Exhibit 99.(b)(1)
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CREDIT AGREEMENT
Dated as of August 28, 2000
among
JRC ACQUISITION CORP. and
L&LR, INC.,
as Co-Borrowers,
THE LENDERS SIGNATORY HERETO
FROM TIME TO TIME,
as Lenders,
and
THE CHASE MANHATTAN BANK,
as Administrative Agent, Arranger, Syndication Agent and Lender
and
FLEET BANK, N.A.,
as Documentation Agent
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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. Availability 1
1.2. Use of Proceeds 1
1.3. Notes 1
1.4. Notice of Borrowing 2
1.5. Disbursement of Funds 2
1.6. Pro Rata Borrowings 3
1.7. Prepayments; Repayment 3
1.8. Interest 3
1.9. Fees 4
1.10. Method and Place of Payment 4
1.11. Application and Allocation of Payments 4
1.12. Indemnity 5
1.13. Capital Adequacy; Increased Costs; Illegality 6
1.14 Single Loan 6
1. CONDITIONS PRECEDENT
2.1. Corporate Documents 7
2.2. Officer's Certificate 7
2.3. Opinion of Counsel 7
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2.4. Credit Agreement; Notes; Loan Documents 7
2.5. Approvals 8
2.6. Payment of Fees 8
2.7. Related Transactions Documents; Tender Offer Acquisition;
Merger 8
2.8. Permanent Credit Agreement 8
2.9. No Litigation 9
2.10. Lien Search Results 9
2.11. No Default; Representations and Warranties 9
2.12. Notice of Borrowing 9
2.13 Form U-1 9
3. REPRESENTATIONS AND WARRANTIES
3.1. Corporate Existence; Compliance with Law 10
3.2. Corporate Power; Authorization; Enforceable Obligations 10
3.3. Financial Condition; Solvency 10
3.4. Special Purpose Corporation 11
3.5. Government Regulation 11
3.6. Margin Regulations 11
3.7. No Litigation 12
3.8. Full Disclosure 12
3.9. Year 2000 Problems 12
3.10. Related Transactions 12
3.11. Common Stock of Cigar 13
3.12 Pledge Agreements 13
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4. AFFIRMATIVE COVENANTS
4.1. Maintenance of Existence and Conduct of Business 13
4.2. Payment of Obligations 14
4.3. Books and Records 14
4.4. Compliance with Laws 14
4.5. Information Covenants 14
4.6. Performance of Obligations 14
4.7. Consummation of Merger 14
4.8. Further Assurances 15
5. NEGATIVE COVENANTS
5.1. Consolidation, Merger, Sale of Assets, Etc. 15
5.2. Advances, Investments, Loans, Purchase of Assets 15
5.3. Indebtedness 15
5.4. Affiliate Transactions 16
5.5. Limitation on Issuance of Equity 16
5.6. Modifications of Certificate of Incorporation, By-Laws and
Certain Agreements, etc. 16
5.7. Liens 16
5.8. Restricted Payments 16
5.9. Change of Corporate Name or Location 16
5.10. Limitation on the Creation of Subsidiaries 16
5.11. Business 16
5.12. Margin Regulations 17
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6. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
6.1 Events of Default 17
6.2. Remedies 18
6.3. Waivers by Co-Borrowers 18
7. THE ADMINISTRATIVE AGENT
7.1. Appointment of Administrative Agent 19
7.2. Nature of Duties 19
7.3. Lack of Reliance on the Administrative Agent 19
7.4. Reliance 20
7.5. Indemnification 20
7.6. The Administrative Agent in its Individual Capacity 21
7.7. Holders 21
7.8. Documentation Agent; Syndication Agent 21
8. MISCELLANEOUS
8.1. Successors and Assigns 21
8.2. Complete Agreement; Modification of Agreement 22
8.3. Amendment or Waiver 22
8.4. Fees and Expenses 22
8.5. No Waiver 23
8.6. Remedies 23
8.7. Right of Setoff 23
8.8. Severability 24
8.9. Governing Law 24
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8.10. Notices 25
8.11. Section Titles 25
8.12. Counterparts 25
8.13. Waiver of Jury Trial 25
8.14. Reinstatement 26
8.15. No Strict Construction 26
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INDEX OF APPENDICES
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C-1 - Form of Pledge Agreement of JRC
Exhibit C-2 - Form of Pledge Agreement of L&LR
Exhibit C-3 - Form of Amended and Restated Pledge
Agreement of L&LR
Annex A (Recitals) - Definitions
Annex B (from Annex A- - Commitments as of Closing Date
Commitments definition)
Annex C - Address for Notices
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CREDIT AGREEMENT, dated as of August 28, 2000, among JRC ACQUISITION
CORP., a Delaware corporation ("JRC"); L&LR, INC., a Delaware corporation
("L&LR") (JRC and L&LR together with their successors and assigns, 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 and Documentation 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 Loans to Co-Borrowers,
jointly and severally, in an aggregate amount of up to the Maximum Amount for
the purpose of financing the Tender Offer Consideration, the Merger
Consideration and expenses related thereto, as more fully described herein, and
for this purpose, Lenders are willing to make certain loans 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, Exhibits and other attachments
(collectively, "Appendices") hereto, or expressly identified in 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:
1. AMOUNT AND TERMS OF LOANS
1.1. AVAILABILITY. Subject to the terms and conditions hereof, each Lender
severally agrees to make on each Borrowing Date a loan (each a "Loan" and
collectively the "Loans") to the Co-Borrowers which Loans shall (i) bear
interest as provided in Section 1.8, (ii) be made and maintained in Dollars,
(iii) not exceed for any Lender, in aggregate principal amount, that amount
which equals such Lender's Commitment, (iv) not exceed in the aggregate the
Maximum Amount, and (v) be the joint and several obligations of the
Co-Borrowers.
1.2. USE OF PROCEEDS. All proceeds of the Loans shall be used by the
Co-Borrowers solely (i) on the Tender Offer Borrowing Date (x) to pay the Tender
Offer Consideration and (y) to pay transaction fees and expenses related to the
Tender Offer Acquisition, and (ii) on the Merger Borrowing Date (x) to pay the
Merger Consideration and (y) to pay fees and expenses related to the Merger.
1.3. NOTES. The Loans shall be evidenced by promissory notes substantially
in the form of Exhibit A (each a "Note" and collectively, the "Notes"). Each
Note issued by Co-Borrowers to any Lender shall (i) be executed by, and be the
joint and several obligations of, Co-Borrowers, (ii) be payable to the order of
such Lender and be dated the date of issuance, (iii) be in a stated
principal amount equal to the Lender's Pro Rata Share of the Loans evidenced in
part by such Note, (iv) mature on the Maturity Date, (v) bear interest as
provided in Section 1.8, (vi) be subject to voluntary prepayment as provided in
Section 1.7 and (vii) be entitled to the benefits of this Agreement and be
secured by the Collateral pursuant to the Pledge Agreements. Each Lender will
note on its internal records the amount of each Loan made by it and each payment
in respect thereof and will prior to any transfer of any of its Notes endorse on
the reverse side thereof the outstanding principal amount of Loans evidenced
thereby. Failure to make any such notation shall not affect the Co-Borrowers'
obligations in respect of such Loans.
1.4. NOTICE OF BORROWING. (a) Whenever Co-Borrowers desire to incur Loans
hereunder, they shall give the Administrative Agent at its Notice Office at
least one Business Day's prior written notice (or telephonic notice promptly
confirmed in writing) of each Loan, provided that any such notice shall be
deemed to have been given on a certain day only if given before 12:00 Noon (New
York time) on such day. Each such written notice or written confirmation of
telephonic notice (each a "Notice of Borrowing"), shall be in the form of
Exhibit B, shall be irrevocable and shall be given by the Co-Borrowers,
appropriately completed to specify (i) the date of such incurrence (which shall
be a Business Day), and (ii) the aggregate principal amount of the Loans to be
made. The Administrative Agent shall promptly (and in any event within one
Business Day after its receipt of a Notice of Borrowing) give each Lender notice
of such proposed incurrence, of such Lender's Pro Rata Share thereof and of the
other matters required by the immediately preceding sentence to be specified in
the Notice of Borrowing.
(b) Without in any way limiting the obligation of the Co-Borrowers to
confirm in writing any telephonic notice of any incurrence of Loans, the
Administrative Agent may act without liability upon the basis of telephonic
notice, believed by the Administrative Agent in good faith to be from an
Authorized Officer of each Co-Borrower prior to receipt of written confirmation.
In each such case, the Co-Borrowers hereby waive the right to dispute the
Administrative Agent's record of the terms of such telephonic notice, absent
manifest error.
1.5. DISBURSEMENT OF FUNDS. No later than 1:00 P.M. (New York time) on the
date specified in each Notice of Borrowing, 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. 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 Borrowing 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. 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
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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.
1.6. 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.
1.7. PREPAYMENTS; REPAYMENT.
(a) Voluntary Prepayments. The Co-Borrowers shall have the right to prepay
Loans, without premium or penalty, in whole or in part from time to time.
(b) Mandatory Repayments. All outstanding Loans together with interest
accrued thereon and unpaid Fees due and owing shall be repaid in full on the
Maturity Date.
1.8. INTEREST.
(a) The Co-Borrowers agree to pay interest in respect of the unpaid
principal amount of each Loan from the date the proceeds thereof are made
available to the Co-Borrowers until the maturity (whether by acceleration or
otherwise) of such Loan, at a rate per annum equal to the Prime Rate in effect
from time to time.
(b) If any Default or Event of Default shall have occurred and be
continuing, the interest rates applicable to the Loans shall be increased by two
percent (2%) per annum above the rate of interest otherwise applicable hereunder
("Default Rate"). 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 two percent (2%).
(c) Accrued (and theretofore unpaid) interest shall be payable (i) on each
Interest Payment Date applicable thereto and (ii) on any repayment or prepayment
(on the amount repaid or prepaid), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
(d) All computations of interest shall be made by the 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 interest is
payable. Each determination by Administrative Agent of an interest rate
hereunder shall be conclusive, absent manifest error.
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(e) Notwithstanding anything to the contrary set forth in this Section
1.8, 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 1.8(a) through (d) 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.
1.9. FEES.
(a) Co-Borrowers shall pay to Chase the Fees specified in the Fee Letter
at the times specified for payment therein.
(b) The Co-Borrowers shall pay to the Administrative Agent for
distribution to each Lender a commitment fee (the "Commitment Fee") for the
period from and including the date hereof to but not including the Termination
Date, computed at a rate equal to .325% per annum on the average daily
unutilized Commitment of such Lender. Accrued commitment fees payable to the
Lenders shall be payable on the first Business Day of each month and on the
Termination Date. For purposes of calculating the Commitment Fee hereunder,
the amount of each Lender's "Commitment" shall be deemed to be based upon a
"Maximum Amount" equal to $55,000,000.
(c) All computation of Fees calculated on a per annum basis 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 Fees are
payable. Each determination by Administrative Agent of Fees hereunder shall be
conclusive, absent manifest error.
1.10. METHOD AND PLACE OF PAYMENT. 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.
1.11. APPLICATION AND ALLOCATION OF PAYMENTS. 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; and (ii) voluntary prepayments
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shall be applied pro rata to the Loans, first to unpaid interest accrued thereon
and then to reduce the unpaid principal amount of the Loans. All payments and
prepayments shall be applied ratably to the portion of the aggregate Loans held
by each Lender as determined by its Pro Rata Share. As to each payment made when
a Default or Event or Default shall have occurred and be continuing or following
the Maturity Date, Co-Borrowers hereby irrevocably waive the right to direct the
application of any and all payments received 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 Section 8.4.
1.12. INDEMNITY. 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 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 found by a final, non-appealable 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 TERMINATED UNDER ANY LOAN DOCUMENT OR AS A RESULT OF ANY
OTHER TRANSACTION CONTEMPLATED HEREUNDER OR THEREUNDER.
1.13. 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
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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 date hereof, 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 and thereby 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 date hereof, 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 1.13.
(c) 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.
1.14. SINGLE LOAN. The 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.
2. CONDITIONS PRECEDENT. The obligation of each Lender to make Loans, or to
take, fulfill, or perform any other action hereunder, is subject to the
satisfaction of the following conditions on or before November 30, 2000 unless
otherwise waived by the Administrative Agent:
2.1. CORPORATE DOCUMENTS. On the Initial Borrowing Date, the
Administrative Agent shall have received the following documents, each certified
as indicated below:
(a) 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
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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 each
such Co-Borrower;
(b) a certificate of the Secretary or an Assistant Secretary of each of
the Co-Borrowers, dated the Initial Borrowing Date and certifying (i) that
attached thereto is a true and complete copy of the By-laws of the Co-Borrower
as amended and in effect at all times from the date on which the resolutions
referred to in clause (ii) were adopted to and including the date of such
certificate, (ii) that attached thereto is a true and complete copy of
resolutions duly adopted by the board of directors of the Co-Borrower
authorizing the execution, delivery and performance of the Loan Documents and
the extensions of credit thereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and effect, (iii) that the
Certificate of Incorporation of the Co-Borrower has not been amended since the
date of the certification thereto furnished pursuant to subparagraph (a) above,
and (iv) as to the incumbency and specimen signature of each officer of the
Co-Borrower executing the Loan Documents (and the Administrative Agent and each
Lender may conclusively rely on such certificate until it receives notice in
writing from the Co-Borrower); and
(c) a certificate of another officer of the Co-Borrower as to the
incumbency and specimen signature of the Secretary or Assistant Secretary, as
the case may be, of the Co-Borrower.
2.2. OFFICER'S CERTIFICATE. On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate dated such date of a
senior officer of each Co-Borrower, stating that all of the applicable
conditions set forth in this Section 2 have been met.
2.3. OPINION OF COUNSEL. On the Initial Borrowing Date, the Administrative
Agent shall have received an opinion, dated the Initial Borrowing Date, of
Xxxxxx, Xxxxx & Xxxxxxx LLP, counsel to the Co-Borrowers, 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).
2.4. CREDIT AGREEMENT; NOTES; LOAN DOCUMENTS. (a) On or prior to the
Initial Borrowing Date, this Agreement shall have been duly executed by, and
delivered to, Co-Borrowers, the Administrative Agent and Lenders; the Notes
shall have been duly completed and executed and delivered; all other Loan
Documents, including, without limitation, the Collateral Documents shall have
been duly executed by the Co-Borrowers party thereto; and Administrative Agent
shall have received such documents, instruments, agreements and legal opinions
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.
(b) On or prior to the Initial Borrowing Date, (i) JRC and L&LR shall have
duly authorized, executed and delivered respective pledge agreements
substantially in the forms of Exhibit C-1 and C-2, respectively, (ii) JRC shall
have (A) delivered to the Administrative Agent for the ratable benefit of the
Lenders all of the Pledged Stock referred to in the Pledge Agreement of JRC then
owned by JRC together with executed and undated irrevocable stock
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powers, and (B) taken such other action, and executed such other documents,
including without limitation UCC-1 financing statements, to perfect the security
interests created thereunder, as the Collateral Agent shall request in its sole
discretion, and (iii) L&LR shall have (A) delivered to the Administration Agent
for the ratable benefit of the Lenders all of the Pledged Stock referred to in
the Pledge Agreement of L&LR then owned by L&LR together with executed and
undated irrevocable stock powers, and (B) taken such other action, and executed
such other documents, including without limitation UCC-1 financing statements,
to perfect the security interests created thereunder, as the Collateral Agent
shall request in its sole discretion. On the Merger Borrowing Date, L&LR shall
have duly authorized, executed and delivered an amended and restated pledge
agreement substantially in the form of Exhibit C-3 and shall have (i) delivered
to Administration Agent for the ratable benefit of the Lenders all of the
Pledged Stock referred to in such Pledge Agreement together with executed and
undated irrevocable stock powers, and (ii) taken such other action, and executed
such other documents, including without limitation, UCC-1 financing statements,
to perfect the security interests created thereunder, as the Collateral Agent
shall request in its sole discretion.
2.5. APPROVALS. On or prior to the Initial Borrowing Date, 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 in connection with 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.
2.6. PAYMENT OF FEES. On or prior to the Initial Borrowing Date,
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.
2.7. RELATED TRANSACTIONS DOCUMENTS; TENDER OFFER ACQUISITION; Merger.
On or prior to the Initial Borrowing Date, Lenders shall have received fully
executed copies of all the Related Transactions Documents, each of which
shall be in form and substance satisfactory to Administrative Agent and its
counsel. The Tender Offer Acquisition shall be consummated contemporaneously
with the Tender Offer Borrowing Date in accordance with the terms of the
Tender Offer and without waiver of any conditions (except as expressly
permitted thereunder) unless consented to by the Administrative Agent. The
Merger shall be consummated contemporaneously with the Merger Borrowing Date.
2.8. PERMANENT CREDIT AGREEMENT. On the Initial Borrowing Date,
Administrative Agent shall have received fully executed copies of the Permanent
Credit Agreement and all documents then required to be delivered thereunder and
the Co-Borrowers thereunder shall be in compliance with the terms and conditions
thereof.
2.9. NO LITIGATION. On each Borrowing Date, there shall exist no action,
suit, investigation, litigation or proceeding affecting the Co-Borrowers or
Cigar pending or threatened
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before any court, governmental agency or arbitration that could reasonably be
expected to have a Material Adverse Effect.
2.10. LIEN SEARCH RESULTS. On the Initial Borrowing Date, 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
and no tax liens or judgments.
2.11. NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of the
making of any Loans hereunder and also after giving effect thereto (i) there
shall exist no Default or Event of Default, (ii) all representations and
warranties contained herein or in the other Loan Documents shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of the making of such
Loans (it being understood and agreed that any representation or warranty which
by its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date), (iii) all
representations and warranties of Cigar and the other Co-Borrowers contained in
the Permanent Credit Agreement shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been on the date of the making of such Loans (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date) and (iv) there shall have occurred no event or
circumstance having a Material Adverse Effect on Co-Borrowers or Cigar. The
request and acceptance by Co-Borrowers of the proceeds of any Loan shall be
deemed to constitute, as of the date of such request or acceptance, (i) a
representation and warranty by Co-Borrowers that the conditions in this Section
2.11 have been satisfied and (ii) a reaffirmation by Co-Borrowers of the
granting and continuance of Administrative Agent's Liens, on behalf of itself
and Lenders, pursuant to the Pledge Agreement.
2.12. NOTICE OF BORROWING. Prior to the making of each Loan, the
Administrative Agent shall have received a Notice of Borrowing.
2.13. FORM U-1. On the Initial Borrowing Date, the Administrative Agent
and each of the Lenders shall have received Federal Reserve Form U-1 provided
for in Regulation U of the Board of Governors of the Federal Reserve System, the
statements made in which shall be such, in the opinion of the Administrative
Agent and the Lenders, as to permit the transactions contemplated hereby in
accordance with said Regulation U.
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
Administrative Agent and each Lender, each and all of which shall survive the
execution and delivery of this Agreement.
3.1. CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Co-Borrower and Cigar
(a) is a corporation duly organized, validly existing and in good standing under
the laws of its respective
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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, and
to conduct its business as now, heretofore and proposed to be conducted; (d) 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 and all
Persons having jurisdiction, to the extent required for such ownership,
operation and conduct and is in compliance with all such licenses, permits,
consents or approvals; (e) is in compliance with its certificate of
incorporation and by-laws; and (f) is in compliance with all applicable
provisions of law, except where the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.
3.2. CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by each Co-Borrower of the Loan Documents to
which it is a party and the creation of all Liens provided for therein: (a) are
within such Co-Borrower'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 Co-Borrower's certificate of incorporation (or similar
organizational document) 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 Co-Borrower is a party or by which such Co-Borrower or any of its
property is bound; (f) do not result in the creation or imposition of any Lien
upon any of the property of such Co-Borrower other than those in favor of
Administrative Agent, on behalf of itself and Lenders, pursuant to the Loan
Documents; and (g) do not require the consent or approval of any Governmental
Authority or any other Person. On or prior to the Initial Borrowing Date, each
of the Loan Documents shall have been duly executed and delivered by each
Co-Borrower 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.
3.3. FINANCIAL CONDITION; SOLVENCY. (a) Since inception, there has been no
material adverse change in the business, operations, property, assets,
liabilities or condition (financial or otherwise) of Co-Borrowers, either
individually or taken as a whole.
(b) On a pro forma basis after giving effect to the Loans occurring on
such date and Liens created by the Co-Borrowers in connection therewith, each of
the Co-Borrowers on a consolidated and stand-alone basis is Solvent.
(c) Except for liabilities or obligations of Co-Borrowers arising under
the Loan Documents, there are not as of the Initial Borrowing Date, and as of
each Borrowing Date, there will not be, any liabilities or obligations with
respect to either Co-Borrower of any nature whatsoever (whether absolute,
accrued, contingent or otherwise and whether or not due).
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(d) Since March 31, 2000, no Material Adverse Effect has occurred with
respect to Cigar.
3.4 SPECIAL PURPOSE CORPORATION. (a) L&LR was formed solely to effect the
Loans and the Related Transactions and, except in connection therewith (and as
contemplated by the Loan Documents), has no significant assets or liabilities
(other than (i) the capital stock of JRC or, after consummation of the Merger,
the capital stock of Cigar as surviving company and (ii) under this Agreement,
the other Loan Documents and the Related Transactions Documents to which it is a
party) and has engaged in no substantial business activities. All of the issued
and outstanding shares of Stock of L&LR are owned beneficially and of record by
Xxxxx X. Xxxxxxx and XxXxxxx X. Xxxxxxx and on the Tender Offer Borrowing Date
will be owned beneficially and of record by Xxxxx X. Xxxxxxx and XxXxxxx X.
Xxxxxxx and the 1998 Trust.
(b) JRC was formed solely to effect the Loans and the Related Transactions
and, except in connection therewith (and as contemplated by the Loan Documents),
has no significant assets or liabilities (other than (i) the capital stock of
Cigar acquired pursuant to the Tender Offer and the Contributed Shares and (ii)
under this Agreement and the other Loan Documents to which it is a party) and
has engaged in no substantial business activities. Prior to the Merger, all of
the issued and outstanding shares of Stock of JRC are owned by L&LR.
3.5. GOVERNMENT REGULATION. None of the Co-Borrowers or Cigar 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. None of the Co-Borrowers or Cigar is
subject to regulation under the Public Utility Holding Company Act of 1935, the
Federal Power 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 or
any Governmental Authority.
3.6. MARGIN REGULATIONS. None of the Co-Borrowers or Cigar 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 in effect (such securities being referred to herein as
"Margin Stock"). No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock; provided that JRC may use the proceeds of the Loan
made on the Tender Offer Borrowing Date to purchase Margin Stock consisting of
Public Stock pursuant to the Tender Offer in compliance with Regulations T, U
and X of the Board of Governors of the Federal Reserve System. Neither the
making of the Loans nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations T, U or X.
3.7. NO LITIGATION. No action, claim, lawsuit, demand, investigation or
proceeding is now pending or, to the knowledge of any Co-Borrower, threatened
against any of Cigar or Co-Borrowers, before any Governmental Authority or
before any arbitrator or panel of arbitrators
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(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 Cigar or any Co-Borrower and which, if so determined,
could have a Material Adverse Effect.
3.8. FULL DISCLOSURE. No information contained in this Agreement, any of
the other Loan Documents, any financial statements delivered by Cigar or any
other reports or written statements furnished by or on behalf of Cigar or any
Co-Borrower to Agent or any Lender pursuant to the terms of this Agreement
contains any untrue statement of a material fact or omits 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.
3.9. YEAR 2000 PROBLEMS. Cigar and each Co-Borrower have 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.
3.10. RELATED TRANSACTIONS. Co-Borrowers have delivered to Administrative
Agent a complete and correct copy 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 paid to consummate the Tender Offer
Acquisition inclusive of all fees and costs is equal to the amount of the Loan
to be made on the Tender Offer Borrowing Date. The total consideration payable
to consummate the Merger inclusive of all fees and costs will be equal to the
amount of the Loan made on the Merger Borrowing Date. None of Cigar or any
Co-Borrower is in default in the performance or compliance with any provisions
of the Related Transactions Documents. The Related Transactions Documents comply
with, and the Tender Offer Acquisition has been or will be 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, Cigar or any Co-Borrower and other Persons referenced therein,
with respect to the transactions contemplated by the Related Transactions
Documents, have been or will be 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 Cigar 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.
3.11. COMMON STOCK OF CIGAR.
(a) On or prior to the Tender Offer Borrowing Date, Xxxxx X. Xxxxxxx,
XxXxxxx X. Xxxxxxx and the 1998 Trust shall have contributed to L&LR an
aggregate of 8,775,840 shares of the common stock of Cigar (the "Contributed
Shares") free and clear of all Liens, representing all of the shares of such
common stock owned of record by them. On or prior to the Tender Offer Borrowing
Date, L&LR shall have contributed the Contributed Shares to JRC, free and clear
of all Liens. The Contributed Shares constitute approximately 74% of the
aggregate issued and outstanding shares of common stock of Cigar.
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(b) As of the Tender Offer Borrowing Date, the Trusts own 524,160 shares of the
common stock of Cigar (the "Trust Shares"), free and clear of all Liens. The
Trust Shares constitute approximately 4% of the aggregate issued and outstanding
shares of common stock of Cigar. There are no shares of any classes of capital
stock of Cigar issued and outstanding other than shares of Common Stock.
(c) The aggregate number of issued and outstanding shares of Public Stock is
2,562,299, which constitutes approximately 22% of the aggregate issued and
outstanding shares of Common Stock of Cigar.
3.12 PLEDGE AGREEMENTS. The provisions of the Pledge Agreement of JRC
annexed hereto as Exhibit C-1 are effective, upon the acquisition by JRC of
rights in the Collateral described therein, to create 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 JRC in the
Collateral described therein. The provisions of the Pledge Agreement of L&LR
annexed hereto as Exhibit C-2 are effective, upon the acquisition by L&LR of
rights in the Collateral described therein, to create 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 in the
Collateral described therein. The provisions of the Pledge Agreement of L&LR
annexed hereto as Exhibit C-3 are effective to continue 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 in
the Collateral described therein. The security interests created in favor of the
Collateral Agent for the benefit of the Lenders under the Collateral Documents
will constitute first priority perfected security interests in the Collateral
described therein, subject to no security interests of any other Person. No
filings or recordings are required in order to perfect the security interests
created in the Collateral and the proceeds thereof under the Pledge Agreements.
4. AFFIRMATIVE COVENANTS
Each Co-Borrower hereby covenants and agrees, jointly and severally, that
on and after the date hereof and thereafter for so long as this Agreement is in
effect and until the Loans and Notes, together with all accrued but unpaid
interest, Fees and other Obligations, are paid in full:
4.1. 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 5.1).
4.2. PAYMENT OF OBLIGATIONS. Each Co-Borrower shall pay and discharge or
cause to be paid and discharged promptly all Charges payable by it, including
Charges imposed upon their respective income, profits or properties.
4.3. BOOKS AND RECORDS. Each Co-Borrower will keep proper books of record
and account in which full, true and correct entries, in conformity with GAAP and
all requirements of law, shall be made of all material dealings and transactions
in relation to its business and activities.
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4.4. COMPLIANCE WITH LAWS. Each Co-Borrower will comply, and will use its
best efforts to cause Cigar to comply, with all applicable statutes, regulations
or orders of, and all applicable restrictions imposed by, all Governmental
Authorities, domestic or foreign, in respect of the conduct of its respective
business and the ownership of its property, except such non compliance as could
not, individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.5. INFORMATION COVENANTS. The Co-Borrowers will furnish to the
Administrative Agent (which shall promptly distribute a copy to each Lender):
(a) NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event within
five Business Days after an officer of any Co-Borrower obtains knowledge
thereof, notice of (i) the occurrence of any event which constitutes a Default
or an event of Default (provided such Default or Event of Default is continuing)
and (ii) any Litigation or governmental investigation or proceeding pending or
threatened (x) against Cigar or any Co-Borrower which could reasonably be
expected to have a Material Adverse Effect or (y) with respect to any Loan
Document.
(b) OTHER REPORTS AND FILINGS. Promptly, copies of all financial
information, proxy materials and other information and reports, if any, which
Cigar or any Co-Borrower shall file with the Securities and Exchange Commission
or any successor thereof (the "SEC").
(c) OTHER INFORMATION. From time to time, such other information or
documents (financial or otherwise) with respect to Cigar or any Co-Borrower as
the Administrative Agent or any Lender may reasonably request in writing.
4.6. PERFORMANCE OF OBLIGATIONS. Each Co-Borrower will perform and will
use its best efforts to cause Cigar to perform all of its obligations under the
terms of each mortgage, deed of trust, indenture, loan agreement or credit
agreement and each other material agreement, contract or instrument by which it
is bound, except such non-performance as could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.7. CONSUMMATION OF MERGER. Each Co-Borrower will perform, and will use
its best efforts to cause Cigar to perform, all of its obligations required
under the Merger Agreement and will take all action necessary to consummate the
Merger. Each Co-Borrower will vote all shares of common stock of Cigar owned by
it in favor of the Merger.
4.8. FURTHER ASSURANCES.
(a) Each Co-Borrower agrees that it shall, at its own 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.
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(b) Without limitation of preceding subparagraph (a), Co-Borrowers 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 Collateral
Documents 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 Collateral
Documents.
5. NEGATIVE COVENANTS
Each Co-Borrower hereby covenants and agrees jointly and severally that on
and after the date hereof and until the Loans and Notes, together with all
accrued but unpaid interest, fees and other Obligations, are paid in full:
5.1. CONSOLIDATION, MERGER, SALES OF ASSETS, ETC. Neither Co-Borrower will
wind up, liquidate or dissolve its affairs or enter into any transaction of
merger or consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time) any part of its property or
assets (including, without limitation, the capital stock of Cigar), or enter
into any sale-leaseback transactions, except that the Merger shall be permitted.
5.2. ADVANCES, INVESTMENTS, LOANS, PURCHASE OF ASSETS. Neither Co-Borrower
will (w) lend money or grant credit or make advances to any other Person, (x)
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets of any other Person (including, without
limitation, any stock, obligations or securities of, or any other interest in,
any other Person), (y) make any capital contribution to any other Person, or (z)
purchase or own a futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, except that the following shall be permitted:
(i) L&LR's contribution to JRC of the Contributed Shares;
(ii) the Tender Offer Acquisition; and
(iii) the Merger.
5.3. INDEBTEDNESS. Neither Co-Borrower will contract, create, incur,
assume or suffer to exist any Indebtedness, except Indebtedness incurred
pursuant to this Agreement and the other Loan Documents.
5.4. AFFILIATE TRANSACTIONS. Neither Co-Borrower will enter into any
transaction or series of related transactions, whether or not in the ordinary
course of business, with any Affiliate of any Co-Borrower, other than as
otherwise permitted under the provisions of this Agreement, except that:
(i) the Merger shall be permitted;
(ii) the Tender Offer and Tender Offer Acquisition shall be
permitted; and
(iii) L&LR's contribution to JRC of the Contributed Shares shall be
permitted.
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5.5. LIMITATION ON ISSUANCE OF EQUITY. Neither Co-Borrower will issue any
capital stock or other equity interests (including by way of sales of treasury
stock) or any options or warrants to purchase, or securities convertible into,
capital stock or other equity interests, except (i) for replacements of then
outstanding shares of capital stock or other equity interests, or (ii) as
otherwise contemplated by the Merger Agreement.
5.6. MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN
AGREEMENTS, ETC. Neither Co-Borrower will amend, modify or change its
certificate of incorporation or by-laws, or any agreement entered into by it,
with respect to its capital stock or other equity interests, or enter into any
new agreement with respect to its capital stock of other equity interests except
as otherwise contemplated by the Merger Agreement; provided, however, that the
foregoing shall not prohibit JRC from extending the date on which the Tender
Offer expires.
5.7. LIENS. Neither Co-Borrower will create, incur, assume or suffer to
exist any Lien upon or with respect to any property or assets (real or personal,
tangible or intangible) of any Co-Borrower, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets, or
assign any right to receive income, provided that the provisions of this Section
5.7 shall not prevent the creation, incurrence, assumption or existence of Liens
created pursuant to the Pledge Agreements.
5.8. RESTRICTED PAYMENTS. Neither Co-Borrower shall make any
Restricted Payments.
5.9. CHANGE OF CORPORATE NAME OR LOCATION. Neither Co-Borrower shall (a)
change its corporate name, or (b) change its chief executive office, principal
place of business, or the location of its books and records.
5.10. LIMITATION ON THE CREATION OF SUBSIDIARIES. No Co-Borrower will
create or acquire any Subsidiary; provided that JRC may acquire Cigar (and,
indirectly, its Subsidiaries) pursuant to the Tender Offer and L&LR may acquire
Cigar pursuant to the Merger.
5.11. BUSINESS. (a) L&LR will not engage in any business activities and
will not have any assets or liabilities or incur any Indebtedness other than its
ownership of the equity interests of JRC, its ownership of the Contributed
Shares, liabilities imposed by law, activities in connection with the Tender
Offer and the Merger and its obligations with respect to this Agreement and the
other Loan Documents to which it is a party.
(b) JRC will not engage in any business activities and will not have any
significant assets or liabilities other than its ownership of the capital stock
of Cigar acquired pursuant to the Tender Offer, its ownership of the Contributed
Shares, liabilities imposed by law, activities in connection with the Tender
Offer and the Merger and its obligations with respect to this Agreement and the
other Loan Documents to which it is a party.
5.12 MARGIN REGULATIONS. The Co-Borrowers will not and will use their best
efforts to cause Cigar not to take or permit to be taken any action which might
cause any Loan Document
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or Related Transactions Document or any transaction contemplated thereby to
violate any regulation of the Federal Reserve Board, including without
limitation Regulation T, U or X.
6. EVENTS OF DEFAULT; RIGHTS AND REMEDIES
6.1. 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 or Lenders for
any expense reimbursable hereunder or under any other Loan Document within three
(3) days following Administrative Agent's demand for such reimbursement or
payment of expenses;
(b) Any representation, warranty or statement made by either 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 as of which
made or deemed made;
(c) Either Co-Borrower shall fail or neglect to perform, keep or observe
any of the provisions of Sections 1.2 or 5;
(d) Either Co-Borrower shall fail or neglect to perform, keep or observe
any other term, covenant or agreement contained in this Agreement or any of the
other Loan Documents (other than as provided in this Section 6.1) and the same
shall remain unremedied for ten (10) days or more;
(e) Either Co-Borrower or Cigar shall commence a voluntary case concerning
itself under Title 11 of the United States Code entitled "Bankruptcy," as now or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against either Co-Borrower and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
either Co-Borrower, or either Co-Borrower commences any other proceeding under
any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to either Co-Borrower, or there is
commenced against either Co-Borrower any such proceeding which remains
undismissed for a period of 60 days; or either Co-Borrower is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or either Co-Borrower suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or either Co-Borrower
makes a general assignment for the benefit of creditors; or any corporate action
is taken by either Co-Borrower for the purpose of effecting any of the
foregoing;
(f) At any time after the execution and delivery thereof, any of the
Collateral Documents shall cease to be in full force and effect, or shall cease
to give the Collateral Agent for the benefit
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of the Lenders the Liens, rights, powers and privileges purported to be created
thereby (including, without limitation, a perfected security interest in, and/or
Lien on, all of the Collateral covered thereby), in favor of the Collateral
Agent, superior to and prior to the rights of all third Persons, and subject to
no other Liens, or either Co-Borrower 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 Collateral Documents;
(g) One or more judgments or decrees shall be entered against any
Co-Borrower involving in the aggregate for the Co-Borrowers a liability of
$100,000 or more (not paid or fully covered by a reputable and solvent insurance
company) and such judgments or decrees shall not have been vacated, discharged
or stayed or bonded pending appeal within 60 days from the entry thereof;
(h) 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);
(i) Any Change of Control shall occur.
6.2. REMEDIES. (a) If any Event of Default shall have occurred and be
continuing, Administrative Agent may (and at the written request of the Required
Lenders shall), without notice, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent, any Lender or the
holder of any Note to enforce its claims against any Co-Borrower: (i) declare
all Commitments terminated, whereupon the Commitment of each Lender shall
forthwith terminate immediately and any Commitment Fee shall forthwith become
due and payable without any other notice of any kind; (ii) declare the principal
of and any accrued interest in respect of all Loans and the Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Co-Borrower; and
(iii) enforce, as Collateral Agent, all of the Liens and security interests
created pursuant to the Pledge Agreements and exercise any and all rights
thereunder.
6.3. 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, (b) all rights to notice and a hearing prior to Administrative
Agent's taking possession or control of, or to Administrative Agent's reply,
attachment or levy upon, the Collateral or any bond or security which might be
required by any court prior to allowing Administrative Agent to exercise any of
its remedies, and (c) the benefit of all valuation, appraisal, marshaling and
exemption laws.
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7. THE ADMINISTRATIVE AGENT
7.1. APPOINTMENT OF ADMINISTRATIVE AGENT. Chase is hereby appointed to act
on behalf of all Lenders as the Administrative Agent (for purposes of this
Section 7, 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 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.
7.2. 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.
7.3. 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
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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.
7.4. 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 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 Required
Lenders.
7.5. 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.
7.6. 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," "Required Lenders,"
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"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.
7.7. 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 may be,
of such Note or of any Note or Notes issued in exchange therefor.
7.8. 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 of 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.
8. MISCELLANEOUS
8.1. SUCCESSORS AND ASSIGNS. This Agreement and the other Loan Documents
shall be binding on and shall inure to the benefit of the Co-Borrowers,
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 Lender may assign or otherwise convey its
rights, benefits or obligations hereunder with the consent of Co-Borrowers
(which shall not be unreasonably withheld) and may assign or sell participations
in the Loans without the consent of Co-Borrowers. The terms and provisions of
this Agreement are for the purpose of defining the relative rights and
obligations of Co-Borrowers, 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.
8.2. 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 8.3 below.
8.3. AMENDMENT OR WAIVER. Neither this Agreement nor any other Loan
Document nor any terms hereof or thereof may be changed, waived, discharged or
terminated unless such change, waiver, discharge or termination is in writing
signed by the respective Co-Borrowers and the Required Lenders; provided that no
such change, waiver, discharge or termination shall, without the consent of each
Lender directly affected thereby: (i) extend the final scheduled
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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 post-default increase in interest rates), or reduce the principal amount
thereof; (ii) release all or substantially all of the Collateral (except as
expressly provided in the Pledge Agreements); (iii) amend, modify or waive any
provision of this Section 8.3; (iv) reduce the percentage specified in, or
otherwise modify, the definition of Required Lenders; (v) consent to the
assignment or transfer by any Co-Borrower of any of its rights and obligations
under this Agreement; or (vi) increase the Commitments of any Lender over the
amount thereof then in effect.
8.4. 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 whether or not any Borrowings shall occur). Co-Borrowers
shall reimburse Administrative Agent (and, with respect to clauses (b), (c) and
(d) below, each Lender) for all of its respective fees, costs and expenses,
including the reasonable fees, costs and expenses of counsel or other advisors
for advice, assistance, or other representation in connection with:
(a) 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;
(b) any litigation, contest, dispute, suit, proceeding or action in any
way relating to the Collateral, 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; 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;
(c) any attempt to enforce any remedies of Administrative Agent or any
Lender against any or all of the Co-Borrowers or any other Person that may be
obligated to Administrative Agent or any Lender by virtue of any of the Loan
Documents; 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 work-out or restructuring of the Loans during the pendency of one
or more Events of Default;
(e) efforts to (i) monitor the Loans or any of the other Obligations, (ii)
evaluate, observe or assess any of the Co-Borrowers or their respective affairs,
and (iii) verify, protect, evaluate, assess, appraise, collect, sell, liquidate
or otherwise dispose of any of the Collateral; including, as to each of clauses
(a) through (d) above, all reasonable attorneys' and other professional and
service providers' fees arising from such services; 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 8.4 shall be payable, on demand, by
Co-Borrowers to Administrative Agent.
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8.5. 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 and any of the other Loan Documents shall waive,
affect or diminish any right of such 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. 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 the 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 Administrative Agent and the
applicable Required Lenders and directed to Co-Borrower specifying such
suspension or waiver.
8.6. REMEDIES. The Administrative Agent's and each Lenders' rights and
remedies under this Agreement shall be cumulative and nonexclusive of any other
rights and remedies which either Administrative Agent or any Lender may have
under any other agreement, including the other Loan Documents, by operation of
law or otherwise. Recourse to the Collateral shall not be required.
8.7. RIGHT OF SETOFF. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of an Event of Default,
each Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Co-Borrower or
to any other Person, any such notice being hereby expressly waived, to set off
and to appropriate and apply any and all deposits (general or special) and any
other Indebtedness at any time held or owing by such Lender (including, without
limitation, by branches and agencies of such Lender wherever located) to or for
the credit or the account of the Co-Borrowers against and on account of the
Obligations and liabilities of the Co-Borrowers to such Lender under this
Agreement or under any of the other Loan Documents.
8.8. 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.
8.9. 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
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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 CREDIT PARTIES, 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 THAT 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 REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR
THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF
ADMINISTRATIVE AGENT. EACH CO-BORROWER EXPRESSLY SUBMITS AND CONSENTS IN 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 C 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.
8.10. 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
8.10), (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
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to the address or facsimile number indicated on Annex C or to such other address
(or facsimile number) as may be substituted by notice given as herein provided.
8.11. 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.
8.12. COUNTERPARTS. This Agreement may be executed in any number of
separate counterparts, each of which shall collectively and separately
constitute one agreement.
8.13. 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 (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 ADMINISTRATIVE AGENT, 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.
8.14. 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.
8.15. 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 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.
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the date
first written above.
JRC ACQUISITION CORP.
/s/ Xxxxx X. Xxxxxxx
--------------------------------------------------
By: Xxxxx X. Xxxxxxx
Title: President
L&LR, 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
EUROPEAN AMERICAN BANK
as Lender
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------------
By: Xxxxxx 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:
"Account Control Agreement" shall mean the Account Control Agreement,
dated the date hereof, by and among the Collateral Agent for the benefit of the
Lenders as creditors, the Co-Borrowers as debtors, and American Stock Transfer &
Trust Company as securities intermediary.
"Administrative Agent" shall mean Chase or its successor appointed
pursuant to Section 7.
"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 Person, (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 Agent and each Lender.
"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 Lender(s) signatory
from time to time to the Agreement.
"Appendices" shall have the meaning assigned to it in the recitals to
the Agreement.
"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
a 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 pursuant to the Agreement.
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"Borrowing Date" shall mean the Tender Offer Borrowing Date and the Merger
Borrowing Date, it being understood and agreed that the proceeds from any
Borrowing on any Borrowing Date shall be only for the purposes described in
Section 1.2.
"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. 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 and interest shall be payable at the then applicable rate during
such extension.
"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.
"Change of Control" shall mean (i) Xxxxx X. Xxxxxxx, XxXxxxx X. Xxxxxxx
and the 1998 Trust shall cease to own 100% of the outstanding equity interests
of L&LR or (ii) L&LR shall cease to own (other than as a result of the Merger)
100% of the outstanding equity interests of JRC or (iii) following the Merger, L
& LR shall cease to own all of the Stock 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 of the Co-Borrowers or, as applicable,
Cigar, (c) Cigar's or the Co-Borrower's ownership or use by Co-Borrowers or, as
applicable, Cigar of any properties or other assets, or (d) any other aspect of
the business of either Co-Borrower or, as applicable, Cigar.
"Chase" means The Chase Manhattan Bank.
"Cigar" means 800-JR CIGAR, Inc., a Delaware corporation.
"Co-Borrowers" shall have the meaning assigned thereto in the recitals
to 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
-28-
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 granted (or purported to be granted), pursuant to the Pledge
Agreements.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Lenders pursuant to the Pledge Agreement 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
and/or Lien on the Collateral, including, without limitation, the Pledge
Agreements and the Account Control Agreement.
"Commitments" shall mean (a) as to any Lender, the aggregate of such
Lender's Commitment as set forth on Annex B to the Agreement and (b) as to all
Lenders, the aggregate of all Lenders' Commitments, which aggregate commitments
shall not exceed the Maximum Amount, in each case as such Commitments may be
amortized from time to time in accordance with the Agreement.
"Commitment Fee" shall have the meaning assigned to it in Section 1.9
(b).
"Contributed Shares" shall have the meaning assigned to it in Section
3.11.
"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 1.8.
"Documentation Agent" shall mean Fleet Bank, N.A.
"Dollars" or "$" shall mean lawful currency of the United States of
America.
"Event of Default" shall have the meaning assigned to it in Section 6.1.
"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 the Administrative Agent or
Lenders pursuant to the Agreement, the Fee Letter or any of the other Loan
Documents.
-29-
"GAAP" shall mean generally accepted accounting principles in the United
States of America, consistently applied.
"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.
"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 Prime Rate as in effect on the Initial Borrowing 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 1.12.
"Initial Borrowing Date" shall mean the earlier of (i) the Tender Offer
Borrowing Date and (ii) the Merger Borrowing Date.
"Interest Payment Date" means as to any Loan, the first Business Day of
each month to occur while such Loan is outstanding, provided that, in addition
to the foregoing, the Maturity Date and the date of any prepayment of principal
of a Loan shall be deemed to be "Interest Payment Dates" with respect to any
interest which is then accrued under the Agreement.
"IRC" shall mean the Internal Revenue Code of 1986, as amended, and any
successor thereto.
"IRS" shall mean the Internal Revenue Service, or any successor thereto.
-30-
"Lending Affiliate" shall mean, with respect to any Person, any other
Person (i) directly or indirectly controlling (including, but not limited to,
all directors, officers and partners of such Person), controlled by, or under
direct or indirect common control with, such Person or (ii) that directly or
indirectly owns more than 50% of any class of the voting securities or capital
stock of or equity interests in such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of such other
Person, whether through the ownership of voting securities, by contract or
otherwise.
"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.
"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 3.7.
"Loan" shall have the meaning assigned to it in Section 1.1.
"Loan Documents" shall mean the Agreement, the Notes, the Collateral
Documents and all other agreements, instruments, documents and certificates
executed and delivered to, or in favor of, Administrative Agent, Documentation
Agent and/or Lenders in connection therewith. 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.
"Loans" shall have the meaning assigned to it in Section 1.1.
"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, either individually or taken as a whole, or of Cigar as the
context shall require, (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 Related Transactions; or (d) either the
Administrative Agent's or any Lender's rights and remedies under the Agreement
and the other Loan Documents.
"Maturity Date" shall mean the earlier of (i) sixty (60) days following
the Tender Offer Borrowing Date and (ii) the next Business Day immediately
following the date on which the Merger is consummated.
-31-
"Maximum Amount" shall mean the aggregate of, but no more than, the amount
of (i) the Tender Offer Consideration and the transaction fees and expenses
related to the Tender Offer Acquisition, PLUS (ii) the Merger Consideration and
the transaction fees and expenses related to the Merger, and in any event the
Maximum Amount shall not exceed $55,000,000.
"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.
"Merger Borrowing Date" shall mean the date on which (i) the Merger is
effective pursuant to the terms of the Merger Agreement, and (ii) each
applicable condition precedent set forth in Section 2 is satisfied or waived by
Administrative Agent.
"Merger Consideration" shall have the meaning assigned to it in the
Merger Agreement.
"Merger Documents" shall mean the Merger Agreement and all documents
related to the Merger.
"1998 Trust" shall mean the Xxxxx Xxxxxx Xxxxxxx 1998 Trust #1 u/a/d
November 10, 1998.
"Note" shall have the meaning assigned to it in Section 1.3.
"Notice Office" shall mean the office of The Chase Manhattan Bank located
at 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
"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 the
Co-Borrowers to the Administrative 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.
"Payment Office" shall mean the office of The Chase Manhattan Bank located
at 000 Xxxxx 00 Xxxx, Xxxxxxxxx, Xxx Xxxxxx 00000.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
-32-
"Permanent Credit Agreement" shall mean that certain Credit Agreement
dated the date hereof among Cigar and the other Co-Borrowers thereunder, the
Lenders signatory thereto, Chase, as Administrative Agent and Lender and Fleet
Bank, N.A., as Documentation Agent and Lender.
"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).
"Pledge Agreement" shall mean each of the Pledge Agreements.
"Pledge Agreements" shall mean the pledge agreements in the forms of
Exhibit C-1, C-2 and C-3, as modified, supplemented or amended from time to
time.
"Pledged Stock" shall have the meaning assigned to it in each of the
Pledge Agreements.
"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.
"Pro Rata Share" shall mean with respect to all matters relating to any
Lender, the percentage obtained by dividing (i) the aggregate Commitments of
that Lender by (ii) the aggregate Commitments of 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.
"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.
"Required Lenders" shall mean, Lenders having (a) prior to the Initial
Borrowing Date sixty-six and two-thirds percent (66 2/3%) or more of the
Commitments of all Lenders or (b) after the Initial Borrowing Date, sixty-six
and two-thirds percent (66 2/3%) or more of the outstanding 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,
-33-
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, loan, contribution, or other transfer of funds or other
property to any holder of Stock of such Person other than payment of
compensation in the ordinary course to stockholders who are employees of such
Person; and (d) any payment of management fees (or other fees of a similar
nature) by such Person to any Stockholder of such Person or their Affiliates.
"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 probable 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 debt 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 actual or matured liabilities.
"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,
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.
"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
-34-
profits of a Lender or Administrative Agent by the jurisdictions under the laws
of which Administrative Agent 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 for the Tender Offer Price, made pursuant to the
Offer to Purchase dated August 29, 2000.
"Tender Offer Acquisition" means the acquisition by JRC of shares of
Public Stock pursuant to and in accordance with the terms and conditions of the
Tender Offer.
"Tender Offer Borrowing Date" shall mean the date on which (i) JRC tenders
payment for the Public Stock of Cigar being acquired by JRC pursuant to the
Tender Offer Acquisition and (ii) each applicable condition precedent set forth
in Section 2 is satisfied or waived by Administrative Agent.
"Tender Offer Consideration" shall mean the aggregate price to be paid by
JRC for all shares of Public Stock actually being purchased by JRC pursuant to
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.
"Tender Offer Price" shall mean the price of $13 per share of common stock
of Cigar offered pursuant to the Tender Offer.
"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.
"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.
"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.
"Trust Shares" shall have the meaning assigned to it in Section 3.11.
-35-
"Year 2000 Date-Sensitive System/Component" shall mean, as to any Person,
any 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 Cigar and each
Co-Borrower, limitations on the capacity or readiness of any such Person'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 Cigar or any Co-Borrower and exchanges of information
among Cigar or any Co-Borrower 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 and Exhibits, 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 or Exhibit.
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 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.
-36-
ANNEX B (FROM ANNEX A - COMMITMENTS DEFINITION)
LENDERS: COMMITMENT:
-------- -----------
The Chase Manhattan Bank .0000000 of the Maximum Amount
Fleet Bank, N.A. .3636364 of the Maximum Amount
European American Bank .1818182 of the Maximum Amount
-37-
ANNEX C (SECTION 8.10)
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, XX 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
-38-
(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
and
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, XX 00000
Attention: Xxxxx X. Xxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-39-
(d) If to Co-Borrowers, at
JRC Acquisition Corp.
000 Xxxxx 00 Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
with copies to:
Xxxxxx, Xxxxx & Xxxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attention: Xxxxxx X. Xxxxxxxxxxx III, Esq.
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
-40-
EXHIBIT A
PROMISSORY NOTE
$___________ , New Jersey
August __, 2000
JRC ACQUISITION CORP., a Delaware corporation ("JRC"), and L&LR,
INC., a Delaware corporation ("L&LR") (JRC and L&LR, collectively, the
"Co-Borrowers"), for value received, hereby promise, jointly and severally, to
pay to the order of [NAME OF LENDER], a national banking association (the
"Lender") at the office of The Chase Manhattan Bank, 000 Xxxxx 00 Xxxx,
Xxxxxxxxx, Xxx Xxxxxx 00000, on the Maturity Date (as defined in the Credit
Agreement defined below), in lawful money of the United States of America and in
immediately available funds, the principal sum of ________________
($__________), 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 Promissory Note (the "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, _____ and ______, as the same may be
amended from time to time (the "Credit 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 Credit Agreement
shall have the meanings therein defined.
This Note is one of the Notes referred to in the Credit Agreement,
and is entitled to the benefits and is subject to the terms of the Credit
Agreement. The principal of this 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 Credit Agreement, if
any payment on this 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 Note are hereby waived.
Upon the occurrence of any Event of Default specified in the Credit
Agreement, all amounts then remaining unpaid on
this Note shall become immediately due and payable, all as and to the extent
provided in the Credit Agreement. This Note is entitled to the benefits of the
Collateral Documents which are referred to in the Credit 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 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 Note may not be changed orally, but only by an instrument in
writing executed pursuant to the provisions of Section 8.3 of the Credit
Agreement.
JRC ACQUISITION CORP.
By:
-----------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
L&LR, INC.
By:
-----------------------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
EXHIBIT B
NOTICE OF BORROWING
Pursuant to Section 1.4 of the Credit Agreement dated as of August
__, 2000 by and among JRC Acquisition Corp. ("JRC"), L&LR, Inc. ("L&LR") (JRC
and L&LR, collectively, the "Co-Borrowers"), The Chase Manhattan Bank ("Chase")
and certain Lenders party thereto as the same may be amended, supplemented,
modified or restated from time to time (the "Agreement"; terms defined therein
being used herein as therein defined), each of the undersigned, the President of
each Co-Borrower, hereby requests on behalf of the Co-Borrowers, jointly and
severally, a Loan in the amount of $__________ to be made available to the
Co-Borrowers on ___________.
The undersigned hereby certify, jointly and severally, 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 properties of the Co-Borrowers
since the execution of the Agreement; and
(v) the proceeds of the Loan will be used in the manner
required by the Agreement.
JRC ACQUISITION CORP.
By:
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
L&LR, INC.
By:
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
DATE:
Exhibit C-1
PLEDGE AGREEMENT
(by JRC Acquisition Corp. of certain shares of 800-JR CIGAR, Inc.
in connection with the Tender Offer Loan)
THIS PLEDGE AGREEMENT dated August __, 2000 by JRC Acquisition Corp. (the
"Pledgor"), in favor of The Chase Manhattan Bank as collateral 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 Agent and such lenders.
RECITALS
A. The Pledgor is the owner of certain shares of 800-JR CIGAR, Inc., a
Delaware corporation (the "Issuer") consisting of the Contributed Shares and
shares acquired by Pledgor pursuant to the Tender Offer; 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 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:
"ACCOUNT CONTROL AGREEMENT" means that certain account control agreement
among the Agent, the Pledgor and the Depositary.
"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.
"DEPOSITARY" means American Stock and Transfer Company in its capacity as
Depositary in connection with the Tender Offer.
"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 ACCOUNT" means account #___________ maintained by the Pledgor
with the Depositary, as securities intermediary, in connection with the Tender
Offer.
"PLEDGED STOCK" means the shares of the capital stock of the Issuer, or
any securities entitlements related thereto, which are now or hereafter (i)
delivered in certificated form to the Agent, or (ii) held by the Depositary in
connection with the Tender Offer in the Pledged Account, which Pledged Stock and
the Pledged Account are subject to the Account Control Agreement.
"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
-2-
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 representing 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 to the Pledgor any additional or substitute shares in certificated form
of capital stock of any class with respect to any Pledged Stock which is held by
the Agent or by the Depositary in the Pledged Account, the Pledgor will
immediately deliver, or cause to be immediately delivered, to the Agent or
Depositary, as the case may be, certificates representing all such shares as
additional security for the Secured Obligations. In the event that the Issuer at
any time issues to the Pledgor, with respect to any Pledged Stock which is in
the form of a securities entitlement held in the Pledged Account, any additional
or substitute shares of capital stock of any class, the Pledgor will immediately
deliver, or cause to be immediately delivered, to the Pledged Account securities
entitlements 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.
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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 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.
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 or credited to the Pledged Account, as the case may be,
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
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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 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
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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 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
-6-
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 of the Pledgor 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 reimbursed 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.
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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.
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 YORK AND NEW JERSEY, 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
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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.
JRC Acquisition Corp.
By:
-----------------------------------
Name: Xxxxx X. Xxxxxxx
Title: President
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Exhibit C-2
PLEDGE AGREEMENT
(by L&LR, Inc. of Capital Stock of JRC Acquisition.
in connection with Tender Offer Loan)
THIS PLEDGE AGREEMENT (the "Agreement") dated August __, 2000 by L&LR,
Inc. (the "Pledgor"), in favor of The Chase Manhattan Bank as collateral 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, JRC Acquisition Corp., the Agent and such lenders.
RECITALS
A. The Pledgor is the owner of all the capital shares of JRC
Acquisition Corp., a Delaware corporation (the "Issuer"); 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 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
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
-2-
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 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.
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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.
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
-4-
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
-5-
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 of the Pledgor 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
-6-
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.
SECTION 14. AGENT.
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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 YORK AND NEW JERSEY, 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.
L&LR, Inc.
By:
------------------------------------------
Xxxxx X. Xxxxxxx
President
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Exhibit C-3
AMENDED AND RESTATED PLEDGE AGREEMENT
(by L&LR, Inc. of Capital Stock of 800-JR CIGAR, Inc.
after the effective date of the merger
in connection with the Tender Offer Loan)
THIS AMENDED AND RESTATED PLEDGE AGREEMENT (the "Agreement") dated August
__, 2000 by L&LR, Inc. (the "Pledgor"), in favor of The Chase Manhattan Bank as
collateral 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, JRC Acquisition Corp., the Agent and such
lenders.
RECITALS
A. Under the terms of Pledge Agreement dated August __, 2000 (the
"Existing Pledge Agreement"), the Pledgor has previously pledged to the Agent
all of the capital stock of JRC Acquisition Corp. to secure its obligations
under the Credit Agreement.
B. Under the terms of Pledge Agreement dated August __, 2000, JRC
Acquisition Corp. has pledged to the Agent certain shares of 800-JR CIGAR, Inc.
to secure its obligations under the Credit Agreement.
C. As a result of a merger (the "Merger") of JRC Acquisition Corp. with
and into 000-XX XXXXX, Xxx., Xxxxxxx is now the owner of all the capital stock
of the surviving corporation which is known as 800-JR CIGAR, Inc. (such
surviving corporation as successor to JRC Acquisition Corp. and 800-JR CIGAR,
Inc. is hereafter referred to as the "Issuer"); and
D. Under the terms of the Credit Agreement, the Pledgor is required to
amend and restate the Existing Pledge Agreement to reflect the Merger and
Agent's perfected security interest in all of the shares of the Issuer as
surviving corporation in the Merger 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.
-2-
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 representing 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.
-3-
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 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.
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
-4-
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 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
-5-
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 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.
-6-
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 of the Pledgor 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 reimbursed 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
-7-
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.
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 YORK AND NEW JERSEY, 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.
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of the day and year first above written.
L&LR, Inc.
By:
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Xxxxx X. Xxxxxxx
President
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