CONFORMED COPY
CONSOLIDATED CIGAR CORPORATION
CREDIT AGREEMENT
dated as of March 2, 1998
CHASE SECURITIES INC.,
AS ARRANGER
THE CHASE MANHATTAN BANK,
AS ADMINISTRATIVE AGENT
NATIONSBANK, N.A.,
AS DOCUMENTATION AGENT
CREDIT SUISSE FIRST BOSTON,
AS SYNDICATION AGENT
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS............................................................................ 1
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1.1 Defined Terms.......................................................................... 1
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1.2 Other Definitional Provisions.......................................................... 19
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SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS....................................................... 20
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2.1 Commitments............................................................................ 20
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2.2 Obligations of the Company............................................................. 20
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2.3 Procedure for Borrowing Loans.......................................................... 20
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2.4 Use of Proceeds of Loans............................................................... 21
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SECTION 3. AMOUNT AND TERMS OF LETTERS OF CREDIT.................................................. 21
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3.1 L/C Facility........................................................................... 21
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3.2 Procedure for Issuance of Letters of Credit............................................ 22
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3.3 Fees, Commissions and Other Charges.................................................... 22
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3.4 L/C Participations..................................................................... 23
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3.5 Reimbursement Obligation of the Company................................................ 24
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3.6 Obligations Absolute................................................................... 24
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3.7 Letter of Credit Payments.............................................................. 25
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3.8 Application............................................................................ 25
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3.9 Existing Letters of Credit............................................................. 25
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SECTION 4. PROVISIONS RELATING TO THE LOANS; FEES AND PAYMENTS.................................... 26
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4.1 Voluntary Termination or Reduction of Commitments...................................... 26
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4.2 Optional Prepayments................................................................... 26
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4.3 Mandatory Prepayments.................................................................. 27
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4.4 Interest Rate and Payment Dates........................................................ 27
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4.5 Conversion Options, Minimum Tranches and Maximum Interest Periods...................... 27
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4.6 Inability to Determine Interest Rate................................................... 28
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4.7 Illegality............................................................................. 29
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4.8 Requirements of Law; Changes of Law.................................................... 29
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4.9 Indemnity.............................................................................. 31
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4.10 Taxes.................................................................................. 31
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4.11 Commitment Fees; Other Fees............................................................ 33
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4.12 Computation of Interest and Fees....................................................... 34
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4.13 Pro Rata Treatment and Payments........................................................ 34
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4.14 Payments on Account of Loans and Fees.................................................. 36
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SECTION 5. REPRESENTATIONS AND WARRANTIES......................................................... 36
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5.1 Corporate Existence.................................................................... 36
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5.2 Corporate Power........................................................................ 37
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5.3 No Legal Bar to Loans.................................................................. 37
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5.4 No Material Litigation................................................................. 37
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5.5 No Default............................................................................. 38
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5.6 Ownership of Properties; Liens......................................................... 38
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5.7 Taxes.................................................................................. 38
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5.8 ERISA.................................................................................. 38
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5.9 Financial Condition.................................................................... 39
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5.10 No Change.............................................................................. 39
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5.11 Federal Regulations.................................................................... 39
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5.12 Not an "Investment Company"............................................................ 40
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5.13 Intellectual Property.................................................................. 40
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5.14 Environmental Matters.................................................................. 40
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5.15 Models and Pro Forma Balance Sheet..................................................... 41
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5.16 Disclosure............................................................................. 41
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5.17 Solvency............................................................................... 41
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5.18 Guarantees............................................................................. 42
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5.19 Matters Relating to Subsidiaries....................................................... 42
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5.20 Labor Matters.......................................................................... 42
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5.21 Tax Allocation Agreement............................................................... 42
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SECTION 6. CONDITIONS PRECEDENT................................................................... 42
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6.1 Conditions to Initial Extensions of Credit............................................. 42
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6.2 Conditions to Each Extension of Credit................................................. 46
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SECTION 7. AFFIRMATIVE COVENANTS.................................................................. 46
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7.1 Financial Statements................................................................... 46
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7.2 Certificates; Other Information........................................................ 47
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7.3 Payment of Obligations................................................................. 48
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7.4 Conduct of Business and Maintenance of Existence....................................... 48
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7.5 Maintenance of Property; Insurance..................................................... 49
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7.6 Inspection of Property; Books and Records; Discussions................................. 49
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7.7 Notices................................................................................ 49
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7.8 Maintenance of Corporate Identity...................................................... 50
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7.9 Environmental Laws..................................................................... 50
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7.10 Intellectual Property.................................................................. 51
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SECTION 8. NEGATIVE COVENANTS..................................................................... 52
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8.1 Financial Covenants.................................................................... 52
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8.2 Limitation on Liens.................................................................... 52
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8.3 Limitation on Contingent Obligations................................................... 54
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8.4 Limitation on Fundamental Changes...................................................... 55
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8.5 Limitation on Sale of Assets........................................................... 56
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8.6 Limitation on Restricted Payments...................................................... 56
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8.7 Limitation on Investments, Loans and Advances.......................................... 57
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8.8 Sale and Leaseback..................................................................... 58
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8.9 Limitation on Transactions with Affiliates............................................. 58
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8.10 Accounting Changes..................................................................... 58
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8.11 Indebtedness........................................................................... 59
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8.12 Limitation on Modifications of Tax Allocation Agreement................................ 59
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8.13 Limitation on Negative Pledge Clauses.................................................. 60
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8.14 Limitation on Lines of Business........................................................ 60
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8.15 Limitation on Restrictions on Subsidiary Distributions................................. 60
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8.16 Limitation on Subsidiaries............................................................. 60
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SECTION 9. EVENTS OF DEFAULT...................................................................... 61
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SECTION 10. THE ADMINISTRATIVE AGENT............................................................... 64
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10.1 Appointment............................................................................ 64
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10.2 Delegation of Duties................................................................... 64
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10.3 Exculpatory Provisions................................................................. 64
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10.4 Reliance by the Administrative Agent................................................... 65
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10.5 Notice of Default...................................................................... 65
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10.6 Non-Reliance on the Administrative Agent and the Other Lenders......................... 65
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10.7 Indemnification........................................................................ 66
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10.8 The Administrative Agent in Its Individual Capacity.................................... 67
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10.9 Successor Administrative Agent......................................................... 67
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10.10 Issuing Lender as Issuer of Letters of Credit.......................................... 67
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10.11 Documentation Agent.................................................................... 67
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10.12 Syndication Agent...................................................................... 67
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SECTION 11. MISCELLANEOUS.......................................................................... 68
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11.1 Amendments and Waivers................................................................. 68
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11.2 Notices................................................................................ 69
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11.3 No Waiver; Cumulative Remedies......................................................... 70
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11.4 Survival of Representations and Warranties............................................. 70
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11.5 Payment of Expenses and Taxes.......................................................... 70
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11.6 Successors and Assigns; Loan Participations............................................ 71
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11.7 Adjustments; Set-off................................................................... 74
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11.8 Severability........................................................................... 75
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11.9 Releases of Guarantee Obligations...................................................... 75
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11.10 Effectiveness; Counterparts............................................................ 75
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11.11 SUBMISSION TO JURISDICTION; WAIVERS.................................................... 75
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11.12 GOVERNING LAW.......................................................................... 76
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SCHEDULES
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Schedule 1.1(A) Lenders; Addresses for Notices
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Schedule 1.1(B) Commitments
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Schedule 3.9 Existing Letters of Credit
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Schedule 5.19 Subsidiaries
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Schedule 8.2(j) Existing Liens
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Schedule 8.11(b) Existing Indebtedness
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EXHIBITS
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Exhibit A Form of Note
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Exhibit B-1 Form of Opinion of ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
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Exhibit B-2 Form of Opinion of General Counsel
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Exhibit C Form of Assignment and Acceptance
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Exhibit D-1 Form of Holdings Guarantee
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Exhibit D-2 Form of Subsidiaries Guarantee
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CREDIT AGREEMENT, dated as of March 2, 1998, among:
(a) CONSOLIDATED CIGAR CORPORATION, a Delaware corporation (the
"Company");
(b) the financial institutions from time to time parties hereto
(the "Lenders");
(c) THE CHASE MANHATTAN BANK, a New York banking corporation, as
administrative agent (in such capacity, the "Administrative
Agent") for the Lenders;
(d) CHASE SECURITIES INC., as arranger;
(e) NATIONSBANK, N.A., a national banking association, as
documentation agent (in such capacity, the "Documentation
Agent") for the Lenders; and
(f) CREDIT SUISSE FIRST BOSTON, as syndication agent (in such
capacity, the "Syndication Agent") for the Lenders.
W I T N E S S E T H :
WHEREAS, the Company has requested the Lenders to make
revolving extensions of credit to it on the terms and conditions set forth
herein in an aggregate principal amount outstanding at any time not to exceed
$140,000,000 to finance the redemption (the "Note Redemption") of all of the
Company's outstanding 10-1/2% Senior Subordinated Notes due 2003 (the "Senior
Subordinated Notes"), and to finance the working capital needs of the Company
and its Subsidiaries and for other general corporate purposes; and
WHEREAS, the Lenders are willing to make revolving credit
extensions to the Company, but only on and subject to the terms and conditions
hereof;
NOW, THEREFORE in consideration of the premises and for
other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the Company, the Lenders and the Administrative Agent
hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following respective meanings (such definitions to be
equally applicable to the singular and plural forms thereof):
"Adjustment Date" shall have the meaning assigned to such
term in the definition of Pricing Grid;
"Administrative Agent" shall have the meaning assigned to
such term in the preamble hereto;
"Affected Loan" shall have the meaning assigned to such term
in subsection 4.6(a);
"Affiliate" of any Person shall mean any other Person (other
than a Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, the first Person. For purposes
of this definition, a Person shall be deemed to be "controlled by" another
Person if such other Person possesses, directly or indirectly, power either to
(a) vote 10% or more of the securities having ordinary voting power for the
election of directors of such first Person or (b) direct or cause the
direction of the management and policies of such first Person whether by
contract or otherwise;
"Aggregate Commitment" shall mean the aggregate Commitments
of the Lenders, the original amount of which totals $140,000,000, as such
amount may be reduced from time to time pursuant to the terms of this
Agreement;
"Aggregate Outstanding Extensions of Credit" shall mean, at
any time, the amount equal to the sum of (a) the aggregate principal amount of
all Loans then outstanding and (b) the aggregate amount of all L/C Obligations
then outstanding;
"Agreement" shall mean this Credit Agreement, as the same
may be amended, supplemented or otherwise modified from time to time;
"Alternate Base Rate" for any day, shall mean a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect
on such day plus 1/2 of 1%. If for any reason the Administrative Agent shall
have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Base CD Rate or the Federal Funds
Effective Rate, or both, for any reason, including the inability or failure of
the Administrative Agent to obtain sufficient quotations in accordance with
the terms thereof, the Alternate Base Rate shall be determined without regard
to clause (b) or (c), or both, of the first sentence of this definition, as
appropriate, until the circumstances giving rise to such inability no longer
exist;
"Alternate Base Rate Loans" shall mean Loans hereunder at
such
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time as such Loans are made and/or being maintained at a rate of interest
based upon the Alternate Base Rate;
"Applicable Margin" shall mean 0.750% per annum; provided,
that on and after the first Adjustment Date, occurring upon the delivery of
the consolidated financial statements of the Company and the Subsidiaries for
the fiscal quarter ended June 30, 1998, the Applicable Margin with respect to
Loans, will be determined pursuant to the definition of Pricing Grid;
"Application" shall mean an application, in such form as the
Issuing Lender may specify from time to time, requesting the Issuing Lender to
open a Letter of Credit;
"Assignment and Acceptance" shall have the meaning assigned
to such term in subsection 11.6(c);
"Available Commitment" at any date, shall mean the amount
equal to the difference between (a) the Aggregate Commitment at such date and
(b) the Aggregate Outstanding Extensions of Credit at such date;
"Bankruptcy Code" shall mean ▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ Code,
as amended from time to time;
"Base CD Rate" shall mean the sum of (a) the product of (i)
the Three-Month Secondary CD Rate and (ii) a fraction, the numerator of which
is one and the denominator of which is one minus the C/D Reserve Percentage
and (b) the C/D Assessment Rate;
"Benefitted Lender" shall have the meaning assigned to such
term in subsection 11.7(a);
"Business Day" shall mean a day other than a Saturday,
Sunday or other day on which commercial banks in New York, New York are
authorized or required by law to close;
"Capital Expenditures" for any period, shall mean all
amounts (whether paid in cash or accrued as liabilities, including all
obligations in respect of Capital Leases) that would in accordance with GAAP
be set forth as "capital expenditures" on the consolidated statement of cash
flows of the Company and its Subsidiaries for such period;
"Capital Lease" shall mean any lease of property (real,
personal or mixed) which in accordance with GAAP is or should be capitalized
on the lessee's balance sheet;
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"Capital Stock" shall mean any and all shares, interests,
participations or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person (other
than a corporation) and any and all warrants, rights or options to purchase
any of the foregoing;
"Cash Equivalents" shall mean (a) securities with maturities
of one year or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of one
year or less from the date of acquisition and overnight bank deposits of any
Lender or of any commercial bank having capital and surplus in excess of
$500,000,000, (c) repurchase obligations of any Lender or of any commercial
bank satisfying the requirements of clause (b) of this definition having a
term of not more than 30 days with respect to securities issued or fully
guaranteed or insured by the United States Government, (d) commercial paper of
a domestic issuer rated at least A-2 by Standard & Poor's Ratings Group or any
successor ("S&P") or P-2 by ▇▇▇▇▇'▇ Investors Service, Inc. or any successor
("Moody's"), (e) securities with maturities of one year or less from the date
of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States or by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody's, (f) securities with maturities of one
year or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition or (g) shares of money market mutual or similar
funds sponsored by any registered broker dealer or mutual fund distributor;
"C/D Assessment Rate" shall mean, for any day, the net
annual assessment rate (rounded upward to the nearest 1/100th of 1%)
determined by the Administrative Agent to be payable on such day to the
Federal Deposit Insurance Corporation or any successor ("FDIC") for FDIC's
insuring time deposits made in Dollars at offices of the Administrative Agent
in the United States;
"C/D Reserve Percentage" shall mean, for any day, that
percentage (expressed as a decimal) which is in effect on such day, as
prescribed by the Board of Governors of the Federal Reserve System (or any
successor), for determining the maximum reserve requirement for a member bank
of the Federal Reserve System in New York City with deposits exceeding one
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billion Dollars in respect of new non-personal time deposits in Dollars in New
York City having a maturity of three months and in an amount of $100,000 or
more;
"Change of Control" shall have occurred if any "person" (as
such term is used in Section 13(d) or 14(d) of the Exchange Act) other than
one or more Permitted Holders (any such other Person, an "Unrelated Person")
or any Unrelated Persons acting as a "group" (as such term is defined in
Section 13(d)(3) of the Exchange Act), together with any Affiliates thereof
which are Unrelated Persons, (A) shall acquire "beneficial ownership" (as such
term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of more than 35% of the total voting power of all classes of Voting Stock of
Holdings then outstanding or (B) shall have elected, or shall have caused to
be elected, a sufficient number of its or their nominees to the board of
directors of Holdings such that the nominees so elected (whether new or
continuing directors) shall constitute a majority of the board of directors of
Holdings;
"Closing Date" shall have the meaning assigned to such term
in subsection 6.1;
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time;
"Commercial Letter of Credit" shall have the meaning
assigned to such term in subsection 3.1;
"Commitment" of any Lender at any date shall mean the
obligation of such Lender at such date to (a) make Loans to the Company or (b)
issue or participate in Letters of Credit on behalf of the Company, in an
aggregate principal amount at any one time outstanding not to exceed the
amount set forth opposite such Lender's name under the caption "Commitment" on
Schedule 1.1(B), as such amount may be reduced from time to time in accordance
with the provisions hereof; collectively, as to all Lenders, the
"Commitments";
"Commitment Fee Rate" shall mean 0.200% per annum; provided
that on and after the first Adjustment Date occurring upon the delivery of the
consolidated financial statements of the Company and the Subsidiaries for the
fiscal quarter ended June 30, 1998 the Commitment Fee Rate will be determined
pursuant to the definition of Pricing Grid;
"Commitment Percentage" for any Lender at any time shall
mean the percentage of the Aggregate Commitment then constituted by such
Lender's Commitment;
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"Commitment Period" shall mean the period commencing on the
Closing Date and ending on the Termination Date;
"Commonly Controlled Entity" shall mean an entity, whether
or not incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes the
Company and which is treated as a single employer under Section 414(b) or (c)
(or, solely for purposes of Section 412 of the Code and Section 302 of ERISA,
Section 414(m) or (o)) of the Code;
"Company" shall have the meaning assigned to such term in
the preamble hereto;
"Consolidated EBITDA" for any fiscal period of the Company
shall mean the Consolidated Net Income or Consolidated Net Loss, as the case
may be, for such fiscal period, (a) after restoring thereto amounts deducted
for (i) extraordinary losses, (ii) depreciation and amortization (including
write-offs or write-downs of amortizable and depreciable items), (iii)
Consolidated Interest Expense, (iv) "provision for taxes" (or any like
caption) on a consolidated statement of earnings of the Company and its
Subsidiaries for such fiscal period, (v) any losses in respect of currency
fluctuations and (vi) minority interests and (b) after deducting therefrom (i)
extraordinary gains (which extraordinary items of gain shall include, whether
or not so includable in accordance with GAAP, any item of gain resulting from
the sale, lease or other disposition of any principal property of the Company
and its Subsidiaries taken as a whole or the Capital Stock of any material
Subsidiary of the Company), (ii) the portion of net income of the Company and
its Subsidiaries allocable to interests in unconsolidated Persons to the
extent that cash dividends or distributions in respect of such portion of net
income have not actually been received by the Company or any of its domestic
Subsidiaries, (iii) the portion of any extraordinary loss actually paid in
cash, but not including the amount of the premium paid by the Company in
connection with the Note Redemption, and (iv) any gains in respect of currency
fluctuations; provided any such restorations or deductions shall only be
restored or deducted to the extent included in the determination of
Consolidated Net Income or Consolidated Net Loss;
"Consolidated Interest Expense" for any fiscal period of the
Company shall mean the amount which, in conformity with GAAP, would be set
forth opposite the caption "interest expense" (or any like caption) on a
consolidated statement of earnings of the Company and its Subsidiaries for
such fiscal period;
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"Consolidated Net Income" or "Consolidated Net Loss" for any
fiscal period of the Company shall mean the amount which, in conformity with
GAAP, would be set forth opposite the caption "net income" (or any like
caption) or "net loss" (or any like caption), as the case may be, on a
consolidated statement of earnings of the Company and its Subsidiaries for
such fiscal period;
"Contingent Obligation" as to any Person shall mean any
obligation of such Person guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends, letters of credit or other obligations
("primary obligations") of any other Person (the "primary obligor") in any
manner, whether directly or indirectly, including, without limitation, any
"keep-well" or "make-well" agreement, guarantee of return on equity or other
obligation of such Person, whether or not contingent, (a) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (b) to advance or supply funds (i) for the purchase or payment of
any such primary obligation or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the obligee under any such
primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (d) otherwise to assure or hold harmless the
obligee under such primary obligation against loss in respect thereof;
"Contractual Obligation" of any Person shall mean any
provision of any material debt security or of any material preferred capital
stock or other equity interest issued by such Person or of any material
indenture, mortgage, agreement, instrument or undertaking to which such Person
is a party or by which it or any of its material property is bound; "Credit
Documents" shall mean this Agreement, the Notes, the Applications and the
Guarantees, each, a "Credit Document";
"Cross Default" of any Person shall mean (a) default in the
payment of any amount when due (whether at maturity or by acceleration) on any
of its Indebtedness (other than any such default in respect of the Loans, the
Notes or the Reimbursement Obligations) or in the payment of any matured
Contingent Obligation in respect of any Indebtedness of any other Person
(except for any such payments on account of any such Indebtedness and
Contingent Obligations in an aggregate principal amount at any one time
outstanding of up to $5,000,000) or (b) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness (except for any such Indebtedness and Contingent Obligations in
an aggregate principal amount at any one time outstanding of up to $5,000,000)
or contained in
8
any instrument or agreement evidencing, securing or relating thereto,
or any other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to permit the holder
or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause, with the giving of notice if required, such
Indebtedness (except for any such Indebtedness in an aggregate principal
amount at any one time outstanding of up to $5,000,000) to become due or to be
required to be redeemed or repurchased prior to its stated maturity;
"Cuban Cigar" shall mean Cuban Cigar Brands, NV, a company
organized under the laws of the Netherlands-Antilles;
"Default" shall mean any of the events specified in Section
9, whether or not any requirement for the giving of notice, the lapse of time,
or both, or any other condition, has been satisfied;
"Disposition" shall mean with respect to any Property, any
sale, lease, sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "Dispose" and "Disposed of" shall have
correlative meanings;
"Documentation Agent" shall have the meaning assigned to
such term in the preamble hereto;
"Dollars" and "$" shall mean dollars in lawful currency of
the United States;
"Domestic Subsidiary" shall mean each Subsidiary of the
Company which is organized under the laws of a State within the United States;
"Environmental Laws" shall mean any and all federal,
foreign, state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees, requirements of any Governmental Authority, and
any and all Requirements of Law regulating, relating to or imposing liability
or standards of conduct concerning pollution or protection of human health or
the environment, as now or may at any time hereafter be in effect;
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time;
"Eurodollar Base Rate" with respect to each Eurodollar Loan
of each Lender for each Interest Period shall mean the rate per annum equal to
the rate at which the Administrative Agent is offered Dollar deposits two
Working Days prior to the beginning of such Interest Period in the interbank
eurodollar market where the foreign currency and
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exchange operations or eurodollar funding operations of the Administrative
Agent are customarily conducted at or about 11:00 A.M. (London time) for
delivery on the first day of such Interest Period for the number of days
contained therein and in an amount equal to a representative amount of such
deposits;
"Eurodollar Loan" shall mean each Loan hereunder at such
time as it is made and/or being maintained at a rate of interest based upon
the Eurodollar Rate;
"Eurodollar Rate" with respect to each Eurodollar Loan for
each day during an Interest Period shall mean the rate per annum determined
for such day (rounded upwards to the nearest whole multiple of 1/100th of one
percent) equal to the following:
Eurodollar Base Rate
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1.00 - Eurodollar Reserve Requirements;
"Eurodollar Reserve Requirements" with respect to any
Interest Period for any Eurodollar Loan shall mean the aggregate of the rates
(expressed as a decimal) of reserve requirements current on the date two
Working Days prior to the beginning of such Interest Period (including,
without limitation, basic, supplemental, marginal and emergency reserves under
any regulations of the Board of Governors of the Federal Reserve System or
other governmental authority having jurisdiction with respect thereto), as now
and from time to time hereafter in effect, dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D of such Board) required to be maintained by a
member bank of such Federal Reserve System;
"Event of Default" shall mean any of the events specified in
Section 9, provided that any requirement for the giving of notice, the lapse
of time, or both, or any other condition, has been satisfied;
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended;
"Existing Credit Agreement" shall mean the Credit Agreement,
dated as of February 23, 1993, among the Company, the several financial
institutions parties thereto and The Chase Manhattan Bank, as Agent, as
amended, supplemented or otherwise modified through the Closing Date;
"Fabrica" shall mean Fabrica de Tobacos la ▇▇▇▇ ▇▇ ▇▇▇▇▇, a
10
company organized under the laws of Honduras;
"Federal Funds Effective Rate" for any day, shall mean the
weighted average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of
New York, or, if such rate is not so published for any day which is a Business
Day, the average of the quotations for the day of such transactions received
by the Administrative Agent from three federal funds brokers of recognized
standing selected by it;
"Foreign Subsidiary" shall mean any Subsidiary of the
Company which is not a Domestic Subsidiary;
"Fully Satisfied" shall mean, with respect to:
(a) the Payment Obligations as of any date, that,
on or before such date, (i) the principal of and interest
accrued to such date on such Payment Obligations shall have
been paid in full in cash (other than the Undrawn L/C
Obligations), (ii) all Undrawn L/C Obligations shall have
been Fully Secured, (iii) all fees, expenses and other
amounts then due and payable which constitute Payment
Obligations (other than the Undrawn L/C Obligations) shall
have been paid in full in cash and (iv) the Commitments
shall have expired or irrevocably been terminated; and
(b) the Obligations (as defined in the Guarantees)
as of any date, that, on or before such date, (i) the
Payment Obligations shall have been Fully Satisfied and (ii)
all Rate Hedging Agreements with any of the Lenders or their
Affiliates shall have been terminated or all obligations
thereunder (other than for fees, expenses and indemnities)
shall have been cash collateralized and all fees, expenses
and indemnity payments then due and payable thereunder shall
have been paid in full in cash;
"Fully Secured" shall mean, with respect to any Undrawn L/C
Obligations as of any date, that, on or before such date, such Undrawn L/C
Obligations shall have been secured by the grant to the Issuing Lender by the
Company of a first priority, perfected security interest in, and Lien on, (a)
cash or Cash Equivalents in an amount at least equal to the excess, if any, of
the amount of such Undrawn L/C Obligations over the amount of the Aggregate
Commitment on such date or (b) other collateral security which is acceptable
to the Issuing Lender and the Required Lenders;
11
"GAAP" shall mean generally accepted accounting principles
in the United States as in effect as of the date of, and used in, the
preparation of the audited consolidated financial statements referred to in
subsection 5.9, except that, with respect to the presentation of financial
statements required to be furnished hereunder, GAAP shall mean generally
accepted accounting principles in the United States as in effect from time to
time;
"Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government (including, without limitation, any
governmental department, commission, board, bureau, agency or instrumentality,
or other court or arbitrator, in each case whether of the United States or
foreign) and the National Association of Insurance Commissioners;
"Guarantees" shall be the collective reference to the
Holdings Guarantee, the Subsidiaries Guarantee and each other guarantee
delivered to the Administrative Agent to support the Payment Obligations of
the Company hereunder and under the Notes, as each of the same may be amended,
supplemented or otherwise modified from time to time; individually, a
"Guarantee";
"Guarantors" shall be the collective reference to the
guarantors parties to the Guarantees; individually, a "Guarantor";
"Hazardous Materials" shall mean any hazardous materials,
hazardous wastes, hazardous or toxic substances, defined or regulated as such
in or under any Environmental Law, including without limitation asbestos,
Petroleum Products and material exhibiting the characteristics of
ignitability, corrosivity, reactivity or extraction procedure toxicity, as
such terms are defined in connection with hazardous materials or hazardous
wastes or hazardous or toxic substances in any Environmental Law;
"Holdings" shall mean Consolidated Cigar Holdings Inc., a
Delaware corporation, the direct parent of the Company;
"Holdings Guarantee" shall mean the Guarantee, to be
executed and delivered by Holdings, substantially in the form of Exhibit D-1,
as the same may be amended, supplemented or otherwise modified from time to
time;
"Holdings Note" shall mean the promissory note of Holdings,
dated
12
August 21, 1996, owing to Mafco Consolidated Group Inc.;
"Indebtedness" of a Person shall mean (a) indebtedness of
such Person for borrowed money whether short-term or long-term and whether
secured or unsecured, (b) indebtedness of such Person for the deferred
purchase price of services or property, which purchase price (i) is due twelve
months or more from the date of incurrence of the obligation in respect
thereof or (ii) customarily or actually is evidenced by a note or other
written instrument (including, without limitation, any such indebtedness which
is non-recourse to the credit of such Person but is secured by assets of such
Person), (c) obligations of such Person under Capital Leases, (d) obligations
of such Person arising under acceptance facilities, (e) the undrawn face
amount of, and unpaid reimbursement obligations in respect of, all letters of
credit issued for the account of such Person, (f) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (g)
all obligations of such Person upon which interest charges are customarily
paid, (h) all obligations of such Person under conditional sale or other title
retention agreements relating to property purchased 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),
(i) obligations of such Person to purchase, redeem, retire, defease or
otherwise acquire for value any Capital Stock of such Person (with redeemable
preferred capital stock being valued at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends), (j) all
executory obligations of such Person in respect of interest rate agreements
and foreign exchange and other financial hedge contracts (including, without
limitation, equity hedge contracts), (k) all Indebtedness of the types
referred to in clauses (a) through (j) above for which such Person is
obligated under a Contingent Obligation and (l) renewals, extensions,
refundings, deferrals, restructurings, amendments and modifications of any
such indebtedness, obligation or guarantee;
"indemnified liabilities" shall have the meaning assigned to
such term in subsection 11.5;
"Insolvency" shall mean with respect to any Multiemployer
Plan, the condition that such Plan is insolvent within the meaning of such
term as used in Section 4245 of ERISA;
"Insolvent" shall pertain to a condition of Insolvency;
"Intellectual Property" shall have the meaning assigned to
such term in subsection 5.13;
13
"Interest Coverage Ratio" at the last day of any fiscal
quarter, shall mean the ratio of (a) (i) Consolidated EBITDA for the period of
four consecutive fiscal quarters ending on such date less (ii) Capital
Expenditures for the period of four consecutive fiscal quarters ending on such
date to (b) Consolidated Interest Expense for the period of four consecutive
fiscal quarters ending on such date;
"Interest Payment Date" shall mean (a) as to any Alternate
Base Rate Loan, the last day of each March, June, September and December,
commencing on the first of such days to occur after such Alternate Base Rate
Loan is made or Eurodollar Loans are converted to Alternate Base Rate Loans,
(b) as to any Eurodollar Loan with an Interest Period of three months or less,
the last day of the Interest Period with respect thereto, (c) as to any
Eurodollar Loan with an Interest Period of six months, the day which is three
months after the first day of such Interest Period and the last day of such
Interest Period and (d) in any event, the Termination Date;
"Interest Period" shall mean, (a) initially, with respect to
any Eurodollar Loan, the period commencing on the borrowing date or the
initial date of conversion with respect to such Eurodollar Loan and ending
one, two, three or six months thereafter as selected by the Company in a
notice of borrowing or conversion, as the case may be, as provided herein and
(b) thereafter, each period commencing on the last day of the immediately
preceding Interest Period applicable to such Eurodollar Loan, as the case may
be, and ending one, two, three or six months thereafter, in any such case as
selected by the Company in accordance with the provisions of subsection 4.5;
provided that all of the foregoing provisions relating to Interest Periods are
subject to the following:
(x) if any Interest Period relating to a Eurodollar
Loan would otherwise end on a day which is not a Working
Day, such Interest Period shall be extended to the next
succeeding Working Day, unless the result of such extension
would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the
immediately preceding Working Day;
(y) the Company shall not select an Interest Period
relating to any Eurodollar Loan which extends beyond the
Termination Date and any Interest Period relating to any
Eurodollar Loan that would otherwise extend beyond the
Termination Date shall end on such date; and
(z) if any Interest Period relating to a Eurodollar
Loan begins
14
on the last Working Day of a calendar month (or
on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period),
such Interest Period shall end on the last Working Day of a
calendar month;
"Issuing Lender" with respect to any Letter of Credit issued
or requested to be issued, shall mean The Chase Manhattan Bank or, subject to
the consent of the Company (which consent shall not be unreasonably withheld
or delayed), any other Lender designated by the Administrative Agent that
agrees to serve in such capacity;
"Jamaica Tobacco" shall mean Jamaica Tobacco Manufacturing
Company (1995) Limited, a company organized under the laws of Jamaica;
"L/C Commitment" shall equal $20,000,000;
"L/C Fee Payment Date" shall mean the last day of each
March, June, September and December and, in any event, the Termination Date;
"L/C Obligations" shall mean, at any time, an amount equal
to the sum of (a) the aggregate amount of Undrawn L/C Obligations then
outstanding and (b) the aggregate amount of then unreimbursed Reimbursement
Obligations;
"L/C Participants" shall be the collective reference to all
the Lenders, other than the Issuing Lender (or, to the extent that the Issuing
Lender is an affiliate of a Lender, such Lender);
"Lenders" shall have the meaning assigned to such term in
the preamble hereto;
"Letters of Credit" shall have the meaning assigned to such
term in subsection 3.1;
"Leverage Ratio" at the last day of any fiscal quarter,
shall mean the ratio of (a) Total Debt (after giving effect to all prepayments
made on such day) on such day to (b) Consolidated EBITDA for the period of
four consecutive fiscal quarters ending on such day;
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory
or other) or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, (a) any conditional sale
or other title retention agreement, (b)
15
any financing lease having substantially the same economic effect as any of
the foregoing, and (c) in the case of securities, any purchase option, call or
similar right of a third party with respect to such securities (other than, in
the case of securities other than the Capital Stock of any Subsidiary of the
Company, pursuant to normal settlement terms));
"Loan" and "Loans" shall have the meanings assigned to such
terms in subsection 2.1;
"Loan Parties" shall mean the Company and the Guarantors;
"Material Adverse Effect" shall mean a material adverse
effect upon (a) the business, assets, operations, condition (financial or
otherwise), performance, properties or prospects of Holdings, the Company and
their Subsidiaries taken as a whole, (b) the ability of Holdings, the Company
and each of their Subsidiaries to perform its obligations under the Credit
Documents or (c) the rights and remedies available to the Administrative Agent
and/or the Lenders under any Credit Document;
"Multiemployer Plan" shall mean a Plan (other than a welfare
plan as defined in Section 3(1) of ERISA) which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA;
"Note" shall have the meaning assigned to such term in
subsection 2.2(c);
"Note Redemption" shall have the meaning assigned to such
term in the recitals hereto;
"Parent" shall have the meaning assigned to such term in
subsection 7.8; "Participants" shall have the meaning assigned to such term in
subsection 11.6(b);
"Payment Obligations" shall mean (a) all principal,
interest, fees, charges, expenses, attorneys' fees and disbursements,
indemnities, reimbursement obligations and any other amounts payable by any
Person under any Credit Document (including, without limitation, the L/C
Obligations) and (b) any amount in respect of any of the foregoing that the
Administrative Agent or any Lender, in its sole discretion, may elect to pay
or advance under this Agreement on behalf of such Person after the occurrence
and during the continuance of a Default or an Event of Default;
"Payment Sharing Notice" shall mean a written notice from
the
16
Company or any Lender informing the Administrative Agent that an Event of
Default has occurred and is continuing and directing the Administrative Agent
to allocate payments thereafter received from the Company in accordance with
the provisions of subsection 4.13(b)(ii);
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA (and any Governmental
Authority which may succeed to the powers and functions thereof);
"Permitted Exceptions" shall have the meaning assigned to
such term in subsection 8.2;
"Permitted Holders" shall mean ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ (or, in
the event of his incompetence or death, his estate, heirs, executor,
administrator, committee or other personal representative) (collectively,
"heirs") or any Person controlled, directly or indirectly, by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇ or his heirs;
"Person" shall mean an individual, a partnership, a
corporation, a business trust, a joint stock company, a limited liability
company, a trust, an unincorporated association, a joint venture, a
Governmental Authority or any other entity of whatever nature;
"Petroleum Products" shall mean gasoline, diesel fuel, motor
oil, waste or used oil, heating oil, kerosene and any other petroleum
products, including crude oil or any fraction thereof;
"Plan" shall mean at any particular time, any employee
benefit plan which is covered by ERISA and in respect of which the Company or
a Commonly Controlled Entity is (or, if such plan was terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as defined in
Section 3(5) of ERISA;
"Potential Withdrawal Liability" shall have the meaning
assigned to such term in subsection 5.8;
"Pricing Grid" shall mean the pricing grid set forth below:
----------------------------------------------------------------------------------------------------------------
Leverage Ratio Applicable Margin Commitment
Fee Rate
----------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.00 to 1.0 1.000% 0.225%
----------------------------------------------------------------------------------------------------------------
17
Greater than or equal to 1.00 to 1.0 and less than 2.00 to 1.0 0.750% 0.200%
----------------------------------------------------------------------------------------------------------------
Greater than or equal to .75 to 1.0 and less than 1.00 to 1.0 0.625% 0.200%
----------------------------------------------------------------------------------------------------------------
Greater than or equal to .50 to 1.0 and less than .75 to 1.0 0.500% 0.175%
----------------------------------------------------------------------------------------------------------------
Less than .50 to 1.0 0.375% 0.150%
----------------------------------------------------------------------------------------------------------------
Changes in the Applicable Margin with respect to Eurodollar Loans or in the
Commitment Fee Rate resulting from changes in the Leverage Ratio shall become
effective on the date (the "Adjustment Date") on which financial statements
are delivered to the Lenders pursuant to subsections 7.1(a) and (c) and shall
remain in effect until the next change to be effected pursuant to this
paragraph. If any such financial statements are not delivered within the time
periods specified in subsections 7.1(a) and (c), then from the time such
financial statements were due, until such financial statements are delivered,
the Leverage Ratio as at the end of the fiscal period that would have been
covered thereby shall for the purposes of this definition be deemed to be
greater than 2.00 to 1.00. In addition, at all times while an Event of Default
shall have occurred and be continuing, the Leverage Ratio shall for the
purposes of this definition be deemed to be greater than 2.00 to 1.00. Each
determination of the Leverage Ratio pursuant to this definition shall be made
with respect to the period of four consecutive fiscal quarters of the Company
ending at the end of the period covered by the relevant financial statements;
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York City (each change in the
Prime Rate to be effective on the date such change is publicly announced);
"Property" shall mean any right or interest in or to
property of any kind whatsoever, whether real, personal or mixed and whether
tangible or intangible, including, without limitation, Capital Stock;
"Purchasing Lenders" shall have the meaning assigned to such
term in subsection 11.6 (c)(ii);
"Rate Hedging Agreement" shall mean any (a) interest rate
swap, option, cap, collar or insurance, (b) foreign exchange contract or (c)
any other agreement or arrangement designed to provide protection against
18
fluctuations in interest rates or currency exchange rates;
"Real Property" shall have the meaning assigned to such term
in subsection 5.14;
"Register" shall have the meaning assigned to such term in
subsection 11.6(d));
"Reimbursement Obligation" shall mean the obligation of the
Company to reimburse the Issuing Lender pursuant to subsection 3.5 for amounts
drawn under Letters of Credit;
"Reorganization" shall mean with respect to any
Multiemployer Plan, the condition that such Plan is in reorganization within
the meaning of such term as used in Section 4241 of ERISA;
"Reportable Event" shall mean any of the events set forth in
Section 4043(c) of ERISA, other than those events as to which the 30-day
notice period is waived by regulation (except for any waiver under PBGC Reg.
Section 4043.25);
"Required Lenders" at any date, shall mean the holders of at
least a majority of the Aggregate Commitment on such date;
"Requirement of Law" for any Person shall mean the
Certificate of Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation, or
determination of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its material
property or to which such Person or any of its material property is subject;
"Responsible Officer" shall mean any officer at the level of
Vice President or higher of the Company or, with respect to financial matters,
the Chief Financial Officer, Chief Accounting Officer or Treasurer of the
Company;
"Restricted Payment" shall mean (a) any payment by the
Company or any of its Subsidiaries of a dividend (other than a dividend
payable solely in Capital Stock of the Company) on, or any payment on account
of, the purchase, redemption or retirement of, or any other distribution on,
any shares of any class of Capital Stock of the Company (including any such
payment or distribution in cash or in property or obligations of the Company
or any of its Subsidiaries), (b) any loan or advance by the Company or any of
its Subsidiaries to any Affiliate of the Company or (c)
19
the payment by the Company or any of its Subsidiaries of any management or
administrative fee to any Affiliate of the Company or of any salary, bonus or
other form of compensation other than in the ordinary course of business to
any Person who is a significant stockholder or executive officer of any
Affiliate of the Company;
"Senior Subordinated Notes" shall have the meaning assigned
to such term in the recitals hereto;
"Significant Trademark" shall mean any Trademark which is of
such a nature that the Company or its Subsidiaries in accordance with its
ordinary business practice then obtaining would file an application for
trademark registration in the United States Patent and Trademark Office;
"Single Employer Plan" shall mean any Plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA;
"Standby Letter of Credit" shall have the meaning assigned
to such term in subsection 3.1;
"Subsidiaries Guarantee" shall mean the Guarantee, to be
executed and delivered by each Domestic Subsidiary of the Company (with assets
the fair market value of which exceeds $100,000), substantially in the form of
Exhibit D-2, as the same shall be amended, supplemented or otherwise modified
from time to time;
"Subsidiary" of any Person shall mean a corporation or other
entity of which shares of Capital Stock or other ownership interests
having ordinary voting power (other than Capital Stock or other
ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the directors of such
corporation, or other Persons performing similar functions for such
entity, are owned, directly or indirectly, by such Person; unless
otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company and all references to a "wholly owned
Subsidiary" in this Agreement shall refer to a Subsidiary or
Subsidiaries of the Company of which the Company directly or
indirectly owns all of the Capital Stock (other than directors'
qualifying shares);
"Syndication Agent" shall have the meaning assigned to such
term in the preamble hereto;
"Taxable Lender" shall have the meaning assigned to such
term in subsection 4.10(d);
20
"Tax Allocation Agreement" shall mean the Amended and
Restated Tax Sharing Agreement entered into as of June 15, 1995 by and among
Mafco Holdings Inc., a Delaware corporation, Holdings (formerly known as
Consolidated Cigar (Parent) Holdings Inc.), Mafco Consolidated Group Inc., a
Delaware corporation, the Company, its Subsidiaries and any entities which
become parties thereto pursuant to the terms thereof, as amended, supplemented
or otherwise modified from time to time; "Taxes" shall have the meaning
assigned to such term in subsection 4.10(a);
"Termination Date" shall mean the earlier of (a) March 3,
2003, and (b) such earlier date upon which the Commitments shall terminate in
accordance with the terms hereof;
"Three-Month Secondary CD Rate" shall mean, for any day, the
secondary market rate for three-month certificates of deposit reported as
being in effect on such day (or, if such day shall not be a Business Day, the
next preceding Business Day) by the Board of Governors of the Federal Reserve
System (the "Board") through the public information telephone line of the
Federal Reserve Bank of New York (which rate will, under the current practices
of the Board, be published in Federal Reserve Statistical Release H.15(519)
during the week following such day), or, if such rate shall not be so reported
on such day or such next preceding Business Day, the average of the secondary
market quotations for three-month certificates of deposit of major money
center banks in New York City received at approximately 10:00 A.M., New York
City time, on such day (or, if such day shall not be a Business Day, on the
next preceding Business Day) by the Administrative Agent from three New York
City negotiable certificate of deposit dealers of recognized standing selected
by it;
"Total Debt" at any time, shall mean the sum (without
duplication) of (a) the aggregate principal amount of all outstanding
Indebtedness of the Company and its Subsidiaries and (b) all outstanding
Contingent Obligations of the Company and its Subsidiaries in respect of
Indebtedness of Persons other than the Company or any of its Subsidiaries;
provided that Indebtedness of the type described in clauses (e) and (j) of the
definition of the term Indebtedness shall not be included for the purpose of
calculating Total Debt;
"Trademark" means (a) all trademarks, trade names, corporate
names, company names, business names, fictitious source of business
identifiers of the Company and its Subsidiaries, and the goodwill associated
therewith, existing as of the Closing Date or thereafter
21
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof, or any political subdivision thereof, or otherwise, and (b) all
renewals thereof;
"Tranche" shall be the collective reference to Eurodollar
Loans the Interest Periods with respect to all of which begin on the same date
and end on the same later date (whether or not such Loans shall originally
have been made on the same day);
"Transferee" shall have the meaning assigned to such term in
subsection 11.6(f);
"Undrawn L/C Obligations" shall mean the portion, if any, of
the Payment Obligations constituting the contingent obligation of the Company
to reimburse the Issuing Lender in respect of the then undrawn and unexpired
portions of the Letters of Credit issued by the Issuing Lender pursuant to
subsection 3.1;
"Unfunded Pension Amount" shall have the meaning assigned to
such term in subsection 5.8;
"Uniform Commercial Code" and "UCC" shall mean the Uniform
Commercial Code as in effect from time to time in the State of New York;
"Uniform Customs" shall mean the Uniform Customs and
Practice for Documentary Credits (1993 Revision), International Chamber of
Commerce Publication No. 500, as the same may be amended from time to time;
"United States" shall mean the United States of America;
"Voting Stock" shall mean, as to any Person, Capital Stock
of such Person of the class or classes pursuant to which the holders thereof
have the general voting power under ordinary circumstances to elect the board
of directors, managers or trustees of such Person (irrespective of whether or
not at the time Capital Stock of any other class or classes shall have or
might have voting power by reason of the happening of any contingency);
"Working Day" shall mean any Business Day other than a
Business Day on which commercial banks in London, England are authorized or
required by law to close;
22
1.2 Other Definitional Provisions. (a) All terms defined in
this Agreement shall have the defined meanings when used in any other Credit
Document or any certificate or other document made or delivered pursuant
hereto or thereto unless otherwise defined therein.
(b) As used herein, in the other Credit Documents and in any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms not defined in subsection 1.1, and accounting terms partly
defined in subsection 1.1 to the extent not defined, shall have the respective
meanings given to them under GAAP. To the extent that the definitions of
accounting terms herein are inconsistent with the meanings of such terms under
GAAP, the definitions contained herein shall control.
(c) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement or any other Credit Document
shall refer to this Agreement or such other Credit Document, as the case may
be, as a whole and not to any particular provision of this Agreement or such
other Credit Document, as the case may be; and Section, subsection, Schedule
and Exhibit references contained in this Agreement are references to Sections,
subsections, Schedules and Exhibits in or to this Agreement, unless otherwise
specified.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS
2.1 Commitments. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make loans in Dollars
(individually, a "Loan"; collectively, the "Loans") to the Company from time
to time during the period from the Closing Date to the Termination Date in an
aggregate principal amount at any one time outstanding not to exceed the
amount equal to the Commitment Percentage of such Lender times the Aggregate
Commitment as of such date, but in no event more than the amount which when
added to such Lender's Commitment Percentage of the L/C Obligations then
outstanding does not exceed the amount of such Lender's Commitment. During the
period commencing on the Closing Date and ending on the Termination Date, the
Company may use the Commitments by borrowing, repaying the Loans in whole or
in part and reborrowing, all in accordance with the terms and conditions
hereof.
2.2 Obligations of the Company. (a) The Company agrees that
each Loan made by each Lender pursuant hereto shall constitute the promise and
obligation of the Company to pay to the Administrative Agent, for the benefit
of such Lender, at the office of the Administrative Agent, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, in lawful money of the United States and in
immediately available funds the aggregate unpaid principal amount of all
23
Loans made to the Company by such Lender pursuant to subsection 2.1, which
amounts shall be due and payable (whether at maturity or by acceleration) as
set forth in this Agreement and, in any event, on the Termination Date.
(b) The Company agrees that each Lender is authorized to
record (i) the date and amount of each Loan made to the Company by such Lender
pursuant to subsection 2.1, (ii) the date of each interest rate conversion
pursuant to subsection 4.5 and the principal amount subject thereto, (iii) the
date and amount of each payment or prepayment of principal of each Loan made
by the Company and (iv) in the case of each Eurodollar Loan, the interest rate
and Interest Period, in the books and records of such Lender and in such
manner as is reasonable and customary for such Lender and a certificate of an
officer of such Lender, setting forth in reasonable detail the information so
recorded, shall constitute prima facie evidence of the accuracy of the
information so recorded; provided that the failure to make any such recording
shall not in any way affect the Payment Obligations of the Company hereunder.
(c) The Company agrees that, upon the request to the
Administrative Agent by any Lender at any time, such Lender's Loans shall be
evidenced by a promissory note of the Company, substantially in the form of
Exhibit A with appropriate insertions as to payor, date and principal amount
(a "Note"), payable to the order of such Lender and representing the
obligation of the Company to pay a principal amount equal to the amount of the
Commitment of such Lender or, if less, the aggregate unpaid principal amount
of all Loans made by such Lender to the Company, with interest on the unpaid
principal amount thereof from time to time outstanding under such Note as
prescribed in subsection 4.4.
2.3 Procedure for Borrowing Loans. (a) The Company may
request a borrowing from time to time under the Aggregate Commitment prior to
the Termination Date on any Business Day (if the Loans to be borrowed are
Alternate Base Rate Loans) or on any Working Day (if the Loans to be borrowed
are Eurodollar Loans) by giving irrevocable notice to the Administrative
Agent, specifying (i) the aggregate principal amount to be borrowed, (ii) the
requested borrowing date, (iii) whether the Loans to be borrowed are to be
Eurodollar Loans or Alternate Base Rate Loans or a combination thereof and, if
a combination, the respective aggregate amount of each type of borrowing and
(iv) if the Loans to be borrowed are Eurodollar Loans, the length of the
Interest Period or Interest Periods applicable thereto. Any such notice of
borrowing must be signed by a Responsible Officer of the Company and be
received by the Administrative Agent prior to 11:00 A.M., New York City time,
three Working Days prior to the requested borrowing date, in the case of
Eurodollar Loans, and one Business Day prior to the requested borrowing date,
in the case of Alternate Base Rate Loans. Each borrowing under the Commitments
shall be
24
in an aggregate principal amount equal to the lesser of (x) $500,000
or a whole multiple of $100,000 in excess thereof or (y) the Available
Commitment. Upon receipt of any such notice, the Administrative Agent will
promptly notify each Lender thereof. Each Lender will make available to the
Administrative Agent at the office of the Administrative Agent specified in
subsection 11.2 (or at such other location as the Administrative Agent may
direct), by 1:00 P.M., New York City time, on the requested borrowing date, an
amount equal to the Commitment Percentage of such Lender times the aggregate
amount of Loans requested to be borrowed on such date, in funds immediately
available to the Administrative Agent. The proceeds of Loans received by the
Administrative Agent hereunder shall promptly be made available to the Company
by the Administrative Agent's crediting the account of the Company at the
office of the Administrative Agent specified in subsection 11.2 with the
aggregate amount actually received by the Administrative Agent from the
Lenders and in like funds as received by the Administrative Agent.
(b) The failure of any Lender to make the Loan to be made by
it on any requested borrowing date shall not relieve any other Lender of its
obligation hereunder to make its Loan on such borrowing date, but no Lender
shall be responsible for the failure of any other Lender to make the Loan to
be made by such other Lender on such borrowing date.
2.4 Use of Proceeds of Loans. The proceeds of the Loans
hereunder shall be used by the Company to finance the Note Redemption of all
of the outstanding Senior Subordinated Notes and to finance the working
capital and general corporate purposes of the Company and its Subsidiaries.
SECTION 3. AMOUNT AND TERMS OF LETTERS OF CREDIT
3.1 L/C Facility. (a) Subject to the terms and conditions
hereof, the Issuing Lender, in reliance on the agreements of the other Lenders
set forth in subsections 3.4(a) and (b), agrees to issue any letter of credit
("Letters of Credit") requested to be issued by it for the account of the
Company on any Business Day during the Commitment Period in such form as may
be approved from time to time by the Issuing Lender; provided that the Issuing
Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C
Commitment or (ii) the aggregate amount of the Available Commitments would be
less than zero. Each Letter of Credit shall (i) be denominated in Dollars,
(ii) be either (x) a standby letter of credit issued to support obligations of
the Company or any of its Subsidiaries, contingent or otherwise, which are of
a type for which Loans would be available if the obligations were then due and
payable (including, without limitation, to support insurance and workmen's
compensation obligations) (a "Standby Letter of Credit"), or (y) a documentary
letter of credit
25
in respect of the purchase of goods or services by the Company or any of its
Subsidiaries in the ordinary course of business (a "Commercial Letter of
Credit") and (iii) expire no later than the earlier of (x) one year from the
date of issue and (y) five Business Days prior to the Termination Date;
provided that any Letter of Credit with a one-year tenor may provide for the
renewal thereof for additional one-year periods (which shall in no event
extend beyond the date referred to in clause (y)); and provided, further, that
the Undrawn L/C Obligations in respect of each Letter of Credit which expires
after the last day of the Commitment Period shall be Fully Secured from and
after such day.
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State
of New York.
(c) The Issuing Lender shall not at any time be obligated to
issue any Letter of Credit hereunder if such issuance would conflict with, or
cause the Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law.
3.2 Procedure for Issuance of Letters of Credit. The Company
shall request the Issuing Lender to issue a Letter of Credit by delivering to
the Issuing Lender at its address for notices specified herein an Application
therefor, completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may reasonably request. Upon receipt of any Application, the Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with its
customary procedures and shall promptly issue the Letter of Credit requested
thereby (but in no event shall the Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such
Letter of Credit to the beneficiary thereof or as otherwise may be agreed by
the Issuing Lender and the Company. The Issuing Lender shall (i) in the case
of each Standby Letter of Credit, notify each L/C Participant and the
Administrative Agent promptly following the request for and following the
issuance of the Standby Letter of Credit and furnish a copy of such Standby
Letter of Credit to the Company and to the Administrative Agent promptly
following the issuance thereof and (ii) in the case of Commercial Letters of
Credit, provide to each L/C Participant and the Administrative Agent, promptly
following the end of each calendar month during which it has issued Commercial
Letters of Credit, a monthly activity report of the Commercial Letters of
Credit issued by it during such month.
3.3 Fees, Commissions and Other Charges. (a) The Company
shall pay to the Administrative Agent, for the account of the Issuing Lender
and
26
the L/C Participants with respect to each Letter of Credit, a letter of
credit commission with respect to such Letter of Credit in an amount per annum
equal to (i) the Applicable Margin applicable to Eurodollar Loans on the date
of payment of such letter of credit commission (which fee shall be for the
accounts of the L/C Participants and the Issuing Lender to be shared ratably
among them in accordance with their respective Commitment Percentages) times
(ii) the undrawn face amount of such Letter of Credit. In addition, the
Company shall pay to the Administrative Agent for the account of the Issuing
Lender for its own account a fronting fee of 1/8 of 1% per annum, payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.
(b) Letter of credit commissions which are payable pursuant
to clause (a) above shall be non-refundable and shall be payable to the
Administrative Agent in arrears on account of the period from the issuance
date with respect thereto through the day immediately preceding the next L/C
Fee Payment Date and on each succeeding L/C Fee Payment Date on account of the
period from such L/C Fee Payment Date through the day immediately preceding
the next L/C Fee Payment Date.
(c) In addition to the foregoing fees and commissions, the
Company shall pay or reimburse the Issuing Lender directly (and not through
the Administrative Agent) in respect of each Letter of Credit for such normal
and customary costs and expenses as are incurred or charged by the Issuing
Lender in issuing, effecting payment under, amending or otherwise
administering any Letter of Credit issued by it.
(d) The Administrative Agent shall pay to each L/C
Participant and the Issuing Lender all fees and commissions (including,
without limitation, any fees and commissions paid to the Administrative Agent
for the account of each L/C Participant and the Issuing Lender on the issuance
date of any Letter of Credit) received from time to time by the Administrative
Agent for their respective accounts pursuant to this subsection 3.3 within one
day following each L/C Fee Payment Date.
3.4 L/C Participations. (a) The Issuing Lender with respect
to each Letter of Credit irrevocably agrees to grant and hereby grants to each
L/C Participant, and, to induce the Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase, and
hereby accepts and purchases, from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Commitment Percentage in
the Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit issued by it
27
for which the Issuing Lender is not reimbursed in full by the Company in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Commitment
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant
to the Issuing Lender pursuant to subsection 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any
Letter of Credit issued by it is paid to the Issuing Lender within three
Business Days after the date such payment is due, such L/C Participant shall
pay to the Issuing Lender on demand an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate, as quoted
by the Issuing Lender, during the period from and including the date such
payment is required to the date on which such payment is immediately available
to the Issuing Lender, times (iii) a fraction the numerator of which is the
number of days that elapse during such period and the denominator of which is
360. If any such amount required to be paid by any L/C Participant pursuant to
subsection 3.4(a) is not made available to the Issuing Lender by such L/C
Participant within three Business Days after the date such payment is due, the
Issuing Lender shall be entitled to recover from such L/C Participant, on
demand, such amount with interest thereon calculated from such due date at the
rate per annum applicable to Alternate Base Rate Loans hereunder. A
certificate of the Issuing Lender submitted to any L/C Participant with
respect to any amounts owing under this subsection 3.4(b) shall be conclusive
in the absence of manifest error.
(c) Whenever, at any time after any Issuing Lender has made
payment under any Letter of Credit issued by it and has received from any L/C
Participant its pro rata share of such payment in accordance with subsection
3.4(a), the Issuing Lender receives any payment related to such Letter of
Credit (whether directly from the Company or otherwise, including proceeds of
collateral applied thereto by the Issuing Lender), or any payment of interest
on account thereof, the Issuing Lender promptly will distribute to such L/C
Participant its pro rata share thereof; provided that, in the event that any
such payment received by the Issuing Lender shall be required to be returned
by the Issuing Lender, such L/C Participant shall return to the Issuing Lender
the portion thereof previously distributed to it by the Issuing Lender.
3.5 Reimbursement Obligation of the Company. The Company
agrees to reimburse the Issuing Lender on each date on which the Issuing
Lender notifies the Company of the date and amount of a draft presented under
any Letter of Credit issued and paid by the Issuing Lender for the amount of
(a) such draft so paid and (b) any taxes, fees, charges or other costs or
expenses
28
incurred by the Issuing Lender in connection with such payment. Each
such payment shall be made to the Issuing Lender at its address for notices
specified herein in lawful money of the United States and in immediately
available funds. Interest shall be payable on any and all amounts remaining
unpaid by the Company under this subsection 3.5 from the date such amounts
become payable (whether at stated maturity, by acceleration or otherwise)
until payment in full at the rate which would be payable on any outstanding
Alternate Base Rate Loans which were then overdue; provided that if the
Issuing Lender does not notify the Company as provided for above earlier than
10:30 A.M. (New York City time) on the date such draft is paid, then for such
day (and until the next Business Day) all amounts remaining unpaid in respect
of such notice shall bear interest at the rate set forth in subsection 4.4(b).
3.6 Obligations Absolute. The Company's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Company may have or have had against the Issuing Lender or
any beneficiary of a Letter of Credit. The Company also agrees with the
Issuing Lender that the Issuing Lender shall not be responsible for, and the
Company's Reimbursement Obligations under subsection 3.5 shall not be affected
by, among other things, the validity or genuineness of documents or of any
endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Company and
any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or any claims whatsoever of the Company
against any beneficiary of such Letter of Credit or any such transferee. The
Issuing Lender shall not be liable for any error, omission, interruption or
delay in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit issued by it, except for
errors or omissions caused by the Issuing Lender's gross negligence or willful
misconduct. The Company agrees that any action taken or omitted by the Issuing
Lender under or in connection with any Letter of Credit issued by the Issuing
Lender or the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards of care
specified in the Uniform Commercial Code of the State of New York, shall be
binding on the Company and shall not result in any liability of the Issuing
Lender to the Company.
3.7 Letter of Credit Payments. If any draft shall be
presented for payment under any Letter of Credit, the Issuing Lender shall
promptly notify the Company of the date and amount thereof. The responsibility
of the Issuing Lender to the Company in connection with any draft presented
for payment under any Letter of Credit issued by it shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with
29
such Letter of Credit.
3.8 Application. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the
provisions of this Section 3, the provisions of this Section 3 shall apply.
3.9 Existing Letters of Credit. Notwithstanding anything to
the contrary contained in this Agreement or any Guarantee, each of the letters
of credit described on Schedule 3.9 shall, from and after the Closing Date, be
deemed to have been issued on the Closing Date pursuant to subsection 3.1(a)
of this Agreement, with the Issuing Lender being deemed to be the Issuing
Lender in respect of such Letter of Credit hereunder and with each other
Lender being deemed to be an L/C Participant with respect to such Letter of
Credit for purposes of this Agreement and the Guarantees. The Company shall
pay to the Administrative Agent, for the accounts of the Issuing Lender and
L/C Participants, the fees and commissions described in subsection 3.3 with
respect to each such Letter of Credit.
SECTION 4. PROVISIONS RELATING TO THE LOANS; FEES AND
PAYMENTS
4.1 Voluntary Termination or Reduction of Commitments. (a)
The Company shall have the right at any time, upon not less than five Business
Days' notice to the Administrative Agent, to terminate or, from time to time,
reduce the Aggregate Commitment, with any such voluntary reduction being in an
amount equal to the lesser of (i) $5,000,000 or a whole multiple of $1,000,000
in excess thereof and (ii) the Aggregate Commitment then in effect. Any such
termination or reduction shall be pro rata among the Lenders and shall
permanently terminate or reduce, as the case may be, the Aggregate Commitment
then in effect.
(b) Any termination of the Aggregate Commitment pursuant to
subsection 4.1(a) shall be accompanied by prepayment in full (together with
accrued interest thereon to such date) by the Company of any Loans then
outstanding and payment of any other amounts necessary to cause the Payment
Obligations with respect to the Loans and the L/C Obligations to be Fully
Satisfied.
(c) Any reduction of the Aggregate Commitment pursuant to
subsection 4.1(a) or otherwise shall be accompanied by prepayment by the
Company of an amount equal to the excess, if any, of the Aggregate Outstanding
Extensions of Credit over the amount of the Aggregate Commitment after giving
effect to such reduction and each such reduction shall permanently reduce the
Aggregate Commitment then in effect.
30
(d) Any prepayment required pursuant to this subsection 4.1
or otherwise shall be applied, first, to the Loans then outstanding; second,
to the reimbursement of all outstanding Reimbursement Obligations; and, third,
to causing the then outstanding Undrawn L/C Obligations to be Fully Secured.
4.2 Optional Prepayments. The Company may, at any time and
from time to time, prepay the Loans made to it then outstanding, in whole or
in part, without premium or penalty (other than amounts payable pursuant to
subsection 4.9), upon at least three Working Days' irrevocable notice to the
Administrative Agent, in the case of Eurodollar Loans and one Business Day's
irrevocable notice to the Administrative Agent, in the case of Alternate Base
Rate Loans, specifying (a) the Loans to be prepaid, (b) the date and amount of
such prepayment and (c) whether the prepayment is of Eurodollar Loans or
Alternate Base Rate Loans or a combination thereof, and, if of a combination
thereof, the amount of prepayment allocable to each (and, with respect to such
Eurodollar Loans, each Tranche thereof). Upon receipt of any such notice, the
Administrative Agent will promptly notify each Lender thereof. If any such
notice is given, the Company will make the prepayment specified therein, and
such prepayment shall be due and payable on the date specified therein. Each
partial prepayment of the Loans pursuant to this subsection 4.2 shall be in an
amount equal to the lesser of (x) $500,000 or a whole multiple of $100,000 in
excess thereof and (y) the aggregate principal amount of the Loans then
outstanding to the Company.
4.3 Mandatory Prepayments.
(a) If, at any time and from time to time, the Aggregate
Outstanding Extensions of Credit exceed the Aggregate Commitment, the Company
shall immediately, first, repay the Loans and, second, make payments necessary
to cause Payment Obligations in respect of L/C Obligations to be Fully
Satisfied in an aggregate amount equal to such excess.
(b) If, as a result of the making of any payment required to
be made pursuant to this subsection 4.3, the Company would incur costs
pursuant to subsection 4.9, the Company may deposit the amount of such payment
with the Administrative Agent, for the benefit of the Lenders, in a cash
collateral account until the end of the applicable Interest Period, at which
time such payment shall be made. The Company hereby grants to the
Administrative Agent, for the benefit of the Lenders, a security interest in
all amounts from time to time on deposit in such cash collateral account and
expressly waives all rights (which rights the Company hereby acknowledges and
agrees are vested exclusively in the Administrative Agent) to exercise
dominion or control over any such amounts.
31
4.4 Interest Rate and Payment Dates. (a) The Eurodollar
Loans shall bear interest on the unpaid principal amount thereof for each day
during each Interest Period with respect thereto at a rate per annum equal to
the Eurodollar Rate for such day plus the Applicable Margin.
(b) The Alternate Base Rate Loans shall bear interest on the
unpaid principal amount thereof at a rate per annum equal to the Alternate
Base Rate.
(c) If all or a portion of any amount owing hereunder shall
not be paid when due, then, for so long as such amount remains unpaid, (i) if
the overdue amount represents principal, all Loans shall bear interest at a
rate per annum which is 2% above the rate which would otherwise be applicable
pursuant to subsection 4.4(a) or (b), as the case may be, and (ii) if the
overdue amount represents overdue interest, fees or other amounts (other than
the amounts described in clause (i) of this paragraph (c)) due under the
Credit Documents, such overdue amount shall bear interest at a rate per annum
equal to the Alternate Base Rate plus 2%. During such time as any principal of
or interest on any Eurodollar Loan remains unpaid, all such Eurodollar Loans
shall be converted to Alternate Base Rate Loans at the end of the respective
Interest Periods applicable thereto.
(d) Interest on each Loan accrued to but not including each
Interest Payment Date applicable thereto shall be payable in arrears on such
Interest Payment Date; provided that interest accruing on the principal of or
(to the extent permitted by applicable law) interest or any other amount
payable in connection with any Loan not paid when due (whether at stated
maturity, by acceleration or otherwise) shall be payable from time to time
upon demand of the Administrative Agent.
4.5 Conversion Options, Minimum Tranches and Maximum
Interest Periods. (a) The Company may elect from time to time to convert
outstanding Loans from Eurodollar Loans to Alternate Base Rate Loans by giving
the Administrative Agent at least one Business Day's prior irrevocable notice
of such election. The Company may elect from time to time and at any time to
convert outstanding Loans from Alternate Base Rate Loans to Eurodollar Loans
by giving the Administrative Agent at least three Working Days' irrevocable
notice of such election; provided that no Loans may be converted to Eurodollar
Loans (i) when any Default or Event of Default has occurred and is continuing
and the Administrative Agent has or the Required Lenders have determined that
such a conversion is not appropriate or (ii) after the date that is one month
prior to the Termination Date. Upon receipt of such notice, the Administrative
Agent shall promptly notify each Lender. On the date on which such conversion
is being made, each Lender shall take such action as is necessary to effect
such conversion. All or any part of the
32
outstanding Eurodollar Loans or Alternate Base Rate Loans may be converted as
provided herein.
(b) Any Eurodollar Loans may be continued as such upon the
expiration of an Interest Period with respect thereto by the Company giving
the Administrative Agent at least three Working Days' irrevocable notice for
continuation thereof; provided that no Eurodollar Loan may be continued as
such (i) when any Default or Event of Default has occurred and is continuing
and the Agent has or the Required Lenders have determined that such a
continuation is not appropriate, or (ii) subsequent to the date that is one
month prior to the Termination Date, and, instead, such Eurodollar Loans shall
be automatically converted to an Alternate Base Rate Loan on the last day of
the Interest Period for which a Eurodollar Rate was determined by the
Administrative Agent prior to the Administrative Agent's obtaining knowledge
of such Default or Event of Default. The Administrative Agent shall notify the
Lenders promptly that such automatic conversion shall occur.
(c) In the event that a timely notice of conversion or
continuation with regard to Eurodollar Loans is not given in accordance with
this subsection 4.5, then, unless the Administrative Agent shall have received
timely notice in accordance with subsection 4.2 that the Company elects to
prepay such Eurodollar Loans on the last day of such Interest Period, the
Company shall be deemed irrevocably to have requested that such Eurodollar
Loans be converted into Alternate Base Rate Loans on the last day of such
Interest Period.
(d) Any borrowing or continuation of Eurodollar Loans, or
conversion to or from Eurodollar Loans, or payments or prepayments of
Eurodollar Loans, shall be in such amounts and be made pursuant to such
elections so that, after giving effect thereto, (i) the aggregate principal
amount of each Tranche of Eurodollar Loans shall be $500,000 or a whole
multiple (to the extent possible) of $100,000 in excess thereof, (ii) the
aggregate principal amount of all Alternate Base Rate Loans shall be $500,000
or a whole multiple (to the extent possible) of $100,000 in excess thereof and
(iii) there shall not be more than six Tranches of Eurodollar Loans in the
aggregate at any one time outstanding.
4.6 Inability to Determine Interest Rate. (a) In the event
that the Administrative Agent shall have determined (which determination, in
the absence of manifest error, shall be conclusive and binding upon the
Company) that by reason of circumstances affecting the relevant interbank
eurocurrency market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for any Interest Period with respect to (i)
proposed Loans that the Company has requested be made as Eurodollar Loans,
(ii) a Eurodollar Loan that will result from the requested conversion of all
or part of the Alternate Base Rate Loans into Eurodollar Loans or (iii) the
continuation of a
33
Eurodollar Loan as such for an additional Interest Period (any such Loan
described in clauses (i), (ii) or (iii) of this subsection 4.6(a) being herein
called an "Affected Loan"), the Administrative Agent shall forthwith give
telecopy or telephonic notice of such determination, confirmed in writing, to
the Company and the Lenders at least two Business Days prior to the borrowing
date for such Loan, the conversion date for such Alternate Base Rate Loan or
the last day of the Interest Period applicable to such Loan, as the case may
be. Unless the Company shall have notified the Administrative Agent promptly
upon receipt of such telecopy or telephonic notice that it wishes to rescind
or modify its request regarding such Affected Loans, then any requested
Eurodollar Loan shall be made as, continued as, or converted into an Alternate
Base Rate Loan, as the case may be. Until any such notice has been withdrawn
by the Administrative Agent, no further Affected Loans shall be made.
(b) In the event that the Required Lenders determine that
the rate quoted by the Administrative Agent does not accurately reflect the
cost of making or maintaining any Loans that the Company has requested be made
or continued as or converted to Eurodollar Loans the Administrative Agent
shall forthwith give telecopy or telephonic notice of such determination to
the Company on or before the requested borrowing, conversion or continuation
date for such Loans or the next succeeding Interest Period for such Loans.
Unless the Company shall have notified the Administrative Agent promptly after
receipt of such telecopy or telephonic notice that it wishes to rescind or
modify its request regarding such Loans, then any such Eurodollar Loans shall
be made as or converted to Alternate Base Rate Loans.
4.7 Illegality. Notwithstanding any other provision herein,
if any change in law, rule, regulation, treaty or directive or in the
interpretation or application thereof, shall make it unlawful for any Lender
to make or maintain Eurodollar Loans as contemplated by this Agreement or to
accept deposits in order to make or maintain such Eurodollar Loans, (a) such
Lender shall promptly notify the Administrative Agent and the Company thereof,
(b) the agreements of such Lender hereunder to make or convert to Eurodollar
Loans shall be suspended forthwith and (c) such Lender's Loans then
outstanding as Eurodollar Loans, if any, shall automatically become Alternate
Base Rate Loans for the duration of the respective Interest Periods applicable
thereto (or, if permitted by applicable law, at the end of such Interest
Periods). The Company agrees promptly to pay to any Lender any additional
amounts necessary to compensate such Lender for any costs incurred by such
Lender as a consequence of the Company making any conversion in accordance
with this subsection 4.7, including, without limitation, any interest or fees
payable by such Lender to lenders of funds obtained by it in order to make or
maintain its Eurodollar Loans. A certificate as to any such costs payable
pursuant to this subsection 4.7 submitted by an officer of any Lender, through
the Administrative Agent, to the Company shall be conclusive, in the absence
34
of manifest error.
4.8 Requirements of Law; Changes of Law. (a) In the event
that the adoption of or any change in law, rule, regulation, treaty or
directive or in the interpretation or application thereof, or compliance by
any Lender with any request or directive (whether or not having the force of
law) issued after the date hereof from any central bank or other Governmental
Authority:
(i) imposes upon any Lender any tax of any kind
whatsoever with respect to this Agreement, its Notes, any Letter of
Credit, any Application or any Loan, or changes the basis of taxation
of payments to such Lender of principal, commitment fee, interest or
any other amount payable hereunder (except for (x) income and
franchise taxes imposed on such Lender by the jurisdiction under the
laws of which such Lender is organized or any political subdivision
or taxing authority thereof or therein, or by any jurisdiction in
which such Lender is located or any political subdivision or taxing
authority thereof or therein, and (y) taxes imposed by way of
deduction or withholding, which shall be exclusively governed by
subsection 4.10);
(ii) imposes, modifies or holds applicable any
reserve, special deposit, compulsory loan or similar requirement
against any Loan made, or assets held by, or credit extended by, or
deposits or other liabilities in or for the account of, or
acquisition of funds by or for the account of, any office of such
Lender, which is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
(iii) imposes on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender
of making, renewing, maintaining or participating in advances or extensions of
credit or issuing or participating in Letters of Credit or to reduce any
amount receivable by it in respect of its Eurodollar Loans, then, in any such
case, the Company shall promptly pay such Lender any additional amounts
necessary to compensate such Lender for such additional cost or reduced amount
receivable as reasonably determined by such Lender with respect to this
Agreement (including, without limitation, its participating interests in
Letters of Credit), its Notes or its Loans after taking into account any
amounts paid or payable pursuant to subsection 4.10(a). If a Lender becomes
entitled to claim any additional amounts pursuant to this subsection 4.8(a),
it shall promptly notify the Company, through the Administrative Agent, of the
event by reason of which it has become so entitled. A certificate as to any
additional amounts payable pursuant to the foregoing sentence submitted by an
officer of a Lender, through the Administrative Agent, to the Company shall be
conclusive, in the absence of manifest error.
35
(b) In the event that any Lender shall have determined that
the adoption of any law, rule, regulation or guideline adopted pursuant to or
arising out of the International Convergence of Capital Measurement and
Capital Standards or of any Requirement of Law otherwise regarding capital
adequacy, or any change therein or in the interpretation or application
thereof or compliance by any Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) issued after the
date hereof from any central bank or Governmental Authority, does or shall
have the effect of reducing the rate of return on such Lender's capital as a
consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy) by
an amount which is reasonably deemed by such Lender to be material, then from
time to time, promptly after submission by such Lender, through the
Administrative Agent, to the Company of a written request therefor, the
Company shall promptly pay to such Lender such additional amount or amounts as
will compensate such Lender for such reduction.
(c) The agreements in this subsection 4.8 shall survive the
termination of this Agreement and payment of the Loans and the Notes and all
other amounts payable hereunder.
4.9 Indemnity. The Company agrees to promptly pay and
indemnify each Lender for, and to hold such Lender harmless from, any loss or
expense which such Lender may sustain or incur in its reemployment of funds
obtained in connection with the making or maintaining of, or converting to,
Eurodollar Loans, as a consequence of (a) any default by the Company in
borrowing such Eurodollar Loans or in converting Alternate Base Rate Loans to
Eurodollar Loans after the Company has given a notice in respect thereof or
(b) any failure by the Company to prepay Eurodollar Loans after the Company
has given notice in respect thereof or (c) any payment, prepayment (whether
optional or mandatory) or conversion (whether optional or mandatory) of any
Eurodollar Loan on a day which is not the last day of an Interest Period with
respect thereto. Without limiting the effect of the foregoing, the Company
agrees to pay to each Lender an amount equal to the excess, if any, of (i) the
amount of interest which otherwise would have accrued on the principal amount
paid, prepaid or not borrowed for (A) the period from the date of such payment
or prepayment to the last day of the Interest Period applicable to such
Eurodollar Loan or (B) in the case of a failure to borrow or to convert, the
Interest Period applicable to such Eurodollar Loan, which would have commenced
on the date specified for such borrowing or conversion, at the applicable rate
of interest for such Eurodollar Loan provided for herein exclusive of any
margin applicable thereto minus (ii) the interest component of the amount such
Lender would have bid in the London interbank market in
36
respect of such Loan if such Loan were to be made on the date of such payment,
prepayment, failure to borrow or failure to convert, as the case may be. A
certificate as to any additional amounts payable pursuant to this subsection
4.9 submitted by an officer of a Lender, through the Administrative Agent, to
the Company shall be conclusive, absent manifest error. The agreements in this
subsection 4.9 shall survive termination of this Agreement and payment of the
Loans and the Notes and all other amounts payable hereunder.
4.10 Taxes. (a) All payments made by the Company under this
Agreement shall be made free and clear of, and without reduction for or on
account of, any present or future income, stamp, documentary, property, excise
or other taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding, in the case of the
Administrative Agent and each Lender, income and franchise taxes imposed on
the Administrative Agent or such Lender by the jurisdiction under the laws of
which the Administrative Agent or such Lender is organized or any political
subdivision or taxing authority thereof or therein, or by any jurisdiction in
which the Administrative Agent or such Lender is located or any political
subdivision or taxing authority thereof or therein (such non-excluded taxes
being called "Taxes"). If any Taxes are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder or under
the Notes, the amounts so payable to the Administrative Agent or such Lender
shall (without any obligation on the part of the Company to pay such amounts
ratably in accordance with the provisions of subsection 4.13) be increased to
the extent necessary to yield to the Administrative Agent or such Lender
(after payment of all Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and the
Notes. Whenever any Taxes are payable by the Company, as promptly as possible
thereafter, the Company shall send to the Administrative Agent, for its own
account or for the account of such Lender, as the case may be, a certified
copy of an original official receipt or other evidence reasonably satisfactory
to the Administrative Agent showing payment thereof. If the Company fails to
pay any Taxes when due to the appropriate taxing authority or fails to remit
to the Administrative Agent the required receipts or other required
documentary evidence, the Company shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. If any Taxes are paid by the Administrative Agent or any Lender to
any Governmental Authority, the Company shall indemnify the Administrative
Agent or such Lender, as the case may be (within 30 days after demand therefor
upon the Company), for any amounts so paid.
(b) Except as the Company shall otherwise consent, each
Lender
37
hereby severally (but not jointly) represents that, under applicable
law and treaties in effect on the date of this Agreement, no United States
federal taxes will be required to be withheld by the Administrative Agent or
the Company with respect to any payments to be made to such Lender in respect
of this Agreement. Each Lender which itself is not incorporated under the laws
of the United States or a state thereof or which is lending from an office
that is not incorporated under the laws of the United States or a state
thereof agrees severally (but not jointly) that, prior to the Closing Date, it
will deliver to the Company and the Administrative Agent two duly completed
copies of either United States Internal Revenue Service Form 1001 or 4224, or,
in the case of a Lender claiming exemption from U.S. federal withholding tax
under Section 871(h) or 881(c) of the Code with respect to payments of
"portfolio interest", a Form W 8, or any subsequent versions thereof or
successors thereto (and, if such Lender delivers a Form W-8, a statement under
the penalties of perjury that such Lender (i) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as a bank
for purposes of any tax, securities law or other filing or submission made to
any Governmental Authority, any application made to a rating agency or
qualification for any exemption from tax, securities law or other legal
requirements, (ii) is not a 10-percent shareholder (within the meaning of
Section 871(h)(3)(B) of the Code) of the Company and (iii) is not a controlled
foreign corporation related to the Company (within the meaning of Section
864(d)(4) of the Code)), certifying in each case that such Lender is entitled
to receive all payments under this Agreement and the Notes payable to it,
without deduction or withholding of any United States federal income taxes.
Each Lender which delivers to the Company and the Administrative Agent any
form pursuant to the immediately preceding sentence further undertakes to
deliver to the Company and the Administrative Agent two further completed
copies of said form, or successor applicable form, or other manner of
certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Company and
the Administrative Agent, and such extensions or renewals thereof as may
reasonably be requested by the Company and the Administrative Agent,
certifying that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless in any such case any change in law, rule, regulation, treaty or
directive, or in the interpretation or application thereof, has occurred prior
to the date on which any such delivery would otherwise be required which
renders all such forms inapplicable or which would prevent such Lender from
duly completing and delivering any such form with respect to it and such
Lender advises the Company that it is not capable of receiving payments
without any deduction or withholding of United States federal income tax.
Notwithstanding any provision of subsection 4.10(a) to the contrary, the
Company shall not have any obligation to pay any amount to or
38
for the account of any Lender on account of any Taxes pursuant to subsection
4.10(a) (including, without limitation, the second sentence thereof) to the
extent that such amount results from (i) the failure of any Lender to comply
with its obligations pursuant to this subsection 4.10(b) (or, in the case of
any Transferee, pursuant to subsection 11.6(g)) or (ii) any representation or
warranty made or deemed to be made by any Lender pursuant to this subsection
4.10(b) (or, in the case of any Transferee pursuant to subsection 11.6(g))
proving to have been incorrect, false or misleading when so made or deemed to
be made.
(c) Each Lender agrees to use reasonable efforts (including
reasonable efforts to change the office in which it is booking its Loans) to
avoid or to minimize any amounts which might otherwise be payable pursuant to
this subsection 4.10; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional costs or legal or regulatory
burdens deemed by such Lender to be material or otherwise be deemed by such
Lender to be disadvantageous to it or contrary to its policies.
(d) In the event that such reasonable efforts pursuant to
subsection 4.10(c) are insufficient to avoid all withholding taxes which would
be payable pursuant to this subsection 4.10, then such Lender (the "Taxable
Lender") shall use its best efforts to transfer to any other Lender (which is
not subject to such withholding taxes) its Loans and Commitment hereunder;
provided, however, that such transfer shall not be deemed by such Taxable
Lender, in its sole discretion, to be disadvantageous to it or contrary to its
policies. In the event that the Taxable Lender is unable, or otherwise is
unwilling, so to transfer its Loans and Commitment, the Company may designate
an alternate bank to purchase the Taxable Lender's Loans and Commitment and,
subject to the approval of the Administrative Agent (which approval shall not
be unreasonably withheld), the Taxable Lender shall transfer its Loans and
Commitments to such alternate bank and such alternate bank shall become a
Lender hereunder.
(e) The agreements in this subsection 4.10 shall survive the
termination of this Agreement and the payment of the Loans and Notes, and all
other amounts payable hereunder.
4.11 Commitment Fees; Other Fees. (a) The Company agrees to
pay to the Administrative Agent, for the account of the Lenders, a commitment
fee from and including the Closing Date in the amount equal to the Commitment
Fee Rate times the average daily Available Commitment, in each case during the
period for which such fee is payable. Such commitment fee shall be payable in
arrears on the last day of each March, June, September and December and (iii)
the Termination Date.
39
(b) The Company agrees to pay to Chase Securities Inc. and
The Chase Manhattan Bank, in each case for its own account the fees set forth
in the Fee Letter dated January 29, 1998 between the Company, Chase Securities
Inc. and The Chase Manhattan Bank on the dates and in the amounts set forth in
such Fee Letter.
4.12 Computation of Interest and Fees. (a) Interest in
respect of Alternate Base Rate Loans bearing interest at a rate based upon the
Prime Rate shall be calculated on the basis of a 365 or 366-day year, as the
case may be, for the actual days elapsed. Interest in respect of Alternate
Base Rate Loans bearing interest at a rate based upon the Federal Funds
Effective Rate or the Base CD Rate, interest in respect of Eurodollar Loans
and commitment fees shall be calculated on the basis of a 360-day year for the
actual days elapsed. The Administrative Agent will, as soon as practicable,
notify the Company and the Lenders of each determination of a Eurodollar Rate
and of any change in the Alternate Base Rate and the effective date thereof.
Any change in the Alternate Base Rate due to a change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate shall be
effective on the effective day of such change in the Prime Rate, the
Three-Month Secondary CD Rate or the Federal Funds Effective Rate,
respectively.
(b) Except as set forth in subsection 4.6, each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Company and
the Lenders, in the absence of manifest error.
4.13 Pro Rata Treatment and Payments. (a) Each borrowing by
the Company of Loans shall be made ratably by the Lenders in accordance with
the respective Commitment Percentages of the Lenders.
(b) Whenever any payment received by the Administrative
Agent under this Agreement or any Note is insufficient to pay in full all
amounts then due and payable to the Administrative Agent and the Lenders under
this Agreement and the Notes:
(i) If the Administrative Agent has not received a
Payment Sharing Notice (or if the Administrative Agent has received a
Payment Sharing Notice but the Event of Default specified in such
Payment Sharing Notice has been cured or waived pursuant to
subsection 11.1), such payment shall be distributed by the
Administrative Agent and applied by the Administrative Agent and the
Lenders in the following order: first, to the payment of fees and
expenses due and payable to the Administrative Agent under and in
connection with this Agreement; second, to the payment of all
expenses due and payable under subsection 11.5, ratably among the
Lenders in accordance
40
with the aggregate amount of such payments owed to each such Lender;
third, to the payment of fees due and payable under subsections 4.11
and 3.3, and ratably among the Lenders in accordance with the
Commitment Percentage of each Lender of the Commitment for which such
payment is owed; fourth, to the payment of interest then due and
payable on the Loans and under the Notes and in respect of the
Reimbursement Obligations, ratably in accordance with the aggregate
amount of interest owed to each such Lender; fifth, to the payment of
the principal amount of the Loans and the Notes and the Reimbursement
Obligations which is then due and payable and, in the case of
payments under any guarantee, to the payment of any other obligations
to any Lender (or Affiliate) not covered in first through fourth
above ratably guaranteed under any such guarantee, ratably among the
Lenders in accordance with the aggregate principal amount and, in the
case of payments under any guarantee, the obligations secured or
guaranteed thereby owed to each such Lender (or Affiliate); and,
sixth, to the payment of any other outstanding Payment Obligations,
ratably among the Lenders in accordance with the aggregate amount
owed to each Lender; and any balance remaining after payment in full
of all Payment Obligations shall be returned to the Company; or
(ii) If the Administrative Agent has received a
Payment Sharing Notice which remains in effect (or, if the Event of
Default specified therein has been waived pursuant to subsection
11.1), all payments received by the Administrative Agent under this
Agreement or any Note shall be distributed by the Administrative
Agent and applied by the Administrative Agent and the Lenders in the
following order: first, to the payment of all amounts described in
clauses "first" through " third" of the foregoing clause (i), in the
order set forth therein; second, to the payment of the interest
accrued on all Loans and Notes regardless of whether any such amount
is then due and payable, and the Reimbursement Obligations then due
and owing ratably among the Lenders in accordance with the aggregate
accrued interest owed to each such Lender; and third, to the payment
of the principal amount of all Loans and Notes and in respect of the
Reimbursement Obligations and, in the case of payments under any
guarantee, to the payment of any other obligations to any Lender (or
Affiliate) not covered in first and second above ratably guaranteed
under any such guarantee, regardless of whether any such amount is
then due and payable, ratably among the Lenders in accordance with
the aggregate principal amount and, in the case of payments under any
guarantee, the obligations guaranteed thereby owed to each such
Lender (or Affiliate); and fourth, to the payment of any other
Payment Obligations, ratably among the Lenders in accordance with the
aggregate amount owed to each Lender; and any balance remaining after
payment in full of all Payment Obligations
41
shall be returned to the Company.
(c) All payments (including prepayments) to be made by the
Company on account of principal, interest and fees shall be made without
set-off or counterclaim and shall be made to the Administrative Agent for the
account of the Lenders at the office of the Administrative Agent specified in
subsection 11.2, or at such other location as the Administrative Agent may
direct on or prior to 1:00 P.M., New York City time, in lawful money of the
United States and in immediately available funds. The Administrative Agent
shall distribute such payments in accordance with the provisions of subsection
4.13(b) promptly upon receipt in like funds as received.
(d) If any payment hereunder (other than payments on
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest thereon shall be payable at the
then applicable rate during such extension. If any payment hereunder on a
Eurodollar Loan becomes due and payable on a day other than a Working Day, the
maturity thereof shall be extended to the next succeeding Working Day unless
the effect of such extension would be to extend such payment into another
calendar month, in which event such payment shall be made on the immediately
preceding Working Day.
(e) Unless the Administrative Agent shall have been notified
by telephone, confirmed in writing, by any Lender prior to a borrowing date
that such Lender will not make the amount which would constitute its
Commitment Percentage of the borrowing to be made on such date available to
the Administrative Agent, on such borrowing date the Administrative Agent may
assume that such Lender has made such amount available to the Administrative
Agent and, in reliance upon such assumption, make available to the Company a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount equal to the product of (i) the daily
average Federal Funds Effective Rate during such period as determined by the
Administrative Agent times (ii) such amount times (iii) a fraction of which
the numerator is the number of days from and including such borrowing date to
the date on which such amount becomes immediately available to the
Administrative Agent and of which the denominator is 360. A certificate of the
Administrative Agent submitted to any Lender with respect to any amounts owing
under this paragraph (e) shall be conclusive, in the absence of manifest
error. If such amount is not in fact made available to the Administrative
Agent by such Lender within three Business Days after such borrowing date, the
Administrative Agent shall be entitled to recover such amount, with interest
thereon at the rate per annum then applicable to Alternate Base Rate Loans
hereunder, within eight Business Days after
42
demand, from the Company.
4.14 Payments on Account of Loans and Fees. All payments and
prepayments hereunder shall be made in accordance with subsection 4.13(c).
SECTION 5. REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders and the Administrative Agent
to enter into this Agreement and to make the Loans hereunder, the Company
hereby represents and warrants to each of them that:
5.1 Corporate Existence. Each of the Company and its
Subsidiaries is duly organized, validly existing and in good standing under
the laws of the jurisdiction of its incorporation (except no representation is
made as to the good standing of any Subsidiary organized under the laws of a
jurisdiction in which there is no concept of good standing), has the corporate
power to own its assets and to transact the business in which it is presently
engaged, is duly qualified as a foreign corporation and in good standing under
the laws of each jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification, except where all such
failures to so qualify and be in good standing would not, in the aggregate, be
reasonably likely to have a Material Adverse Effect, and is in compliance with
all Requirements of Law except to the extent that the failure to comply
therewith would not, in the aggregate be reasonably likely to have a Material
Adverse Effect.
5.2 Corporate Power. (a) The Company has the corporate
power, authority and legal right to execute, deliver and perform this
Agreement and the other Credit Documents to which it is a party and to borrow
hereunder. The Company has taken as of the Closing Date all necessary
corporate action to authorize the borrowings on the terms and conditions of
this Agreement and the other Credit Documents. The Company has taken as of the
Closing Date all necessary corporate action to authorize the execution,
delivery and performance of this Agreement and the other Credit Documents to
which it is a party.
(b) No consent of any other Person (including, without
limitation, stockholders or creditors of the Company or any of its
Subsidiaries), and no consent, license, permit, approval or authorization of,
exemption by, or registration, filing or declaration with, any Governmental
Authority is required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement, the Applications and the Notes
and the Guarantees other than (i) those which have been obtained or made and
remain in full force and effect and (ii) those which, in the aggregate, would
not be
43
reasonably likely to have a Material Adverse Effect if not obtained or
made.
(c) This Agreement and the other Credit Documents to which
it is a party have been executed and delivered by a duly authorized officer of
the Company and constitute the legal, valid and binding obligations of the
Company, enforceable against it in accordance with their terms except as
enforceability may be limited by bankruptcy, insolvency, moratorium,
reorganization or other similar laws affecting creditors' rights generally and
except as enforceability may be limited by general principles of equity.
5.3 No Legal Bar to Loans. The execution, delivery and
performance by the Company of this Agreement, the Applications and the Notes
will not violate any Contractual Obligation or material Requirement of Law to
which the Company or any of its Subsidiaries is a party, or by which the
Company or any of its Subsidiaries or any of their respective material
properties or assets may be bound, and will not result in the creation or
imposition of any Lien on any of their respective material properties or
assets pursuant to the provisions of any Contractual Obligation except
pursuant to the Credit Documents.
5.4 No Material Litigation. No litigation, suit, action,
investigation, inquiry or other proceeding is presently pending or, to the
knowledge of the Company, threatened against Holdings or any of its
Subsidiaries or any of its or their properties or assets, by or before any
arbitrator or any Governmental Authority and no preliminary or permanent
injunction or order by a state or federal court has been entered in connection
with any Credit Document or any of the transactions contemplated hereby or
thereby, which in any of such cases would be reasonably likely to have a
Material Adverse Effect, and all applicable waiting periods have expired
without any action being taken or threatened by any Governmental Authority
which would restrain, prevent or otherwise impose material adverse conditions
on the transactions contemplated hereby or which would be reasonably likely to
have a Material Adverse Effect.
5.5 No Default. Neither Holdings nor any of its Subsidiaries
is in default in the payment or performance of any obligations or in the
performance of any Contractual Obligation to which it is a party or by which
it or any of its properties or assets may be bound, except to the extent that
such defaults, in the aggregate, would not be reasonably likely to have a
Material Adverse Effect. No Default hereunder has occurred and is continuing.
Neither Holdings nor any of its Subsidiaries is in default under any order,
award or decree of any court, arbitrator or Governmental Authority binding
upon or affecting it or by which any of its material properties or assets is
bound or affected, and no such order, award or decree or any default
thereunder would be reasonably likely to have a Material Adverse Effect.
44
5.6 Ownership of Properties; Liens. Except as is or would be
permitted pursuant to subsection 8.2, each of the Company and its Subsidiaries
has good and marketable title to all its owned real properties, subject to no
Lien (other than Permitted Exceptions), and has good title to all its personal
properties and assets, subject to no Lien (other than Permitted Exceptions).
5.7 Taxes. Each of the Company and its Subsidiaries has
timely filed or caused to be timely filed all material tax returns (including,
without limitation, information returns) which to the knowledge of the Company
or any of its Subsidiaries are required to be filed, and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
them (other than those being contested in good faith by appropriate
proceedings for which adequate reserves (in accordance with GAAP) have been
provided on the books of the Company or such Subsidiary, as the case may be),
and no tax liens have been filed (other than those relating to taxes which are
not yet due and payable or which are being contested as aforesaid).
5.8 ERISA. No Reportable Event has occurred during the
immediately preceding six-year period with respect to any Plan that resulted
or would be reasonably likely to result in any unpaid liability, and each Plan
(other than any Multiemployer Plan or any multiemployer health or welfare
plan) has complied and has been administered in all material respects with the
applicable provisions of ERISA and the Code, except as such Reportable Event
or such failure to comply or be so administered would not reasonably be likely
to have a Material Adverse Effect. The amount by which the present value of
all accrued benefits under each Single Employer Plan maintained by the Company
or any of its Subsidiaries or any Commonly Controlled Entity (based on those
assumptions used to fund the Plans), as of the last annual valuation date
applicable thereto, exceeds the value of the assets of each such Plan
allocable to such benefits, in the aggregate for all such Plans as to which
such present value of benefits exceeds the value of its assets (the "Unfunded
Pension Amount"), is less than $60,000,000, when aggregated with the Potential
Withdrawal Liability. Neither the Company nor any of its Subsidiaries nor any
Commonly Controlled Entity has during the immediately preceding six-year
period had a complete or partial withdrawal from any Multiemployer Plan that
resulted or would be reasonably likely to result in any unpaid withdrawal
liability under Section 4201 of ERISA that would be reasonably likely to have
a Material Adverse Effect, and the withdrawal liability under Section 4201 of
ERISA to which the Company or any of its Subsidiaries or any Commonly
Controlled Entity would become subject under ERISA if the Company or any of
its Subsidiaries or any such Commonly Controlled Entity were to withdraw
completely from all Multiemployer Plans as of the most recent valuation date
applicable thereto (the "Potential Withdrawal Liability") is not in excess of
$60,000,000, when aggregated with the Unfunded Pension Amount. Neither
45
the Company nor any of its Subsidiaries nor any Commonly Controlled Entity has
received notice that any Multiemployer Plan is in Reorganization or Insolvent
where such Reorganization or Insolvency has resulted, or would be reasonably
likely to result in an unpaid liability that would be reasonably likely to
have a Material Adverse Effect nor, to the best knowledge of the Company or
any of its Subsidiaries, is any such Reorganization or Insolvency reasonably
likely to occur. The obligations of the Company and each of its Subsidiaries
and each Commonly Controlled Entity for post retirement benefits to be
provided to their current and former employees under Plans which are welfare
benefits plans (as defined in Section 3(l) of ERISA) are not reasonably likely
to have a Material Adverse Effect, when aggregated with their obligations with
respect to the Unfunded Pension Amount and the Potential Withdrawal Liability.
5.9 Financial Condition. The consolidated balance sheet of
the Company as of December 31, 1996 and the related consolidated statements of
earnings and stockholders' equity and cash flows for the fiscal year ended on
such date, certified by Ernst & Young LLP, present fairly the consolidated
financial position of the Company and its Subsidiaries as at such date, and
the consolidated results of their operations and cash flows for the fiscal
year then ended. The unaudited consolidated balance sheet of the Company as at
September 27, 1997, and the related unaudited consolidated statements of
earnings and stockholders' equity and cash flows for the nine-month period
ended on such date present fairly the consolidated financial position of the
Company and its Subsidiaries as of such date, and the consolidated results of
their operations and cash flows for the nine-month period then ended (subject
to normal year-end audit adjustments and subject to the absence of footnotes).
All such financial statements, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved except as disclosed in the notes thereto.
Neither the Company nor any of its Subsidiaries has any material Contingent
Obligation or any material obligation, liability or commitment, direct or
contingent (including, without limitation, any liability for taxes or any
material forward or long-term commitment), which is not (a) reflected in the
foregoing statements or in the notes thereto or (b) permitted to be incurred
under this Agreement.
5.10 No Change. Since December 31, 1996, there has been no
material adverse change in the business, condition (financial or otherwise),
operations, performance, properties or prospects of either of (i) the Company
or (ii) the Company and its Subsidiaries taken as a whole.
5.11 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" in
violation of Regulations G, T, U and X of the Board of Governors of the
Federal Reserve
46
System as now and from time to time hereafter in effect. If
requested by any Lender or the Administrative Agent at any time or from time
to time, the Company will furnish to the Administrative Agent and each Lender
a statement to the foregoing effect in conformity with the requirements of FR
Form U-1 or G-3 referred to in said Regulations U and G, respectively.
5.12 Not an "Investment Company". Neither the Company nor
any of its Subsidiaries is an "investment company," or a company "controlled"
by an "investment company", within the meaning of the Investment Company Act
of 1940, as amended. Neither the Company nor any of its Subsidiaries is
subject to regulation under any federal or state statute or regulation which
limits its ability to incur indebtedness.
5.13 Intellectual Property. Each of the Company and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, patents, technology, know-how and processes necessary for the
conduct of its business as currently conducted that are material to the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Company and its Subsidiaries taken as a whole
(the "Intellectual Property"). No claim has been asserted and is pending by
any Person with respect to the use of any such Intellectual Property, or
challenging or questioning the validity or effectiveness of any such
Intellectual Property and the Company and its Subsidiaries do not know of any
valid basis for any such claim, nor does the use of such Intellectual Property
by the Company and its Subsidiaries infringe on the rights of any Person,
except to the extent of such claims and infringements which would not
(including, without limitation, any liability arising therefrom), in the
aggregate, be reasonably likely to have a Material Adverse Effect.
5.14 Environmental Matters. Except to the extent that the
failure of the representations and warranties set forth in this subsection
5.14 to be true and correct would not be reasonably likely to have a Material
Adverse Effect, to the best knowledge of the Company and its Subsidiaries:
(i) each parcel of real property owned or leased by
the Company or any of its Subsidiaries (the "Real Property") does not
contain any Hazardous Materials in concentrations which violate any
applicable Environmental Laws governing the use, storage, treatment,
transportation, manufacture, refinement, handling, production or
disposal of Hazardous Materials;
(ii) the Real Property is in compliance with all
Environmental Laws, including, without limitation, all applicable
federal, state and local standards and requirements regarding the
generation, treatment, storage, handling, use or disposal of
Hazardous Materials at
47
the Real Property, and there is no Hazardous Materials contamination
which could materially interfere with the continued operation of the
Real Property or materially impair the fair saleable value thereof;
(iii) neither the Company nor any of its
Subsidiaries has received any notice of violation or advisory action
by any Governmental Authority regarding environmental control matters
or permit compliance with regard to the Real Property, nor is the
Company nor any Subsidiary aware that any Governmental Authority is
contemplating delivering to the Company or any of its Subsidiaries
any such notice;
(iv) Hazardous Materials have not been transferred
from the Real Property to any other location in violation of any
applicable Environmental Laws; and
(v) there are no governmental administrative
actions or judicial proceedings pending or, threatened under any
Environmental Laws to which the Company or any of its Subsidiaries is
or will be named as a party with respect to the Real Property.
5.15 Models and Pro Forma Balance Sheet. The financial
models (including projections for the 1998 fiscal year of the Company) and the
pro forma financial statements adjusted to give effect to the Note Redemption
and the financings contemplated hereby contained in the confidential
information memorandum delivered to the Lenders in January 1998 were prepared
in good faith on the basis of the assumptions stated therein, which
assumptions (a) were reasonable in light of conditions existing at the time of
delivery of such models and pro forma financial statements and, in all
material respects, on the Closing Date, and (b) represented, at the time of
delivery and on the Closing Date, the Company's best estimate of future
financial performance.
5.16 Disclosure. No information, schedule, exhibit or report
or other document furnished by the Company or any of its Subsidiaries to the
Administrative Agent or any Lender in connection with the negotiation of this
Agreement or pursuant to the terms of this Agreement, as such information,
schedule, exhibit or report or other document has been amended, supplemented
or superseded by any other information, schedule, exhibit or report or other
document later delivered to the same parties receiving such information,
schedule, exhibit or report or other document, contained any material
misstatement of fact or omitted to state a material fact or any fact necessary
to make the statements contained therein, in light of the circumstances when
made, not materially misleading; provided that in the case of information,
schedules, exhibits or reports or other documents made, delivered or prepared
by Persons other than the Company, its Subsidiaries and their agents, such
representation and warranty is subject to the qualification
48
that it is true and correct only to the knowledge of the Company and its
Subsidiaries.
5.17 Solvency. The aggregate value of all of the assets of
the Company and its Subsidiaries on a consolidated basis, at a fair valuation,
exceeds the total liabilities of the Company and its Subsidiaries on a
consolidated basis (including contingent, subordinated, unmatured and
unliquidated liabilities). Each of the Company and its Subsidiaries has the
ability to pay its debts as they mature and each of the Company and its
Subsidiaries does not have unreasonably small capital with which to conduct
its business. For purposes of this subsection 5.17, the "fair valuation" of
such assets shall be determined on the basis of that amount which may be
realized within a reasonable time, in any manner through realization of the
value of or dispositions of such assets at the regular market value,
conceiving the latter as the amount which could be obtained for the properties
in question within such period by a capable and diligent business person from
an interested buyer who is willing to purchase under ordinary selling
conditions.
5.18 Guarantees. The provisions of each Guarantee are
effective to create a legal, valid, binding and enforceable guarantee of the
obligations described therein, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
the enforcement of creditors' rights generally and by general equitable
principles.
5.19 Matters Relating to Subsidiaries. The Company has no
Subsidiaries on the Closing Date, other than those set forth on Schedule 5.19.
The Company has notified the Administrative Agent in writing of each
Subsidiary created or acquired after the Closing Date and has complied with
the provisions of subsection 8.16 with respect to each such Subsidiary.
5.20 Labor Matters. There are no strikes or other labor
disputes against the Company or any of its Subsidiaries pending or, to the
knowledge of the Company, threatened that (individually or in the aggregate)
would be reasonably likely to have a Material Adverse Effect. Hours worked by
and payment made to employees of the Company and its Subsidiaries have not
been in violation of the Fair Labor Standards Act or any other applicable
Requirement of Law dealing with such matters that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. All
payments due from the Company or any of its Subsidiaries on account of
employee health and welfare insurance that (individually or in the aggregate)
would be reasonably likely to have a Material Adverse Effect if not paid, have
been paid or accrued as a liability on the books of the Company or the
relevant Subsidiary.
5.21 Tax Allocation Agreement. The Tax Allocation Agreement
is
49
in full force and effect.
SECTION 6. CONDITIONS PRECEDENT
6.1 Conditions to Initial Extensions of Credit. The
agreement of each Lender to make the initial extensions of credit (regardless
of whether such extensions of credit are to be made in the form of Loans or
Letters of Credit) requested to be made by it shall be subject to the
satisfaction or waiver by such Lender of the following conditions precedent
(the date on which said conditions are satisfied or waived, being herein
called the "Closing Date") on or before March 2, 1998:
(a) Credit Agreement. The Administrative Agent shall have
received this Agreement duly executed and delivered by a duly
authorized officer of the Company, each Lender and the Administrative
Agent;
(b) Notes. The Administrative Agent shall have received, for
the account of each Lender which has so requested, a Note conforming
to the requirements hereof and executed and delivered by a duly
authorized officer of the Company;
(c) Guarantees. The Administrative Agent shall have received
each Guarantee (other than the Guarantees delivered pursuant to
subsection 8.16), duly executed and delivered by a duly authorized
officer of the Guarantor or Guarantors parties thereto;
(d) Lien Searches. The Administrative Agent shall have
received the results of Lien searches, conducted by a search service
reasonably satisfactory to the Administrative Agent, and the
Administrative Agent shall be satisfied that no Liens are outstanding
on the property or assets of the Company and its Domestic
Subsidiaries, other than any such Liens (i) which are permitted
pursuant to the terms of the Credit Documents or (ii) as to which the
Administrative Agent has received documentation reasonably
satisfactory to it evidencing the termination of such Liens;
(e) Corporate Proceedings of Loan Parties. The
Administrative Agent shall have received (a) certified copies of the
Charter and by-laws of each Loan Party and (b) the resolutions, in
form and substance reasonably satisfactory to the Administrative
Agent, of the Board of Directors of each Loan Party, authorizing in
each case the execution, delivery and performance of this Agreement,
the Notes and the other Credit Documents to which such Loan Party is
a party, in each case certified by the Secretary or an Assistant
Secretary of such Loan Party as of the Closing Date and each such
certificate shall state that the
50
resolutions thereby certified have not been amended, modified,
revoked or rescinded as of the date of such certificate;
(f) Incumbency Certificates for Loan Parties. The
Administrative Agent shall have received a certificate of the
Secretary or an Assistant Secretary (or analogous officer) of each
Loan Party dated the Closing Date, as to the incumbency and signature
of the officers of such Loan Party executing each of this Agreement,
the Notes and each other Credit Document to which such Loan Party is
a party, and any certificate or other documents to be delivered by it
pursuant thereto, together with evidence of the incumbency of such
Secretary or Assistant Secretary as the case may be;
(g) Certain Legal Opinions. The Administrative Agent shall
have received executed legal opinions of:
(i) ▇▇▇▇, Weiss, Rifkind, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, as
counsel to the Company, substantially in the form of Exhibit B-1; and
(ii) the General Counsel (or other person
reasonably acceptable to the Administrative Agent) of the Company,
substantially in the form of Exhibit B-2.
Each of the foregoing legal opinions shall be accompanied by copies of the
legal opinions, if any, upon which such counsel rely, and in each case shall
contain such changes thereto as may be approved by, and as shall otherwise be
in form and substance reasonably satisfactory to, the Administrative Agent and
shall cover such other matters incident to the transactions contemplated by
the Credit Documents as the Administrative Agent may reasonably require. Each
of the counsel delivering the foregoing legal opinions is expressly instructed
to deliver its opinion for the benefit of each of the Administrative Agent and
each other holder of the Payment Obligations;
(h) Existing Credit Agreement. The Company shall have given
irrevocable notice pursuant to the terms of the Existing Credit
Agreement, terminating in whole the loan commitments of the lenders
thereunder. All principal and interest, if any, outstanding under,
and all fees or other amounts then due under, the Existing Credit
Agreement shall have been paid in full, and the Administrative Agent
shall have received a certificate of the Company to the foregoing
effect;
(i) Termination of Existing Security Documents. The
Administrative Agent shall have received evidence satisfactory to it
that (i) all "Security Documents" (as defined in the Existing Credit
Agreement)
51
have been terminated and (ii) all collateral security delivered under
such Security Documents has been released and returned;
(j) Fees. The Administrative Agent shall have received, for
the accounts of the Lenders and the Administrative Agent, all accrued
fees and expenses owing hereunder or in connection herewith to the
Administrative Agent and the Lenders (including, without limitation,
accrued fees and disbursements of counsel to the Administrative
Agent), to the extent that such fees and expenses have been presented
for payment a reasonable time prior to the Closing Date;
(k) Financial Statements. The Lenders shall have received
(i) satisfactory audited consolidated financial statements of the
Company for the two most recent fiscal years ended prior to the
Closing Date as to which such financial statements are available and
(ii) satisfactory unaudited interim consolidated financial statements
of the Company certified by a senior officer of the Company for each
fiscal quarterly period ended subsequent to the date of the latest
financial statements delivered pursuant to clause (i) of this
paragraph as to which such financial statements are available;
(l) Legal Investment. The making of the Loans and other
extensions of credit hereunder shall be permitted on the Closing Date
as a legal investment by the laws, rules and regulations of the State
of New York and by each jurisdiction to which the Lenders may be
subject (without resort to any so-called "basket" provision of such
laws, including without limitation Section 1405(8) of the New York
Insurance Laws); and the Lenders shall have received such
certificates or other evidence as they may reasonably request
demonstrating the legality of such purchase under such laws, rules
and regulations;
(m) Financial Models and Pro Forma Balance Sheet. The
Administrative Agent shall have received financial models and pro
forma balance sheet referenced in subsection 5.15;
(n) Consents and Approvals. The Administrative Agent shall
have received true and correct copies (in each case, certified as to
authenticity on such date by a duly authorized officer of the
Company) of all documents and instruments necessary or reasonably
advisable under any Requirement of Law or by Contractual Obligation
of the Company or any of its Subsidiaries, in connection with the
execution, delivery, performance, validity and enforceability of any
Credit Document and the continuing operations of the Company and its
Subsidiaries, other than any consents, authorizations and filings for
which the failure to make or obtain would not be reasonably likely to
have a Material Adverse Effect;
52
such consents, authorizations and filings shall be reasonably
satisfactory in form and substance to the Administrative Agent and
shall be in full force and effect. The Administrative Agent shall
have received a certificate of a Responsible Officer of the Company
stating that such consents, licenses and approvals are in full force
and effect;
(o) Redemption of Senior Subordinated Notes. The Note
Redemption of the Senior Subordinated Notes shall have been
consummated concurrently with the initial funding of the Loans at a
redemption price of 103%;
(p) No Litigation. No litigation, suit, action,
investigation, inquiry or other proceeding by or before any
arbitrator or any Governmental Authority shall be pending and no
preliminary or permanent injunction or order by a state or federal
court shall have been entered in connection with any Credit Document
or any of the transactions contemplated hereby or thereby or
otherwise which in any of such cases would be reasonably likely to
have a material adverse effect on (a) the business, assets,
operations, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole, (b) their ability to
perform their obligations under the Credit Documents or (c) the
rights and remedies of the Lenders, and all applicable waiting
periods shall have expired without any action being taken or
threatened by any Governmental Authority which would restrain,
prevent or otherwise impose material adverse conditions on the
transactions contemplated hereby;
(q) No New Information. The Lenders shall not have become
aware of any previously undisclosed information which would be
reasonably likely to have a Material Adverse Effect;
(r) No Defaults. There shall exist no event of default (or
condition which would constitute an event of default with the giving
of notice or the passage of time) under any Capital Stock, financing
agreements, lease agreements or other contracts of Holdings or any of
its Subsidiaries which event of default or condition, in the
aggregate with all other then-existing events of default and
conditions, would be reasonably likely to (i) have a Material Adverse
Effect or (ii) materially adversely affect the ability of the Company
to consummate the Note Redemption;
(s) Tax Allocation Agreement. The Administrative Agent shall
have received a true and correct copy of the Tax Allocation
Agreement; and
(t) Additional Matters. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with
53
the transactions contemplated by the Credit Documents shall be
reasonably satisfactory in form and substance to the Administrative
Agent and its counsel.
6.2 Conditions to Each Extension of Credit. The agreement of
each Lender to make any Loan requested to be made by it on any date and the
agreement of the Issuing Lender to issue any Letter of Credit to be issued by
it on any date (including, without limitation, its initial extension of
credit) is subject to the satisfaction of the following conditions precedent:
(a) Representations and Warranties. Each of the
representations and warranties made by each party to each Credit
Document in or pursuant to this Agreement or any other Credit
Document, or contained in any certificate or financial statement
furnished at any time under or in connection with this Agreement or
any other Credit Document shall be true and correct in all material
respects on and as of such date as if made on and as of such date,
both before and after giving effect to such Loan, and to all other
extensions of credit to be made on such date and the use of the
proceeds thereof; and
(b) No Default. No Event of Default and no Default shall
have occurred and be continuing on such date or after giving effect
to the extensions of credit requested to be made on such date.
Each borrowing by the Company or issuance of a Letter of Credit hereunder
shall constitute a representation and warranty by the Company, as of the date
of such borrowing or issuance, that the conditions contained in paragraphs (a)
and (b) of this subsection 6.2 have been satisfied.
SECTION 7. AFFIRMATIVE COVENANTS
The Company hereby agrees that, until the Payment
Obligations have been Fully Satisfied:
7.1 Financial Statements. The Company will furnish to each
Lender, through the Administrative Agent:
(a) as soon as available, but in any event within 105 days
after the end of each fiscal year of the Company, a copy of the
audited consolidated balance sheet of the Company and its
Subsidiaries as at the end of such year and the related consolidated
statements of earnings and stockholders' equity and cash flows for
such year, setting forth in each case in comparative form the figures
for the previous year, certified without a "going concern" or like
qualification or exception, or
54
qualification arising out of the scope of the audit, by independent
certified public accountants of nationally recognized standing not
unacceptable to the Required Lenders;
(b) as soon as available, but in any event within 105 days
after the end of each fiscal year of the Company, a copy of the
consolidating balance sheet of the Company and its Subsidiaries as at
the end of such year and the related consolidating statements of
earnings for such year, setting forth in each case in comparative
form the figures for the previous year, certified by a Responsible
Officer;
(c) as soon as available, but in any event within 50 days
after the end of each of the first three fiscal quarters in each
fiscal year of the Company, a copy of the unaudited consolidated
balance sheet of the Company and its Subsidiaries as at the end of
each such quarter and the related unaudited consolidated statements
of earnings and stockholders' equity and cash flows for such
quarterly period and the portion of the fiscal year through such
date, setting forth in each case in comparative form the figures for
the previous year, certified by a Responsible Officer (subject to
normal year-end audit adjustments); and
(d) as soon as available, but in any event within 50 days
after the end of the first three fiscal quarters in each fiscal year
of the Company, a copy of the unaudited consolidating balance sheet
of the Company and its Subsidiaries as at the end of each such
quarter and the related unaudited consolidating statements of
earnings for such quarterly period and the portion of the fiscal year
through such date, setting forth in each case in comparative form the
figures for the previous year, certified by a Responsible Officer
(subject to normal year-end audit adjustments).
All financial statements referred to in this subsection 7.1
shall be prepared in reasonable detail and in accordance with GAAP applied
consistently throughout the periods reflected therein (except as approved by
such accountants or Responsible Officer, as the case may be, and disclosed
therein).
7.2 Certificates; Other Information. The Company will
furnish to each Lender, through the Administrative Agent:
(a) concurrently with the delivery of the financial
statements referred to in subsection 7.1(a), a certificate of the
independent certified public accountants certifying such financial
statements stating that in making the examination necessary therefor
no knowledge was obtained of any Default or Event of Default, except
as specified in such certificate;
55
(b) concurrently with the delivery of the financial
statements referred to in subsections 7.1(a) through (d), a
certificate of a Responsible Officer (i) stating that, to the best of
such Responsible Officer's knowledge, the Company during such period
has observed or performed in all material respects all of its
covenants and other agreements, and satisfied in all material
respects every condition, contained in the Credit Documents to be
observed, performed or satisfied by it, and that such officer has
obtained no knowledge of any Default or Event of Default, except as
specified in such certificate, and (ii) showing in detail the
calculations supporting such statement in respect of subsection 8.1;
(c) within 60 days following the commencement of each fiscal
year, the budget for the Company and its Subsidiaries for such fiscal
year, showing each quarter separately;
(d) promptly upon receipt thereof, copies of all audit
reports submitted to the Company by independent public accountants in
connection with each interim or special audit of the books of the
Company or any of its Subsidiaries made by such accountants;
(e) within five days after the same are sent, copies of all
financial statements and reports which Holdings sends to its
stockholders or holders of its publicly traded equity securities or
Indebtedness pursuant to Section 13 or 15(d) of the Exchange Act, and
within five days after the same are filed, copies of all financial
statements and reports which the Company or Holdings may make to, or
file with, the Securities and Exchange Commission; and
(f) promptly, such additional documents and financial and
other information with respect to Holdings and its Subsidiaries as
the Administrative Agent or any Lender may from time to time
reasonably request.
7.3 Payment of Obligations. The Company will, and will cause
each of its Subsidiaries to, pay, discharge or otherwise satisfy at or before
maturity or before they become delinquent, as the case may be, all its
Indebtedness and other material obligations of whatever nature, except when
the amount or validity thereof is then being contested in good faith by
appropriate proceedings and reserves with respect thereto to the extent, if
any, required by GAAP have been provided on the books of the Company or such
Subsidiary, as the case may be. Notwithstanding anything to the contrary in
the foregoing sentence, the Company shall not be in default under this
subsection 7.3 unless the aggregate amount of non-contested Indebtedness or
obligations which it and its Subsidiaries have so failed to pay, discharge or
satisfy before they become delinquent and which remain delinquent at the time
of determination is more than $5,000,000 in the aggregate.
56
7.4 Conduct of Business and Maintenance of Existence. Except
as permitted by this Agreement, the Company and its Subsidiaries will continue
to engage in business of the same general type as now conducted by the Company
and its Subsidiaries; and, except as permitted by this Agreement, the Company
will, and will cause each of its Subsidiaries to, preserve, renew and keep in
full force and effect its corporate existence and take all reasonable action
to maintain all rights, privileges and franchises necessary or desirable in
the normal conduct of its business, except as otherwise permitted pursuant to
subsections 8.4 and 8.5 and except that the Company and its Subsidiaries may
fail to maintain any such rights, privileges and franchises which in the
Company's business judgment are not necessary in the best interests of the
Company to be maintained, and comply with all Contractual Obligations and
Requirements of Law except to the extent that all failures to comply therewith
would not in the aggregate, be reasonably likely to have a Material Adverse
Effect. The Company and its Subsidiaries will not make any material change in
its present method of conducting business.
7.5 Maintenance of Property; Insurance. The Company will,
and will cause each of its Subsidiaries to, (a) keep all property useful and
necessary in its business in good working order and condition, except where
the failure to do so would not, in the aggregate, be reasonably likely to have
a Material Adverse Effect and (b) maintain with financially sound and
reputable insurance companies insurance on such of its property and against
such liabilities in at least such amounts and against at least such risks as
are customarily insured against in the same general area by companies engaged
in the same or a similar business and furnish to the Administrative Agent,
upon written request, and to each Lender which makes a written request through
the Administrative Agent, reasonable information as to the insurance carried.
7.6 Inspection of Property; Books and Records; Discussions.
The Company will, and will cause each of its Subsidiaries to, (a) keep proper
books of accounts and records in which entries in conformity in all material
respects with all Requirements of Law shall be made of all dealings and
transactions in relation to its businesses and activities and which shall
permit the preparation of financial statements in conformity with GAAP and (b)
permit representatives of any Lender to visit and inspect such of its
properties as such Lender may request through the Administrative Agent and
(during such visit or inspection, or otherwise upon request through the
Administrative Agent) examine and make abstracts from such of its books and
records as it may reasonably request at any reasonable time and as often as
may reasonably be desired, and to discuss the business, condition (financial
or otherwise), performance, properties and prospects of the Company and its
Subsidiaries with officers and employees of the Company and its Subsidiaries
and with its then independent certified public accountants.
57
7.7 Notices. The Company will promptly give notice to each
Lender, through the Administrative Agent, and the Administrative Agent:
(a) of the occurrence of any Default or Event of Default;
(b) of any default or event of default by Holdings or any of
its Subsidiaries under any Contractual Obligation of Holdings or any
of its Subsidiaries or the institution of, or the occurrence of any
material adverse change in the status or likely result of, any
litigation, investigation or proceeding which may exist at any time
between Holdings or any of its Subsidiaries and any Governmental
Authority or any other Person which, in any of the foregoing cases,
would be reasonably likely to have a Material Adverse Effect;
(c) of (i) any violation or noncompliance by Holdings or any
of its Subsidiaries or, to the best of its knowledge, any other
Person of any Environmental Laws which would be reasonably likely to
have a Material Adverse Effect or (ii) any liability or potential
liability of Holdings or any of its Subsidiaries or, to the best of
its knowledge, of any other Person under, any Environmental Laws
which would be reasonably likely to have a Material Adverse Effect;
(d) of any of the following events, as soon as practicable,
and in any event, within 30 days after the Company knows or has
reason to know thereof:
(i) the occurrence or expected occurrence of any
Reportable Event with respect to any Plan; or
(ii) the institution of proceedings or the taking
or expected taking of any other action by PBGC or the
Company or any Commonly Controlled Entity to terminate,
withdraw or partially withdraw from any Single Employer or
Multiemployer Plan and with respect to a Multiemployer Plan,
the Reorganization or Insolvency of such Plan;
if such Reportable Event, termination, withdrawal or partial
withdrawal (and, in the case of any Multiemployer Plan, its
Reorganization or Insolvency) would be reasonably likely to result in
liability to the Company and its Subsidiaries, in the aggregate, in
excess of $60,000,000; and
(e) of a material adverse change in the business, condition
(financial or otherwise), operations, performance, properties or
prospects of the Company and its Subsidiaries taken as a whole, or of
any event
58
which would be reasonably likely to have a Material Adverse Effect.
Each notice pursuant to this subsection 7.7 shall be accompanied by a
statement of a Responsible Officer of the Company setting forth details of the
occurrence referred to therein and stating what action the Company proposes to
take with respect thereto.
7.8 Maintenance of Corporate Identity. The Company will
operate its businesses and those of its Subsidiaries, and maintain their
records, independently from any Person (a "Parent") which, directly or
indirectly, is in control (as defined in Rule 12b-2 under the Exchange Act) of
the Company and independently from any Subsidiary of such Parent other than
the Company and its Subsidiaries; and the Company will maintain bank accounts
separate from the bank accounts of each Parent of the Company and act solely
in its own corporate name and through its own authorized officers and agents.
7.9 Environmental Laws. The Company will, and will cause
each of its Subsidiaries to:
(a) comply with and require compliance by all tenants and
subtenants, if any, with all Environmental Laws and obtain and comply
in all respects with and maintain, and require that all tenants and
subtenants obtain and comply with and maintain, any and all licenses,
approvals, registrations or permits required by Environmental Laws,
except to the extent that the failure to do so would not be
reasonably likely to have a Material Adverse Effect;
(b) conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions
required under Environmental Laws and promptly comply in all respects
with all lawful orders and directives of all Governmental Authorities
respecting Environmental Laws, except (i) to the extent that the
failure to perform any of the obligations contained in this clause
(b) would not be reasonably likely to have a Material Adverse Effect
or (ii) to the extent that such obligations are being contested in
good faith by appropriate proceedings and the pendency of such
proceedings would not be reasonably likely to have a Material Adverse
Effect; and
(c) defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective employees, agents,
officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature, known or unknown, contingent or
otherwise, arising out of, or in any way relating to the violation of
or noncompliance with any Environmental Laws by the Company or any of
its Subsidiaries, or any
59
orders, requirements or demands of Governmental Authorities related
thereto, including without limitation reasonable attorney and
consultant fees, investigation and laboratory fees, court costs and
litigation expenses, except to the extent that any of the foregoing
arise out of the gross negligence or willful misconduct of the party
seeking indemnification therefor. The agreements in this subsection
7.9(c) shall survive the payment of the Loans, the Notes, and all
other amounts payable hereunder.
7.10 Intellectual Property. (a) The Company will, to the
extent permitted by Title 15 of the United States Code, submit, and will cause
each of its Domestic Subsidiaries to submit, to the United States Patent and
Trademark Office for registration or recordation, as applicable:
(i) a completed application for trademark registration, in
such class or classes as is in conformity with its ordinary business
practice then obtaining, of each Trademark acquired or adopted and
used or intended to be used by it, with respect to any ▇▇▇▇ which, in
the Company's reasonable judgment, is a Significant Trademark; and
(ii) with respect to any interest acquired after the date
hereof by the Company or any of its Subsidiaries in a Significant
Trademark, any appropriate assignment to the Company or such Domestic
Subsidiary of the interest acquired by it in the United States in
such Significant Trademark, including, without limitation, all
previously unrecorded assignments to the Company's or such Domestic
Subsidiary's predecessors-in-interest of which the Company or any
Domestic Subsidiary is or becomes aware.
The Company will, and will cause each of its Domestic Subsidiaries to, use its
respective best efforts to comply with all requirements of the ▇▇▇▇▇▇ Act and
the rules and regulations thereunder, as from time to time in effect, or other
applicable law necessary in order to validly register and maintain the
registration of any such Significant Trademark with the United States Patent
and Trademark Office, except as permitted pursuant to subsections 7.4, 8.4 and
8.5.
(b) The Company will, to the extent permitted by Title 35 of
the United States Code, submit, and will cause each of its Domestic
Subsidiaries to submit, to the United States Patent and Trademark Office for
issuance or recordation, as applicable:
(i) an application for letters patent for each patentable
invention acquired by or invented by or for it which invention is of
such a nature that the Company or its Subsidiaries in accordance with
its ordinary business practice then obtaining would file a patent
application
60
in the United States Patent and Trademark Office with respect to it;
and
(ii) with respect to any interest acquired after the date
hereof by the Company or any of its Subsidiaries in a material
patent, any appropriate assignment to the Company or such Domestic
Subsidiary of the interest acquired by it in the United States in
such patent, including, without limitation, all previously unrecorded
assignments to the Company's or such Domestic Subsidiary's
predecessors-in-interest of which the Company or any Domestic
Subsidiary is or becomes aware.
The Company will, and will cause each of its Domestic Subsidiaries to, use its
respective best efforts to comply with all requirements of the United States
Patent Act and the rules and regulations thereunder, as from time to time in
effect, or other applicable law necessary in order to validly obtain and
maintain any material patent with the United States Patent and Trademark
Office, except as permitted pursuant to subsections 7.4, 8.4 and 8.5.
(c) Notwithstanding anything to the contrary contained in
this subsection 7.10, the Company and its Subsidiaries shall have the right to
license their respective patents and Trademarks to third parties on an arms'
length basis.
SECTION 8. NEGATIVE COVENANTS
The Company hereby agrees that, until the Payment
Obligations are Fully Satisfied:
8.1 Financial Covenants. The Company will not:
(a) Leverage. Permit the Leverage Ratio as of the last day
of any fiscal quarter to exceed 2.50 to 1.00.
(b) Interest Coverage. Permit the Interest Coverage Ratio as
of the last day of any fiscal quarter to be less than 3.00 to 1.00.
8.2 Limitation on Liens. The Company will not, and will not
permit any of its Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any of their properties, assets (including shares of Capital
Stock) or revenues, whether now owned or hereafter acquired, except for the
following (collectively, "Permitted Exceptions"):
(a) Liens for taxes not yet due or which are being contested
in good faith and by appropriate proceedings if adequate reserves
with respect thereto are maintained on the books of the Company or
any of its
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Subsidiaries, as the case may be, in accordance with GAAP;
(b) carriers', warehousemen', mechanics', materialmen',
repairmen' or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or
which are being contested in good faith and by appropriate
proceedings;
(c) pledges or deposits in connection with workmen's
compensation, unemployment insurance and other social security
legislation;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), government contracts,
leases, statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred and statutory
or contractual bankers' Liens on monies held in bank accounts in the
ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which do not
in any case materially detract from the value of the property subject
thereto or interfere with the ordinary conduct of the business of the
Company or any of its Subsidiaries;
(f) Liens in favor of the United States for amounts paid by
the Company or any of its Subsidiaries as progress payments under
government contracts entered into by them;
(g) attachment, judgment or other similar Liens arising in
connection with court or arbitration proceedings, provided that the
same are discharged, or that execution or enforcement thereof is
stayed pending appeal, within 30 days or (in the case of any
execution or enforcement pending appeal) such lesser time during
which such appeal may be taken;
(h) Liens granted in the ordinary course of business of the
Company or any of its Subsidiaries in favor of issuers of documentary
or trade letters of credit for the account of the Company or such
Subsidiary which support the purchase and/or importation of inventory
of the Company and its Subsidiaries, which Liens secure the
reimbursement obligations of the Company or such Subsidiary on
account of such letters of credit; provided that each such Lien is
limited to (i) the assets acquired or shipped with the support of
such letter of credit and (ii) any assets of the Company or such
Subsidiary which are in the care, custody or control of such issuer
in the ordinary course of business;
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(i) possessory Liens in favor of brokers and dealers arising
in connection with the acquisition or disposition of investments of
the type permitted by subsection 8.7(a)(ii); provided that such Liens
(i) attach only to such investments and (ii) secure only obligations
incurred in the ordinary course and arising in connection with the
acquisition or disposition of such investments and not any obligation
in connection with margin financing;
(j) Liens set forth in Schedule 8.2(j);
(k) Liens on the assets of any Foreign Subsidiary securing
obligations of such Foreign Subsidiary permitted hereunder;
(l) Liens securing Indebtedness in an aggregate amount at
any one time outstanding not in excess of $1,000,000 incurred to
purchase or finance the purchase of real or personal property;
provided that (i) such Liens shall be created substantially
simultaneously with the purchase of such property, (ii) such Liens do
not at any time encumber any property other than the property
financed by such Indebtedness, (iii) the amount of Indebtedness is
not increased and (iv) the principal amount of Indebtedness secured
by any such Lien shall at no time exceed 100% of the purchase price
of such property;
(m) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness of
such Subsidiary permitted by subsection 8.11(f) or Contingent
Obligations permitted by subsection 8.3(d), provided that (i) such
Liens and Indebtedness or Contingent Obligations existed at the time
such corporation became a Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any
other property or assets of such corporation after the time such
corporation becomes a Subsidiary, (iii) the amount of Indebtedness or
Contingent Obligation secured thereby is not increased and (iv)
immediately after giving effect to the acquisition of such
corporation, no Default or Event of Default shall have occurred and
be continuing; and
(n) any extension, renewal or replacement of the foregoing;
provided that the Liens permitted by this paragraph shall not extend
to or cover any additional Indebtedness or Property (other than a
substitution of like Property).
8.3 Limitation on Contingent Obligations. The Company will
not, and will not permit any of its Subsidiaries to, agree to, or assume or
incur, or otherwise in any way be or become responsible or liable, directly or
indirectly,
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with respect to, any Contingent Obligation other than:
(a) the guarantees made by the Domestic Subsidiaries
pursuant to the Subsidiaries Guarantee;
(b) Contingent Obligations of any Subsidiary of the Company
in the nature of a guarantee of Indebtedness or other obligations of
the Company or any other wholly-owned Subsidiary of the Company
(including, without limitation, any wholly-owned Subsidiary incurring
such Contingent Obligations);
(c) Contingent Obligations of the Company in the nature of
guarantees of Indebtedness or other obligations of any of its
wholly-owned Subsidiaries to the extent such Indebtedness or other
obligations, as the case may be, are not prohibited by this
Agreement;
(d) Contingent Obligations of a corporation which becomes a
Subsidiary after the date hereof, provided that (i) such Contingent
Obligations existed at the time such corporation became a Subsidiary
and were not created in anticipation thereof and (ii) immediately
after giving effect to the acquisition of such corporation no Default
or Event of Default shall have occurred and be continuing; and
(e) Guarantees of obligations of customers or suppliers made
in the ordinary course of business after the Closing Date by the
Company and/or any Subsidiary of the Company in respect of funds
advanced to customers or suppliers by third parties so long as the
aggregate amount so Guaranteed, together with the amounts paid under
any such Guarantee or advanced under subsection 8.7(e), does not
exceed $20,000,000 in the aggregate at any one time outstanding.
8.4 Limitation on Fundamental Changes. The Company will not,
and will not permit any of its Subsidiaries to, enter into any transaction in
the nature of merger or consolidation or amalgamation, or liquidate, wind up
or dissolve itself (or suffer any liquidation or dissolution), convey, sell,
lease, assign, transfer or otherwise dispose of, in one transaction or a
series of related transactions, all or a substantial part of the business or
assets of the Company, or enter into any such transaction or series of related
transactions with regard to a group of Subsidiaries which, if merged into a
single Subsidiary, would constitute a substantial part of the business or
assets of the Company, or acquire by purchase or otherwise all or
substantially all the business or assets of, or Capital Stock or other
evidences of beneficial ownership of, any Person, except that:
(a) any Subsidiary of the Company (i) may be merged or
consolidated with or into, or its assets liquidated and distributed
to, the
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Company, provided that the Company shall be the continuing or
surviving corporation or (ii) may be merged or consolidated with or
into, or its assets liquidated and distributed to, any one or more
wholly-owned Subsidiaries of the Company; provided that no Domestic
Subsidiary may be merged or consolidated with or into a Foreign
Subsidiary unless a Domestic Subsidiary is the continuing or
surviving entity and no Domestic Subsidiary may have its assets
liquidated and distributed to any Foreign Subsidiary;
(b) any Subsidiary of the Company may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to the Company or a wholly-owned Subsidiary
of the Company; provided that no Domestic Subsidiary may sell, lease
transfer or otherwise dispose of any of its assets to any Foreign
Subsidiary other than in the ordinary course of business; and
(c) the Company and its Subsidiaries may make acquisitions
and purchases permitted by subsection 8.7.
8.5 Limitation on Sale of Assets. The Company will not, and
will not permit any of its Subsidiaries to, sell, lease, assign, transfer or
otherwise dispose of any of its assets (including, without limitation,
receivables and leasehold interests), whether now owned or hereafter acquired,
or, in the case of any of the Subsidiaries of the Company, issue any shares of
Capital Stock (other than any director's qualifying shares), to any Person
other than the Company or any of its Subsidiaries, except:
(a) as permitted by subsections 8.2 or 8.4;
(b) the sale or other disposition (including abandonment) of
any property (including intellectual property rights) which has
become uneconomic, obsolete or worn out and which is disposed of in
the ordinary course of business;
(c) the sale of inventory in the ordinary course of
business;
(d) licensing agreements entered into with respect to
Trademarks, patents, trade secrets or know-how in the ordinary course
of business; and
(e) from the Closing Date, sales and other dispositions of
property not having a value together with all other sales and
dispositions pursuant to this clause (e) in excess of the lesser of
(i) 5% of the consolidated assets of the Company as of the last day
of the most recent fiscal period for which financial statements have
been delivered pursuant to subsection 7.1 and (ii) $5,000,000.
65
8.6 Limitation on Restricted Payments. The Company will not,
and will not permit any of its Subsidiaries to, make any Restricted Payment,
except that the following Restricted Payments may be made:
(a) Restricted Payments to Holdings (i) in amounts equal to
the amounts required for Holdings to pay franchise and similar taxes
and other fees required to maintain its corporate existence and (ii)
in amounts equal to the amounts required to pay actual expenses,
other than those paid to Affiliates of the Company, incidental to
being a publicly reporting, but non-operating company;
(b) Restricted Payments necessary for Holdings, the Company
and any of its Subsidiaries to pay federal, state and local taxes to
the extent such taxes are attributable to the operations of the
Company and its Subsidiaries;
(c) So long as no Default or Event of Default has occurred
and is continuing at the time such Restricted Payment is made or
would result therefrom, commencing with the 1998 fiscal year,
Restricted Payments in an aggregate amount not to exceed an amount
equal to the greater of (i) 50% of Consolidated Net Income for the
prior fiscal year and (ii) $10,000,000 per annum, including for the
purpose of enabling Holdings to make principal payments on the
Holdings Note;
(d) So long as no Default or Event of Default has occurred
and is continuing at the time such Restricted Payment is made or
would result therefrom, Restricted Payments by Fabrica, or any
non-wholly owned Subsidiary of Fabrica, so long as such Restricted
Payment is made on a pro rata basis (or a basis more favorable to the
Company and its other Subsidiaries) to each holder of Capital Stock
of Fabrica;
(e) So long as no Default or Event of Default has occurred
and is continuing at the time such Restricted Payment is made or
would result therefrom, Restricted Payments by Jamaica Tobacco, or
any non-wholly owned Subsidiary of Jamaica Tobacco, so long as such
Restricted Payment is made on a pro-rata basis (or a basis more
favorable to the Company and its other Subsidiaries) to each holder
of Capital Stock of Jamaica Tobacco; and
(f) So long as no Default or Event of Default has occurred
and is continuing at the time such Restricted Payment is made or
would result therefrom, Restricted Payments by Cuban Cigar, or any
non-wholly owned Subsidiary of Cuban Cigar, so long as such
Restricted Payment is made on a pro-rata basis (or a basis more
favorable to the
66
Company and its other Subsidiaries) to each holder of Capital Stock
of Cuban Cigar.
8.7 Limitation on Investments, Loans and Advances. The
Company will not, and will not permit any of its Subsidiaries to, make or
commit to make any advance, loan, extension of credit or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other
securities of, or make any other investment in, any Person (other than the
Company or any of its Subsidiaries), except:
(a) investments by the Company and its Subsidiaries in (i)
accounts, contract rights and chattel paper (as defined in the
Uniform Commercial Code), put and call foreign exchange options and
foreign exchange forwards and futures to the extent necessary to
hedge foreign exchange exposures and notes receivable, arising or
acquired in the ordinary course of business and in Rate Hedging
Agreements and (ii) Cash Equivalents;
(b) investments by Foreign Subsidiaries in investments of a
type similar to Cash Equivalents made outside of the United States;
(c) extensions of trade credit in the ordinary course of
business;
(d) the Company and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers or in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising out of the ordinary course of
business; provided that the Company and its Subsidiaries have paid no
new consideration (other than forgiveness of Indebtedness or other
obligations) therefor;
(e) Payments made after the Closing Date on Guarantees
permitted by subsection 8.3(e) hereof and advances made after the
Closing Date by the Company and/or any Subsidiary of the Company to
suppliers or customers in the ordinary course of business so long as
the amount of all such payments and advances, together with the
amounts guaranteed under subsection 8.3(e), does not exceed
$20,000,000 in the aggregate at any one time outstanding;
(f) so long as no Default or Event of Default shall have
occurred and be continuing, or would result therefrom (including,
without limitation, compliance with subsection 8.14), other
investments in Persons not to exceed $20,000,000 in the aggregate at
any time (such investments to be measured by their fair market value
at the time of the investment); and
67
(g) loans and advances to officers, directors and employees
in the ordinary course of business not to exceed $2,000,000 in the
aggregate at any time outstanding.
8.8 Sale and Leaseback. The Company will not, and will not
permit any of its Subsidiaries to, enter into any arrangement with any Person
whereby the Company shall sell or transfer any property, real or personal,
whether now owned or hereafter acquired, and thereafter rent or lease such
property.
8.9 Limitation on Transactions with Affiliates. The Company
will not, and will not permit any of its Subsidiaries to, enter into any
transaction (including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service) with any Affiliate of
the Company unless such transactions are not otherwise prohibited under this
Agreement, are in the ordinary course of business and are upon fair and
reasonable terms no less favorable to the Company or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction
with a Person not an Affiliate.
8.10 Accounting Changes. (a) The Company will not, and will
not permit any of its Subsidiaries to, make or permit to be made any change in
accounting policies affecting the presentation of financial statements or
reporting practices from those employed by it on the date hereof, unless (i)
such changes are required or permitted by GAAP, (ii) such changes are
disclosed to the Lenders through the Administrative Agent or otherwise and
(iii) if requested by the Administrative Agent, relevant prior financial
statements are reconciled (in form and detail satisfactory to the
Administrative Agent) to show comparative results and reconciliations.
(b) Notwithstanding anything to the contrary contained
herein, compliance with the financial covenants contained in subsection 8.1
shall be determined based upon GAAP as in effect on the date of this
Agreement.
(c) The Company will not permit its fiscal year to end on a
date other than December 31.
8.11 Indebtedness. The Company will not, and will not permit
any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness
except:
(a) Indebtedness to the Lenders hereunder and under the
other Credit Documents;
(b) Indebtedness outstanding on the date hereof and listed
in
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Schedule 8.11(b), and other Indebtedness outstanding on the date
hereof in an aggregate principal amount at any one time outstanding
not to exceed $250,000;
(c) Indebtedness of (i) Subsidiaries to the Company or to
other Subsidiaries and (ii) the Company to any of its Subsidiaries;
(d) Indebtedness of the Company and its Subsidiaries secured
by Liens permitted by subsection 8.2(l) hereof;
(e) Indebtedness permitted by subsection 8.3;
(f) Indebtedness of a corporation which becomes a Subsidiary
after the date hereof in an aggregate principal amount not to exceed
$10,000,000 at any one time outstanding, provided that (i) such
Indebtedness existed at the time such corporation became a Subsidiary
and was not created in anticipation thereof and (ii) immediately
after giving effect to the acquisition of such corporation, no
Default or Event of Default shall have occurred and be continuing;
(g) Indebtedness of (i) Fabrica in an aggregate principal
amount at any one time outstanding not to exceed $5,000,000, (ii)
Jamaica Tobacco in an aggregate principal amount at any one time
outstanding not to exceed $5,000,000 and (iii) Foreign Subsidiaries
other then Fabrica and Jamaica Tobacco in an aggregate principal
amount at any one time outstanding not to exceed $2,000,000;
(h) Indebtedness in respect of documentary and trade letters
of credit issued for the account of the Company or any of its
Subsidiaries in the ordinary course of business in an aggregate
amount not to exceed $2,000,000 at any one time outstanding; and
(i) obligations arising under Capital Leases in an aggregate
principal amount not to exceed $1,000,000.
8.12 Limitation on Modifications of Tax Allocation
Agreement. The Company will not and will not permit any of its Subsidiaries to
modify or waive any provision of the Tax Allocation Agreement to the extent
such amendment, modification or waiver would be reasonably likely to have a
material adverse effect on the interests of the Lenders hereunder and under
the other Loan Documents.
8.13 Limitation on Negative Pledge Clauses. The Company will
not, and will not permit any of its Subsidiaries to, enter into with any
Person any agreement, other than this Agreement, which prohibits or limits the
ability
69
of the Company or any of its Subsidiaries to create, incur, assume or
suffer to exist any Lien upon any of its property, assets or revenues, whether
now owned or hereafter acquired; provided that any of the Company and its
Subsidiaries may enter into any such agreement to the extent that such
agreement is in connection with (i) a Lien permitted by subsection 8.2 or a
sale of assets permitted by section 8.5 and any such prohibitions or
limitations apply only to the Property encumbered by such Lien or subject to
such sale or (ii) Indebtedness permitted under subsection 8.11(f) and (g).
8.14 Limitation on Lines of Business. The Company will not,
and will not permit any of its Subsidiaries to, principally engage in any
business or activity other than the business conducted by the Company and its
Subsidiaries on the Closing Date and businesses and activities reasonably
related thereto.
8.15 Limitation on Restrictions on Subsidiary Distributions.
The Company will not, and will not permit any of its Subsidiaries to, enter
into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary of the Company to (a) pay
dividends or make any other distributions in respect of any Capital Stock of
such Subsidiary held by, or pay any Indebtedness owed to, the Company or any
other Subsidiary of the Company, (b) make loans or advances to the Company or
any other Subsidiary of the Company or (c) transfer any of its assets to the
Company or any other Subsidiary of the Company, except for such encumbrances
or restrictions existing under or by reason of (i) any restrictions existing
under the Credit Documents, (ii) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement which has been entered into in connection
with the disposition of all or substantially all of the Capital Stock or
assets of such Subsidiary, (iii) any restrictions with respect to the Company
or any of its Subsidiaries imposed pursuant to an agreement which has been
entered into in connection with a Lien permitted by subsection 8.2 or a sale
of assets permitted by subsection 8.5 and any such prohibitions or limitations
apply only to the Property encumbered by such Lien or subject to such sale or
(iv) any restrictions imposed pursuant to agreements in connection with
Indebtedness permitted under subsections 8.11(f) and (g).
8.16 Limitation on Subsidiaries. The Company will not, and
will not permit any of its Subsidiaries to, create, acquire or otherwise
suffer to exist any Domestic Subsidiary unless either (i) the fair market
value of the assets of such Domestic Subsidiary is equal to or less than
$100,000 or (ii) such Domestic Subsidiary is party to a guarantee
substantially in the form of the Subsidiaries Guarantee and the Administrative
Agent has received such legal opinions and other such documents, instruments
and agreements (including, without limitation, any board resolutions and
incumbency certificates) as the Administrative Agent reasonably may request to
evidence the enforceability of
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such guarantee.
SECTION 9. EVENTS OF DEFAULT
Upon the occurrence and during the continuance of any of the
following events:
(a) Payments. Failure by the Company to pay any principal of
or interest on any Loan or Note or any Reimbursement Obligation when
due in accordance with the terms thereof and hereof, or failure by
the Company to pay any fee or other amount payable in connection with
any Credit Document within five days after the date when due; or
(b) Representations and Warranties. Any representation or
warranty made or deemed made by the Company or any Guarantor in any
Credit Document or which is contained in any certificate or financial
statement furnished at any time under or in connection herewith or
therewith shall prove to have been incorrect, false or misleading in
any material respect on or as of the date when made or deemed to have
been made; or
(c) Negative Covenants. Default by the Company or any of its
Subsidiaries in the observance or performance of any negative
covenant or agreement contained in Section 8; or
(d) Other Covenants. Default by any Loan Party in the
observance or performance of any other covenant or agreement
contained or incorporated by reference in this Agreement other than
as provided in clauses (a) through (c) above, and such default shall
continue unremedied for a period of 30 days; or
(e) Cross Default. Holdings or any of its Subsidiaries
(including without limitation the Company) shall Cross Default; or
(f) Commencement of Bankruptcy or Reorganization Proceeding.
(i) Holdings or any of its Subsidiaries shall commence any case,
proceeding or other action (A) under any existing or future law of
any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an
order for relief entered with respect to it, or seeking to adjudicate
it as bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment, wind-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (B) seeking appointment of
a receiver, trustee, custodian or other similar official for it or
for all or any substantial part of its assets; or, (ii) there shall
be commenced against Holdings or any of its
71
Subsidiaries any such case, proceeding or other action referred to in
subsection (i) which results in the entry of an order for relief or
any such adjudication or appointment remains undismissed,
undischarged or unbonded for a period of 60 days, provided that the
Company, for itself and on behalf of each of its Subsidiaries, hereby
expressly authorizes the Administrative Agent and each Lender to
appear in any court conducting any such case, proceeding or other
action during said 60-day period to preserve, protect and defend
their rights under the Credit Documents; or (iii) there shall be
commenced against Holdings or any of its Subsidiaries any case,
proceeding or other action seeking issuance of a warrant of
attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an
order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) Holdings or any of its Subsidiaries shall
take any action authorizing, or in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set
forth above in this paragraph (f); or (v) Holdings or any of its
Subsidiaries shall generally not, or shall be unable to, or shall
admit in writing its inability to, pay its debts as they become due;
or
(g) ERISA. (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of
the Code) involving any Plan, (ii) any "accumulated funding
deficiency" (as defined in Section 302 of ERISA), whether or not
waived, shall exist with respect to any Plan, (iii) a Reportable
Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to
administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a
trustee is, in the reasonable opinion of the Required Lenders, likely
to result in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, (v) the Company or any Commonly Controlled Entity
of the Company shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur
or exist, with respect to a Plan; provided that, in each case in
clauses (i) through (vi) above, such event or condition, together
with all other such events or conditions, if any, would be reasonably
likely to have a Material Adverse Effect; or
(h) Change of Control. At any time on or after the Closing
Date, Holdings shall fail to own, beneficially and of record, and
control all of the issued and outstanding capital stock of the
Company; or any Change
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of Control shall occur; or
(i) Material Judgments. (i) One or more judgments or decrees
shall be entered against Holdings or any of its Subsidiaries
involving in the aggregate a liability (not covered by insurance) of
$5,000,000 or more or (ii) any non-monetary judgment or order shall
be rendered against Holdings or any of its Subsidiaries that is
reasonably likely to have a Material Adverse Effect, and in the case
of either clause (i) or (ii), there shall be any period of 30
consecutive days during which a stay of enforcement of such judgment
or order, by reason of a pending appeal or otherwise, shall not be in
effect unless such judgment or order shall have been vacated,
satisfied, discharged or bonded pending appeal; or
(j) Effectiveness of the Guarantees. On or after the Closing
Date, (i) for any reason (other than any act on the part of the
Administrative Agent or any Lender or by its terms) any Guarantee
ceases to be or is not in full force or (ii) the Company or any
Guarantor shall assert in writing that any Guarantee has ceased to be
or is not in full force and effect; or
(k) Activities of Holdings. Holdings shall (a) conduct,
transact or otherwise engage in, or commit to conduct, transact or
otherwise engage in, any business or operations other than those
incidental to its ownership of the Capital Stock of the Company, (b)
incur, create, assume or suffer to exist any Indebtedness or other
liabilities or financial obligations, except (i) nonconsensual
obligations imposed by operation of law, (ii) pursuant to the Credit
Documents to which it is a party, (iii) obligations with respect to
its Capital Stock and (iv) obligations under the Holdings Note, or
(c) own, lease, manage or otherwise operate any properties or assets
(other than cash and Cash Equivalents) other than the ownership of
shares of Capital Stock of the Company;
then, and in any such event, (x) if such event is an Event of Default
specified in clause (i), (ii) or (iii) of paragraph (f) of this Section with
respect to the Company, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all
other amounts owing under this Agreement (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) and the other Credit Documents shall immediately become due and
payable, and (y) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the consent of the Required
Lenders, the
73
Administrative Agent may, or upon the request of the Required
Lenders, the Administrative Agent shall, by notice to the Company, declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and/or (ii) with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Company, declare all or any part
of the Loans (with accrued interest thereon) and any other amounts owing under
this Agreement and the other Credit Documents to be due and payable forthwith,
whereupon the same shall immediately become due and payable.
With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Company shall at such time deposit in
a cash collateral account opened by the Administrative Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Company hereunder and under the Notes. After all such
Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations
of the Company hereunder and under the Notes then due and payable shall have
been paid in full, the balance, if any, in such cash collateral account shall
be returned to the Company. The Company hereby grants to the Administrative
Agent, for the ratable benefit of the Lenders, as collateral security for the
payment in full of the Payment Obligations, a security interest in all amounts
from time to time held in the cash collateral account maintained pursuant to
this paragraph.
Except as expressly provided above in this Section 9,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived to the maximum extent permitted by applicable law.
SECTION 10. THE ADMINISTRATIVE AGENT
10.1 Appointment. Each Lender hereby irrevocably designates
and appoints The Chase Manhattan Bank (and each successor thereto which is
appointed in accordance with the provisions of subsection 10.9) as the
Administrative Agent under the Credit Documents and hereby irrevocably
authorizes The Chase Manhattan Bank (and any such successors thereto), as the
Administrative Agent for such Lender, to take such action, in the
Administrative Agent's discretion, on such Lender's behalf under the
provisions of the Credit Documents and to exercise such powers and perform
such duties as are expressly delegated to the Administrative Agent by the
terms of the Credit Documents, together with such other powers as are
reasonably incidental thereto. The Chase Manhattan Bank hereby accepts its
appointment as the Administrative Agent and the authorization set forth above.
Notwithstanding any provision to the contrary in the Credit Documents, the
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Administrative Agent shall not have any duties or responsibilities, except
those expressly set forth in the Credit Documents, nor any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into the
Credit Documents or otherwise exist against the Administrative Agent in such
capacity.
10.2 Delegation of Duties. The Administrative Agent may
execute any of its duties under the Credit Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Administrative Agent shall not be
responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
10.3 Exculpatory Provisions. Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates shall be (a) liable to any of the Lenders for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with the Credit Documents (except for its or such Person's own
gross negligence or willful misconduct) or (b) responsible in any manner to
any of the Lenders for any recitals, statements, representations or warranties
made by the Company or any officer thereof contained in the Credit Documents
or in any certificate, report, statement or other document referred to or
provided for in, or received by it under or in connection with, the Credit
Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of the Credit Documents (other than with respect
to its own due execution and delivery thereof) or the perfection of any
security interest contemplated thereby or for any failure of any party thereto
(other than the Administrative Agent in such capacity) to perform its
obligations thereunder. The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, the
Credit Documents, or to inspect the properties, books or records of any party
to any thereof.
10.4 Reliance by the Administrative Agent. The
Administrative Agent shall be entitled to rely, and shall be fully protected
in relying, upon any writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent may deem and
treat the payee of any Note or on account of any Loan as the owner thereof for
all purposes unless a written notice of assignment, negotiation or transfer
thereof shall have
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been filed with the Administrative Agent (in its capacity as such). The
Administrative Agent shall be fully justified in failing or refusing to take
any action under any Credit Document unless it shall have received such advice
or concurrence of the Required Lenders as it deems appropriate or it shall
have been expressly indemnified to its satisfaction by the Lenders or, at its
option, the Required Lenders against any and all liability and expense which
may be incurred by it by reason of taking or continuing to take any such
action (except that no such indemnification need include any indemnification
for any liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
gross negligence or willful misconduct of the Administrative Agent). Each of
the Administrative Agent and its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall in all cases be fully protected in
acting, or in refraining from acting, under the Credit Documents upon advice
of counsel or in accordance with a request of the Required Lenders (except in
cases in which a greater number of Lenders is required, in which case the
Administrative Agent and its officers, directors, employees, agents,
attorneys-in-fact or affiliates shall in all cases be fully protected in
acting, or in refraining from acting, under the Credit Documents in accordance
with a request of such Lenders), and such request, and any action taken or
failure to act pursuant thereto, shall be binding upon all the Lenders and all
future holders of the Loans and the Notes.
10.5 Notice of Default. The Administrative Agent shall not
be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default unless, the Administrative Agent has received notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default." In the
event that the Administrative Agent receives any such notice, it shall
promptly give notice thereof to the Lenders. The Administrative Agent shall
take such action with respect to any Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that, unless and until
the Administrative Agent shall have received any such directions, it may (but
shall not be obligated to) take such action (other than any such action under
clause (y) of Section 9), or refrain from taking such action, with respect to
such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
10.6 Non-Reliance on the Administrative Agent and the Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representations or warranties to it and that no act
by it hereinafter taken, including any review of the affairs of the Company or
any Subsidiary or any Affiliate of any of the foregoing, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender. Each Lender represents to the Administrative Agent that it has or
will, independently and without reliance upon the Administrative Agent or any
other
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Lender, and based on such documents and information as it has deemed or
will deem appropriate, made and will make its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Company and its Subsidiaries and
Affiliates and made and will make its own decision to make its Loans and enter
into the Credit Documents to which it is or will be a party. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
the Credit Documents, and to make such investigation as it deems necessary to
inform itself as to the business, operations, property, financial and other
condition and creditworthiness of the Company and its Subsidiaries and
Affiliates. Each Lender acknowledges that no action on the part of the
Administrative Agent shall relieve such Lender from performing its own credit
analysis and making its own determination prior to, and from time to time
after, its entering into this Agreement with respect to the nature of the
transaction contemplated hereby and assuming any risks or disadvantages to it
that may arise out of any such determination. Except for notices, reports and
other documents expressly required to be furnished to the Lenders, or
obtained, by the Administrative Agent, under the Credit Documents, the
Administrative Agent in such capacity shall have no duty or responsibility to
provide any Lender with any credit or other information concerning the
business, operations, property, financial and other condition or
creditworthiness of the Company and its Subsidiaries and Affiliates which may
come into its possession or the possession of any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
10.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent (in its capacity as such) and its officers, directors,
employees, agents, attorneys-in-fact or affiliates, to the extent not
reimbursed by the Company and without limiting the obligation of the Company
to do so, ratably according to the respective amounts of their pro rata shares
of the Aggregate Commitment in effect on the date upon which indemnity is
sought, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever (including, without limitation, legal
fees and disbursements) which may at any time (including, without limitation,
at any time following the payment of the Loans or the Notes) be imposed on,
incurred by or asserted against the Administrative Agent, in such capacity, in
any way relating to or arising out of the Credit Documents, or any documents
contemplated by or referred to therein or the transactions contemplated
thereby or any action taken or omitted by the Administrative Agent, in such
capacity, thereunder or in connection therewith, provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages,
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penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the gross negligence or willful misconduct of the
Administrative Agent, in such capacity, or, in the case of a claim against the
Administrative Agent, in such capacity, arising from a lawsuit against the
Administrative Agent if such Lender was not given notice of said lawsuit and
an opportunity to participate in the defense thereof at its own expense. The
agreements in this subsection 10.7 shall survive the payment of the Loans, the
Notes, and all other amounts payable hereunder.
10.8 The Administrative Agent in Its Individual Capacity.
The Administrative Agent and its Affiliates may make loans to, accept deposits
from and generally engage in any kind of business with Holdings and any of its
Subsidiaries or Affiliates as though it were not the Administrative Agent.
With respect to its Loans and any Notes or other promissory note issued to it,
the Administrative Agent shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the
Administrative Agent, and the terms "Lender" and "Lenders" shall include the
Administrative Agent in its individual capacity.
10.9 Successor Administrative Agent. The Administrative
Agent may resign as the Administrative Agent upon 30 days' notice to the
Lenders and the Company. If it shall resign as Administrative Agent, then the
Required Lenders shall appoint from among the Lenders a successor
Administrative Agent for the Lenders, which successor Administrative Agent
shall be approved by the Company, such approval not to be unreasonably
withheld (or, if the Required Lenders and the Company are unable to select
such successor Administrative Agent within such 30-day period, a successor
Administrative Agent shall be selected by the Administrative Agent), whereupon
such successor agent shall succeed to the rights, powers and duties of the
resigning Administrative Agent under all of the Credit Documents, and the term
"Administrative Agent" shall mean such successor Administrative Agent
effective upon its appointment, and the former Administrative Agent's rights,
powers and duties as the Administrative Agent shall be terminated, without any
other or further act or deed on the part of such former Administrative Agent
or any of the parties to this Agreement or any holders of the Loans or the
Notes. After any retiring Administrative Agent's resignation hereunder or as
Administrative Agent, as the case may be, the provisions of this Section 10
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was the Administrative Agent under the Credit Documents.
10.10 Issuing Lender as Issuer of Letters of Credit. Each
Lender hereby acknowledges and agrees that the provisions of this Section 10
shall apply to the Issuing Lender, in its capacity as issuer of the Letters of
Credit, in the same manner as such provisions are expressly stated to apply to
the Administrative Agent.
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10.11 Documentation Agent. The Documentation Agent, in its
capacity as such, shall not have any duties or any responsibilities hereunder
nor any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise against the Documentation Agent in its
capacity as such.
10.12 Syndication Agent. The Syndication Agent, in its
capacity as such, shall not have any duties or any responsibilities hereunder
nor any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this agreement or otherwise against the Syndication Agent in its capacity
as such.
SECTION 11. MISCELLANEOUS
11.1 Amendments and Waivers. (a) Except as set forth in the
next succeeding sentence, the Administrative Agent, on the one hand and the
Company or the Guarantors, as the case may be, as party thereto, on the other
hand, may from time to time with the written consent of the Required Lenders
enter into written amendments, supplements or modifications for the purpose of
adding, deleting or modifying any provision of any Credit Document or changing
in any manner the rights, remedies, obligations and duties of the parties
thereto, and the Administrative Agent, on behalf of the Lenders, may, with the
written consent of the Required Lenders, execute and deliver a written
instrument waiving, on such terms and conditions as may be specified in such
instrument, any of the requirements applicable to the Company or Guarantors
party to any Credit Document, or any Default or Event of Default and its
consequences. No such waiver, amendment, supplement or modification shall:
(i) without the written consent of each Lender directly
affected thereby, extend the final scheduled maturity of any of the
Loans or the Notes or any scheduled installment thereof, or reduce
the rate or extend the time of payment of interest thereon, or reduce
the principal amount thereof, or change the amount or terms
(including, without limitation, fees and commissions) of any
Commitment, or consent to the assignment or transfer by the Company
of any of its rights and obligations under this Agreement, or reduce
the percentages specified in the definitions of "Required Lenders" in
subsection 1.1, or amend, modify or waive any provision of this
subsection 11.1;
(ii) without the written consent of Lenders holding 100% of
the Aggregate Commitment, take any action having the effect of
releasing any of the material guarantee obligations provided for in a
Guarantee, except as set forth therein or in subsection 11.9;
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(iii) without the prior written consent of the Issuing
Lender amend, supplement or otherwise modify Section 3 or any
provisions of or directly applicable to any Letter of Credit; or
(iv) without the written consent of the then Administrative
Agent and Issuing Lender, amend, modify or waive any provision of
Section 10.
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Lenders and all
future holders of any of the Loans and the Notes. In the case of such waiver,
the parties to the Credit Documents, the Lenders and the Administrative Agent
shall be restored to their former positions and rights hereunder and under the
Notes, and any Default or any Event of Default waived shall, to the extent
provided in such waiver, be deemed to be cured and not continuing; but, no
such waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon. The Administrative Agent
shall, as soon as practicable, furnish a copy of each such amendment,
supplement, modification or waiver to each Lender.
(b) To the extent that the execution, delivery or
performance of any Credit Document constitutes a Default or an Event of
Default under (and as defined in) the Existing Credit Agreement, each Lender
hereunder which is a party to the Existing Credit Agreement hereby waives such
Default or Event of Default.
(c) To the extent that the existence or performance of any
Basic Document (as defined in the Existing Credit Agreement) constitutes a
Default or an Event of Default hereunder, each Lender hereunder hereby waives
such Default or Event of Default; provided that the Existing Credit Agreement
is terminated in the manner and at the time contemplated by subsection 6.1(h)
hereof.
(d) Each Lender hereby agrees that any Security Document
under (and as defined in) the Existing Credit Agreement, and any financing
statement or similar filing on account thereof, which remains in effect after
the date hereof shall be deemed not to constitute a "Lien" for purposes of
this Agreement; provided that such Security Documents are terminated in the
manner and at the time contemplated by subsection 6.1(i) hereof and the
Company shall use best efforts to terminate or cause to be terminated such
filings upon the termination of the Existing Credit Agreement.
11.2 Notices. All notices, consents, requests and demands to
or upon the respective parties hereto to be effective shall be in writing and,
unless otherwise expressly provided herein, shall be deemed to have been duly
given or made when delivered by hand, or three Business Days after being
deposited
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in the mail, certified mail, return receipt requested, postage
prepaid, or, in the case of telecopy notice, when sent, addressed as follows
in the case of the Company, the Administrative Agent and the Issuing Lender,
and as set forth in Schedule 1.1(A) hereto in the case of each of the other
parties hereto, or to such address or other address as may be hereafter
notified by any of the respective parties hereto or any future holders of the
Loans or the Notes:
The Company: Consolidated Cigar Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇ - Senior Vice
President and Chief Financial
Officer
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
The Administrative Agent
and Issuing Lender: The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to: The Chase Manhattan Bank Agency
Services Corporation
Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
provided that any notice, request or demand to or upon the Administrative
Agent or the Issuing Lender pursuant to Sections 2, 3 and 4 shall not be
effective until received.
11.3 No Waiver; Cumulative Remedies. No failure to exercise
and no delay in exercising, on the part of the Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder, shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith
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shall survive the execution and delivery of this Agreement and the Notes.
11.5 Payment of Expenses and Taxes. The Company agrees (a)
to pay or reimburse the Administrative Agent for all of its reasonable
out-of-pocket costs and expenses incurred in connection with the preparation,
execution and delivery of, and any amendment, supplement or modification to,
any Credit Document and any other documents prepared in connection herewith,
and the consummation of the transactions contemplated hereby and thereby
(including, without limitation, the fees and disbursements of counsel to the
Administrative Agent, but not including any fees and expenses of counsel to
the Lenders), (b) to pay or reimburse each Lender, the Issuing Lender and the
Administrative Agent for all its reasonable costs and expenses incurred in
connection with the enforcement or preservation of any rights under the Credit
Documents and any such other documents, including, without limitation, fees
and disbursements of counsel to the Administrative Agent, the Issuing Lender
and to the Lenders, (c) to pay, indemnify, and to hold each Lender, the
Issuing Lender and the Administrative Agent harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other similar taxes, if
any, which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any
waiver or consent under or in respect of, the Credit Documents and any such
other documents, and (d) to pay, indemnify, and hold each Lender, the Issuing
Lender, the Administrative Agent, the Documentation Agent, the Syndication
Agent, and the officers, directors, employees and agents thereof, harmless
from and against any and all other liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever with respect to the execution, delivery,
consummation, enforcement, performance and administration of the Credit
Documents and the use by the Company of the proceeds of the Loans and other
extensions of credit hereunder (all of the foregoing, collectively, the
"indemnified liabilities"), provided that the Company shall have no obligation
hereunder with respect to indemnified liabilities arising from (i) the gross
negligence or willful misconduct of any such Lender, the Issuing Lender or of
the Administrative Agent, (ii) legal proceedings commenced against any such
Lender, the Issuing Lender or against the Administrative Agent by any security
holder or creditor (other than the Company, its Subsidiaries and its
Affiliates) thereof arising out of and based upon rights afforded any such
security holder or creditor solely in its capacity as such, (iii) legal
proceedings commenced against any such Lender or the Issuing Lender by any
other Lender or by the Administrative Agent or (iv) amounts of the types
referred to in clauses (a) through (c) above except as provided therein. The
agreements in this subsection 11.5 shall survive repayment of the Loans and
the Notes and all other amounts payable hereunder.
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11.6 Successors and Assigns; Loan Participations. (a) This
Agreement shall be binding upon and inure to the benefit of the Company, the
Administrative Agent, the Lenders, all future holders of the Loans and the
Notes, and their respective successors and assigns, except that the Company
may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Lender.
(b) Any Lender may, in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender hereunder or under any other Credit Document. In the event of any such
sale by a Lender of participating interests to a Participant, such Lender's
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan or
Note for all purposes under this Agreement and the Company and the
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement. The Company agrees that if amounts outstanding under this Agreement
and the Notes are due and unpaid, or shall have been declared or shall have
become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement and any Note to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement or any Note; provided that
such right of set-off shall be subject to the obligation of such Participant
to share with the Lenders, and the Lenders agree to share with such
Participant, as provided in subsection 11.7. The Company also agrees that each
Participant shall be entitled to the benefits of subsections 4.8, 4.9 and 11.5
with respect to its participation in the Loans and Commitments outstanding
from time to time; provided that no Participant shall be entitled to receive
any greater amount pursuant to such subsections than the transferor Lender
would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred. Notwithstanding anything to the contrary contained
herein, no Participant shall have any right to consent to any amendment,
supplement or other modification to this Agreement or the other Credit
Documents, other than any such amendment, supplement or other modification
which would (i) extend the final scheduled maturity of any of the Loans or the
Notes, (ii) reduce the rate or extend the time of payment of interest thereon,
or reduce the principal amount thereof, (iii) increase the amount of such
Participant's participating interest in the Loans or the Notes or (iv) except
in accordance with their terms, release any of the material guarantee
obligations provided for in any Guarantee.
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(c) Any Lender may, in accordance with applicable law:
(i) at any time sell all or any part of its rights
and obligations under this Agreement and any of the Loans or the
Notes and any other Credit Document to any Lender or any Affiliate
thereof; and
(ii) with the consent of the Company and the
Administrative Agent (which consent shall not be unreasonably
withheld) sell to one or more additional banks or financial
institutions ("Purchasing Lenders") which are not Lenders or
Affiliates thereof, all or any part of its rights and obligations
under this Agreement and the Loans and the Notes and any other Credit
Document, provided that, unless the Company and the Administrative
Agent otherwise consent (which consent shall not be unreasonably
withheld), each such sale pursuant to this clause (ii) shall be in an
amount of $5,000,000 or more;
provided that, after giving effect to such sale, if the transferor Lender
retains any Commitment hereunder, such Commitment shall, unless the Company
otherwise consents (which consent shall not be unreasonably withheld), be not
less than $5,000,000. Any such sale pursuant to clause (i) or (ii) shall be
made pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit C (an "Assignment and Acceptance"), executed by the Administrative
Agent, such Purchasing Lender and such transferor Lender (and, in the case of
any such transfer which requires the Company's consent, by the Company), and
delivered to the Administrative Agent for its acceptance and recording in the
Register (as defined below). Upon such execution, delivery, acceptance and
recording, from and after the effective date set forth in such Assignment and
Acceptance, (x) the Assignee thereunder (and as defined therein) shall be a
party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with Commitments as set
forth therein, and (y) the Assignor thereunder (and as defined therein) shall,
to the extent of the interest transferred, as reflected in such Assignment and
Acceptance, be released from its obligations under this Agreement and the
other Credit Documents (and, in the case of an Assignment and Acceptance
covering all or the remaining portion of an Assignor's rights and obligations
under this Agreement and the other Credit Documents, such Assignor shall cease
to be a party hereto). Such Assignment and Acceptance shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Assignee and the resulting adjustment of the relevant
Commitment Percentages arising from the purchase by such Assignee of all or a
portion of the rights and obligations of such Assignor under this Agreement
and the Loans and the Notes. On or prior to the effective date of such
Assignment and Acceptance, the Company (at its own expense and upon the
request of such Assignee or the Assignor) shall execute and deliver to the
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Administrative Agent in exchange for any surrendered Note a new Note to the
order of such Assignee in an amount equal to the relevant Commitment assumed
by it pursuant to such Assignment and Acceptance and, if the Assignor has
retained such a Commitment hereunder (and has previously requested a Note
evidencing its Loans thereunder), a new Note to the order of the Assignor in
an amount equal to the relevant Commitment retained by it hereunder. Any such
new Note shall be dated the date of the original Note and shall otherwise be
in the form of the Note replaced thereby. Any Note surrendered by the Assignor
shall be returned by the Administrative Agent to the Company marked
"canceled."
(d) The Administrative Agent shall maintain at its address
referred to in subsection 11.2 a copy of each Assignment and Acceptance
delivered to it and a register (the "Register") for the recordation of the
names and addresses of the Lenders and the Commitments and Commitment
Percentages of the Loans owing to each Lender from time to time. The entries
in the Register shall be conclusive, in the absence of manifest error, and the
Company, the Administrative Agent and the Lenders may treat each
Person whose name is recorded in the Register as the owner of the Loan
recorded therein for all purposes of this Agreement. The Register shall be
available for inspection by the Company or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance
executed by an Assignor and an Assignee (and, in the case of any transfer
which requires the Company's consent, by the Company and the Administrative
Agent), together with payment to the Administrative Agent of a registration
and processing fee of $3,500 ($1,000 if the Purchasing Lender is then a Lender
or an Affiliate thereof), the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date thereof record
the information contained therein in the Register and give notice of such
acceptance and recordation to the Lenders and the Company.
(f) The Company authorizes each Lender to disclose to any
Participant or Assignee (each, a "Transferee") and any prospective Transferee
any and all financial information in such Lender's possession concerning
Holdings, the Company and its Subsidiaries which has been delivered to such
Lender by or on behalf of the Company pursuant to this Agreement or any other
Credit Document, or which has been delivered to such Lender by or on behalf of
the Company in connection with such Lender's credit evaluation of the Company,
its Subsidiaries and its Affiliates prior to becoming a party to this
Agreement; provided that such Transferee or potential Transferee agrees to
take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information provided to it concerning the Company or
any of its Subsidiaries.
85
(g) Unless the Company shall otherwise consent, if, pursuant
to this subsection 11.6, any interest in this Agreement or any Loan or Note is
transferred to any Transferee (which, for purposes of this subsection 11.6(g),
shall include an Affiliate of a Lender to which a sale is made pursuant to
subsection 11.6(c)(i)) which is organized under the laws of any jurisdiction
other than the United States or any State thereof, the transferor Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer,
(i) to represent to the transferor Lender (for the benefit of the transferor
Lender, the Administrative Agent, and the Company) that under applicable law
and treaties at the time in effect no taxes will be required to be withheld by
the Administrative Agent, the Company or the transferor Lender with respect to
any payments to be made to such Transferee in respect of the Loans under this
Agreement, (ii) to furnish to the transferor Lender (and, in the case of any
Purchasing Lender registered in the Register, the Administrative Agent and the
Company) either United States Internal Revenue Service Form 4224 or United
States Internal Revenue Service Form 1001 or any successor applicable form, as
the case may be (wherein such Transferee claims entitlement to complete
exemption from United States federal withholding tax on all interest payments
hereunder) and (iii) to agree (for the benefit of the transferor Lender, the
Administrative Agent and the Company) to be bound by the provisions of
subsections 4.10(b), (c) and (d) as if such Transferee were a Lender
hereunder.
(h) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection 11.6 concerning assignments
of Loans and Notes relate only to absolute assignments and that such
provisions do not prohibit assignments creating security interests, including,
without limitation, any pledge or assignment by a Lender of any Loan or Note
to any Federal Reserve Bank in accordance with applicable law.
11.7 Adjustments; Set-off. (a) If any Lender (a "Benefitted
Lender") shall at any time receive any payment of all or part of any of the
Loans or Reimbursement Obligations owing to it, or interest thereon, pursuant
to a guarantee or otherwise, or receive any collateral in respect thereof
(whether voluntarily or involuntarily, by set-off or otherwise), in a greater
proportion than any such payment to and collateral received by any other
Lender, if any, in respect of such other Lender's Loans or Reimbursement
Obligations, as the case may be, owing to it or interest thereon, such
Benefitted Lender shall purchase for cash from the other Lenders such portion
of each such other Lender's Loans or Reimbursement Obligations, as the case
may be, owing to such other Lender, or shall provide such other Lenders with
the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such
86
Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned, to the extent of such recovery, but without interest.
The Company agrees that each Lender so purchasing a portion of another
Lender's Loans or Reimbursement Obligations may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such purchasing Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders
provided by law, upon both the occurrence of an Event of Default and
acceleration of the obligations owing in connection with this Agreement, each
Lender shall have the right, without prior notice to the Company, any such
notice being expressly waived to the extent permitted by applicable law, to
set off and apply against any indebtedness, whether matured or unmatured, of
the Company to such or any other Lender, any amount owing from such Lender to
the Company at, or at any time after, the happening of both of the above
mentioned events, and such right of set-off may be exercised by such Lender
against the Company or against any trustee in bankruptcy, debtor in
possession, assignee for the benefit of creditors, receiver, custodian or
execution, judgment or attachment creditor of the Company, or against anyone
else claiming through or against the Company or such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receivers or
execution, judgment or attachment creditor, notwithstanding the fact that such
right of set-off shall not have been exercised by such Lender prior to the
making, filing or issuance of, or service upon such Lender of, or of notice
of, any such petition, assignment for the benefit of creditors, appointment or
application for the appointment of a receiver, or issuance of execution,
subpoena, order or warrant. Each Lender agrees promptly to notify the Company
and the Administrative Agent after any such set-off and application made by
such Lender, provided that the failure to give such notice shall not affect
the validity of such set-off and application.
11.8 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
11.9 Releases of Guarantee Obligations. Notwithstanding
anything to the contrary contained herein or in any Guarantee, upon request of
the Company, the Administrative Agent shall (without any notice to or vote or
consent of any Lender) take action having the effect of releasing any
guarantee obligations provided for in any Guarantee to the extent necessary to
permit the consummation of any transactions not prohibited hereunder by the
relevant Person in accordance with the provisions of this Agreement and the
other Credit Documents.
87
11.10 Effectiveness; Counterparts. This Agreement shall
become binding upon the parties hereto when the Administrative Agent shall
have received one or more counterparts of this Agreement, executed by a duly
authorized officer of each party hereto or, in the case of any Lender, telex
or telecopier confirmation to the Administrative Agent that a duly authorized
officer of such Lender has executed a counterpart of this Agreement and that
such counterpart has been sent to the Administrative Agent. This Agreement may
be executed by one or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument. A set of the copies of this
Agreement signed by all the parties shall be lodged with the Company and the
Administrative Agent.
11.11 SUBMISSION TO JURISDICTION; WAIVERS.
(a) THE COMPANY HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY
LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT TO WHICH IT IS A PARTY, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT THEREOF, TO THE NON-EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
COURTS OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND APPELLATE COURTS FROM ANY THEREOF;
(ii) CONSENTS THAT ANY SUCH ACTION OR PROCEEDING
MAY BE BROUGHT IN SUCH COURTS AND WAIVES TRIAL BY JURY AND 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;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH
ACTION OR PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY
REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO IT AT ITS ADDRESS SET FORTH IN SUBSECTION
11.2 OR AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL
HAVE BEEN NOTIFIED PURSUANT THERETO; AND
88
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE
RIGHT TO EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR SHALL LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION.
(b) EACH OF THE COMPANY, THE ADMINISTRATIVE AGENT, THE
ISSUING LENDER AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (A)
ABOVE.
11.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW
YORK.
89
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered in New York, New York by their
proper and duly authorized officers as of the day and year first above
written.
CONSOLIDATED CIGAR CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Title: Senior Vice President
THE CHASE MANHATTAN BANK, as
Administrative Agent, as Issuing Lender,
and as a Lender
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Vice President
NATIONSBANK, N.A., as
Documentation Agent and as a Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
---------------------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent and as a Lender
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------------
Title: Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Associate
Annex A
HOLDINGS GUARANTEE
GUARANTEE, dated as of March 2, 1998, made by CONSOLIDATED
CIGAR HOLDINGS INC., a Delaware corporation (the "Guarantor"), in favor of THE
CHASE MANHATTAN BANK, as administrative agent (in such capacity, the
"Administrative Agent") for the financial institutions (the "Lenders") from
time to time parties to the Credit Agreement, dated as of the date hereof (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Consolidated Cigar Corporation, a Delaware corporation (the
"Company"), the Lenders, the Arranger, the Administrative Agent, the
Documentation Agent, and the Syndication Agent (the Lenders and the
Administrative Agent, collectively, the "Benefitted Parties").
W I T N E S S E T H :
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make loans and other extensions of credit to the Company
upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their respective loans and other extensions of credit to
the Company under the Credit Agreement that the Guarantor shall have executed
and delivered this Guarantee to the Administrative Agent, for the benefit of
the Benefitted Parties;
NOW, THEREFORE, in consideration of the premises and to
induce the Benefitted Parties to enter into the Credit Agreement and to induce
the Lenders to make their respective loans and other extensions of credit to
the Company under the Credit Agreement, the Guarantor hereby agrees with the
Administrative Agent as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms
which are defined in the Credit Agreement and used herein are so used as so
defined and the following terms shall have the following meanings:
"Obligations" shall mean the Payment Obligations and all
obligations (including, without limitation, principal, interest,
fees, expenses, costs and indemnities) owing by the Company under
each Rate Hedging Agreement with a Lender or an Affiliate thereof.
"Termination Date" shall mean (subject to reinstatement
pursuant to Section 7) the earlier of (i) the date upon which all
Guarantors have been released by the Administrative Agent from their
respective guarantee obligations hereunder in accordance with the
terms of the Credit Agreement and (ii) the date upon which the
Obligations have been Fully Satisfied.
(b) The words "hereof," "herein" and "hereunder" and words
of similar import when used in this Guarantee shall refer to this Guarantee as
a whole and not to any particular
2
provision of this Guarantee, and section and paragraph references are to this
Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
2. Guarantee. (a) The Guarantor hereby unconditionally and
irrevocably guarantees to the Administrative Agent, for the benefit of the
Benefitted Parties and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Company when
due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations (including, in any event, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans and
interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding relating to the Company whether
or not a claim for post-filing or post-petition interest is allowed in such
proceeding). The Guarantor further agrees to pay any and all reasonable and
documented fees, charges and expenses (including, without limitation, all
reasonable and documented fees and disbursements of counsel) which may be paid
or incurred by any Benefitted Party in enforcing, or obtaining advice of
counsel in connection with the enforcement of, any of their rights under this
Guarantee to which it is a party. Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts that
constitute part of the Obligations and would be owed by the Company but for
the fact that they are unenforceable or not allowable due to the existence of
a bankruptcy. This Guarantee shall remain in full force and effect until the
Termination Date, notwithstanding that from time to time prior thereto the
Company may be free from any Obligations. This Guarantee shall terminate on
the Termination Date. The provisions of the second and third sentences of this
paragraph (a) shall survive the termination of this Guarantee and the payment
in full of the Obligations and the termination of the Commitments.
(b) The Guarantor agrees that whenever, at any time, or from
time to time, it shall make any payment to a Benefitted Party on account of
its liability hereunder, it will notify such Benefitted Party (with a copy to
the Administrative Agent) in writing that such payment is made under this
Guarantee for such purpose. No payment or payments made by the Company or any
other Person or received or collected by any Benefitted Party from the Company
or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application, at any time or from time to time, in reduction
of or in payment of the Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of the Guarantor hereunder which shall
remain obligated hereunder, notwithstanding any such payment or payments
(other than payments made by, or collected or received from, the Guarantor in
respect of the Obligations), until the Termination Date. By its acceptance of
the benefits hereof, each Benefitted Party agrees to make demand for payment
from the Guarantor on account of this Guarantee through the Administrative
Agent, not to take any action to enforce this Guarantee (other than actions
contemplated by Section 3) without the consent of the Administrative Agent and
to notify the Administrative Agent in writing of any payments received by such
Benefitted Party from any Person other than the Administrative Agent
(including, without limitation, by the exercise of any right of set-off)
pursuant to this Guarantee.
(c) All payments made by the Guarantor hereunder shall be
made, in accordance
3
with subsection 4.10 of the Credit Agreement, free and clear of, and without
reduction for or on account of, any present or future Taxes. If any Taxes are
required to be withheld from or in respect of any amounts payable to any
Benefitted Party hereunder, (i) the amounts so payable to such Benefitted
Party shall be increased to the extent necessary to yield to such Benefitted
Party (after payment of all Taxes) such amounts equal to the amounts it would
have received had no such withholding been made, (ii) the Guarantor shall make
such withholding and (iii) the Guarantor shall pay the full amount of the
Taxes to the relevant taxation authority or other authority in accordance with
applicable law. If the Guarantor fails to pay any Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Guarantor shall
indemnify each Benefitted Party for any incremental taxes, interest or
penalties that may become payable by such Benefitted Party as a result of any
such failure. The provisions of this paragraph shall survive the termination
of this Guarantee and the payment in full of the Obligations and the
termination of the Commitments.
3. Right of Set-off. During any period in which an Event of
Default shall have occurred and be continuing, each Benefitted Party is hereby
irrevocably authorized by the Guarantor at any time and from time to time
without notice to the Guarantor, any such notice being hereby waived by the
Guarantor, to set off and appropriate and apply any and all deposits (general
or special, time or demand, provisional or final), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Benefitted Party to or for the credit or the account of
the Guarantor, or any part thereof in such amounts as such Benefitted Party
may elect, on account of the liabilities of the Guarantor hereunder and claims
of every nature and description of such Benefitted Party against the
Guarantor, in any currency, whether arising hereunder, under the Credit
Agreement, the Loans, the Notes, the Applications, the Letters of Credit or
any other Credit Document, as such Benefitted Party may elect, whether or not
such Benefitted Party has made any demand for payment and although such
liabilities and claims may be contingent or unmatured. Each Benefitted Party
shall notify the Guarantor promptly of any such set-off made by it and the
application made by it of the proceeds thereof; provided that the failure to
give such notice shall not affect the validity of such set-off and
application. The rights of each Benefitted Party under this Section are in
addition to other rights and remedies (including, without limitation, other
rights of set-off) which such Benefitted Party may have.
4. No Subrogation. Notwithstanding any payment or payments
made by the Guarantor hereunder or any set-off or application of funds of the
Guarantor by any Benefitted Party, the Guarantor shall not be entitled to be
subrogated to any of the rights of any Benefitted Party against the Company or
any other guarantor or any collateral security or guarantee or right of offset
held by any Benefitted Party for the payment of the Obligations, nor shall the
Guarantor seek or be entitled to seek any contribution or reimbursement from
the Company or any other guarantor in respect of payments made by the
Guarantor hereunder, until all amounts owing to the Benefitted Parties by the
Company on account of the Obligations are Fully Satisfied. If any amount shall
be paid to the Guarantor on account of such subrogation rights at any time
when all of the Obligations shall not have been Fully Satisfied, such amount
shall be held by the Guarantor in trust for the Administrative Agent (on
behalf of the Benefitted Parties), segregated from other funds of the
Guarantor, and shall, forthwith upon receipt by the Guarantor, be turned
4
over to the Administrative Agent (on behalf of the Benefitted Parties) in the
exact form received by the Guarantor (duly indorsed by the Guarantor to the
Administrative Agent, if required), to be applied against the Obligations,
whether matured or unmatured, in such order as the Administrative Agent may
determine.
5. Amendments, etc. with respect to the Obligations. The
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against the Guarantor, and without notice to or further
assent by the Guarantor, any demand for payment of any of the Obligations made
by any Benefitted Party may be rescinded by such Benefitted Party, and any of
the Obligations continued, and the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by any Benefitted Party, and the
Credit Agreement, any Notes, any Application, any Letter of Credit, any other
Credit Document and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Lenders may deem advisable from time to time and in accordance
with the Credit Agreement, and any collateral security, guarantee or right of
offset at any time held by any Benefitted Party for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. No
Benefitted Party, nor any other holder of Obligations, shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for the Obligations or for this Guarantee or any property
subject thereto.
6. Guarantee Absolute and Unconditional. The Guarantor
waives any and all notice of the creation, renewal, extension or accrual of
any of the Obligations and notice of or proof of reliance by any Benefitted
Party upon this Guarantee or acceptance of this Guarantee; the Obligations,
and any of them, shall conclusively be deemed to have been created, contracted
or incurred, or renewed, extended, amended or waived in reliance upon this
Guarantee; and all dealings between the Company or the Guarantor, on the one
hand, and the Benefitted Parties, on the other, shall likewise be conclusively
presumed to have been had or consummated in reliance upon this Guarantee. The
Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Company or the Guarantor with
respect to the Obligations. This Guarantee shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement, any Note, any Application,
any Letter of Credit, any other Credit Document or any of the documents
executed in connection therewith, any of the Obligations or any collateral
security therefor or guarantee or right of offset with respect thereto at any
time or from time to time held by any Benefitted Party, (b) any defense
(including, without limitation, any statute of limitations), set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by the Company against any Benefitted
Party, (c) any change in the time, manner or place of any application of
collateral security, or proceeds thereof, to all or any of the Obligations, or
any manner of sale or other disposition of any collateral security for all or
any of the Obligations or any other assets of the Company or any of its
Subsidiaries, (d) any change, restructuring or termination of the corporate
structure or existence of the Company or any of its Subsidiaries, or (e) any
other circumstance whatsoever (with or without notice to or knowledge of the
Company or the Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of the Company for the
5
Obligations, or of the Guarantor under this Guarantee, in bankruptcy or in any
other instance. When any Benefitted Party is pursuing its rights and remedies
hereunder against the Guarantor, such Benefitted Party may, but shall be under
no obligation to, pursue such rights and remedies as it may have against the
Company or any other Person or against any collateral security or guarantee
for the Obligations or any right of offset with respect thereto, and any
failure by such Benefitted Party to pursue such other rights or remedies or to
collect any payments from the Company or any such other Person or to realize
upon any such collateral security or guarantee or to exercise any such right
of offset, or any release of the Company or any such other Person or of any
such collateral security, guarantee or right of offset, shall not relieve the
Guarantor of any liability hereunder, and shall not impair or affect the
rights and remedies, whether express, implied or available as a matter of law,
of the Benefitted Parties against the Guarantor.
7. Reinstatement. This Guarantee shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or
any part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by any Benefitted Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or upon or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Company or any substantial part of its
property, or otherwise, all as though such payments had not been made.
8. Payments. The Guarantor hereby agrees that amounts
payable by it under this Guarantee will be paid to the Administrative Agent
without set-off or counterclaim in U.S. Dollars at the office of the
Administrative Agent located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or
at such other office as the Administrative Agent shall designate in writing to
the Guarantor.
9. Representations and Warranties. The Guarantor represents
and warrants that:
(a) the Guarantor is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of
its incorporation and has the corporate power and authority and the
legal right to own and operate its property, to lease the property it
operates as lessee and to conduct the business in which it is
currently engaged;
(b) the Guarantor has the corporate power and authority and
the legal right to execute and deliver, and to perform its
obligations under, this Guarantee, and has taken all necessary
corporate action to authorize its execution, delivery and performance
of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding
obligation of the Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles;
(d) the execution, delivery and performance of this
Guarantee will not violate any Contractual Obligation or material
Requirement of Law of the Guarantor and will not result in or require
the creation or imposition of any Lien on any of the material
properties or assets of the Guarantor pursuant to the provisions of
any Contractual
6
Obligation of the Guarantor;
(e) no consent or authorization of, filing with, or other
act by or in respect of, any arbitrator or Governmental Authority and
no consent of any other Person (including, without limitation, any
stockholder or creditor of the Guarantor) is required in connection
with the execution, delivery, performance, validity or enforceability
of this Guarantee, except for such consents which have been obtained
prior to the date hereof and remain in full force and effect;
(f) no litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the
knowledge of the Guarantor, threatened against the Guarantor or
against any of its properties or assets (i) with respect to this
Guarantee or any of the transactions contemplated hereby or (ii)
which would be reasonably likely to have a material adverse effect on
the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Company and its
Subsidiaries taken as a whole;
(g) the Guarantor has good title to all its personal
properties and assets, and none of such property is subject to any
Lien of any nature whatsoever except Liens of a type permitted under
subsection 8.2 of the Credit Agreement;
(h) the Guarantor has filed or caused to be filed all
material tax returns, which to the knowledge of the Guarantor are
required to be filed by it, and has paid all taxes shown to be due
and payable on said returns or on any assessments made against it
(other than those being contested in good faith by appropriate
proceedings for which adequate reserves (in accordance with GAAP)
have been provided on its books);
(i) no Default or Event of Default has occurred and is
continuing on the date hereof and no Default or Event of Default will
occur as a result of consummation of the transactions contemplated
hereby.
The Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by the Guarantor on the date of
each extension of credit under the Credit Agreement on and as of such date of
extension of credit as though made hereunder on and as of such date.
10. Covenants. The Guarantor hereby agrees that, until the
Termination Date, notwithstanding anything to the contrary in the Credit
Agreement or any other Credit Document, the Guarantor will not (a) conduct,
transact or otherwise engage in, or commit to conduct, transact or otherwise
engage in, any business or operations other than those incidental to its
ownership of the Capital Stock of the Company, (b) incur, create, assume or
suffer to exist any Indebtedness or other liabilities or financial
obligations, except (i) nonconsensual obligations imposed by operation of law,
(ii) pursuant to the Credit Documents to which it is a party, (iii)
obligations with respect to its Capital Stock, and (iv) obligations under the
Holdings Note, or (c) own, lease manage or otherwise operate any properties or
assets (other than cash and Cash Equivalents) other than the ownership of
shares of Capital Stock of the Company.
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11. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
12. Headings. The paragraph and section headings used in
this Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
13. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any other holder of Obligations shall by any act
(except pursuant to Section 14 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Benefitted Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by any Benefitted Party of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which it would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive
of any rights or remedies provided by law.
14. Waivers and Amendments; Successors and Assigns. None of
the terms or provisions of this Guarantee may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the Guarantor
and the Administrative Agent and otherwise in accordance with subsection 11.1
of the Credit Agreement. This Guarantee shall be binding upon the successors
and assigns of the Guarantor and shall inure to the benefit of the Benefitted
Parties and their respective successors and assigns.
15. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
16. Notices. Notices by the Administrative Agent to the
Guarantor may be given by mail or by facsimile transmission, addressed to the
Guarantor at its address or transmission number set forth under its signature
hereto and shall be effective (a) in the case of mail or hand delivery, upon
delivery and (b) in the case of facsimile transmissions, when sent. The
Guarantor may change its address and transmission numbers by written notice to
the Administrative Agent.
17. Authority of Administrative Agent. The Guarantor
acknowledges that the rights and responsibilities of the Administrative Agent
under this Guarantee with respect to any action taken by the Administrative
Agent or the exercise or non-exercise by the Administrative Agent of any
option, right, request, judgment or other right or remedy provided for herein
or resulting or arising out of this Guarantee shall, as between the Benefitted
Parties, be governed by the Credit Agreement, but, as between the
Administrative Agent and the Guarantor, the
8
Administrative Agent shall be conclusively presumed to be acting with full and
valid authority so to act or refrain from acting, and the Guarantor shall not
be under any obligation, or entitlement, to make any inquiry respecting such
authority.
18. SUBMISSION TO JURISDICTION; WAIVERS. (a) THE GUARANTOR
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS GUARANTEE, OR FOR RECOGNITION AND
ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF, TO THE NON-EXCLUSIVE
GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK, THE
COURTS OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND APPELLATE COURTS FROM ANY THEREOF;
(ii) 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;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO IT AT ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR
AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE
BEEN NOTIFIED PURSUANT TO SECTION 16 HEREOF;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO EFFECT
SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL
LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION; AND
(v) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ANY
RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.
(b) THE GUARANTOR (AND BY ITS ACCEPTANCE HEREOF, EACH
BENEFITTED PARTY) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (A) ABOVE.
9
IN WITNESS WHEREOF, the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as
of the date first above written.
CONSOLIDATED CIGAR HOLDINGS INC.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Senior Vice President
Address for Notices:
Consolidated Cigar Holdings, Inc.
c/o Consolidated Cigar Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
SUBSIDIARIES GUARANTEE
SUBSIDIARIES GUARANTEE, dated as of March 2, 1998, made by
the Domestic Subsidiaries of Consolidated Cigar Corporation, a Delaware
corporation (the "Company") named on the signature pages hereof or that shall
become a party to this agreement pursuant to subsection 8.16 of the Credit
Agreement referred to below (each a "Guarantor" and, collectively, the
"Guarantors") in favor of The Chase Manhattan Bank, as administrative agent
(in such capacity, the "Administrative Agent") for the financial institutions
(the "Lenders") from time to time parties to the Credit Agreement, dated the
date hereof (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement") among the Company, the Lenders, the Arranger, the
Administrative Agent, the Documentation Agent, and the Syndication Agent (the
Lenders and the Administrative Agent, collectively, the "Benefitted Parties").
W I T N E S S E T H:
WHEREAS, pursuant to the Credit Agreement, the Lenders have
severally agreed to make loans and other extensions of credit to the Company
upon the terms and subject to the conditions set forth therein;
WHEREAS, each Guarantor is a Subsidiary of the Company;
WHEREAS, the Company and the Guarantors are engaged in
related businesses, and each Guarantor will derive substantial direct and
indirect benefit from the making of the extensions of credit; and
WHEREAS, it is a condition precedent to the obligation of
the Lenders to make their respective loans and other extensions of credit to
the Company under the Credit Agreement that the Guarantors shall have executed
and delivered this Guarantee to the Administrative Agent, for the benefit of
the Benefitted Parties;
NOW, THEREFORE, in consideration of the premises and to
induce the Benefitted Parties to enter into the Credit Agreement and to induce
the Lenders to make their respective loans and other extensions of credit to
the Company under the Credit Agreement, the Guarantors hereby agree with the
Administrative Agent as follows:
1. Defined Terms. (a) Unless otherwise defined herein, terms which
are defined in the Credit Agreement and used herein are so used as so defined
and the following terms shall have the following meanings:
"Obligations" shall mean the Payment Obligations and all
obligations (including, without limitation, principal, interest,
fees, expenses, costs and indemnities) owing by the
2
Company under each Rate Hedging Agreement with a Lender or an
Affiliate thereof.
"Termination Date" shall mean (subject to reinstatement
pursuant to Section 8) the earlier of (i) the date upon which all
Guarantors have been released by the Administrative Agent from their
respective guarantee obligations hereunder in accordance with the
terms of the Credit Agreement and (ii) the date upon which the
Obligations have been Fully Satisfied.
(b) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Guarantee shall refer to this Guarantee as a whole
and not to any particular provision of this Guarantee, and section and
paragraph references are to this Guarantee unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. Guarantee (a) Subject to the provisions of paragraph 2(b), each of
the Guarantors hereby, jointly and severally, unconditionally and irrevocably,
guarantees to the Administrative Agent, for the benefit of the Benefitted
Parties and their respective successors, indorsees, transferees and assigns,
the prompt and complete payment and performance by the Company when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations (including, in any event, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans and
interest accruing at the then applicable rate provided in the Credit Agreement
after the filing of any petition in bankruptcy, or the commencement of any
insolvency, reorganization or like proceeding, relating to the Company whether
or not a claim for post-petition interest is allowed in such proceeding).
(b) Anything herein or in any other Credit Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under
the other Credit Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to the insolvency of debtors.
(c) Each Guarantor further agrees to pay any and all reasonable and
documented fees, charges and expenses (including, without limitation, all
reasonable and documented fees and disbursements of counsel) which may be paid
or incurred by the Administrative Agent or any Benefitted Party in enforcing,
or obtaining advice of counsel in connection with the enforcement of, any of
their rights under this Guarantee to which such Guarantor is a party. Without
limiting the generality of the foregoing, each Guarantor's liability shall
extend to all amounts that constitute part of the Obligations and would be
owed by the Company but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy. This Guarantee shall remain in
full force and effect until the Termination Date, notwithstanding that from
time to time prior thereto the Company may be free from any Obligations. This
Guarantee shall terminate on the Termination Date. The provisions of the first
and second sentences of this paragraph (c) shall survive the termination of
this Guarantee and the payment in full of the Obligations and the termination
of the Commitments.
3
(d) Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing this Guarantee or affecting the rights and
remedies of the Administrative Agent or any Benefitted Party hereunder.
(e) No payment or payments made by the Company, any of the other
Guarantors, any other Person or received or collected by the Administrative
Agent, or any Benefitted Party from the Company, any of the other Guarantors,
or any other Person by virtue of any action or proceeding or any set-off or
appropriation or application, at any time or from time to time, in reduction
of or in payment of the Obligations shall be deemed to modify, reduce, release
or otherwise affect the liability of any Guarantor hereunder which shall
remain obligated hereunder, notwithstanding any such payment or payments
(other than payments made by, or collected or received from, such Guarantor in
respect of the Obligations) up to the maximum liability of such Guarantor
hereunder until the Termination Date. By its acceptance of the benefits
hereof, each Benefitted Party agrees to make demand for payment from each
Guarantor on account of this Guarantee through the Administrative Agent, not
to take any action to enforce this Guarantee (other than actions contemplated
by Section 4) without the consent of the Administrative Agent and to notify
the Administrative Agent in writing of any payments received by such
Benefitted Party from any Person other than the Administrative Agent
(including, without limitation, by the exercise of any right of set-off)
pursuant to this Guarantee.
(f) Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to a Benefitted Party on account of its
liability hereunder, it will notify such Benefitted Party (with a copy to the
Administrative Agent) in writing that such payment is made under this
Guarantee for such purpose.
(g) All payments made by each Guarantor hereunder shall be made, in
accordance with subsection 4.10 of the Credit Agreement, free and clear of,
and without reduction for or on account of, any present or future Taxes. If
any Taxes are required to be withheld from or in respect of any amounts
payable to any Benefitted Party hereunder, (i) the amounts so payable to such
Benefitted Party shall be increased to the extent necessary to yield to such
Benefitted Party (after payment of all Taxes) such amounts equal to the
amounts it would have received had no such withholding been made, (ii) the
applicable Guarantor shall make such withholding and (iii) the applicable
Guarantor shall pay the full amount of the Taxes to the relevant taxation
authority or other authority in accordance with applicable law. If any
Guarantor fails to pay any Taxes when due to the appropriate taxing authority
or fails to remit to the Administrative Agent the required receipts or other
required documentary evidence, such Guarantor shall indemnify each Benefitted
Party for any incremental taxes, interest or penalties that may become payable
by such Benefitted Party as a result of any such failure. The provisions of
this paragraph shall survive the termination of this Guarantee and the payment
in full of the Obligations and the termination of the Commitments.
3. Right of Contribution. Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder,
4
such Guarantor shall be entitled to seek and receive contribution from and
against any other Guarantor hereunder who has not paid its proportionate share
of such payment. Each Guarantor's right of contribution shall be subject to
the terms and conditions of Section 5 hereof. The provisions of this Section 3
shall in no respect limit the obligations and liabilities of any Guarantor to
the Benefitted Parties, and each Guarantor shall remain liable to the
Benefitted Parties for the full amount guaranteed by such Guarantor hereunder.
4. Right of Set-off. Each Guarantor hereby irrevocably authorizes
each Benefitted Party at any time and from time to time when an Event of
Default has occurred and is continuing without notice to such Guarantor or any
other Guarantor, any such notice being hereby waived by each Guarantor, to
set-off and appropriate and apply any and all deposits (general or special,
time or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Benefitted Party to or for the credit or the account of such
Guarantor, or any part thereof in such amounts as such Benefitted Party may
elect, on account of the liabilities of such Guarantor hereunder and claims of
every nature and description of such Benefitted Party against such Guarantor,
in any currency, whether arising hereunder, under the Credit Agreement, the
Notes, the Applications, the Letters of Credit or any other Credit Document as
such Benefitted Party may elect, whether or not such Benefitted Party has made
any demand for payment and although such liabilities and claims may be
contingent or unmatured. Each Benefitted Party shall notify such Guarantor
promptly of any such set-off made by it and the application made by it of the
proceeds thereof, provided that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of such
Benefitted Party under this Section are in addition to other rights and
remedies (including, without limitation, other rights of set-off) which such
Benefitted Party may have.
5. No Subrogation. Notwithstanding any payment or payments made by
any of the Guarantors hereunder or any set-off or application of funds of any
of the Guarantors by any Benefitted Party, no Guarantor shall be entitled to
be subrogated to any of the rights of any Benefitted Party against the
Company, any other Guarantor or any other guarantor or any collateral security
or guarantee or right of offset held by any Benefitted Party for the payment
of the Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the Company, any other Guarantor or any
other guarantor in respect of payments made by such Guarantor hereunder, until
all amounts owing to the Benefitted Parties by the Company on account of the
Obligations are Fully Satisfied. If any amount shall be paid to any Guarantor
on account of such subrogation rights at any time when all of the Obligations
shall not have been Fully Satisfied, such amount shall be held by such
Guarantor in trust for the Administrative Agent (on behalf of the Benefitted
Parties), segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent (on
behalf of the Benefitted Parties) in the exact form received by such Guarantor
(duly indorsed by such Guarantor to the Administrative Agent, if required), to
be applied against the Obligations, whether matured or unmatured, in such
order as the Administrative Agent may determine.
6. Amendments, etc. with respect to the Obligations. Each Guarantor
shall remain
5
obligated hereunder notwithstanding that, without any reservation of rights
against any Guarantor and without notice to or further assent by any
Guarantor, any demand for payment of any of the Obligations made by any
Benefitted Party may be rescinded by such Benefitted Party and any of the
Obligations continued, and the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee
therefor or right of offset with respect thereto, may, from time to time, in
whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by any Benefitted Party and the
Credit Agreement, any Notes, any Application, any Letter of Credit, any other
Credit Document and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Lenders may deem advisable from time to time and in accordance
with the Credit Agreement, and any collateral security, guarantee or right of
offset at any time held by any Benefitted Party for the payment of the
Obligations may be sold, exchanged, waived, surrendered or released. No
Benefitted Party, nor any other holder of the Obligations, shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by
it as security for the Obligations or for this Guarantee or any property
subject thereto.
7. Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, renewal, extension or accrual of any of the
Obligations and notice of or proof of reliance by any Benefitted Party upon
this Guarantee or acceptance of this Guarantee, the Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guarantee; and all dealings between the Company and any of the Guarantors, on
the one hand, and the Benefitted Parties, on the other shall likewise be
conclusively presumed to have been had or consummated in reliance upon this
Guarantee. Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon the Company or any of
the Guarantors with respect to the Obligations. This Guarantee shall be
construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Credit Agreement,
any Note, any Application, any Letter of Credit, any other Credit Document or
any of the documents executed in connection therewith, any of the Obligations
or any collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by any Benefitted Party,
(b) any defense (including, without limitation, any statute of limitations),
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by the Company against any
Benefitted Party, (c) any change in the time, manner or place of any
application of collateral security, or proceeds thereof, to all or any of the
Obligations, or any manner of sale or other disposition of any collateral
security for all or any of the Obligations or any other assets of the Company
or any of its Subsidiaries, (d) any change, restructuring or termination of
the corporate structure or existence of the Company or any of its
Subsidiaries, or (e) any other circumstance whatsoever (with or without notice
to or knowledge of the Company or such Guarantor) which constitutes, or might
be construed to constitute, an equitable or legal discharge of the Company for
the Obligations, or of such Guarantor under this Guarantee, in bankruptcy or
in any other instance. When any Benefitted Party is pursuing its rights and
remedies hereunder against any Guarantor, such Benefitted Party may, but shall
be under no obligation to, pursue such rights and remedies as it may have
against the Company or any other Person or against any
6
collateral security or guarantee for the Obligations or any right of offset
with respect thereto, and any failure by such Benefitted Party to pursue such
other rights or remedies or to collect any payments from the Company or any
such other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Company or any
such other Person or of any such collateral security, guarantee or right of
offset, shall not relieve such Guarantor of any liability hereunder, and shall
not impair or affect the rights and remedies, whether express, implied or
available as a matter of law, of the Benefitted Parties against such
Guarantor.
8. Reinstatement. This Guarantee shall continue to be effective, or
be reinstated, as the case may be, if at any time payment, or any part
thereof, of any of the Obligations is rescinded or must otherwise be restored
or returned by any Benefitted Party upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of the Company or any Guarantor, or
upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Company or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
9. Payments. Each Guarantor hereby agrees that amounts payable by it
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in U.S. Dollars at the office of the Administrative Agent located
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ or at such other office as the
Administrative Agent shall designate in writing to such Guarantor.
10. Representations and Warranties. Each Guarantor severally
represents and warrants that:
(a) it is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has the
corporate power and authority and the legal right to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged;
(b) it has the corporate power and authority and the legal right to
execute and deliver, and to perform its obligations under, this Guarantee, and
has taken all necessary corporate action to authorize its execution, delivery
and performance of this Guarantee;
(c) this Guarantee constitutes a legal, valid and binding obligation
of such Guarantor enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors' rights
generally and by general equitable principles;
(d) the execution, delivery and performance of this Guarantee will
not violate any Contractual Obligation or material Requirement of Law of such
Guarantor and will not result in or require the creation or imposition of any
Lien on any of the material properties or assets of such Guarantor pursuant to
the provisions of any Contractual Obligation of such Guarantor;
(e) no consent or authorization of, filing with, or other act by or
in respect of, any
7
arbitrator or Governmental Authority and no consent of any other Person
(including, without limitation, any stockholder or creditor of such Guarantor)
is required in connection with the execution, delivery, performance, validity
or enforceability of this Guarantee, except for consents which have been
obtained prior to the date hereof and remain in full force and effect;
(f) no litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of such
Guarantor, threatened against such Guarantor or against any of its properties
or assets (i) with respect to this Guarantee or any of the transactions
contemplated hereby or (ii) which would be reasonably likely to have a
material adverse effect on the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Company and its
Subsidiaries taken as a whole;
(g) it has good title in all its personal properties and assets, and
none of such property is subject to any Lien of any nature whatsoever except
Liens of a type permitted by subsection 8.2 of the Credit Agreement;
(h) it has filed or caused to be filed all material tax returns,
which to its knowledge are required to be filed by it and has paid all taxes
shown to be due and payable on said returns or on any assessments made against
it (other than those being contested in good faith by appropriate proceedings
for which adequate reserves (in accordance with GAAP) have been provided on
the books of such Guarantor);
Each Guarantor agrees that the foregoing representations and
warranties shall be deemed to have been made by such Guarantor on the date of
each extension of credit under the Credit Agreement on and as of such date of
such extension of credit as though made hereunder on and as of such date.
11. Severability. Any provision of this Guarantee which is
prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
12. Headings. The paragraph and section headings used in
this Guarantee are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation
hereof.
13. No Waiver; Cumulative Remedies. Neither the
Administrative Agent nor any other holder of Obligations shall by any act
(except pursuant to Section 14 hereof), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default or in any breach of any of the
terms and conditions hereof. No failure to exercise, nor any delay in
exercising, on the part of any Benefitted Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by any Benefitted Party
8
of any right or remedy hereunder on any one occasion shall not be construed as
a bar to any right or remedy which it would otherwise have on any future
occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any rights or
remedies provided by law.
14. Waivers and Amendments; Successors and Assigns. None of the terms
or provisions of this Guarantee may be waived, amended, supplemented or
otherwise modified except by a written instrument executed by each Guarantor
and the Administrative Agent and otherwise in accordance with subsection 11.1
of the Credit Agreement. This Guarantee shall be binding upon the successors
and assigns of each Guarantor and shall inure to the benefit of the Benefitted
Parties and their respective successors and assigns.
15. Additional Guarantors. Each of the parties hereto agrees that, to
give effect to the provisions of subsection 8.16 of the Credit Agreement, each
Person that after the date hereof becomes a Domestic Subsidiary of the Company
(other than the Guarantor(s) party hereto on the date of the initial execution
hereof) and has assets the fair market value of which is greater than $100,000
may become party to this Subsidiaries Guarantee by delivering to the
Administrative Agent, the Lenders and each other Guarantor a Guarantee
Amendment, in substantially the form of Annex 1 hereto, duly executed by such
person, together with such documents called for by said subsection 8.16. Each
of the parties hereto authorizes the Agent, the Banks and each other Guarantor
to attach each such Guarantee Amendment to this Subsidiaries Guarantee. Upon
the execution and delivery of such Guarantee Amendment by such Person, such
Person shall become a Guarantor hereunder.
16. GOVERNING LAW. THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
17. Notices. Notices by the Administrative Agent to any Guarantor may
be given by mail or by facsimile transmission, addressed to such Guarantor at
its address or transmission number set forth under its signature hereto and
shall be effective (a) in the case of mail or hand delivery, upon delivery and
(b) in the case of facsimile transmissions, when sent. Any Guarantor may
change its address and transmission numbers by written notice to the
Administrative Agent.
18. Authority of Administrative Agent. Each Guarantor acknowledges
that the rights and responsibilities of the Administrative Agent under this
Guarantee with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Guarantee shall, as between the Benefitted Parties, be
governed by the Credit Agreement, but, as between the Administrative Agent and
such Guarantor, the Administrative Agent shall be conclusively presumed to be
acting with full and valid authority so to act or refrain from acting, and no
Guarantor shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
19. SUBMISSION TO JURISDICTION; WAIVERS. (a) EACH GUARANTOR
9
HEREBY IRREVOCABLY AND UNCONDITIONALLY:
(i) SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS GUARANTEE, OR FOR RECOGNITION
AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF, TO THE
NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW
YORK, THE COURTS OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF
NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF;
(ii) 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;
(iii) AGREES THAT SERVICE OF PROCESS IN ANY SUCH ACTION OR
PROCEEDING MAY BE EFFECTED BY MAILING A COPY THEREOF BY REGISTERED OR
CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF MAIL), POSTAGE
PREPAID, TO IT AT ITS ADDRESS SET FORTH UNDER ITS SIGNATURE BELOW OR
AT SUCH OTHER ADDRESS OF WHICH THE ADMINISTRATIVE AGENT SHALL HAVE
BEEN NOTIFIED PURSUANT TO SECTION 16 HEREOF;
(iv) AGREES THAT NOTHING HEREIN SHALL AFFECT THE RIGHT TO
EFFECT SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
SHALL LIMIT THE RIGHT TO ▇▇▇ IN ANY OTHER JURISDICTION; AND
(v) WAIVES, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW,
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LEGAL ACTION OR
PROCEEDING REFERRED TO IN THIS SUBSECTION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES.
(b) EACH GUARANTOR (AND BY ITS ACCEPTANCE HEREOF, EACH
BENEFITTED PARTY) HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY
IN ANY LEGAL ACTION OR PROCEEDING REFERRED TO IN PARAGRAPH (A) ABOVE.
IN WITNESS WHEREOF, each of the undersigned has caused this
Guarantee to be duly executed and delivered by its duly authorized officer as
of the date first above written.
TRIPLE C MARKETING INC.
By:
-------------------------------
Title:
Address for Notices:
Triple C Marketing Inc.
c/o Consolidated Cigar Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
CONGAR INTERNATIONAL CORPORATION
By:
-------------------------------
Title:
Address for Notices:
Congar International Corporation
c/o Consolidated Cigar Corporation
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
ANNEX 1
GUARANTEE AMENDMENT
This Guarantee Amendment is delivered pursuant to Section 15
of the Subsidiaries Guarantee dated as of March 2, 1998 (the "Subsidiaries
Guarantee") between certain Domestic Subsidiaries of Consolidated Cigar
Corporation, a Delaware corporation, that are Guarantors party thereto and The
Chase Manhattan Bank, as administrative agent for the lenders referred to
therein.
The undersigned hereby agrees that this Guarantee Amendment
may be attached to the Subsidiaries Guarantee and that, upon the execution and
delivery of this Guarantee Amendment as provided in said Section 15, the
undersigned shall become a "Guarantor" as such term is used in the
Subsidiaries Guarantee.
IN WITNESS WHEREOF, the undersigned has caused this
Guarantee Amendment to be duly executed on this ____ day of _______, ____.
[NAME OF DOMESTIC SUBSIDIARY]
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Title: Senior Vice President
Address for Notices:
[Address]
