EXHIBIT 10.1
SECOND AMENDMENT TO CREDIT AGREEMENT
SECOND AMENDMENT TO CREDIT AGREEMENT (this "Amendment"), dated as of
September 25, 2003, among X.X. XXXXXXXX TOBACCO HOLDINGS, INC. (f/k/a/ RJR
NABISCO, INC.), a Delaware corporation (the "Borrower") and various lending
institutions party to the Credit Agreement referred to below. All capitalized
terms used herein and not otherwise defined herein shall have the respective
meanings provided such terms in the Credit Agreement.
W I T N E S S E T H :
- - - - - - - - - -
WHEREAS, the Borrower, various lending institutions (the "Lenders")
and JPMorgan Chase Bank, as Administrative Agent (in such capacity, the
"Administrative Agent"), are parties to a Second Amended and Restated Credit
Agreement, dated as of May 10, 2002 (as so amended and restated and as the same
has been further amended, modified and/or supplemented through, but not
including, the date hereof, the "Credit Agreement"); and
WHEREAS, the Borrower and the Lenders wish to amend the Credit
Agreement as provided herein;
NOW, THEREFORE, it is agreed:
I. Amendments to the Credit Agreement.
----------------------------------
1. The definition of "Adjusted Operating Income" appearing in
Section 10 of the Credit Agreement is hereby amended by inserting the following
text immediately preceding the period at the end of said definition:
"provided further that (x) notwithstanding any differing treatment by
GAAP, for purposes of (and only for purposes of) determining the timing of
the recording or accrual (but not the amount) of any New Restructuring
Charge and its impact on Adjusted Operating Income, such determination
shall be made in accordance with Modified GAAP and (y) (i) for any Test
Period which includes any portion of the period from April 1, 2003 to and
including June 30, 2003, Adjusted Operating Income shall be adjusted by
adding thereto the pre-tax 2nd Quarter 2003 Restructuring Charges recorded
or accrued during such period in accordance with preceding clause (x), in
each case to the extent deducted in any determination of Adjusted
Operating Income, (ii) for any Test Period which includes any portion of
the period from July 1, 2003 to and including September 30, 2003, Adjusted
Operating Income shall be adjusted by adding thereto the pre-tax 3rd
Quarter 2003 Restructuring Charges recorded or accrued during such period
in accordance with preceding clause (x), in each case to the extent
deducted in any determination of Adjusted Operating Income, (iii) for any
Test Period which includes any portion
of the period from October 1, 2003 to and including December 31, 2003,
Adjusted Operating Income shall be adjusted by adding thereto the pre-tax
4th Quarter 2003 Restructuring Charges recorded or accrued during such
period in accordance with preceding clause (x), in each case to the extent
deducted in any determination of Adjusted Operating Income and (iv) for
any Test Period which includes any portion of the period from January 1,
2004 to and including December 31, 2004, Adjusted Operating Income shall
be adjusted by adding thereto the pre-tax Fiscal Year 2004 Restructuring
Charges recorded or accrued during such period in accordance with
preceding clause (x), in each case to the extent deducted in any
determination of Adjusted Operating Income".
2. The definition of "Consolidated Net Worth" appearing in
Section 10 of the Credit Agreement is hereby amended by inserting the following
text immediately prior to the period at the end of said definition:
"provided further that (x) notwithstanding any differing treatment by
GAAP, for purposes of (and only for purposes of) determining the timing of
the recording or accrual (but not the amount) of any New Restructuring
Charge and its impact on Consolidated Net Worth, such determination shall
be made in accordance with Modified GAAP and (y) Consolidated Net Worth as
otherwise determined above shall be adjusted by adding thereto (i) an
amount equal to the aggregate post-tax 2nd Quarter 2003 Restructuring
Charges recorded or accrued as of such date of determination in accordance
with preceding clause (x), (ii) an amount equal to the aggregate post-tax
3rd Quarter 2003 Restructuring Charges recorded or accrued as of such date
of determination in accordance with preceding clause (x), (iii) an amount
equal to the aggregate post-tax 4th Quarter 2003 Restructuring Charges
recorded or accrued as of such date of determination in accordance with
preceding clause (x) and (iv) an amount equal to the aggregate post-tax
Fiscal Year 2004 Restructuring Charges recorded or accrued as of such date
of determination in accordance with preceding clause (x), in the case of
each of clauses (i) through (iv) above, to the extent the respective New
Restructuring Charge is deducted in any determination of Consolidated Net
Worth".
3. Section 10 of the Credit Agreement is hereby further amended by
inserting the following defined terms in the appropriate alphabetical order:
"Fiscal Year 2004 Restructuring Charges" shall mean restructuring charges
actually accrued or recorded by the Borrower and its Subsidiaries during
the fiscal year of the Borrower ending December 31, 2004 in connection
with lease terminations, the relocation of equipment and employees and the
payment of professional fees (including other associated costs disclosed
in the SEC Form-10K or XXX Xxxx-00X, as the case may be, filed by the
Borrower with the SEC for the fiscal quarter in which such restructuring
charges are accrued or recorded); provided that (x) notwithstanding any
differing treatment by GAAP, for purposes of (and only for purposes of)
determining the timing of the actual recording or accrual (but not the
amount) of such restructuring charges during such fiscal year, such
determination shall be made in accordance with Modified GAAP and (y) the
aggregate amount of such restructuring charges (to the extent provided for
as an add-back pursuant to the definitions of "Adjusted Operating Income"
or "Consolidated Net Worth") shall not exceed $20,000,000 during such
fiscal year
-2-
(determined on a pre-tax basis), of which no more than approximately
$16,000,000 (determined on a pre-tax basis) shall be characterized as
cash restructuring charges.
"4th Quarter 2003 Restructuring Charges" shall mean restructuring
charges actually accrued or recorded by the Borrower and its Subsidiaries
during the fiscal quarter of the Borrower ended December 31, 2003 in
connection with lease terminations, the relocation of equipment and
employees and the payment of professional fees (including other associated
costs disclosed in the SEC Form-10K filed by the Borrower with the SEC for
the fiscal year ended of the Borrower December 31, 2003); provided that
(x) notwithstanding any differing treatment by GAAP, for purposes of (and
only for purposes of) determining the timing of the actual recording or
accrual (but not the amount) of such restructuring charges during such
fiscal quarter, such determination shall be made in accordance with
Modified GAAP and (y) the aggregate amount of such restructuring charges
(to the extent provided for as an add-back pursuant to the definitions of
"Adjusted Operating Income" or "Consolidated Net Worth") shall not exceed
$10,000,000 (determined on a pre-tax basis), of which no more than
approximately $10,000,000 (determined on a pre-tax basis) shall be
characterized as cash restructuring charges.
"Modified GAAP" shall mean generally accepted accounting principles
of the United States of America as in effect on March 31, 2003.
"New Restructuring Charges" shall mean and include 2nd Quarter 2003
Restructuring Charges, 3rd Quarter 2003 Restructuring Charges, 4th Quarter
2003 Restructuring Charges and Fiscal Year 2004 Restructuring Charges.
"2nd Quarter 2003 Restructuring Charges" shall mean restructuring
charges actually accrued or recorded by the Borrower and its Subsidiaries
during the fiscal quarter of the Borrower ended June 30, 2003 in
connection with the write-off of certain equipment of the Borrower and its
Subsidiaries and the discontinuation of certain event marketing programs
of the Borrower and its Subsidiaries (including other associated costs
disclosed in the SEC Form-10Q filed by the Borrower with the SEC for such
fiscal quarter); provided that (x) notwithstanding any differing treatment
by GAAP, for purposes of (and only for purposes of) determining the timing
of the actual recording or accrual (but not the amount) of such
restructuring charges during such fiscal quarter, such determination shall
be made in accordance with Modified GAAP and (y) the aggregate amount of
such restructuring charges (to the extent provided for as an add-back
pursuant to the definitions of "Adjusted Operating Income" or
"Consolidated Net Worth") shall not exceed $55,000,000 (determined on a
pre-tax basis), of which no more than approximately $35,000,000
(determined on a pre-tax basis) shall be characterized as cash
restructuring charges.
"3rd Quarter 2003 Restructuring Charges" shall mean restructuring
charges actually accrued or recorded by the Borrower and its Subsidiaries
during the fiscal quarter of the Borrower ended September 30, 2003 in
connection with the accrual of certain pension liabilities by the Borrower
and its Subsidiaries and a reduction in the workforce of the Borrower and
its Subsidiaries (including other associated
-3-
costs disclosed in the SEC Form-10Q filed by the Borrower with the SEC for
such fiscal quarter); provided that (x) notwithstanding any differing
treatment by GAAP, for purposes of (and only for purposes of) determining
the timing of the actual recording or accrual (but not the amount) of such
restructuring charges during such fiscal quarter, such determination shall
be made in accordance with Modified GAAP and (y) the aggregate amount of
such restructuring charges (to the extent provided for as an add-back
pursuant to the definitions of "Adjusted Operating Income" or
"Consolidated Net Worth") shall not exceed $340,000,000 (determined on a
pre-tax basis), of which no more than approximately $225,000,000
(determined on a pre-tax basis) shall be characterized as cash
restructuring charges.
II. Miscellaneous Provisions.
------------------------
1. In order to induce the Lenders to enter into this Amendment, the
Borrower hereby (i) makes each of the representations, warranties and agreements
contained in Section 6 of the Credit Agreement, and (ii) represents and warrants
that there exists no Default or Event of Default, in each case on the date
hereof and on the Second Amendment Effective Date (as defined below), both
before and after giving effect to this Amendment.
2. This Amendment is limited as specified and shall not constitute a
modification, acceptance or waiver of any other provision of the Credit
Agreement or any other Credit Document.
3. This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which
counterparts when executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A complete set of
counterparts shall be lodged with the Borrower and the Administrative Agent.
4. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE
STATE OF NEW YORK.
5. From and after the Second Amendment Effective Date, all
references in the Credit Agreement and each of the other Credit Documents shall
be deemed to be references to the Credit Agreement as amended hereby.
6. This Amendment shall become effective on the date (the "Second
Amendment Effective Date") when the Borrower and the Lenders constituting
Required Lenders under the Credit Agreement shall have signed a copy hereof
(whether the same or different copies) and shall have delivered (including by
way of facsimile transmission) the same to White & Case LLP, 0000 Xxxxxx xx xxx
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: May Xxx-Xxxxxxx (Facsimile No.:
(000) 000-0000).
7. The Borrower hereby covenants and agrees that, so long as the
Second Amendment Effective Date occurs, it shall pay to each Lender which
executes and delivers to the Administrative Agent (or its designee) a
counterpart hereof by the later to occur of (x) 5:00 P.M. (New York time) on
September 25, 2003 or (y) the close of business on the Second Amendment
Effective Date (such later date, the "Outside Date"), a non-refundable cash fee
in an amount
-4-
equal to 0.25% of the Commitment of such Lender as same is in effect on the
Second Amendment Effective Date immediately prior to giving effect hereto, which
fees shall be paid by the Borrower to the Administrative Agent for distribution
to the Lenders not later than the second Business Day following the Outside
Date.
* * *
-5-
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Amendment to be duly executed and delivered as of the date
first above written.
X.X. XXXXXXXX TOBACCO HOLDINGS, INC.,
as the Borrower
By: /s/ Xxxx X. Xxxx
----------------------------------------
Name: Xxxx X. Xxxx
Title: Senior Vice President & Treasurer
LEAD AGENTS
-----------
JPMORGAN CHASE BANK, Individually, as
Administrative Agent and as Senior
Managing Agent
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Managing Director
CITIBANK, N.A., Individually, as Syndication
Agent and Senior Managing Agent
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
THE BANK OF NEW YORK
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
THE BANK OF NOVA SCOTIA
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: Managing Director & Office Head
XXXXXX COMMERCIAL PAPER INC.
By: /s/ Xxxx X. Xxxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Authorized Signatory
MIZUHO CORPORATE BANK, LTD.
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Deputy General Manager
CREDIT LYONNAIS, NEW YORK BRANCH
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Vice President
PARTICIPANTS
------------
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Xxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Associate
ERSTE BANK
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
By: /s/ Xxxxx X. Xxxxx
----------------------------------------
Name: Xxxxx X. Xxxxx
Title: First Vice President
CITY NATIONAL BANK OF NEW JERSEY
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Senior Vice President
CHOHUNG BANK, NEW YORK BRANCH
By: /s/ Nam Xxx Xxx
----------------------------------------
Name: Nam Xxx Xxx
Title: General Manager
BANCO BILBAO VIZCAYA ARGENTARIA
PUERTO RICO OVERSEAS, A UNIT OF
BANCO BILBAO VIZCAYA ARGENTARIA
PUERTO RICO
By: /s/ Xxxxxxx Xxxx
----------------------------------------
Name: Xxxxxxx Xxxx
Title: Senior Executive Vice President
By: /s/ Xxxxx Xxxxx
----------------------------------------
Name: Xxxxx Xxxxx
Title: Senior Vice President
