Exhibit 10.1
Execution Version
AMENDMENT NO. 3
TO
CREDIT AGREEMENT
This Amendment No.
3 to Credit Agreement (the “Amendment”) is dated as of October 30, 2015, and is by and between Calm Waters Partnership,
a Wisconsin General Partnership (“Calm Waters”) and Electronic Cigarettes International Group, Ltd., a Nevada
corporation (the “Borrower”).
WHEREAS, Calm
Waters and the Borrower entered into that certain Credit Agreement dated as of April 27, 2015 (the “CW Credit Agreement”);
WHEREAS, the
Borrower entered into that certain Credit Agreement, dated April 27, 2015 (the “Additional Lender Credit Agreement”),
by and among the Borrower, Tiburon Opportunity Fund, L.P., as a lender and as agent, and various additional lenders party thereto
(the “Additional Lenders” and collectively with Calm Waters, the “Lenders”);
WHEREAS, the
Lenders entered into that certain Intercreditor Credit Agreement, dated April 27, 2015 (the “Intercreditor Agreement”);
WHEREAS, pursuant
to Amendment No. 1 to Credit Agreement, dated June 26, 2015 (“Amendment No. 1”), the Borrower and Calm Waters amended
the CW Credit Agreement to (i) increase the aggregate principal amount of the Term Loans thereunder by $6,000,000 and (ii) extend
the due date of certain post-Closing obligations of the Borrower;
WHEREAS, pursuant
to Amendment No. 2 to Credit Agreement, dated June 30, 2015 (“Amendment No. 2”), and as a condition to receiving funds
under a trade facility with ExWorks Capital Fund I, L.P., (“ExWorks”), the Borrower and Calm Waters amended the CW
Credit Agreement to include a legend stating that the liens granted to the Lenders thereunder are subject to an Intercreditor Agreement
among the Borrower, and the subordinated creditors party thereto (the CW Credit Agreement, as amended by Amendment No.1 and Amendment
No.2, the “Amended CW Credit Agreement”);
WHEREAS, the
Borrower desires to further amend the Amended CW Credit Agreement to increase the aggregate principal amount of the Term Loans
thereunder by $18,000,000;
WHEREAS, pursuant
to Section 5.1 of the Intercreditor Agreement, no term of the Amended CW Credit Agreement or the Additional Lender Credit Agreement
may be amended and the performance or observance by the parties of any term of the Amended CW Credit Agreement or the Additional
Lender Credit Agreement may not be waived without the consent of the Requisite Lenders;
WHEREAS, Calm
Waters, by itself the Requisite Lender, has agreed to permit the Borrower to (i) increase the aggregate principal amount of the
Term Loans under the Amended CW Credit Agreement and (ii) permit the issuance of a warrant to Calm Waters;
NOW, THEREFORE,
in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties to this Amendment, each intending to be legally bound, hereby agree as follows:
1. Definitions.
Capitalized terms used herein without definition shall have the meanings ascribed to such terms in the Amended CW Credit Agreement.
2. Amendments
to the Amended CW Credit Agreement and the Disclosure Schedules.
2.1. Section
1.01 of the Amended CW Credit Agreement is hereby amended by deleting the definition of “Closing” in its entirety and
replacing it with the following:
“Closing” shall mean the Initial
Closing, the Second Closing and the Third Closing, unless otherwise specifically provided herein.
2.2. Section
1.01 of the Amended CW Credit Agreement is hereby amended by deleting the definition of “Closing Date” in its entirety
and replacing it with the following:
“Closing Date” shall mean the Initial
Closing Date, the Second Closing Date and the Third Closing Date, unless otherwise specifically provided herein.
2.3. Section
1.01 of the Amended CW Credit Agreement is hereby amended by adding the following definitions:
“Third Closing”
shall mean the closing of the transactions contemplated by this Agreement on the Third Closing Date.
“Third Closing Date”
shall mean October 30, 2015.
2.4. Section
1.01 of the Amended CW Credit Agreement is hereby amended by deleting the definition of “Warrant” in its entirety and
replacing it with the following:
“Warrant”
shall mean the Common Stock Purchase Warrants executed and delivered pursuant to Section 4.01(o), Section 4.02(g), and Section
4.03(g) substantially in the form of Exhibit F.”
2.5. Section
2.01 of the Amended CW Credit Agreement is hereby amended by deleting it in its entirety and replacing it with the following:
“Section 2.01. Term
Loan. Subject to the terms and conditions and relying upon the representations and warranties set forth herein and in the other
Loan Documents, the Lender agrees to make Term Loans to the Borrower on the Closing Dates in an aggregate principal amount equal
to $59,000,000, consisting of (i) a Term Loan on the Initial Closing Date in a principal amount equal to $35,000,000, (ii) a Term
Loan on the Second Closing Date in a principal amount equal to $6,000,000, and (iii) a Term Loan on the Third Closing Date in a
principal amount equal to $18,000,000, to be disbursed in accordance with Schedule 3.15; provided, however, that the disbursement
of any amounts in settlement of debt obligations shall be subject to payoff letters entered into between the Borrower and the obligee
in form and substance (including, but not limited to, a release of the Borrower) acceptable to Calm Waters. Amounts repaid or prepaid
in respect of the Term Loan may not be reborrowed. The Borrower and the Lender agree that for U.S. federal income tax purposes,
the aggregate issue price under Section 1273(b) of the Internal Revenue Code of 1986, as amended, of the Term Loan is $56,050,000.
The Borrower and the Lender agree to use the foregoing issue price and the values and the yields which result in such issue price
for U.S. federal income tax purposes.
2.6. Section
2.06(a) of the Amended CW Credit Agreement is hereby amended by deleting “$703,000” and replacing it with “$1,012,000”.
2.7. Article
IV is hereby amended by adding the following as a new Section 4.03:
“Section
4.03. Conditions of Borrowing at the Third Closing. On the Third Closing Date:
(a) The
representations and warranties set forth in Article
III and in each other Loan Document shall be true and correct on and as of the Third Closing Date, with the same effect as though
made on and as of such date, except to the extent such representations and warranties expressly relate to an earlier date.
(b) On
the Third Closing Date, no Default or Event of Default shall have occurred and be continuing.
(c) The
Lender shall have received a certificate, dated the Third Closing Date, and signed by a Financial Officer of the Borrower, confirming
compliance with the conditions precedent set forth in paragraphs (a) and (b) of this Section 4.03.
(d) The
Lender shall have received duly executed counterparts of Amendment No. 3 to Credit Agreement from each party hereto.
(e) The
Lender shall have received a certificate from the chief financial officer of the Borrower certifying that each of the Loan Parties,
after giving effect to the Transactions to occur on the Third Closing Date, is Solvent.
(f) All
requisite Governmental Authorities and third parties shall have approved or consented to the Transactions and the other transactions
contemplated hereby to the extent required or reasonably requested by the Lender, all applicable appeal periods shall have expired
and there shall not be any pending or threatened litigation, governmental, administrative or judicial action that has resulted
or could reasonably be expected to restrain, prevent or impose burdensome conditions on the Transactions or the other transactions
contemplated hereby.
(g) The
Lender shall have received from the Company a duly executed Warrant to purchase 40,000,000 shares of Common Stock.
(h) The
Lender shall have received (i) a certificate of the Secretary or Assistant Secretary of each Loan Party dated as of the Third Closing
Date and certifying (A) with respect to the Borrower, that attached thereto is a true and complete copy of resolutions duly adopted
by the Board of Directors of the Borrower authorizing the execution, delivery and performance of the Amendment and the borrowings
hereunder, and that such resolutions have not been modified, rescinded or amended and are in full force and effect, (B) that the
certificate or articles of incorporation, bylaws or operating agreement (or comparable organizational documents) of each Loan Party
have not been amended since the Second Closing Date and (C) as to the incumbency and specimen signature of each officer executing
any Loan Document or any other document delivered in connection herewith on behalf of such Loan Party; and (ii) a certificate of
another officer as to the incumbency and specimen signature of the Secretary or Assistant Secretary executing the certificate pursuant
to clause (i) above.
(i) Contemporaneously
with the Closing, the Lender shall have received all amounts due and payable on or prior to the Third Closing Date, including,
to the extent invoiced, reimbursement or payment of all out-of-pocket expenses required to be reimbursed or paid by the Borrower
hereunder or under any other Loan Document.
(j) The
Lender shall have received a Note duly executed and delivered by the Borrower payable to the Lender and its registered assigns
in the principal amount of $18,000,000.
(k) Lender
shall have received favorable written opinions of Pryor Cashman LLP and Fennemore Craig, P.C., counsels for the Borrower, in form
and substance reasonably satisfactory to the Lender.
(l) The
Lender shall have received a certificate with respect to the Loan Parties dated as of the Third Closing Date and duly executed
by a Responsible Officer of the Borrower certifying that the Perfection Certificate delivered in connection with the Second Closing
is true and correct in all respects as of the Third Closing Date as if given on such date.
2.8. Schedule
1.01(a) of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Existing Credit Agreements” is hereby
amended by deleting it in its entirety and replacing it with the revised Schedule 1.01(a) attached hereto as Exhibit A.
2.9. Schedule
1.01(c) of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Mortgaged Properties” is hereby amended
by deleting it in its entirety and replacing it with the revised Schedule 1.01(c) attached hereto as Exhibit B.
2.10. Schedule
3.06 of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Capitalization” is hereby amended by deleting
it in its entirety and replacing it with the revised Schedule 3.06 attached hereto as Exhibit C.
2.11. Schedule
3.11 of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Litigation” is hereby amended by deleting
it in its entirety and replacing it with the revised Schedule 3.11 attached hereto as Exhibit D.
2.12. Schedule
3.12 of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Agreements” is hereby amended by deleting
it in its entirety and replacing it with the revised Schedule 3.12 attached hereto as Exhibit E.
2.13. Schedule
3.15 of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Use of Proceeds” is hereby amended by
deleting it in its entirety and replacing it with the revised Schedule 3.15 attached hereto as Exhibit F.
2.14. Schedule
3.20(c) of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Mortgage Filing Offices” is hereby
amended by deleting it in its entirety and replacing it with the revised Schedule 3.20(c) attached hereto as Exhibit G.
2.15. Schedule
3.21 of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Owned Real Property” is hereby amended
by deleting it in its entirety and replacing it with the revised Schedule 3.21 attached hereto as Exhibit H.
2.16. Schedule
3.29 of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Indebtedness” is hereby amended by deleting
it in its entirety and replacing it with the revised Schedule 3.29 attached hereto as Exhibit I.
2.17. Schedule
6.02(a) of the Disclosure Schedule to the Amended CW Credit Agreement entitled “Existing Liens” is hereby amended by
deleting it in its entirety and replacing it with the revised Schedule 6.02(a) attached hereto as Exhibit J.
3. Full
Force and Effect. Except as expressly modified by this Amendment, all of the terms, covenants, agreements, conditions and other
provisions of the Amended CW Credit Agreement shall remain in full force and effect in accordance with their respective terms.
As used in the Amended CW Credit Agreement, the terms "this Agreement", herein, hereinafter, hereunder, hereto and words
of similar import shall mean and refer to, from and after the date hereof, unless the context otherwise requires, the Amended CW
Credit Agreement as amended by this Amendment.
4. Governing
Law. This Amendment shall be governed by, construed and enforced in accordance with the laws of the State of New York and not
by choice of law principles or the laws of any other State.
5. Entire
Agreement and Amendments. The Amended CW Credit Agreement, as amended by this Amendment, embodies the entire agreement and
understanding of the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings between
the parties.
6. Counterparts.
This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which
together shall be deemed to be one and the same agreement.
7. Guarantees
and Security Interests. By signing this Amendment, the Borrower
and each Guarantor hereby confirms that (i) the obligations of the Borrower and each Guarantor under the Amended CW Credit Agreement
as amended by this Amendment and the other Loan Documents as amended hereby constitute “Secured Guarantees” and are
entitled to the benefit of the guarantees and the security interests set forth in the Security Documents, (ii) the Loan Documents
are, and shall continue to be, in full force and effect and are hereby ratified and confirmed in all respects, and (iii) all Liens
granted, conveyed or assigned to Calm Waters by such Person pursuant to each Loan Document to which it is party remain in full
force and effect, are not released or reduced, and continue to secure full payment and performance of the Secured Guarantees as
amended hereby.
[Remainder of page intentionally left
blank]
IN WITNESS WHEREOF,
this Amendment has been executed as of, and is effective as of, the day and year first written above.
| |
Calm Waters Partnership |
| |
|
| |
By: |
/s/ Richard S. Strong |
| |
Name: Richard S. Strong |
| |
Title: Managing Partner |
| |
|
| |
ELECTRONIC CIGARETTES INTERNATIONAL GROUP, LTD. |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: Chief Financial Officer |
| |
|
| |
VCIG LLC |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: Manager |
| |
|
| |
FIN BRANDING GROUP, LLC |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: Manager |
| |
|
| |
HARDWIRE INTERACTIVE ACQUISITION COMPANY |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: President |
| |
|
| |
VICTORY ELECTRONIC CIGARETTES, INC. |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: President |
| |
VAPESTICK HOLDINGS LIMITED |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: Director |
| |
|
| |
MUST HAVE LIMITED |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: Director |
| |
|
| |
E-CIGS UK HOLDING COMPANY LIMITED |
| |
|
| |
By: |
/s/ Philip Anderson |
| |
Name: Philip Anderson |
| |
Title: Director |
