordinary business hours and at such place or
places as the Agent may fix in the notice of such sale. At any such sale, the
Collateral may be sold in one lot as an entirety or in separate parcels, as the
Agent may determine. The Agent shall not be obligated to make any such sale
pursuant to any such notice. The Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned. In case
of any sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Agent until the selling
price is paid by the purchaser thereof, but the Agent shall not incur any
liability in case of the failure of such purchaser to take up and pay for the
Collateral so sold and, in case of any such failure, such Collateral may again
be sold upon like notice.
D. OTHER REMEDIES. The Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the Security Interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
SECTION 11. EXPENSES.
The Pledgor agrees that it will forthwith upon demand pay to the Agent:
a. the amount of any taxes which the Agent may have been required to pay
by reason of the Security Interests with respect to the Collateral or to free
any of the Collateral from any Lien thereon, and
b. the amount of any and all reasonable out-of-pocket expenses, including
the reasonable fees and disbursements of counsel and of any other experts, which
the Agent may incur in connection with (i) the administration or enforcement of
this Agreement with respect to the Collateral, including such expenses as are
incurred to preserve the value of the Collateral and the validity, perfection,
rank and value of any Security Interests therein, (ii) the collection, sale or
other disposition of any of the Collateral, (iii) the exercise by the Agent of
any of the rights conferred upon it hereunder with respect to the Collateral or
(iv) any Default or Event of Default.
Any such amount not paid on demand shall bear interest for each day until
paid at an interest rate of 15% per annum.
SECTION 12. APPLICATION OF PROCEEDS.
Upon the occurrence and during the continuance of an Event of Default, the
proceeds of any sale of, or other realization upon, all or any part of the
Collateral and any cash held in respect thereof shall be applied by the Agent in
the following order of priorities:
FIRST, to payment of the reasonable expenses of such sale or other
realization, including reasonable compensation to agents and counsel for the
Agent, and all expenses, liabilities and
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advances incurred or made by the Agent in connection therewith, and any other
expenses for which the Agent is to be reimbursed pursuant to SECTION 11 hereof;
SECOND, to the payment of accrued but unpaid interest on the Secured
Obligations;
THIRD, to the payment of unpaid principal of the Secured Obligations;
FOURTH, to the payment of all other Secured Obligations, until all
Secured Obligations shall have been paid in full; and
FINALLY, to payment to the Pledgor or its successors or assigns, or as a
court of competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 13. GENERAL TERMS.
A. NOTICES. All notices, communications and distributions to any party
hereunder shall be in writing and shall be given to such party in the manner
specified in the Credit Agreement.
B. WAIVERS, NON-EXCLUSIVE REMEDIES. No failure on the part of the Agent to
exercise, and no delay in exercising and no course of dealing with respect to,
any right under this Agreement shall operate as a waiver thereof; nor shall any
single or partial exercise by the Agent of any right under this Agreement
preclude any other or further exercise thereof or the exercise of any other
right. The rights in this Agreement are cumulative and are not exclusive of any
other remedies provided by law.
C. SUCCESSORS AND ASSIGNS. This Agreement is for the benefit of the Agent
and its successors and assigns. This Agreement shall be binding on the Pledgor
and its successors and assigns.
D. CHANGES IN WRITING. Neither this Agreement nor any provision hereof may
be changed, waived, discharged or terminated orally.
E. LAW. This Agreement shall be construed in accordance with and governed
by the laws of the State of New York (without giving effect to the conflict of
laws principles thereof) except to the extent that the laws of another state
govern the creation or perfection of the security interest hereunder.
F. SEVERABILITY. If any provision hereof is invalid or unenforceable in
any jurisdiction, then, to the fullest extent permitted by law, (i) the other
provisions hereof shall remain in full force and effect in such jurisdiction and
shall be liberally construed in favor of the Agent in order to carry out the
intentions of the parties hereto as nearly as may be possible; and (ii) the
invalidity or enforceability of any provision hereof in any jurisdiction shall
not affect the validity or enforceability of such provision in any other
jurisdiction.
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SECTION 14. AGENT.
The Pledgor acknowledges that the rights and responsibilities of the Agent
under this Agreement with respect to any action taken by the Agent or the
exercise or non-exercise by the Agent of any option, right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as among the Agent and the Lenders, be governed by the Credit
Agreement and such other agreements with respect thereto as may exist from time
to time among them but, as between the Agent and the Pledgor, the Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and Pledgor shall not be under any
obligation or entitlement to make any inquiry respecting such authority.
SECTION 15. SUBMISSION TO JURISDICTION; WAIVERS.
THE PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY:
A. SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING
RELATING TO THIS AGREEMENT, OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT
IN RESPECT THEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF
THE STATES OF NEW JERSEY AND NEW YORK, THE COURTS OF THE UNITED STATES OF
AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK AND THE DISTRICT OF NEW JERSEY AND
APPELLATE COURTS FROM ANY THEREOF; and
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.
SECTION 16. WAIVERS OF JURY TRIAL.
THE PLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AND FOR ANY
COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the day and year first above written.
800-JR CIGAR, Inc.
By:
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Xxxxx X. Xxxxxxx
President
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EXHIBIT 8.1(A)
ASSIGNMENT AGREEMENT
Dated:_________________, 20__
Reference is made to the certain Credit Agreement dated as of August __,
2000 (as from time to time amended, extended, restated, modified or
supplemented, the "Credit Agreement"; capitalized terms used herein shall have
the meaning assigned to them in the Credit Agreement), among 800-JR CIGAR, Inc.,
a Delaware corporation ("Cigar"); L&LR, Inc., a Delaware corporation ("L&LR");
J.R. Tobacco of America, Inc., a North Carolina corporation ("JR-America");
Santa Xxxxx, Inc., a North Carolina corporation ("JR-Santa Xxxxx"); J.N.R.
Grocery Corp., a New York corporation ("JR-Grocery"); J.R. Tobacco NC, Inc., a
North Carolina corporation ("JR-NC"); J&R Tobacco (New Jersey) Corp., a New
Jersey corporation ("JR-New Jersey"); J.R. Tobacco Company of Michigan, Inc., a
Michigan corporation ("JR-Michigan"); J.R.-46th Street, Inc., a New York
corporation ("JR-46th"); J.R. Tobacco Outlet, Inc., a New Jersey corporation
("JR-Outlet"); J.R. Statesville, Inc., a North Carolina corporation
("JR-Statesville"); J R Cigar (DC), Inc., a corporation organized under the laws
of the District of Columbia ("JR-DC"); J.R. Tobacco of Burlington, Inc., a North
Carolina corporation ("JR-Burlington"); Casa Xxxxxx, Inc., a New Jersey
corporation ("JR-Casa Xxxxxx"); xxxxxxxx.xxx, Inc., a North Carolina corporation
("XX.XXX") (Cigar, L&LR, Jr-America, Jr-Santa Xxxxx, JR-Grocery, JR-NC, JR-New
Jersey, JR-Michigan, JR-46th, JR-Outlet, JR-Statesville, JR-DC, JR-Burlington,
JR-Casa Xxxxxx and XX.XXX, collectively, the "Co-Borrowers"), The Chase
Manhattan Bank, as Agent for the Lenders party to the Credit Agreement, the
several Lenders and Fleet Bank, N.A., as Documentation Agent.
_________________________ (the "ASSIGNOR") and ___________________________
(the "Assignee"), agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, WITHOUT RECOURSE, a ______%1
interest in and to all of the Assignor's rights and obligations under the Credit
Agreement as of the Effective Date (as defined below) including, without
limitation, such percentage interest in the Assignor's Commitment as in effect
on the Effective Date, the Commitment Fee and the Loans owing to the Assignor on
the Effective Date.
2. The Assignor (i) represents and warrants that, as of the date hereof,
its Commitment (without giving effect to assignments thereof which have not yet
become effective) is $ and the aggregate outstanding principal amount of Loans
owing to it (without giving effect to assignments thereof which have not yet
become effective) is $ ; (ii) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any
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(1)Specify percentage equal in value to at least $5,000,000.
adverse claim; (iii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any of the Loan Documents
or the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Credit Agreement or any of the Loan Documents or any other
instrument or document furnished pursuant thereto; and (iv) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Co-Borrowers or the performance or observance by
Co-Borrowers of any of their obligations under the Credit Agreement or any of
the Loan Documents or any other instrument or document furnished pursuant
thereto.
3. The Assignee (i) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to in
SECTION 3.4 and delivered by Co-Borrowers pursuant to SECTION 4.1 thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement; (ii)
agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Agent to take such actions on its behalf and to exercise such
powers under the Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (iv)
agrees that it will become a party to the Credit Agreement on the Effective Date
and perform in accordance with its terms all of the obligations which by the
terms of the Credit Agreement are required to be performed by it as a Lender;
(v) specifies as its address for notices the office set forth beneath its name
on the signature pages hereof; and (vi) represents and warrants that it is
purchasing the foregoing interest in Assignor's rights and obligations pursuant
to the Credit Agreement for its own account, for investment purposes and not
with a view to the distribution thereof.
4. The effective date of this Assignment Agreement shall be ______________
_____________the "Effective Date").2 Following the execution of this Assignment
Agreement and receipt of Co-Borrowers' consent thereto, it will be delivered to
the Agent for acceptance and recording by the Agent.
5. Upon such acceptance, consent and recording, as of the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and., to the extent
provided in this Assignment Agreement, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to
the extent provided in this Assignment Agreement, relinquish its rights and be
released from its obligations under the Credit Agreement.
6. Upon such acceptance, consent and recording, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement in
respect of the interest assigned hereby (including, without limitation, all
payments of principal, interest
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(2) Such date shall be at least _________ Business Days after the execution of
this Assignment Agreement.
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and commitment and other fees with respect thereto) to the Assignee. The
Assignor and Assignee shall make all appropriate adjustments in payments under
the Credit Agreement for periods prior to the Effective Date directly between
themselves.
7. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of New York, without giving effect to the
conflict of laws principles thereof.
[NAME OF ASSIGNOR]
By:
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Name:
Title:
After the Effective Date:
Commitment: $
Outstanding Loans: $
[NAME OF ASSIGNEE]
By:
-----------------------------------------
Name:
Title:
After the Effective Date:
Commitment: $
Outstanding Loans: $
Consented to this ___ day of
_______________, 20__
800-JR CIGAR, Inc.
By:
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Name:
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Title:
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L&LR, Inc.
By:
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Name:
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Title:
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J.R. Tobacco of America, Inc.
By:
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Name:
-------------------------
Title:
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Santa Xxxxx, Inc.
By:
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Name:
-------------------------
Title:
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J.N.R. Grocery Corp.
By:
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Name:
-------------------------
Title:
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J.R. Tobacco NC, Inc.
By:
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Name:
-------------------------
Title:
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J&R Tobacco (New Jersey) Corp.
By:
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Name:
-------------------------
Title:
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J.R. Tobacco Company of Michigan, Inc.
By:
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Name:
-------------------------
Title:
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J.R.-46th Street, Inc.
By:
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Name:
-------------------------
Title:
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J.R. Tobacco Outlet, Inc.
By:
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Name:
-------------------------
Title:
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J.R. Statesville, Inc.
By:
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Name:
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Title:
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J R Cigar (DC), Inc.
By:
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Name:
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Title:
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J.R. Tobacco of Burlington, Inc.
By:
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Name:
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Title:
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Casa Xxxxxx, Inc.
By:
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Name:
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Title:
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xxxxxxxx.xxx, Inc.
By:
---------------------------
Name:
-------------------------
Title:
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Accepted this ___ day of
______________, 20__
The Chase Manhattan Bank, as Agent
By:
---------------------------
Name:
-------------------------
Title:
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