EXHIBIT 10.1
FIRST AMENDMENT TO THE FINANCING AGREEMENT
FIRST AMENDMENT (this "Amendment"), dated as of November 8, 2005, to
the Financing Agreement, dated as of June 16, 2005 (as amended and supplemented
from time to time, the "Financing Agreement"), by and among North Atlantic
Holding Company, Inc., a Delaware corporation (the "Parent"), North Atlantic
Trading Company, Inc., a Delaware corporation ("NATC"), National Tobacco
Company, L.P., a Delaware limited partnership ("NTC"), North Atlantic Operating
Company, Inc., a Delaware corporation ("NAOC"), North Atlantic Cigarette
Company, Inc., a Delaware corporation ("NACC"), National Tobacco Finance
Corporation, a Delaware corporation ("NTFC"), RBJ Sales, Inc., a Tennessee
corporation ("RB"), Xxxx Xxxxxx & Sons, Inc., a Tennessee corporation ("Xxxx
Xxxxxx") and Xxxxxx, Inc., a Tennessee corporation ("Xxxxxx" and together with
NATC, NTC, NAOC, NACC, NTFC, RB and Xxxx Xxxxxx, each a "Borrower" and
collectively, the "Borrowers"), each subsidiary of the Parent listed as a
"Guarantor" on the signature pages thereto (together with the Parent, each a
"Guarantor" and collectively, the "Guarantors"), the financial institutions from
time to time party thereto (each a "Lender" and collectively, the "Lenders"),
and Fortress Credit Corp., a Delaware corporation ("Fortress"), as agent for the
Lenders (in such capacity, the "Agent").
WHEREAS, the Borrowers and the Lenders have entered into a Financing
Agreement, pursuant to which the Lenders have extended credit to the Borrowers
consisting of (a) a term loan in the aggregate principal amount of $30,000,000
and (b) a revolving credit facility in an aggregate principal amount not to
exceed $55,000,000 at any time outstanding;
WHEREAS, the Borrowers have requested that the Agent and the Lenders
agree, and the Agent and the Lenders have agreed, to certain amendments to the
Financing Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and conditions hereinafter set forth, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Defined Terms. All terms used herein which are defined in the
Financing Agreement and not otherwise defined herein are used herein as defined
therein.
2. Mandatory Prepayments. Section 2.05(c)(i) of the Financing
Agreement is hereby amended by (i) deleting the reference to "$2,000,000" set
forth therein and (ii) inserting in lieu thereof "$4,000,000".
3. Financial Covenants. Section 7.03(b) of the Financing Agreement is
hereby amended in its entirety to read as follows:
"(b) Consolidated EBITDAR. Permit Consolidated EBITDAR of NATC
and its Subsidiaries for each period of four (4) consecutive fiscal quarters of
NATC and its Subsidiaries for which the last quarter ends on a date set forth
below to be less than the applicable amount set forth below:
Fiscal Quarter End Consolidated EBITDAR
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June 30, 2005 $18,532,000
September 30, 2005 $17,072,000
December 31, 2005 $21,067,000
March 31, 2006 $22,189,000
June 30, 2006 $23,652,000
September 30, 2006 $24,701,000
December 31, 2006 $25,460,000
March 31, 2007 $26,121,000
June 30, 2007 $27,037,000
September 30, 2007 $27,738,000
December 31, 2007 $28,414,000
March 31, 2008 $28,702,000
June 30, 2008 $29,068,000
September 30, 2008 $29,431,000
December 31, 2008 $29,810,000
March 31, 2009 $30,104,000
June 30, 2009 $30,481,000
September 30, 2009 $30,851,000
December 31, 2009 and each fiscal $31,238,000"
quarter ending thereafter
4. Conditions to Effectiveness. This Amendment shall become effective
only upon satisfaction in full, in a manner satisfactory to the Agent, of the
following conditions precedent (the first date upon which all such conditions
shall have been satisfied being herein called the "First Amendment Effective
Date"):
(a) The representations and warranties contained in Article VI
of the Financing Agreement and in each other Loan Document, certificate or other
writing delivered by or on behalf of any Loan Party to the Agent or any Lender
pursuant to the Financing Agreement or any other Loan Document on or prior to
the First Amendment Effective Date are true and correct in all material respects
on and as of such date as though made on and as of such date (except as
otherwise disclosed in writing by any Loan Party to the Agent prior to the date
hereof), and no Default or Event of Default shall have occurred and be
continuing on the First Amendment Effective Date (except as otherwise disclosed
in writing by any Loan Party to the Agent prior to the date hereof) or would
result from this Amendment becoming effective in accordance with its terms.
(b) The Agent shall have received counterparts of this Amendment
which bear the signatures of each Borrower and each Guarantor that is a party to
the Financing Agreement.
(c) The Agent shall have received satisfactory evidence that the
Required Lenders have consented to this Amendment
(d) All legal matters incident to this Amendment shall be
reasonably satisfactory to the Agent and its counsel.
5. Representations and Warranties. Each Loan Party that is a party to
the Financing Agreement hereby represents and warrants to the Agent and the
Lenders as follows:
(a) Representations and Warranties; No Event of Default. The
representations and warranties herein, in Article VI of the Financing Agreement
and in each other Loan Document, certificate or other writing delivered by or on
behalf of any Loan Party to the Agent or any Lender pursuant to the Financing
Agreement or any other Loan Document on or prior to the First Amendment
Effective Date are true and correct in all material respects on and as of such
date as though made on and as of such date and no Default or Event of Default
has occurred and is continuing as of the First Amendment Effective Date or would
result from this Amendment becoming effective in accordance with its terms.
(b) Organization, Good Standing, Etc. Each Loan Party (i) is a
corporation, limited liability company or limited partnership duly organized,
validly existing and in good standing under the laws of the state or
jurisdiction of its organization, (ii) has all requisite power and authority to
conduct its business as now conducted and as presently contemplated and, in the
case of the Borrowers, to make the borrowings hereunder, and to execute and
deliver each Loan Document to which it is a party, and to consummate the
transactions contemplated thereby, and (iii) is duly qualified to do business
and is in good standing in each jurisdiction in which the character of the
properties owned or leased by it or in which the transaction of its business
makes such qualification necessary.
(c) Authorization; Enforceability. The execution, delivery and
performance by each Loan Party of each Loan Document to which it is or will be a
party, (i) have been duly authorized by all necessary action, (ii) do not and
will not contravene its charter or by-laws, its limited liability company or
operating agreement or its certificate of partnership or partnership agreement,
as applicable, or any applicable law or any contractual restriction binding on
or otherwise affecting it or any of its properties, (iii) do not and will not
result in or require the creation of any Lien (other than pursuant to any Loan
Document) upon or with respect to any of its properties, and (iv) do not and
will not result in any default, noncompliance, suspension, revocation,
impairment, forfeiture or nonrenewal of any permit, license, authorization or
approval applicable to its operations or any of its properties which could
reasonably be expected to have a Material Adverse Effect.
(d) Governmental Approvals; No Conflicts. The execution,
delivery and performance of this Amendment by each applicable Loan Party, and
the performance of the Financing Agreement, as amended hereby, do not require
authorization or approval or other action by, and no notice to or filing with,
any Governmental Authority in connection with the due execution, delivery and
performance by any Loan Party of any Loan Document to which it is or will be a
party, except for (i) consents, authorizations, notices and filings described in
Schedule 6.01(c) of the Financing Agreement, all of which have been obtained or
made or have the status described in such Schedule 6.01(c), (ii) filings to
perfect the Liens created by the Loan Documents and (iii) consents,
authorizations, filings, notices or other acts the failure to make or obtain
could not reasonably be expected to have a Material Adverse Effect.
(e) Continued Effectiveness of Financing Agreement. Each Loan
Party that is a party to the Financing Agreement hereby (i) confirms and agrees
that each Loan Document to which it is a party is, and shall continue to be, in
full force and effect and is hereby ratified and confirmed in all respects
except that on and after the First Amendment Effective Date all references in
any such Loan Document to "the Financing Agreement", "thereto", "thereof",
"thereunder" or words of like import referring to the Financing Agreement shall
mean the Financing Agreement as amended by this Amendment, and (ii) confirms and
agrees that to the extent that any such Loan Document purports to assign or
pledge to the Agent, or to grant to the Agent a Lien on any collateral as
security for the Obligations of the Borrowers from time to time existing in
respect of the Financing Agreement and the Loan Documents, such pledge,
assignment and/or grant of a Lien is hereby ratified and confirmed in all
respects.
6. Miscellaneous.
(a) This Amendment may be executed in any number of counterparts
(including by facsimile) and by different parties hereto in separate
counterparts, each of which shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.
(b) Section and paragraph headings herein are included for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
(c) This Amendment shall be governed by, and construed in
accordance with, the laws of the State of New York.
(d) Each Loan Party hereby acknowledges and agrees that this
Amendment constitutes a "Loan Document" under the Financing Agreement.
Accordingly, it shall be an Event of Default under the Financing Agreement if
(i) any representation or warranty made by a Loan Party under or in connection
with this Amendment shall have been untrue, false or misleading in any material
respect when made, or (ii) a Loan Party shall fail to perform or observe any
term, covenant or agreement contained in this Amendment.
(e) The Borrowers will pay on demand all reasonable
out-of-pocket costs and expenses of the Agent and the Lenders in connection with
the preparation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees, disbursements and other charges of Xxxxxxx Xxxx
& Xxxxx LLP, counsel to the Agent.
[Remainder of Page Intentionally Left Blank.]
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date first above written.
BORROWERS:
NORTH ATLANTIC TRADING COMPANY, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
NORTH ATLANTIC OPERATING COMPANY, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
NATIONAL TOBACCO COMPANY, L.P.
By: National Tobacco Finance Corporation, as
its general partner
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
NATIONAL TOBACCO FINANCE CORPORATION
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
NORTH ATLANTIC CIGARETTE COMPANY, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
XXXXXX, INC.
By: /s/ Xxxxx Xxxxxxx
--------------------------------------------
Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
RBJ SALES, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
XXXX XXXXXX & SONS, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
GUARANTOR:
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NORTH ATLANTIC HOLDING COMPANY, INC.
By: /s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
Title: Chief Financial Officer and Senior
Vice President
AGENT:
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FORTRESS CREDIT CORP.
By: /s/ Xxxxxxxxxxx Xxxxxxxx
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Name: Xxxxxxxxxxx Xxxxxxxx
Title: Chief Credit Officer
LENDERS:
FORTRESS CREDIT OPPORTUNITIES I LP
By: Fortress Credit Opportunities I GP LLC,
its general partner
By: /s/ Xxxxxxxxxxx Xxxxxxxx
--------------------------------------------
Name: Xxxxxxxxxxx Xxxxxxxx
Title: Chief Credit Officer
FORTRESS CREDIT OPPORTUNITIES II LP
By: Fortress Credit Opportunities II GP LLC,
its general partner
By: /s/ Xxxxxxxxxxx Xxxxxxxx
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Name: Xxxxxxxxxxx Xxxxxxxx
Title: Chief Credit Officer
ABLECO FINANCE LLC
By: /s/ Xxx Xxxx
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Name: Xxx Xxxx
Title: Senior Vice President
XXXXXXX NATIONAL LOAN INVESTORS, LTD.
By:
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Name:
Title:
GENERAL ELECTRIC CAPITAL CORPORATION
By:
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Name:
Title:
