LIGGETT GROUP LLC 100 MAPLE LLC 100 Maple Lane Mebane, North Carolina 27302 Re: Amendment No. 4 to Financing Agreements Ladies and Gentlemen:
EXHIBIT 4.1
As of January 31, 2007
XXXXXXX GROUP LLC
100 MAPLE LLC
000 Xxxxx Xxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
100 MAPLE LLC
000 Xxxxx Xxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Re: Amendment No. 4 to Financing Agreements
Ladies and Gentlemen:
Reference is made to the financing arrangements between Wachovia Bank, National Association,
successor by merger to Congress Financial Corporation (“Lender”) and Xxxxxxx Group LLC, a Delaware
limited liability company, as successor to Xxxxxxx Group, Inc. (“Borrower”) pursuant to the terms
of the Amended and Restated Loan and Security Agreement, dated as of April 14, 2004 (as the same
may now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, the “Loan Agreement”). Capitalized terms used herein shall have the meanings assigned
thereto in the Loan Agreement, unless otherwise defined herein.
Maple and Borrower have requested that Lender extend the term of the Loan Agreement and to
make certain amendments thereto, which Lender has agreed to the foregoing subject to the terms
hereof.
In consideration of the mutual agreements and covenants contained herein and other good and
valuable consideration, the parties hereto agree as follows:
Additional Definitions. Section 1 of the Loan Agreement is hereby amended by the addition thereto
of the following defined terms:
“ “Bank Products” shall mean any one or more of the following
types or services or facilities provided to Borrower by Lender or any
Affiliate of Lender: (a) credit cards or stored value cards or (b) cash
management or related services, including (i) the automated clearinghouse
transfer of funds for the account of Borrower pursuant to agreement or
overdraft for any accounts of Borrower maintained at Lender that are subject
to the control of Lender, whether pursuant to any Deposit Account Control
Agreement to which Lender is a party or by Lender being the bank at which
the deposit account is maintained, as applicable, and (ii) controlled
disbursement services and (c) Hedge Agreements if and to the extent
permitted hereunder.
“Hedge Agreement” shall mean an agreement between Borrower and
Lender, or any Affiliate of Lender, that is a swap agreement as such
term is defined in 11 U.S.C. Section 101, and including any rate swap
agreement, basis swap, forward rate agreement, commodity swap, interest rate
option, forward foreign exchange agreement, spot foreign exchange agreement,
rate cap agreement, floor agreement, rate collar agreement, currency swap
agreement, cross-currency rate swap agreement, currency option, any other
similar agreement (including any option to enter into any of the foregoing
or a master agreement for any of the foregoing together with all supplements
thereto) for the purpose of protecting against or managing exposure to
fluctuations in interest or exchange rates, currency valuations or commodity
prices; sometimes being collectively referred to herein as “Hedge
Agreements.
“Capital Expenditures” means all payments or accruals
(including Capital Lease Obligations) 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.
“Consolidated Net Income” shall mean, with respect to any
Person, for any period, the aggregate of the net income (loss) of such
Person and its Subsidiaries, on a consolidated basis, for such period,
excluding to the extent included therein any extraordinary, one-time or
non-recurring gains or non-cash losses, after deducting all charges which
should be deducted before arriving at the net income (loss) for such period
and after deducting the Provision for Taxes for such period, all as
determined in accordance with GAAP; provided, that, (a) the
net income of any Person that is not a majority owned Subsidiary or that is
accounted for by the equity method of accounting shall be included only to
the extent of the amount of cash dividends or similar distributions paid to
such Person or a majority owned Subsidiary of such Person; (b) the effect of
any change in accounting principles adopted by (or applicable) such Person
or its Subsidiaries after the date hereof (including any cumulative effects
resulting from changes in purchase accounting principles) shall be excluded;
and (c) the net income (if positive) of any majority-owned Subsidiary of
such Person to the extent the payment of cash dividends or similar cash
distributions by such Subsidiary is not at the time permitted by operation
of the terms of its charter or any agreement, instrument, judgment, decree,
order, statute, rule or governmental regulation applicable to such
majority-owned Subsidiary shall be excluded (except to the extent of the
amount of cash dividends or similar distributions paid to such Person or a
majority owned Subsidiary of such Person). For the purpose of this
definition, net income excludes any material gain or non-cash loss, together
with any related fees and expenses and Provision for Taxes, for such gain or
non-cash loss realized upon the sale or other disposition of any assets or
of any Capital Stock of such Person or a Subsidiary of such Person.
“EBITDA” shall mean as to any Person, with respect to any
period, an amount equal to: (a) the Consolidated Net income of such
2
Person, and its Subsidiaries for such period, plus (b) depreciation and
amortization, imputed interest, deferred compensation for such period and
other non-cash charges (to the extent deducted in the computation of
Consolidated net Income of such Person), all in accordance with GAAP, plus
(c) Interest Expense for such period (to the extent deducted in the
computation of Consolidated Net Income of such Person), plus (d) the
Provision for Taxes for such period (to the extent deducted in the
computation of Consolidated Net Income of such Person). EBITDA shall be
calculated on a trailing twelve (12) month basis.
“Interest Expense” shall mean, for any period, as to any
Person, as determined in accordance with GAAP, the total interest expense of
such Person, whether paid or accrued during such period but without
duplication (including the interest component of Capital Leases for such
period), including, without limitation, discounts in connection with the
sale of any Accounts that are sold for purposes other than collection, but
excluding interest paid in property other than cash and any other interest
expense not payable in cash.
“Provision for Taxes” shall mean an amount equal to all taxes
imposed on or measured by net income or due under any tax sharing agreement
or arrangement with Vector Group Ltd., whether Federal, State, Provincial,
country or local , and whether foreign or domestic, that are paid or payable
by any Person in respect of any period in accordance with GAAP.”
The definition of “Financing Agreements”, appearing in Section 1 of the Agreement, is hereby
deleted, in its entirety, and replaced by the following definition:
“ “Financing Agreements” shall mean, collectively, this
Agreement and all notes, guarantees, security agreements, deposit account
control agreements, investment property control agreements, intercreditor
agreements and all other agreements, documents and instruments now or at any
time hereafter executed and/or delivered by Borrower or any Obligor in
connection with this Agreement; provided, that, in no event shall the term
Financing Agreements be deemed to include any Hedge Agreement.”
The definition of “Obligations” appearing in Section 1 of the Agreement, is hereby deleted, in its
entirety, and replaced by the following definition:
“ “Obligations” shall mean a) any and all Loans, Letter of
Credit Obligations and all other obligations, liabilities and indebtedness
of every kind, nature and description owing by Borrower to Lender, including
principal, interest, charges, fees, costs and expenses, however evidenced,
whether as principal, surety, endorser, guarantor or otherwise, arising
under this Agreement or any of the other Financing Agreements, whether
3
now existing or hereafter arising, whether arising before, during or
after the initial or any renewal term of this Agreement or after the
commencement of any case with respect to Borrower under the United States
Bankruptcy Code or any similar statute (including the payment of interest
and other amounts which would accrue and become due but for the commencement
of such case, whether or not such amounts are allowed or allowable in whole
or in part in such case), whether direct or indirect, absolute or
contingent, joint or several, due or not due, primary or secondary,
liquidated or unliquidated, or secured or unsecured and b) for purposes only
of Section 5.1 hereof and subject to the priority in right of payment set
forth in Section 6.4 hereof, all obligations, liabilities and indebtedness
of every kind, nature and description owing by Borrower to Lender or any
Affiliate of Lender arising under or pursuant to any Bank Products, whether
now existing or hereafter arising (and in the case of any Affiliate of
Lender, Lender shall be deemed to act as Lender for such Affiliate for
purposes of Section 5.1 hereof).”
Amendment to the Interest Rate. Section 1.50 of the Loan Agreement is hereby amended and restated
in its entirety as follows:
“1.50 “Interest Rate” shall mean,
c) Subject to clause (b) of this definition below:
i) as to Prime Rate Loans, a rate equal to zero (0%)
percent per annum in excess of the Prime Rate,
ii) as to Eurodollar Rate Loans, a rate equal to two
(2.00%) percent per annum in excess of the Adjusted
Eurodollar Rate (in each case, based on the Eurodollar Rate
applicable for the Interest Period selected by Borrower, as
in effect three (3) Business Days after the date of receipt
by Lender of the request of or on behalf of Borrower for such
Eurodollar Rate Loans in accordance with the terms hereof,
whether such rate is higher or lower than any rate previously
quoted to Borrower).
d) Notwithstanding anything to the contrary contained in clause
(a) of this definition, the Interest Rate shall mean the rate of two
(2.00%) percent per annum in excess of the Prime Rate as to Prime
Rate Loans and the rate of four (4.00%) percent per annum in excess
of the Adjusted Eurodollar Rate as to Eurodollar Rate Loans, at
Lender’s option, without notice, i) either (1) for the period on and
after the date of termination or non-renewal hereof until such time
as all Obligations are indefeasibly paid and satisfied in full in
immediately available funds, or (2) for the period from and after
the date of the occurrence of any Event of
4
Default, and for so long as such Event of Default is continuing
as determined by Lender and ii) on the Loans to Borrower at any
time outstanding in excess of the lending formulas set forth in
Section 2.1(a) or the Maximum Credit (whether or not such excess(es)
arise or are made with or without Lender’s knowledge or consent and
whether made before or after an Event of Default).”
Collection of Accounts. The first sentence of Section 6.3(b) of the Loan Agreement is hereby
amended and restated in its entirety as follows:
“(b) For purposes of calculating interest on the Obligations, such
payments or other funds received will be applied (conditional upon final
collection) to the Obligations on the Business Day of receipt of immediately
available funds by Lender in the Lender Payment Account.”
Amendment to Payments. Section 6.4(a) of the Loan Agreement is hereby amended and restated in its
entirety as follows:
“e) All Obligations shall be payable to the Lender Payment Account as
provided in Section 6.3 or such other place as Lender may designate from
time to time. Lender shall apply payments received or collected from
Borrower or any Obligor or for the account of Borrower or any Obligor
(including the monetary proceeds of collections or of realization upon any
Collateral) as follows: first, to pay any fees, indemnities or
expense reimbursements then due to Lender from Borrower or any Obligor;
second, to pay interest due in respect of any Loans; third,
to pay principal in respect of the Loans and to pay or prepay Obligations
arising under or pursuant to any Hedge Agreements of Borrower (up to the
amount of any then effective Reserve established in respect of such
Obligations), on a pro rata basis; fourth, to pay or prepay any
other Obligations whether or not then due, in such order and manner as
Lender determines or to be held as cash collateral in connection with any
Letters of Credit or other contingent Obligations (but not including for
this purpose any Obligations arising under or pursuant to any Bank
Products); and fifth, to pay or prepay any Obligations arising under
or pursuant to any Bank Products (other than to the extent provided for
above) on a pro rata basis. Notwithstanding anything to the contrary
contained in this Agreement, i) unless so directed by Lender, or unless a
Default or an Event of Default shall exist or have occurred and be
continuing, Lender shall not apply any payments which it receives to any
Eurodollar Rate Loans, except (1) on the expiration date of the Interest
Period applicable to any such Eurodollar Rate Loans or (2) in the event that
there are no outstanding Prime Rate Loans and ii) to the extent Borrower
uses any proceeds of the Loans or Letters of Credit to acquire rights in or
the use of any Collateral or to repay any Indebtedness used to acquire
rights in or the use of any Collateral, payments in respect of the
Obligations shall be deemed applied first to the Obligations arising from
Loans and Letters of
5
Credit that were not used for such purposes and second to the
Obligations arising from Loans and Letters of Credit the proceeds of which
were used to acquire rights in or the use of any Collateral in the
chronological order in which Borrower acquired such rights in or the use of
such Collateral.”
Bank Products. Section 6 of the Loan Agreement is hereby amended by the addition thereto of the
following new Section 6.9:
“6.9 Bank Products. Borrower may (but is not required to)
request that Lender or its Affiliates provide or arrange for Borrower to
obtain Bank Products, and Lender may, in its sole discretion, provide or
arrange for Borrower to obtain the requested Bank Products. Borrower
acknowledges and agrees that the obtaining of Bank Products f) is in the
sole discretion of Lender, and g) is subject to all rules and regulations of
Lender with respect thereto. In addition to any other Availability Reserves
established hereunder, Lender may, at its option, establish an Availability
Reserve to reflect obligations, liabilities or indebtedness (contingent or
otherwise) of Borrower to Lender or any Affiliate of any Lender arising
under or in connection with any Bank Products to the extent that such
obligations, liabilities or indebtedness constitute Obligations as such term
is defined herein or otherwise receive the benefit of the security interest
of Lender in any Collateral.”
Encumbrances. Section 9.8(a) is hereby amended and restated in its entirety as follows:
“(a) the security interests and liens of Lender (and, in the case of
Bank Products, any Affiliate of Lender);”
Indebtedness. Section 9.9 is hereby amended by the addition thereto of the following:
“(e) Indebtedness of any Borrower or Guarantor entered into in the
ordinary course of business pursuant to a Hedge Agreement;”
Amendment to Financial Covenants. Section 9.13 and Section 9.14 are hereby amended and restated in
their entirety as follows, respectively:
“9.13 EBITDA. If, at any time, Excess Availability is less
than $20,000,000, then Borrower shall, at all times, maintain EBITDA of not
less than $100,000,000.
9.14 Maximum Capital Expenditures. Borrower and its
Subsidiaries on a consolidated basis shall not make Capital Expenditures
during any fiscal year that exceed in the aggregate the amount of
$10,000,000, provided, however, that the amount of permitted
Capital Expenditures during any fiscal year will be increased by the lesser
of (a) the amount equal to the difference between the Capital Expenditures
limit specified above for the immediately preceding fiscal year
minus the actual amount of any Capital Expenditures expended during
such immediately
6
preceding fiscal year, and (b) $2,500,000 (the “Carry Over Amount”).
For purposes of measuring compliance with the covenant set forth herein, the
Carry Over Amount shall be deemed to be the last amount spent on Capital
Expenditures in the succeeding year.”
Term. Section 12.1(a) of the Loan Agreement is hereby amended and restated in its entirety as
follows:
“(a) This Agreement and the other Financing Agreements shall become
effective as of the date set forth on the first page hereof and shall
continue in full force and effect for a term ending March 8, 2010 (the
“Renewal Date”), and from year to year thereafter, unless sooner terminated
pursuant to the terms hereof. Lender or Borrower may terminate this
Agreement and the other Financing Agreements effective on the Renewal Date
or on the anniversary of the Renewal Date in any year by giving to the other
party at least sixty (60) days prior written notice; provided, that, this
Agreement and all other Financing Agreements must be terminated
simultaneously. Upon the effective date of termination or non-renewal of
the Financing Agreements, Borrower shall pay to Lender, in full, all
outstanding and unpaid Obligations and shall furnish cash collateral to
Lender in such amounts as Lender determines are reasonably necessary to
secure Lender from loss, cost, damage or expense, including attorneys’ fees
and legal expenses, in connection with any contingent Obligations, including
issued and outstanding Letter of Credit Accommodations and checks or other
payments provisionally credited to the Obligations and/or as to which Lender
has not yet received final and indefeasible payment and any continuing
obligations of Lender to any bank or other financial institution under or
pursuant to any Deposit Account Control Agreement and for any of the
Obligations arising under or in connection with any Bank Products in such
amounts as Lender may require (unless such Obligations arising under or in
connection with any Bank Products are paid in full in cash and terminated in
a manner satisfactory to Lender). Such cash collateral shall be remitted by
wire transfer in Federal funds to such bank account of Lender, as Lender
may, in its discretion, designate in writing to Borrower for such purpose.
Interest shall be due until and including the next Business Day, if the
amounts so paid by Borrower to the bank account designated by Lender are
received in such bank account later than 12:00 noon, New York City time.”
7
Representations, Warranties and Covenants. In addition to the continuing representations,
warranties and covenants heretofore or hereafter made by Borrower and Maple to Lender pursuant to
the Financing Agreements, Borrower and Maple hereby represent, warrant and covenant with and to
Lender as follows (which representations, warranties and covenants are continuing and shall survive
the execution and delivery hereof and shall be incorporated into and made a part of the Financing
Agreements):
No Event of Default exists or has occurred and is continuing on the date hereof, after giving
effect to the terms of this Amendment.
This Amendment has been duly executed and delivered by Borrower and Maple and is in full force and
effect as of the date hereof, and the agreements and obligations of Borrower and Maple contained
herein constitute the legal, valid and binding obligations of Borrower and Maple enforceable
against Borrower and Maple in accordance with its terms.
Effect of this Amendment. This Amendment shall be effective upon execution by Lender, Maple and
Borrower and contains the entire agreement of the parties with respect to the subject matter hereof
and supersedes all correspondence, memoranda, communications, discussions and negotiations with
respect thereto. No existing defaults or Events of Default and no rights or remedies of Lender
have been or are being waived hereby and no changes or modifications to the Financing Agreements
have been or are being made or are intended hereby, except as expressly set forth herein, and in
all other respects the Financing Agreements are hereby specifically ratified, restated and
confirmed by all parties hereto as of the date hereof. In the event that any term or provision of
this Amendment conflicts with any term or provision of the Financing Agreements, the term or
provision of this Amendment shall control.
Counterparts. This Amendment may be executed and delivered in counterparts.
[SIGNATURE PAGE FOLLOWS]
8
| Very truly yours, WACHOVIA BANK, NATIONAL ASSOCIATION |
||||
| By: | /s/Xxxxxxxxxxx Xxxxxx | |||
| Title: Relationship Manager/Associate Vice President | ||||
| AGREED AND ACCEPTED: XXXXXXX GROUP LLC |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx Xx. | |||
| Title: Manager | ||||
| 100 MAPLE LLC |
||||
| By: | /s/ Xxxxxxx X. Xxxxxx Xx. | |||
| Title: Manager | ||||
9
