EXHIBIT 10.3
SECOND AMENDMENT TO MORTGAGE AND SECURITY
AGREEMENT, ASSIGNMENT OF LEASES, RENTS AND PROFITS,
FINANCING STATEMENT AND FIXTURE FILING
This is a Second Amendment to Mortgage and Security Agreement,
Assignment of Leases, Rents and Profits, Financing Statement and Fixture Filing
(this "Agreement") dated as of November 17, 2003 among:
BANK ONE, NA,
successor to Bank One, Kentucky, NA
a national banking association
000 X. Xxxxxxxxx Xxxxxx, Xxxxxxxxxx, (As "Agent Bank" and
Xxxxxxxxx Xxxxxx, Xxxxxxxx 00000 "Mortgagee," for the
benefit of the Banks as
defined in the 2003B
Amendment to Loan
Documents)
and
NATIONAL TOBACCO COMPANY, L.P.,
a limited partnership with a chief executive office located at:
000 Xxxx Xxxxxx Xxxxx, 0xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 10010-7304, and its Kentucky registered office
located at:
0000 Xxxxxxxx Xxx Xxxxxxxxx,
Xxxxxxxxxx, Xxxxxxxx 00000
(the "Mortgagor")
Recitals
--------
A. Mortgagor is the owner in fee of the real property described on
Exhibit A attached hereto and made a part hereof.
B. Mortgagor and Mortgagee entered into that certain Loan Agreement,
dated as of December 29, 2000 (the "Loan Agreement"), by and among (i)
Mortgagee; (ii) the BANKS as defined therein; (iii) North Atlantic Trading
Company, Inc., a Delaware corporation with its principal office and place of
business in New York, New York (the "Borrower"); and (iv) the SUBSIDIARIES, as
defined therein, providing for the making of Loans and the issuance of, and
participation in, Letters of Credit as contemplated therein. In connection with
the Loan Agreement, Borrower executed and delivered two promissory notes, each
dated December 29, 2000, in the amounts of up to Ten Million Dollars
($10,000,000.00) ("Original Revolving Credit Note") and Twenty Five Million
Dollars ($25,000,000.00) ("Original Term Note") (collectively, the "Original
Notes") to Mortgagee.
C. In order to secure its obligations to Mortgagee under the Original
Notes, the Loan Agreement, and other Loan Documents (as defined in the Loan
Agreement), and any other obligations of Mortgagor and Borrower as described in
the Loan Agreement and other Loan Documents, Mortgagor executed and delivered a
Mortgage and Security Agreement, Assignment of Leases, Rents and Profits,
Financing Statement and Fixture Filing dated December 29, 2000 (the "Mortgage").
The Mortgage was recorded in the Office of the Clerk of Jefferson County,
Kentucky on January 5, 2001 in Mortgage Book 5742, Page 587.
D. The parties entered into that certain 2002A Amendment to Loan
Documents dated December 31, 2002 (the "2002 Modification Agreement"), to
reflect the following: (i) the Original Term Note had been paid in full; (ii)
the amount of the Revolving Credit Facility (as defined in the Loan Agreement)
was increased from Ten Million Dollars ($10,000,000.00) to Twenty Million
Dollars ($20,000,000.00) (the "Amended Revolving Credit Loan"), as evidenced by
that certain amended revolving credit note (the "Amended Revolving Credit
Note"), and (iii) the maturities of the Revolving Credit Facility and the Letter
of Credit Subfacility provided for in the Loan Agreement were extended to
December 31, 2003.
E. The parties entered into that certain 2003A Amendment to Loan
Documents of even date herewith (the "2003A Modification Agreement") to provide
for a subordinated term loan of Nineteen Million Dollars ($19,000,000.00), and
to reflect other matters, including, but not limited to, the addition of the
Class B Lenders and a Class B Loan Agent to the Loan Agreement (the former as
Banks thereunder), as well as to establish the $15,000,000 Sublimit (as defined
in the 2003A Modification Agreement), all as set forth in the 2003A Modification
Agreement.
F. The parties have entered into that certain 2003B Amendment to Loan
Documents of even date herewith (the "2003B Modification Agreement") to provide
for an increase in the subordinated term loans of Twenty Three Million Dollars
($23,000,000), bringing the total amount of subordinated term loans to Forty Two
Million Dollars ($42,000,000), (the "Class B Term Loans"), evidenced by those
certain Class B Term Notes in the aggregate principal amount of $42,000,000 (the
"Class B Term Notes") ((i) the 2002 Modification Agreement and the 2003A
Modification Agreement shall hereinafter be referred to as the "Modification
Agreements" and (ii) the Amended Revolving Credit Loan and the Class B Term
Loans shall hereinafter be referred to as the "Revised Loans").
G. The Modification Agreements amend, modify, and restate the
obligations of Mortgagee and Borrower under the Mortgage.
H. This Agreement is given to secure to Mortgagee, among other
things, payment of the Revised Loans, together with interest thereon as provided
in the Loan Agreement, principal and interest being payable as stated in the
Loan Agreement, as well as any of the other Obligations as defined in the Loan
Agreement, all as modified by the Modification Agreements.
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NOW, THEREFORE, in consideration of the foregoing recitals, which are
incorporated herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby expressly acknowledged by each party to this
Agreement, the Mortgagor and Mortgagee hereby agree as follows:
1. MODIFICATION OF MORTGAGE. The Mortgage is hereby amended as
follows:
(a) Recitals. The first recital paragraph in the Mortgage is deleted
and replaced in its entirety by the following:
"WHEREAS, the parties have entered into a certain Loan Agreement,
dated as of December 29, 2000, by and among (i) BANK ONE, NA, successor to Bank
One, Kentucky, NA; (ii) the BANKS identified on Schedule 1.1 thereto; (iii)
NORTH ATLANTIC TRADING COMPANY, INC., a Delaware corporation with its principal
office and place of business and registered office in New York, New York (the
"Borrower"); and (iv) the SUBSIDIARIES identified on Schedule 1.2 thereto, as
amended by that certain 2002A Amendment to Loan Documents dated December 31,
2002, and by that certain 2003A Amendment to Loan Documents dated as of July 31,
2003, and by that certain 2003B Amendment to Loan Documents dated as of November
17, 2003, (collectively, the 2002A Amendment to Loan Documents dated December
31, 2002, the 2003A Amendment to Loan Documents dated as of July 31, 2003 and
the 2003B Amendment to Loan Documents dated as of November 17, 2003 shall
hereinafter be referred to as the "Modification Agreements") providing for the
making of Loans and the issuance of, and participation in, Letters of Credit as
contemplated therein in the maximum principal amount of Sixty Two Million
Dollars ($62,000,000.00) (as used herein, the term "Loan Agreement" means the
Loan Agreement described above in this paragraph, as amended by the Modification
Agreements, as the same may be amended, modified, extended, renewed, replaced,
restated, supplemented or refinanced from time to time, and including any
agreement extending the maturity of, refinancing or restructuring all or any
portion of the indebtedness under such agreement or any successor agreements,
whether or not with the same agent, trustee, representative lenders or
holders)."
The recital designated "(i)" on page 2 of the Mortgage is deleted and
replaced in its entirety by the following:
"The full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise), of all obligations and liabilities
(including, without limitation, the principal of and interest on the notes
issued and loans made under the Loan Agreement, including a Revolving Credit
Loan in the principal amount of up to Twenty Million Dollars ($20,000,000.00)
with a maturity date of December 31, 2003 (the "Amended Revolving Credit Loan"),
as evidenced by that certain "Revolving Credit Note," and subordinated term
loans in the principal amount of Forty Two Million Dollars ($42,000,000.00) with
a maturity date of March 31, 2004 (the "Class B Term Loans"), as evidenced by
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those certain Class B Term Notes in the aggregate principal amount of
$42,000,000 (the "Class B Term Notes"), all reimbursement obligations and unpaid
drawings with respect to letters of credit issued under the Loan Agreement and
all indemnities, reasonable fees and interest thereon or owed thereunder) of
Mortgagor to the Banks (including all obligations and liabilities of the
Mortgagor under the Guaranty Agreement), whether now existing or hereafter
incurred under, arising out of or in connection with the Loan Agreement and the
other loan documents to which Mortgagor is a party and the due performance and
compliance by Mortgagor with all of the terms, conditions and agreements
contained in the Loan Agreement and such other loan documents;"
(b) Open-End Mortgage. Paragraph 6.16 of the Mortgage is hereby
amended as follows:
The sentence beginning with "Pursuant to KRS 382.520..." shall be
deleted and replaced in its entirety with the following: "Pursuant to KRS
382.520, this Mortgage shall secure payment of (i) all renewals and extensions
of the Obligations described herein; and (ii) any additional indebtedness,
whether direct, indirect, existing, future, contingent, or otherwise, of
Mortgagor to Mortgagee, said additional indebtedness (if extended by the Banks)
in no event to exceed the principal amount of the Obligations (which are in the
aggregate principal amount of $62,000,000) by more than $10,000,000."
The sentence immediately following the sentence above is hereby
deleted and replaced in its entirety with the following: "To the extent that the
obligations are deemed to be a "revolving credit plan" or "line of credit"
pursuant to KRS 382.385, $20,000,000 is the maximum principal amount of credit
that may be extended under the line of credit or the maximum credit limit of the
revolving credit plan that, in each case, may be outstanding at any time or
times under the line of credit or revolving credit plan, and that is to be
secured by this Mortgage."
2. NO DISCHARGE, NOVATION, OR LOSS OF PRIORITY. Mortgagor and
Mortgagee acknowledge and agree that the Modification Agreements shall not
operate to discharge, satisfy, cancel, release, or repay, or be deemed a
substitution or novation of, the indebtedness theretofore evidenced described by
the documents or instruments described above, which indebtedness is expressly
preserved and confirmed in all respects here and in the Loan Agreement as
amended by the Modification Agreements. Mortgagor and Mortgagee also acknowledge
and agree that the lien of the Mortgage and the priority thereof, as security
for the Revised Loans, shall continue unimpaired by the execution and delivery
of this Agreement. Mortgagee agrees to pay and perform all obligations of
Mortgagee under the documents and instruments described above, of which the
Amended Revolving Credit Note shall have a final maturity date of December 31,
2003, and the Class B Term Notes shall have a final maturity date of March 31,
2004, at which time, payment and performance is due thereunder to the extent
provided in the Modification Agreements.
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3. RATIFICATION AND REAFFIRMATION OF LOAN DOCUMENTS. Except as
expressly modified pursuant to the terms of the Modification Agreement or this
Agreement, the terms of the Original Notes, the Mortgage, and all other Loan
Documents are hereby ratified and reaffirmed in every respect and shall remain
in full force and effect. Mortgagor and Borrower hereby acknowledge and agree
that the Mortgage, as modified hereby, constitutes a valid and enforceable lien
on the fee simple interest of Mortgagor in the Property (as defined in the
Mortgage). Nothing contained herein shall be construed to impair the lien of the
Mortgage, or the priority thereof, and nothing herein contained shall affect or
impair any right, power, or remedy granted to Mortgagee under the Loan Documents
or be considered a waiver of any such right, power, or remedy, except as
expressly provided herein.
4. CHANGES IN REFERENCES IN LOAN DOCUMENTS. All references in the
Loan Documents to the "Loan Documents" shall be deemed to include a reference to
this Agreement and any and all other agreements, instruments and documents
executed and/or delivered in connection with this Agreement; and, all references
in the Loan Documents to the "Loan Agreement" shall be deemed to include a
reference to the Loan Agreement as amended by the Modification Agreements and
any and all other agreements, instruments and documents executed and/or
delivered in connection with this Agreement and/or the Modification Agreements.
5. PAYMENT OF MORTGAGEE'S COSTS AND EXPENSES. Upon the execution of
this Agreement, Mortgagor shall pay all of Mortgagee's reasonable attorneys'
fees incurred for the preparation, negotiation, and conclusion of the
transactions contemplated by this Agreement, and Mortgagor shall pay all other
reasonable costs and expenses incurred by Mortgagee in connection with the
transactions contemplated by this Agreement, including all title examination and
title insurance premium and endorsement fees, recording fees, and such other
assurances of title and perfection of security interests as Mortgagee may
require.
6. MISCELLANEOUS.
(a) Entire Agreement. This Agreement and the agreements, instruments
and other documents referred to herein, constitute the entire agreement of the
parties with respect to, and supersede all prior understandings of the parties
with respect to, the subject matter hereof. No change, modification, addition,
or termination of this Agreement shall be enforceable unless in writing and
signed by the party against whom enforcement is sought.
(b) Governing Law. This Agreement and the related writings and the
respective rights and obligations of the parties shall be governed by, and
construed and enforced in accordance with, the laws (without regard to conflicts
of laws rules) of the Commonwealth of Kentucky.
(c) Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and it shall not be
necessary in making proof of this Agreement or the terms hereof to produce or
account for more than one of such counterparts.
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(d) Headings. The headings used in this Agreement have been included
solely for ease of reference and shall not be considered in the interpretation
or construction of this Agreement.
(e) Severability. If any court shall finally determine that any part,
term or provision of this Agreement is in any way unenforceable, such part, term
or provision shall be reduced to the extent necessary to make such provision
enforceable to the greatest extent allowed by law. Consistent with the
foregoing, if any provision of this Agreement or its application shall be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of all other applications of that provision and of all other
provisions and applications of this Agreement shall not in any way be affected
or impaired.
(f) Binding Effect. This Agreement shall be binding upon, and shall
inure to the benefit of the parties hereto, and any permitted successors or
assigns of such parties, and is not for the benefit of any third party.
(g) Further Assurances. From time to time at Mortgagee's request and
without further consideration, the Mortgagor shall execute and deliver such
further agreements, instruments and other documents, and shall take such other
actions as Mortgagee may reasonably request, in order to more effectively carry
out the intents and purposes of this Agreement.
(h) No Waiver or Course of Dealing. Mortgagee's execution and
delivery of this Agreement does not waive any right that Mortgagee might have
under any of the Loan Documents except for the specific modifications and
amendments contained in this Agreement. Neither this Agreement, nor earlier
amendments or modifications of any of the Loan Documents, creates any course of
dealing among Mortgagee, Mortgagor, Borrower, or any other Person, and neither
Mortgagor nor Borrower, nor any other Person should infer that Mortgagee will
enter into any other or future amendment or modification of any of Loan
Documents in the future, whether similar of dissimilar to this Agreement.
7. DEFINED TERMS. All terms not otherwise defined herein shall have
the meaning set forth in the Loan Agreement, as amended by the Modification
Agreements.
8. SUBORDINATION AGREEMENT. THIS AGREEMENT IS SUBJECT TO THE TERMS OF
THE AMENDED AND RESTATED SUBORDINATION AGREEMENT, DATED AS OF NOVEMBER 17, 2003
(THE "SUBORDINATION AGREEMENT") BY AND AMONG BANK ONE, NA, THE CLASS B LOAN
AGENT, THE CLASS B LENDERS, NORTH ATLANTIC TRADING COMPANY, INC. AND ITS
SUBSIDIARIES. NOTWITHSTANDING ANY CONTRARY STATEMENT CONTAINED IN THIS
INSTRUMENT, NO PAYMENT ON ACCOUNT OF ANY OBLIGATION ARISING FROM OR IN
CONNECTION WITH THIS INSTRUMENT OR ANY RELATED AGREEMENT (WHETHER OF PRINCIPAL,
INTEREST OR OTHERWISE) SHALL BE MADE, PAID, RECEIVED OR ACCEPTED EXCEPT IN
ACCORDANCE WITH THE TERMS OF SAID SUBORDINATION AGREEMENT.
[THE BALANCE OF THIS PAGE IS LEFT BLANK INTENTIONALLY.]
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IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date set forth in the preamble hereto, but actually on the
dates set forth below.
Mortgagee:
----------
BANK ONE, NA,
successor to Bank One, Kentucky, NA
a national banking association, as Agent Bank and
Mortgagee for the benefit of the Banks
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------------------
Xxxxxx Xxxxxxx, Senior Vice President
Date: 11-13-2003
-----------------------------------------------
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Mortgagor:
----------
NATIONAL TOBACCO COMPANY, L.P.,
a limited partnership
By NATIONAL TOBACCO FINANCE
CORPORATION as its general partner
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------------
Xxxxx X. Xxxxxxx, Executive Vice President
and Chief Financial Officer
Date: 11-17-2003
-------------------------------------------
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COMMONWEALTH OF KENTUCKY )
) SS
COUNTY OF JEFFERSON )
The foregoing Agreement was acknowledged before me on November 13,
2003 by Xxxxxx Xxxxxxx as Senior Vice President of Bank One, NA, successor to
Bank One, Kentucky, NA, as Agent Bank and Mortgagee for the benefit of the
Banks, on behalf of the association.
My Commission Expires: 03/21/06
-------------------------
/s/ Xxxx X. Xxxx
--------------------------------------
Notary Public
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STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK )
The foregoing Agreement was acknowledged before me on November 17,
2003, by Xxxxx X. Xxxxxxx, Executive Vice President of National Tobacco Finance
Corporation, as general partner of NATIONAL TOBACCO COMPANY, L.P., a limited
partnership, on behalf of the limited partnership.
My Commission Expires: 08/30/05
-------------------------
/s/ Xxxxx X. Xxxxxx
-------------------------------------
Notary Public
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This Instrument Prepared By:
---------------------------------
Xxxxx X. Xxxxxxxx, Esq.
Xxxxx Xxxxx Xxxx LLC
000 X. Xxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
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