CREDIT AGREEMENT

EXHIBIT 10.1

[EXECUTION COPY]

 

 

$650,000,000

 

CREDIT AGREEMENT

 

among

 

ALLIANCE ONE INTERNATIONAL, INC.,

as the Company and a Borrower,

 

INTABEX NETHERLANDS B.V.,

as the Dutch Borrower

 

THE MATERIAL DOMESTIC SUBSIDIARIES

OF THE COMPANY

FROM TIME TO TIME PARTIES HERETO,

as Domestic Guarantors,

 

DIMON INTERNATIONAL AG,

as a Foreign Guarantor,

 

THE LENDERS FROM

TIME TO TIME PARTIES HERETO,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

 

ING BANK N.V., LONDON BRANCH,

as Syndication Agent

 

and

 

ABN AMRO BANK N.V.,

DEUTSCHE BANK AG NEW YORK BRANCH,

 

and

 

SOCIETE GENERALE,

as Documentation Agents

 

WACHOVIA CAPITAL MARKETS, LLC,

as Co-Lead Arranger and Sole Book Manager

and

ING CAPITAL LLC,

as Co-Lead Arranger

 

Dated as of May 13, 2005

 

TABLE OF CONTENTS

 

 

i

 

ii

 

iii

 

iv

 

i

CREDIT AGREEMENT , dated as of May 13, 2005, among ALLIANCE ONE INTERNATIONAL, INC. , a Virginia corporation (the “ Company ”), INTABEX NETHERLANDS B.V. , a company formed under the laws of The Netherlands and a Subsidiary of the Company (the “ Dutch Borrower ”; together with the Company, collectively the “ Borrowers ,” and individually, a “ Borrower ”), those Domestic Subsidiaries of the Company identified as a “Domestic Guarantor” on the signature pages hereto and such other Material Domestic Subsidiaries of the Company as may from time to time become a party hereto (collectively the “ Domestic Guarantors ”), DIMON INTERNATIONAL AG , a Swiss corporation (“ DIAG ”; together with the Company and the Domestic Guarantors, collectively the “ Foreign Guarantors ,” or the “ Guarantors ” and individually, a “ Foreign Guarantor ” or a “ Guarantor ”), the several banks and other financial institutions as may from time to time become parties to this Agreement (collectively the “ Lenders ,” and individually, a “ Lender ”), and WACHOVIA BANK, NATIONAL ASSOCIATION , a national banking association, as administrative agent for the Lenders hereunder (in such capacity, the “ Administrative Agent ”).

 

W I T N E S S E T H :

 

WHEREAS, the Borrowers have requested that the Lenders make loans and other financial accommodations to the Borrowers in the amount of up to $650,000,000, as more particularly described herein; and

 

WHEREAS, the Lenders have agreed to make such loans and other financial accommodations to the Borrowers on the terms and conditions contained herein.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, the parties hereto hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

Section 1.1 Defined Terms .

 

As used in this Agreement, terms defined in the preamble to this Agreement have the meanings therein indicated, and the following terms have the following meanings:

 

“ Account Designation Letter ” shall mean the Account Designation Letter dated as of the Closing Date from the Administrative Borrower to the Administrative Agent substantially in the form attached hereto as Schedule 1.1(a) .

 

“ Acquisition ” shall mean any transaction, or any series of related transactions, by which the Company and/or any of its Subsidiaries directly or indirectly (a) acquires any ongoing business or all or substantially all of the assets of any Person or division thereof, whether through purchase of

 

assets, merger or otherwise, (b) acquires (in one transaction or as the most recent transaction in a series of transactions) control of at least a majority in ordinary voting power of the securities of a Person which have ordinary voting power for the election of directors or (c) otherwise acquires control of a 50% or more ownership interest in any such Person.

 

“ Additional Credit Party ” shall mean each Person that becomes a Guarantor by execution of a Joinder Agreement in accordance with Section 5.10.

 

“ Administrative Agent ” shall have the meaning set forth in the first paragraph of this Agreement and any successors in such capacity.

 

“ Administrative Borrower ” shall mean the Company.

 

“ Advances on Tobacco ” shall mean loans, advances and extensions of credit made by the Company or any of its Subsidiaries to growers and other suppliers of tobacco (including Affiliates) and tobacco growers’ cooperatives, whether short-term or long-term, in the ordinary course of business to finance the growing or processing of tobacco.

 

“ Affiliate ” shall mean as to any Person, any other Person (excluding any Subsidiary) which, directly or indirectly, is in control of, is controlled by, or is under common control with, such Person. For purposes of this definition, a Person shall be deemed to be “controlled by” a Person if such Person possesses, directly or indirectly, power either (a) to vote 10% or more of the securities having ordinary voting power for the election of directors of such Person or (b) to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

 

“ Agents ” shall mean the Administrative Agent, ING Bank N.V., London Branch, as Syndication Agent and Deutsche Bank AG New York Branch, as Documentation Agent.

 

“ Agreement ” or “ Credit Agreement ” shall mean this Credit Agreement, as amended, modified or supplemented from time to time in accordance with its terms.

 

“ Alternate Base Rate ” shall mean, for any day, a rate per annum equal to the greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes hereof: “ Prime Rate ” shall mean, at any time, the rate of interest per annum publicly announced from time to time by Wachovia at its principal office in Charlotte, North Carolina as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in the Prime Rate occurs. The parties hereto acknowledge that the rate announced publicly by Wachovia as its Prime Rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks; and “ Federal Funds Effective Rate ” shall mean, for any day, 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 on the next succeeding Business Day, the average of the quotations for the day of such transactions received by the Administrative Agent from three (3) federal funds brokers of recognized standing selected by it. If for any reason the

 

2

Administrative Agent shall have determined (which determination shall be conclusive in the absence of manifest error) that it is unable to ascertain the Federal Funds Effective Rate, 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) of the first sentence of this definition, as appropriate, until the circumstances giving rise to such inability no longer exist. Any change in the Alternate Base Rate due to a change in the Prime Rate or the Federal Funds Effective Rate shall be effective on the opening of business on the date of such change.

 

“ Alternate Base Rate Loans ” shall mean Loans that bear interest at an interest rate based on the Alternate Base Rate.

 

“ Anti-Competition Litigation ” shall mean the litigation described on Schedule 1.1(f) hereto.

 

“ Applicable Borrower ” shall mean, (a) with respect to any Revolving Loan or Swingline Loan, the Borrower that has borrowed such Revolving Loan or Swingline Loan and (b) with respect to any Letter of Credit, the Borrower for whose account the Administrative Borrower has requested such Letter of Credit be issued.

 

“ Applicable Lending Office ” shall mean, with respect to each Lender, such Lender’s Domestic Lending Office in the case of an Alternate Base Rate Loan and such Lender’s LIBOR Lending Office in the case of LIBOR Rate Loans.

 

“ Applicable Percentage ” shall mean, for any day, the rate per annum set forth below opposite the applicable Level then in effect, and based on the Consolidated Interest Coverage Ratio as follows:

 

 

The Applicable Percentage shall, in each case, be determined and adjusted quarterly on the date five (5) Business Days after the date on which the Administrative Agent has received from the Company the annual or quarterly financial information and certifications required to be delivered to the Administrative Agent and the Lenders in accordance with the provisions of

 

3

Sections 5.1(a) and (b) and Section 5.2(b) (each an “ Interest Determination Date ”). Such Applicable Percentage shall be effective from such Interest Determination Date until the next such Interest Determination Date. The initial Applicable Percentages shall be those set forth in Level II until the Interest Determination Date occurring after the delivery of the officer’s compliance certificate pursuant to Section 5.2(b) for the quarter ended September 30, 2005. After the Closing Date, if the Company shall fail to provide the annual or quarterly financial information and certifications in accordance with the provisions of Sections 5.1(a) and (b) and Section 5.2(b), the Applicable Percentage from the date five (5) Business Days after the date by which the Company was so required to provide such financial information and certifications to the Administrative Agent and the Lenders, shall be based on Level I until such time as such information and certifications are provided, whereupon the Level shall be determined by the then current Consolidated Interest Coverage Ratio.

 

“ Approved Accounting Firm ” shall mean Ernst & Young LLP or any other independent public accountants selected by the Company and reasonably satisfactory to the Required Lenders.

 

“ Approved Fund ” shall mean any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

 

“ Asset Disposition ” shall mean the disposition of any or all of the assets (including, without limitation, the Capital Stock of a Subsidiary or any ownership interest in a joint venture) of any Credit Party or any of its Subsidiaries, whether by sale, lease, transfer or otherwise, in a single transaction or in a series of related transactions. The term “Asset Disposition” shall not include (a) the sale, lease, transfer or other disposition of assets permitted by Section 6.4(a)(i), (ii), (iii), (iv), (v), (vi), (vii) or (viii) or (b) any Equity Issuance.

 

“ Average Outstanding ” shall have the meaning set forth in the definition of “Consolidated Total Debt.”

 

“ Bankruptcy Code ” shall mean the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.

 

“ Bankruptcy Event ” shall mean the occurrence of an Event of Default under Section 7.1(e).

 

“ Borrower ” shall have the meaning set forth in the preamble of this Agreement.

 

“ Borrowing Base ” shall mean, as of any day, the sum of (a) 80% of Eligible Receivables, plus (b) 80% of total Advances on Tobacco, plus (c) 90% of Committed Inventories constituting Eligible Inventory, plus (d) 60% of Uncommitted Inventories constituting Eligible Inventory, in each case as set forth in the most recent Borrowing Base Certificate delivered to the Administrative Agent and the Lenders in accordance with the terms of Section 5.2(c).

 

“ Borrowing Base Certificate ” shall have the meaning set forth in Section 5.2(c).

 

4

“ Borrowing Date ” shall mean, in respect of any Loan, the date such Loan is made.

 

“ Business Day ” shall mean a day other than a Saturday, Sunday or other day on which commercial banks in Charlotte, North Carolina or New York, New York are authorized or required by law to close; provided , however , that when used in connection with a rate determination, borrowing or payment in respect of a LIBOR Rate Loan, the term “Business Day” shall also exclude any day on which banks in London, England are not open for dealings in Dollar deposits in the London interbank market.

 

“ Calculation Period ” shall mean as of the last day of any fiscal quarter the four (4) fiscal-quarter period of the Company ending on such date.

 

“ Capital Lease ” shall mean any lease of property, real or personal, the obligations with respect to which are required to be capitalized on a balance sheet of the lessee in accordance with GAAP.

 

“ Capital Lease Obligations ” shall mean the capitalized lease obligations relating to a Capital Lease determined in accordance with GAAP.

 

“ Capital Stock ” shall mean (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests and (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person.

 

“ Cash Equivalents ” shall mean (a) securities issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof) having maturities of not more than twelve (12) months from the date of acquisition (“ Government Obligations ”), (b) Investments in deposits in (including money market funds of), or certificates of deposits or bankers’ acceptances of, (i) any bank or trust company organized under the laws of the United States or any state thereof having capital and surplus in excess of $100,000,000, (ii) any international bank organized under the laws of any country which is a member of the OECD or a political subdivision of any such country, and having a combined capital and surplus of at least $100,000,000, or (iii) leading banks in a country where the Company or the Subsidiary making such Investment does business; provided , that all such Investments mature within 270 days of the date of such Investment; and provided , further , that all Investments pursuant to clause (iii) above are (A) solely of funds generated in the ordinary course of business by operations of the relevant investor in the country where such Investment is made, and (B) denominated in the currency of the country in which such Investment is made or in Dollars, (c) commercial paper maturing within 270 days and having one of the two highest ratings of either S&P, Moody’s or Fitch Investors’ Service, Inc., (d) money market funds (other than those referred to in clause (c) above) that have assets in excess of $2,000,000,000, are managed by recognized and responsible institutions and invest solely in obligations of the types referred to in clauses (a), (b)(i) and (ii) and (c) above, (e) repurchase agreements with a bank or trust company (including a Lender) or recognized

 

5

securities dealer having capital and surplus in excess of $500,000,000 for direct obligations issued by or directly and fully guaranteed by the United States of America, (f) obligations of any state of the United States or any political subdivision thereof for the payment of the principal and redemption price of and interest on which there shall have been irrevocably deposited Government Obligations maturing as to principal and interest at times and in amounts sufficient to provide such payment, and (g) auction preferred stock rated in the highest short term credit rating category by S&P or Moody’s.

 

“ Change of Control ” shall mean such time as:

 

(a) any Person or group (within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act) has become, directly or indirectly, the beneficial owner, by way of merger, consolidation or otherwise, of 30% or more of the voting power of the Voting Stock of the Company on a fully-diluted basis, after giving effect to the conversion and exercise of all outstanding warrants, options and other securities of the Company convertible into or exercisable for Voting Stock of the Company (whether or not such securities are then currently convertible or exercisable); or

 

(b) the sale, lease or transfer of all or substantially all of the consolidated assets of the Company to any Person or group; or

 

(c) during any period of two (2) consecutive calendar years, individuals who at the beginning of such period constituted the Board of Directors of the Company, together with any new members of such Board of Directors whose election by such Board of Directors or whose nomination for election by the stockholders of the Company was approved by a vote of a majority of the members of such Board of Directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority of the directors of the Company then in office; or

 

(d) the Company consolidates with or merges with or into another Person or any Person consolidates with, or merges with or into, the Company (in each case, whether or not in compliance with the terms of this Agreement), in any such event pursuant to a transaction in which immediately after the consummation thereof Persons owning a majority of the Voting Stock of the Company immediately prior to such consummation shall cease to own a majority of the Voting Stock of the Company; or

 

(e) the Company shall fail to own and control, directly or indirectly, 100% of the outstanding Capital Stock of the Dutch Borrower.

 

“ Closing Date ” shall mean the date of this Agreement.

 

“ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time.

 

6

“ Collateral ” shall mean a collective reference to the collateral that is identified in, and at any time will be covered by, the Security Documents and any other collateral that may from time to time secure the Credit Party Obligations.

 

“ Commitment ” shall mean the Revolving Commitment, the LOC Commitment, the Swingline Commitment, the Term Loan A Commitment and the Term Loan B Commitment, individually or collectively, as appropriate.

 

“ Commitment Fee ” shall have the meaning set forth in Section 2.6(a).

 

“ Commitment Percentage ” shall mean the Revolving Commitment Percentage, the Term Loan A Commitment Percentage and/or the Term Loan B Commitment Percentage, as appropriate.

 

“ Commitment Period ” shall mean the period from and including the Closing Date to but not including the Maturity Date.

 

“ Commitment Transfer Supplement ” shall mean a Commitment Transfer Supplement, substantially in the form of Schedule 9.6(c) .

 

“ Committed Inventories ” shall mean tobacco inventories for which the Company or any of its Subsidiaries has received a Confirmed Order.

 

“ Commonly Controlled Entity ” shall mean an entity, whether or not incorporated, which is under common control with the Company or any of its Subsidiaries within the meaning of Section 4001 of ERISA or is part of a group which includes the Company or any of its Subsidiaries and which is treated as a single employer under Section 414 of the Code.

 

“ Company ” shall have the meaning set forth in the preamble hereof.

 

“ Company LOC Obligations ” shall mean the LOC Obligations in respect of Letters of Credit issued for the account of the Company.

 

“ Compliance Certificate ” shall have the meaning set forth in Section 5.2(b).

 

“ Confirmed Order ” shall mean an order by a customer not an Affiliate of the Company or any of its Subsidiaries which has been accepted in the ordinary course of business by representatives of the Company or any of its Subsidiaries or an Affiliate of the Company or any of its Subsidiaries and recorded on the inventory records of such Affiliate or the Company or any of its Subsidiaries.

 

“ Consolidated Capital Expenditures ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, all expenditures by the Company and its Subsidiaries for the acquisition or leasing of any fixed assets or improvements, or for replacements, substitutions or additions thereto, which have a useful life of more than one year (such fixed assets or improvements referred to as “ Capital Assets ”) and which are or should be

 

7

reflected on the Company’s consolidated statement of cash flows for such period as capital expenditures in accordance with GAAP.

 

“ Consolidated EBIT ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the sum (without duplication) of (a) Consolidated Net Income plus (b) to the extent included in the determination of such Consolidated Net Income, (i) Consolidated Income Tax Expense plus (ii) Consolidated Interest Expense minus (iii) any extraordinary items of gain minus (iv) any items of gain attributable to Financial Accounting Standards Board Statements No. 121, 133 (solely with respect to any interest rate swap, cap or collar agreement), 142 and 144) plus (v) any items of loss attributable to Financial Accounting Standards Board Statements No. 121, 133 (solely with respect to any interest rate swap, cap or collar agreement), 142 and 144), in each case determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP. Consolidated EBIT shall not include the effects of up to $10,000,000 in fines imposed on the Company and/or certain of its Subsidiaries by the Directorate General for Competition of the European Commission in connection with the Anti-Competition Litigation.

 

“ Consolidated EBITDA ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the sum of (a) Consolidated EBIT, plus (b) the aggregate amount of the depreciation expense and amortization expense of the Company and its Subsidiaries to the extent deducted in determining Consolidated Net Income, in each case determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP; provided that, (i) for purposes of the determining Consolidated EBITDA of the Company and its Subsidiaries for any fiscal quarter ending prior to the Closing Date, Consolidated EBITDA shall equal the sum of Consolidated EBITDA of DIMON and its Subsidiaries for such fiscal quarter plus Consolidated EBITDA of Standard and its Subsidiaries for such fiscal quarter, in each case (other than the fiscal quarter ending March 31, 2005) as set forth on Schedule 1.1(b) , together with any synergies reasonably approved by the Agents for such fiscal quarter as set forth on Schedule 1.1(b) and (ii) for purposes of determining Consolidated EBITDA of the Company and its Subsidiaries for the fiscal quarter ending June 30, 2005, Consolidated EBITDA shall equal Consolidated EBITDA of the Company and its Subsidiaries for such fiscal quarter, as adjusted on a pro forma basis to include Consolidated EBITDA of Standard and its Subsidiaries for the period from April 1, 2005 to the Closing Date as set forth on Schedule 1.1(b) , together with any synergies reasonably approved by the Agents for such fiscal quarter as set forth on Schedule 1.1(b) .

 

“ Consolidated Funded Debt ” shall mean, at any date, all liabilities of the Company and its Subsidiaries that are or should be reflected at such date on the Company’s consolidated balance sheet as long-term debt and current maturities of long-term debt in accordance with GAAP.

 

“ Consolidated Income Tax Expense ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the income tax expense of the Company and its Subsidiaries, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“ Consolidated Interest Coverage Ratio ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the ratio of (a) the sum of

 

8

(i) Consolidated EBITDA, minus (ii) Consolidated Interest Income to (b) Consolidated Net Interest Expense, in each case determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“ Consolidated Interest Expense ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the cash interest expense of the Company and its Subsidiaries (including, without limitation, the cash interest component of payments under Capital Leases), determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP; provided that, for purposes of determining Consolidated Interest Expense of the Company and its Subsidiaries for any fiscal quarter ending prior to the Closing Date and for the fiscal quarter ending June 30, 2005, Consolidated Interest Expense shall equal the amount for such fiscal quarter set forth on Schedule 1.1(b) .

 

“ Consolidated Interest Income ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the cash interest income of the Company and its Subsidiaries, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP; provided that, for purposes of determining Consolidated Interest Income of the Company and its Subsidiaries for any fiscal quarter ending prior to the Closing Date and for the fiscal quarter ending June 30, 2005, Consolidated Interest Income shall equal the amount for such fiscal quarter set forth on Schedule 1.1(b) .

 

“ Consolidated Leverage Ratio ” shall mean, as of the last day of any fiscal quarter of the Company, the ratio of (a) Consolidated Total Debt as of such date minus cash on hand of the Company and its Subsidiaries as of such date to the extent such cash on hand exceeds $25,000,000; provided that the amount of cash on hand subtracted from Consolidated Total Debt in determining the Consolidated Leverage Ratio shall not exceed $25,000,000, to (b) Consolidated EBITDA for the Calculation Period ending on such date.

 

“ Consolidated Net Income ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the sum (without duplication) of (a) the net income (or net loss) of the Company and its Subsidiaries, as determined on a consolidated basis in accordance with GAAP, plus (b) to the extent deducted in determining such net income (or net loss), (i) expenses and fees incurred on the Closing Date in connection with the consummation of the Merger, up to an aggregate maximum amount of $20,000,000, plus (ii) costs, expenses and fees incurred on the Closing Date in connection with the closing of the tender offers for DIMON’s existing 2011 and 2013 senior notes and for Standard’s existing 2012 senior notes, and costs, expenses and fees incurred after the Closing Date in connection with the repurchase or redemption of the Subordinated Debt Securities, plus (iii) cash costs and expenses incurred, within no more than 24 months following the Closing Date, in connection with the integration of the businesses and operations of DIMON and Standard following the Merger, up to a maximum aggregate amount of $45,000,000 plus (iv) costs related to the termination of DIMON’s existing Hedging Agreements plus (v) any non-cash charge related to the write-off of deferred financing costs plus (vi) the non-cash impact resulting from the change in the valuations of inventory as a result of the consummation of the Merger.

 

9

“ Consolidated Net Interest Expense ” shall mean, as of the last day of any fiscal quarter of the Company for the Calculation Period ending on such date, the sum of (a) Consolidated Interest Expense (including, without limitation, the interest component of payments under Capital Leases) minus (b) Consolidated Interest Income, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“ Consolidated Net Worth ” shall mean, at any date, the Company’s total stockholders’ equity at such date, without giving effect to (a) foreign currency translation adjustments under Financial Accounting Standards Board Statement No. 52, “Foreign Currency Translation”, (b) adjustments to the value of the investments of the Company and its Subsidiaries in debt and equity securities under Financial Accounting Standards Board Statement No. 115, “Accounting For Certain Investments In Debt And Equity Securities”, (c) the cost of postretirement benefits to employees of the Company and its Subsidiaries under Financial Accounting Standards Board Statement No. 106, “Employer’s Accounting for Postretirement Benefits Other Than Pensions”, and (d) derivative transactions adjustments under Financial Accounting Standards Board Statement No. 133, determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“ Consolidated Tangible Net Worth ” shall mean, at any date, the sum of (a) Consolidated Net Worth, minus (b) the amount of the intangible assets of the Company and its Subsidiaries at such date, including, without limitation, goodwill (whether representing the excess of cost over book value of assets acquired, or otherwise), capitalized expenses, patents, trademarks, tradenames, copyrights, franchises, licenses and deferred charges (such as, without limitation, unamortized costs and costs of research and development), all determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“ Consolidated Total Assets ” shall mean, at any date, the total assets of the Company and its Subsidiaries on such date, as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP.

 

“ Consolidated Total Debt ” shall mean, at any date, and without duplication, the sum of (a) the average outstanding principal amount of Revolving Loans and Swingline Loans calculated on a daily basis (based on a 365/366 day year) over the four fiscal quarter period most recently ended, (b) the average outstanding principal amount of local credit facility borrowings in jurisdictions outside the United States and other outstanding Indebtedness for borrowed money of Foreign Subsidiaries calculated on a quarterly basis over the four fiscal quarter period most recently ended (together with the average outstanding principal amount under clause (a), the “ Average Outstandings ”), (c) the outstanding principal amount of the Term Loan A on such date, (d) the outstanding principal amount of the Term Loan B on such date, (e) the outstanding principal amount of the Senior Notes and the Senior Subordinated Notes on such date, and (f) the outstanding principal amount of the other long term Indebtedness of the Company and its Subsidiaries on such date; provided that, for purposes of the determining Average Outstandings of the Company and its Subsidiaries on the Closing Date and for any period prior to the Closing Date, (i) the daily average outstanding principal amount of Revolving Loans and Swingline Loans shall be deemed $68,275,000 and (ii) the quarterly average outstanding principal amount of local credit facility borrowings in jurisdictions outside the United States and other outstanding Indebtedness for borrowed money of Foreign Subsidiaries shall be deemed $400,000,000.

 

10

“ Consolidated Total Senior Debt ” shall mean, at any date, and without duplication, the aggregate principal amount of (a) outstanding Loans, (b) outstanding principal amount of local credit facility borrowings in jurisdictions outside the United States on such date and other outstanding Indebtedness for borrowed money of Foreign Subsidiaries on such date, (c) customer advances, in each case as determined for the Company and its Subsidiaries on a consolidated basis in accordance with GAAP and (d) the outstanding principal amount of other Indebtedness (excluding Subordinated Indebtedness and the Senior Notes) of the Company and its Subsidiaries on such date.

 

“ Consolidated Total Senior Debt to Borrowing Base Ratio ” shall mean, at any date, the ratio of (a) Consolidated Total Senior Debt on such date minus Cash Equivalents on such date to (b) the Borrowing Base for the Calculation Period ending on such date.

 

“ Constructive Profit Distribution ” shall have the meaning set forth in Section 11.9(a).

 

“ Contractual Obligation ” shall mean, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or undertaking to which such Person is a party or by which it or any of its property is bound.

 

“ Corresponding Debt ” shall have the meaning set forth in Section 2.22(b).

 

“ Credit Documents ” shall mean a collective reference to this Agreement, the Notes, the Security Documents, the Fee Letter, the LOC Documents, any Joinder Agreement, each Notice of Borrowing, each Notice of Conversion and all other documents delivered by any Credit Party to the Administrative Agent or any Lender in connection herewith or therewith, excluding any Hedging Agreement.

 

“ Credit Party ” shall mean any of the Borrowers or the Guarantors.

 

“ Credit Party Obligations ” shall mean, without duplication, (a) all of the obligations of the Credit Parties to the Lenders and the Administrative Agent, whenever arising, under this Agreement, the Notes or any of the other Credit Documents (including, but not limited to, any interest accruing after the occurrence of a filing of a petition of bankruptcy under the Bankruptcy Code with respect to any Credit Party, regardless of whether such interest is an allowed claim under the Bankruptcy Code) and (b) all liabilities and obligations, whenever arising, owing from any Credit Party or any of its Subsidiaries to any Hedging Agreement Provider arising under any Secured Hedging Agreement.

 

“ CRES Operations ” shall mean Standard’s cut rolled expanded stem operation in Russia.

 

“ Debt Issuance ” shall mean the issuance of any Indebtedness for borrowed money by any Credit Party or any of its Subsidiaries (excluding, for purposes hereof, any Equity Issuance or any Indebtedness of any Credit Party and its Subsidiaries permitted to be incurred pursuant to Section 6.1).

 

11

“ Debt Rating ” shall mean the debt rating for the Company’s senior, unsecured, non credit enhanced long term Indebtedness for money borrowed as determined by Moody’s and S&P.

 

“ Default ” shall mean any of the events specified in Section 7.1, whether or not any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

 

“ Defaulting Lender ” shall mean, at any time, any Lender that, at such time (a) has failed to make a Loan required pursuant to the terms of this Agreement, including the funding of a Participation Interest in accordance with the terms hereof, (b) has failed to pay to the Administrative Agent or any Lender an amount owed by such Lender pursuant to the terms of this Agreement, or (c) has been deemed insolvent or has become subject to a bankruptcy or insolvency proceeding or to a receiver, trustee or similar official.

 

“ Delayed Draw Funding Date ” shall have the meaning set forth in Section 2.4(a).

 

“ Delayed Draw Term Loan A Funding ” shall have the meaning set forth in Section 2.4(a).

 

“ DIAG ” shall have the meaning set forth in the preamble of this Agreement.

 

“ DIAG Guaranty ” shall have the meaning set forth in Section 11.9.

 

“ DIAG Guaranty Payments ” shall have the meaning set forth in Section 11.9(b).

 

“ DIMON ” shall mean DIMON Incorporated, a Virginia corporation, predecessor by merger to the Company.

 

“ Dollars ” and “ $ ” shall mean dollars in lawful currency of the United States of America.

 

“ Domestic Guarantor ” shall have the meaning set forth in the preamble of this Agreement.

 

“ Domestic Guaranty ” shall mean the guaranty of the Domestic Guarantors set forth in Article X.

 

“ Domestic Lending Office ” shall mean, initially, the office of each Lender designated as such Lender’s Domestic Lending Office shown on Schedule 9.2 ; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Administrative Borrower as the office of such Lender at which Alternate Base Rate Loans of such Lender are to be made.

 

“ Domestic Subsidiary ” shall mean any Subsidiary that is organized and existing under the laws of the United States or any state or commonwealth thereof or under the laws of the District of Columbia.

 

12

“ Dutch Borrower ” shall have the meaning set forth in the preamble hereof.

 

“ Eligible Inventory ” shall mean, as of any date of determination and without duplication, the lower of the aggregate book value (based on an average cost valuation, consistently applied in accordance with GAAP principles) or fair market value of all raw materials and finished goods inventory owned by the Company or any of its Subsidiaries less appropriate reserves determined in accordance with GAAP but excluding in any event (i) inventory subject to a Lien that is not a Permitted Lien, (ii) inventory which is not in good condition or fails to meet standards for sale or use imposed by governmental agencies, departments or divisions having regulatory authority over such goods, (iii) inventory which is not useable or salable and (iv) inventory which fails to meet such other specifications and requirements as may from time to time be established by the Administrative Agent in its reasonable discretion.

 

“ Eligible Receivables ” shall mean, as of any date of determination and without duplication, the aggregate book value of all accounts receivable, receivables, and obligations for payment created or arising from the sale of inventory or the rendering of services in the ordinary course of business (collectively, the “ Receivables ”), owned by or owing to the Company or any of its Subsidiaries, net of allowances and reserves for doubtful or uncollectible accounts and sales adjustments consistent with such Person’s internal policies and in any event in accordance with GAAP, but excluding in any event (i) any Receivable which is subject to a Lien that is not a Permitted Lien, (ii) Receivables which are more than ninety (90) days past due (net of reserves for bad debts in connection with any such Receivables), (iii) Receivables owing by an account debtor which is not solvent or is subject to any bankruptcy or insolvency proceeding of any kind, (iv) Receivables which are contingent or subject to offset, deduction, counterclaim, dispute or other defense to payment, in each case to the extent of such offset, deduction, counterclaim, dispute or other defense, (v) Receivables for which any direct or indirect Subsidiary or any Affiliate of the Company or any of its Subsidiaries is the account debtor and (vi) Receivables which fail to meet such other specifications and requirements as may from time to time be established by the Administrative Agent in its reasonable discretion.

 

“ Environmental Claim ” shall mean any claim, however asserted, by any Governmental Authority or other Person alleging potential liability or responsibility for violation of any Environmental Law or for release into or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, investigation, removal, remedial or response costs, litigation costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon (a) the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental placement, spills, leaks, discharges, emissions, releases or threatened releases) of any Hazardous Material at, in, or from property, whether or not owned by the Company or any of its Subsidiaries, or (b) any other circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

 

“ Environmental Law ” shall mean any federal, state or local law, statute, ordinance, code, rule, regulation, decree, order, judgment, or principles of common law relating to (i) releases or threatened releases of Hazardous Materials or materials containing Hazardous Materials; (ii) the

 

13

manufacture, handling, transport, use, treatment, storage or disposal of Hazardous Materials or materials containing Hazardous Materials; or (iii) otherwise relating to the environment or to the protection of human health.

 

“ Environmental Permits ” shall have the meaning set forth in Section 3.10(b).

 

“ Equity Issuance ” shall mean any issuance by any Credit Party or any of its Subsidiaries to any Person which is not a Credit Party of (a) shares of or interests in its Capital Stock, (b) any shares of or interests in its Capital Stock pursuant to the exercise of options or warrants or other similar rights, (c) any shares of or interests in its Capital Stock pursuant to the conversion of any debt securities to equity or (d) warrants or options or other similar rights which are exercisable for or convertible into shares of or interests in its Capital Stock. The term “Equity Issuance” shall not include (i) any Equity Issuance in connection with the Merger Agreement, (ii) any Asset Disposition, (iii) any Debt Issuance, or (iv) any equity issuance to officers or employees of any Credit Party.

 

“ ERISA ” shall mean the Employee Retirement Income Security Act of 1974, as amended from time to time.

 

“ Eurodollar Reserve Percentage ” shall mean for any day, the percentage (expressed as a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for such day as prescribed by the Federal Reserve Board (or any successor) for determining the maximum reserve requirement (including, without limitation, any basic, supplemental or emergency reserves) in respect of Eurocurrency liabilities, as defined in Regulation D of such Board as in effect from time to time, or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

 

“ Event of Default ” shall mean any of the events specified in Section 7.1; provided , however , that any requirement for the giving of notice or the lapse of time, or both, or any other condition, has been satisfied.

 

“ Excess Cash Flow ” shall mean, with respect to any fiscal year of the Company (or for fiscal year 2005, with respect to the period from the Closing Date through March 31, 2006), for the Company and its Subsidiaries on a consolidated basis, an amount equal to (a) Consolidated EBITDA for such period minus (b) Consolidated Capital Expenditures for such period (net of Consolidated Capital Expenditures funded with proceeds of Indebtedness or asset sales) minus (c) scheduled payments of principal of the Consolidated Funded Debt during such period (including, without limitation, the principal component of scheduled payments under Capital Leases) minus (d) Consolidated Interest Expense (excluding any Consolidated Interest Expense associated with intercompany Indebtedness) for such period to the extent deducted in determining Consolidated Net Income for such period minus (e) Consolidated Income Tax Expense with respect to such period to the extent deducted in determining Consolidated Net Income for such period minus (f) the amount of dividends, distributions, stock repurchases and stock redemptions paid in cash by the Company or any of its Subsidiaries (other than any such dividend, distribution, stock repurchase or stock redemption payments made to the Company or any of its Subsidiaries) during such period (to the extent allowed hereunder) minus (g) cash costs and

 

14

expenses in connection with the integration of the businesses and operations of DIMON and Standard following the Merger to the extent added back to net income in determining Consolidated Net Income for such period pursuant to clause (b)(iii) of the definition of Consolidated Net Income minus (h) optional prepayments of the Term Loans and Revolving Loans (to the extent accompanied by a corresponding reduction of the Revolving Commitments).

 

“ Exchange Percentage ” shall mean, as to each Lender, a fraction, expressed as a decimal, in each case determined on the date of occurrence of a Sharing Event (but before giving effect to any actions to occur on such date pursuant to Article XII) of which (a) the numerator shall be the sum of, without duplication, (i) the aggregate outstanding principal amount of all Loans of such Lender and (ii) the aggregate outstanding funded and unfunded Participation Interests of such Lender, and (b) the denominator of which shall be the sum of (i) the aggregate outstanding principal amount of all Loans and (ii) the aggregate unreimbursed amount of all outstanding Letters of Credit.

 

“ Excluded Inventory ” shall mean (a) tobacco inventories for which title has passed to a customer and (b) Committed Inventories to the extent a customer is providing financing to the Company or any of its Subsidiaries for such Committed Inventories.

 

“ Extension of Credit ” shall mean, as to any Lender, the making of a Loan by such Lender, the participation by such Lender in a Swingline Loan or the issuance of, or participation in, a Letter of Credit by such Lender.

 

“ Federal Funds Effective Rate ” shall have the meaning set forth in the definition of “Alternate Base Rate”.

 

“ Fee Letter ” shall mean that certain Fee Letter dated April 25, 2005 among DIMON, Wachovia, Wachovia Capital Markets, LLC, ING Bank N.V., London Branch, ING Capital LLC and Deutsche Bank AG New York Branch.

 

“ Foreign Guarantors ” shall have the meaning set forth in the preamble of this Agreement.

 

“ Foreign Guaranty ” shall mean the guaranty of the Foreign Guarantors set forth in Article XI.

 

“ Foreign Pledge Agreements ” shall mean (a) those pledge agreements and charges listed on Schedule 1.1(d) , dated as of the Closing Date, executed by certain Subsidiaries of the Company in favor of the Administrative Agent and (b) any other Pledge Agreement, Memorandum of Charge Over Shares or similar document or instrument entered into by the Company or any of its Subsidiaries with respect to the Pledged Foreign Subsidiaries.

 

“ Foreign Subsidiary ” shall mean any Subsidiary that is not a Domestic Subsidiary.

 

“ Fronting Fee ” shall have the meaning set forth in Section 2.6(b).

 

15

“ Fund ” shall mean any Person (other than a natural person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its business.

 

“ GAAP ” shall mean generally accepted accounting principles in effect in the United States of America applied on a consistent basis, subject , however , in the case of determination of compliance with the financial covenants set out in Section 5.9 to the provisions of Section 1.3.

 

“ 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.

 

“ Guarantor ” shall have the meaning set forth in the preamble of this Agreement.

 

“ Guaranty ” shall mean, collectively, the Domestic Guaranty and the Foreign Guaranty.

 

“ Guaranty Obligations ” shall mean, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including, without limitation, any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including, without limitation, keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.

 

“ Hazardous Materials ” shall mean (i) those substances defined in or regulated as toxic or hazardous under the following federal statutes and their state counterparts, as well as the statutes’ implementing regulations, as amended from time to time: the Hazardous Materials Transportation Act; the Resource Conservation and Recovery Act; the Comprehensive Environmental Response, Compensation and Liability Act; the Clean Water Act; the Safe Drinking Water Act; the Toxic Substances Control Act; the Federal Insecticide, Fungicide and Rodenticide Act; the Federal Food, Drug, and Cosmetic Act; and the Clean Air Act; and (ii) any pollutant, contaminant or other substance with respect to which a Governmental Authority requires environmental investigation, monitoring, reporting or remediation.

 

“ Hedging Agreement ” shall mean, with respect to any Person, any agreement entered into to protect such Person against fluctuations in interest rates, or currency or raw materials values, including, without limitation, any interest rate swap, cap or collar agreement, or similar arrangement between such Person and one or more counterparties, any foreign currency

 

16

exchange agreement, currency protection agreements, commodity purchase or option agreements, or other interest or exchange rate or commodity price hedging agreements.

 

“ Hedging Agreement Provider ” shall mean any Person that enters into a Secured Hedging Agreement with a Credit Party or any of its Subsidiaries that is permitted by Section 6.1(e) to the extent such Person is (a) a Lender, (b) an Affiliate of a Lender, (c) a Person (or an Affiliate of such Person) that becomes a Lender subsequent to entering into the Secured Hedging Agreement or (d) a Person that was a Lender (or an Affiliate of a Lender) at the time it entered into such Secured Hedging Agreement but has ceased to be a Lender (or whose Affiliate has ceased to be a Lender) under the Credit Agreement; provided , in the case of a Secured Hedging Agreement with a Person who is no longer a Lender, such Secured Hedging Agreement shall cease to be a Secured Hedging Agreement hereunder after the stated maturity date (without extension or renewal) of such Secured Hedging Agreement.

 

“ Hostile Acquisition ” shall mean any Acquisition involving a tender offer or proxy contest that has not been recommended or approved by the board of directors of the Person that is the subject of the Acquisition prior to the first public announcement or disclosure relating to such Acquisition.

 

“ Indebtedness ” of any Person shall mean, at any date, without duplication, (a) all obligations of such Person for borrowed money, (b) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments, (c) all obligations of such Person to pay the deferred purchase price of property or services (except trade accounts payable arising in the ordinary course of business), (d) all obligations of such Person as lessee under Capital Leases, (e) all obligations of such Person to purchase securities or other property which arise out of or in connection with the sale of the same or substantially similar securities or property, (f) all non-contingent obligations of such Person to reimburse any other Person in respect of amounts paid under letters of credit, surety and appeal bonds and performance bonds or similar instruments assuring any other Person of the performance of any act or acts or the payment of any obligation, (g) all obligations of others secured by a Lien on any asset of such Person, whether or not such obligation is assumed by such Person and (h) the principal portion of all obligations of such Person under any synthetic lease or other similar off-balance sheet financing product.

 

“ Initial Term Loan A Funding ” shall have the meaning set forth in Section 2.4(a).

 

“ 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 mean being in a condition of Insolvency.

 

“ Interest Payment Date ” shall mean (a) as to any Alternate Base Rate Loan, the last day of each March, June, September and December and on the Maturity Date, (b) as to any LIBOR Rate Loan having an Interest Period of three months or less, the last day of such Interest Period, and (c) as to any LIBOR Rate Loan having an Interest Period longer than three (3) months, each day which is three (3) months after the first day of such Interest Period and the last day of such Interest Period.

 

17

“ Interest Period ” shall mean, with respect to any LIBOR Rate Loan,

 

(a) initially, the period commencing on the Borrowing Date or conversion date, as the case may be, with respect to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Administrative Borrower in the Notice of Borrowing or Notice of Conversion given with respect thereto; and

 

(b) thereafter, each period commencing on the last day of the immediately preceding Interest Period applicable to such LIBOR Rate Loan and ending one, two, three or six months thereafter, as selected by the Administrative Borrower by irrevocable notice to the Administrative Agent not less than three Business Days prior to the last day of the then current Interest Period with respect thereto;

 

provided that the foregoing provisions are subject to the following:

 

(i) if any Interest Period pertaining to a LIBOR Rate Loan would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the next succeeding Business 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 Business Day;

 

(ii) any Interest Period pertaining to a LIBOR Rate Loan that begins on the last Business 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) shall end on the last Business Day of the relevant calendar month;

 

(iii) if the Administrative Borrower shall fail to give notice as provided above, the Administrative Borrower shall be deemed to have selected an Alternate Base Rate Loan to replace the affected LIBOR Rate Loan;

 

(iv) with regard to the Term Loans, no Interest Period shall extend beyond any principal amortization payment date unless the portion of the Term Loans consisting of Alternate Base Rate Loans together with the portion of the Term Loans consisting of LIBOR Rate Loans with Interest Periods expiring prior to or concurrently with the date such principal amortization payments are due, is at least equal to the amount of such principal amortization payments due on such date;

 

(v) any Interest Period in respect of any Loan that would otherwise extend beyond the Maturity Date with respect to such Loan shall end on such Maturity Date; and

 

(vi) no more than ten (10) LIBOR Tranches may be in effect at any one time. For purposes hereof, LIBOR Rate Loans with different Interest Periods shall be considered as separate LIBOR Tranches, even if they shall begin on the

 

18

same date and have the same duration, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new LIBOR Tranche.

 

“ Investment ” shall mean all investments, in cash or by delivery of property made, directly or indirectly in, to or from any Person, whether by acquisition of shares of Capital Stock, property, assets, indebtedness or other obligations or securities or by loan, advance, capital contribution or otherwise.

 

“ Issuing Lender ” shall mean Wachovia or such other Lender as agreed to by the Administrative Agent and the Administrative Borrower; provided , however , to the extent Wachovia shall be unable to provide any Letter of Credit requested by the Administrative Borrower, either ING Bank N.V., London Branch or Deutsche Bank AG New York Branch may serve as the Issuing Lender for such Letter of Credit.

 

“ Italy Division ” shall mean the plant, property and equipment of the discontinued Italian division of Standard.

 

“ Joinder Agreement ” shall mean a Joinder Agreement substantially in the form of Schedule 5.10 , executed and delivered by an Additional Credit Party in accordance with the provisions of Section 5.10.

 

“ Judgment Currency ” shall have the meaning set forth in Section 9.20.

 

“ Lender ” shall have the meaning set forth in the first paragraph of this Agreement.

 

“ Lender Commitment Letter ” shall mean, with respect to any Lender, the letter (or other correspondence) to such Lender from the Administrative Agent notifying such Lender of its LOC Commitment, Revolving Commitment Percentage, Term Loan A Commitment Percentage and/or Term Loan B Commitment Percentage.

 

“ Letters of Credit ” shall mean any letter of credit issued by any Issuing Lender pursuant to the terms hereof, as such letter of credit may be amended, modified, extended, renewed or replaced from time to time.

 

“ Letter of Credit Fee ” shall have the meaning set forth in Section 2.6(b).

 

“ LIBOR ” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor page) as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days prior to the first day of such Interest Period for a term comparable to such Interest Period. If for any reason such rate is not available, the term “LIBOR” shall mean, for any LIBOR Rate Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London interbank offered rate for deposits in Dollars at approximately 11:00 A.M. (London time) two (2) Business Days prior to the first day of such Interest Period for a

 

19

term comparable to such Interest Period; provided , however , if more than one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of all such rates (rounded upwards, if necessary, to the nearest 1/100 of 1%). If, for any reason, neither of such rates is available, then “LIBOR” shall mean the rate per annum at which, as determined by the Administrative Agent, Dollars in an amount comparable to the Loans then requested are being offered to leading banks at approximately 11:00 A.M. London time, two (2) Business Days prior to the commencement of the applicable Interest Period for settlement in immediately available funds by leading banks in the London interbank market for a period equal to the Interest Period selected.

 

“ LIBOR Lending Office ” shall mean, initially, the office of each Lender designated as such Lender’s LIBOR Lending Office shown on Schedule 9.2 ; and thereafter, such other office of such Lender as such Lender may from time to time specify to the Administrative Agent and the Administrative Borrower as the office of such Lender at which the LIBOR Rate Loans of such Lender are to be made.

 

“ LIBOR Rate ” shall mean a rate per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%) determined by the Administrative Agent pursuant to the following formula:

 

LIBOR Rate =		LIBOR
		1.00 - Eurodollar Reserve Percentage

 

“ LIBOR Rate Loan ” shall mean Loans the rate of interest applicable to which is based on the LIBOR Rate.

 

“ Lien ” shall mean any deed of trust, mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge or other security interest or any preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including, without limitation, any conditional sale or other title retention agreement and any Capital Lease having substantially the same economic effect as any of the foregoing).

 

“ Loan ” shall mean a Revolving Loan, a Swingline Loan, the Term Loan A, and/or the Term Loan B as appropriate.

 

“ LOC Commitment ” shall mean the commitment of any Issuing Lender to issue Letters of Credit in an amount up to the LOC Committed Amount and with respect to each Revolving Lender, the commitment of such Revolving Lender to purchase Participation Interests in the Letters of Credit based on such Revolving Lender’s Revolving Commitment Percentage as specified in the Lender Commitment Letter or in the Register, as such amount may be reduced from time to time in accordance with the provisions hereof.

 

“ LOC Committed Amount ” shall have the meaning set forth in Section 2.3(a).

 

20

“ LOC Documents ” shall mean, with respect to any Letter of Credit, such Letter of Credit, any amendments thereto, any documents delivered in connection therewith, any application therefor, and any agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or (b) any collateral security for such obligations.

 

“ LOC Obligations ” shall mean, at any time, the sum of (a) the maximum amount that is, or at any time thereafter may become, available to be drawn under Letters of Credit then outstanding, assuming compliance with all requirements for drawings referred to in such Letters of Credit plus (b) the aggregate amount of all drawings under Letters of Credit honored by the Issuing Lender but not theretofore reimbursed.

 

“ Mandatory LOC Borrowing ” shall have the meaning set forth in Section 2.3(e).

 

“ Mandatory Swingline Borrowing ” shall have the meaning set forth in Section 2.2(b)(ii).

 

“ Material Adverse Effect ” shall mean a material adverse effect on (a) the business, operations, property, condition (financial or otherwise) or prospects of the Credit Parties and their Subsidiaries taken as a whole, (b) the ability of any Credit Party to perform its obligations, when such obligations are required to be performed, under this Agreement, any of the Notes or any other Credit Document or (c) the validity or enforceability of this Agreement, any of the Notes or any of the other Credit Documents or the material rights or remedies of the Administrative Agent or the Lenders hereunder or thereunder.

 

“ Material Contract ” shall mean any contract or other arrangement, whether written or oral, to which the Company or any Subsidiary is a party as to which contract the breach, nonperformance or cancellation of such contract by any party thereto could reasonably be expected to have a Material Adverse Effect.

 

“ Material Domestic Subsidiary ” shall mean any Domestic Subsidiary of the Company that would constitute a “significant subsidiary” of the Company as defined in Rule 1.02 of Regulation S-X promulgated by the Securities and Exchange Commission except that for purposes of this definition all references in such Rule 1.02 to “ten percent (10%)” shall be deemed to be references to “five percent (5%)”.

 

“ Material Foreign Subsidiary ” shall mean any Foreign Subsidiary of the Company that would constitute a “significant subsidiary” of the Company as defined in Rule 1.02 of Regulation S-X promulgated by the Securities and Exchange Commission.

 

“ Material Local Credit Facilities ” shall mean those local credit facilities identified on Schedule 1.1(e) and any other local credit facility with an outstanding principal balance as of March 31, 2005 or at any time after the Closing Date of more than $10,000,000.

 

“ Maturity Date ” shall mean (i) with respect to the Term Loan A, the Revolving Loans, the Swingline Loans and the LOC Obligations, May 13, 2008, and (ii) with respect to the Term Loan B, May 13, 2010.

 

21

“ Merger ” shall mean the merger of Standard with and into DIMON pursuant to the terms of the Merger Agreement.

 

“ Merger Agreement ” shall mean that certain Agreement and Plan of Reorganization, dated as of November 7, 2004, between DIMON and Standard, as amended, modified or supplemented prior to the Closing Date.

 

“ Moody’s ” shall mean Moody’s Investors Service, Inc.

 

“ Multiemployer Plan ” shall mean a Plan which is a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

 

“ Net Cash Proceeds ” shall mean the aggregate cash proceeds received by the Credit Parties and their Subsidiaries in respect of any Asset Disposition, Equity Issuance, Debt Issuance or Recovery Event, net of (a) direct costs paid or payable as a result thereof (including, without limitation, legal, accounting and investment banking fees, and sales commissions) and (b) taxes paid or payable as a result thereof; it being understood that “Net Cash Proceeds” shall include, without limitation, any cash received upon the sale or other disposition of any non-cash consideration received by the Credit Parties and their Subsidiaries in respect of any Asset Disposition, Equity Issuance, Debt Issuance or Recovery Event and any cash released from escrow as part of the purchase price in connection with any Asset Disposition.

 

“ Note ” or “ Notes ” shall mean the Revolving Notes, the Swingline Note and/or the Term Loan Notes, collectively, separately or individually, as appropriate.

 

“ Notice of Borrowing ” shall mean (a) a request for a Revolving Loan borrowing pursuant to Section 2.1(b)(i), (b) a request for a Swingline Loan borrowing pursuant to Section 2.2(b)(i), (c) a request for a Term Loan A borrowing pursuant to Section 2.4(b)(i), or (d) a request for a Term Loan B borrowing pursuant to Section 2.5(b)(i), as appropriate, in substantially the form of the notice of borrowing attached hereto as Schedule 2.1(b)(i) .

 

“ Notice of Conversion ” shall mean the written notice of extension or conversion as referenced in Section 2.10.

 

“ Obligations ” shall mean, collectively, Loans and LOC Obligations and all other obligations of the Credit Parties to the Administrative Agent and the Lenders under the Credit Documents.

 

“ OECD ” shall mean the Organization for Economic Cooperation and Development and any successor thereto.

 

“ OFAC ” shall mean the U.S. Department of the Treasury’s Office of Foreign Assets Control.

 

“ Operating Lease ” shall mean any lease which is not a Capital Lease.

 

22

“ Parallel Debt ” shall have the meaning set forth in Section 2.22(b).

 

“ Participant ” shall have the meaning set forth in Section 9.6(b).

 

“ Participation Interest ” shall mean a participation interest purchased by a Revolving Lender in LOC Obligations as provided in Section 2.3 and in Swingline Loans as provided in Section 2.2.

 

“ Patriot Act ” shall have the meaning set forth in Section 9.19.

 

“ PBGC ” shall mean the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA.

 

“ Permitted Acquisition ” shall mean an Acquisition permitted pursuant to the terms of Section 6.5(a).

 

“ Permitted Investments ” shall have the meaning set forth in Section 6.5.

 

“ Permitted Liens ” shall have the meaning set forth in Section 6.2.

 

“ Person ” shall mean an individual, partnership, corporation, limited liability company, business trust, joint stock company, trust, unincorporated association, joint venture, Governmental Authority or other entity of whatever nature.

 

“ Plan ” shall mean, at any particular time, any employee benefit plan which is covered by Title IV of ERISA and in respect of which the Company, any Subsidiary or a Commonly Controlled Entity is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

 

“ Pledge Agreement ” shall mean (a) the Pledge and Security Agreement, (b) the Foreign Pledge Agreements, and (c) any other pledge agreement or security agreement entered into by a Credit Party or a Subsidiary thereof pursuant to the terms of the Credit Documents, in each case as amended, modified, restated or supplemented from time to time.

 

“ Pledge and Security Agreement ” shall mean the Pledge and Security Agreement dated as of the Closing Date entered into by the Company in favor of the Administrative Agent, for the benefit of the Lenders, as amended, modified, restated or supplemented from time to time.

 

“ Pledged Foreign Subsidiaries ” shall mean the Foreign Subsidiaries set forth on Schedule 1.1(c) and any other Material Foreign Subsidiaries the Capital Stock of which are pledged pursuant to the Foreign Pledge Agreements.

 

“ Prime Rate ” shall have the meaning set forth in the definition of Alternate Base Rate.

 

23

“ Pro Forma Basis ” shall mean, with respect to any transaction, that such transaction shall be deemed to have occurred as of the first day of the four (4) fiscal-quarter period ending as of the last day of the most recent fiscal quarter preceding the date of such transaction with respect to which the Administrative Agent and the Lenders shall have received the financial statements referred to in Section 5.1(a) or (b), as applicable.

 

“ Purchasing Lenders ” shall have the meaning set forth in Section 9.6(c).

 

“ Quoted Rate ” shall mean the fixed or floating percentage rate per annum, if any, offered by the Swingline Lender and accepted by the Administrative Borrower in accordance with the provisions hereof.

 

“ Quoted Rate Swingline Loan ” shall mean a Swingline Loan bearing interest at the Quoted Rate.

 

“ Recovery Event ” shall mean the receipt by the Company or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective property or assets.

 

“ Register ” shall have the meaning set forth in Section 9.6(d).

 

“ Reimbursement Obligation ” shall mean, with respect to a Letter of Credit issued for the account of a Borrower, the obligation of such Borrower to reimburse the Issuing Lender for a drawing under such Letter 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 thirty-day notice period is waived under PBGC Reg. §4043.

 

“ Required Lenders ” shall mean, as of any date of determination, Lenders holding in the aggregate greater than 50% of the sum of (a) (i) the Revolving Commitments or (ii) if the Revolving Commitments have been terminated, the outstanding Revolving Loans and Participation Interests (including the Participation Interests of Wachovia, in its capacity as a Lender, in any Letters of Credit and Swingline Loans), (b) the outstanding Term Loan A and, prior to the Delayed Draw Funding Date, the unfunded Term Loan A Commitments, and (c) the outstanding Term Loan B, in each case on such date of determination; provided , however , that if any Lender shall be a Defaulting Lender at such time, then there shall be excluded from the determination of Required Lenders, the Term Loan owing to such Defaulting Lender and such Defaulting Lender’s Revolving Commitment or, after termination of the Revolving Commitments, the principal balance of the Revolving Loans owing to such Defaulting Lender and such Defaulting Lender’s Participation Interests.

 

24

“ Requirement of Law ” shall mean, as to any Person, the Certificate of Incorporation and Bylaws or other organizational or governing documents of such Person, and each 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 property or to which such Person or any of its property is subject.

 

“ Responsible Officer ” shall mean, as to (a) a Borrower, the President and Chief Executive Officer or the Chief Financial Officer or (b) the Administrative Borrower or any other Credit Party, any duly authorized officer thereof.

 

“ Restricted Payment ” shall mean (a) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of the Company or any of its Subsidiaries, now or hereafter outstanding, (b) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Capital Stock of the Company or any of its Subsidiaries, now or hereafter outstanding, (c) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of the Company or any of its Subsidiaries, now or hereafter outstanding, or (d) any payment or prepayment of principal of, premium, if any, or interest on, redemption, purchase, retirement, defeasance, sinking fund or similar payment with respect to, any Senior Note or any Subordinated Indebtedness.

 

“ Revolving Commitment ” shall mean, with respect to each Revolving Lender, the commitment of such Revolving Lender to make Revolving Loans in an aggregate principal amount at any time outstanding up to an amount equal to such Lender’s Revolving Commitment Percentage of the Revolving Committed Amount.

 

“ Revolving Commitment Fee ” shall have the meaning set forth in Section 2.6(a).

 

“ Revolving Commitment Percentage ” shall mean, for each Revolving Lender, the percentage identified as its Revolving Commitment Percentage in its Lender Commitment Letter or in the Commitment Transfer Supplement pursuant to which such Revolving Lender became a Lender hereunder, in each case as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6(c).

 

“ Revolving Committed Amount ” shall have the meaning set forth in Section 2.1(a).

 

“ Revolving Lender ” shall mean, as of any date of determination, a Lender holding a Revolving Loan Commitment and/or a portion of the outstanding Revolving Loans on such date.

 

“ Revolving Loan ” shall have the meaning set forth in Section 2.1.

 

“ Revolving Note ” or “ Revolving Notes ” shall mean each of the promissory notes of the Borrowers in favor of each of the Revolving Lenders evidencing the Revolving Loans provided pursuant to Section 2.1(e), individually or collectively, as appropriate, as such promissory notes may be amended, modified, supplemented, extended, renewed or replaced from time to time.

 

25

“ S&P ” shall mean Standard & Poor’s Ratings Group, a division of The McGraw Hill, Inc.

 

“ Sanctioned Country ” shall mean a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html, or as otherwise published from time to time.

 

“ Sanctioned Person ” shall mean (a) a Person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC available at http://www.treas.gov/offices/enforcement/ofac/sdn/index.html, or as otherwise published from time to time, or (b) (i) an agency of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

 

“ Secured Hedging Agreement ” shall mean any Hedging Agreement between any Credit Party and any Hedging Agreement Provider.

 

“ Secured Parties ” shall mean the Administrative Agent, the Lenders and the Hedging Agreement Providers.

 

“ Security Documents ” shall mean the Pledge Agreements and such other documents executed and delivered and/or filed in connection with the attachment and perfection of the Administrative Agent’s security interests and liens arising thereunder, including, without limitation, UCC financing statements.

 

“ Senior Indenture ” shall mean that certain Indenture, dated as of May 13, 2005, by and among the Company, as issuer, and Deutsche Bank, as trustee with respect to the Senior Notes as supplemented, amended or otherwise modified from time to time to the extent permitted hereunder.

 

“ Senior Subordinated Indenture ” shall mean that certain Indenture, dated as of May 13, 2005, by and among the Company, as issuer, Law Debenture Trust Company of New York, as trustee, and Deutsche Bank Trust Company Americas, as paying agent and registrar, as supplemented, amended or otherwise modified from time to time to the extent permitted hereunder.

 

“ Senior Notes ” shall mean the 11% Senior Notes due 2012 in an aggregate principal amount of $315,000,000, issued by the Company pursuant to the Senior Indenture, as such Senior Notes may be supplemented, amended or otherwise modified from time to time to the extent permitted hereunder.

 

“ Senior Subordinated Notes ” shall mean any one of the 12 ¾% Senior Subordinated Notes due 2012 in an aggregate principal amount of $100,000,000, issued by the Company pursuant to the Senior Subordinated Indenture, as such Senior Subordinated Notes may be supplemented, amended or otherwise modified from time to time to the extent permitted hereunder.

 

26

“ Sharing Event ” shall mean (a) the occurrence of any Event of Default under Section 7.1(e), (b) the declaration of the termination of any Commitment, or the acceleration of the maturity of any Loans, in each case in accordance with Section 7.2 or (iii) the failure of the Borrowers to pay any principal of, or interest on, any Loans or any LOC Obligations on the relevant Maturity Date.

 

“ Shortfall on Enforcement ” shall have the meaning set forth in Section 11.9(e).

 

“ Single Employer Plan ” shall mean any Plan which is not a Multiemployer Plan.

 

“ Solvent ” shall mean, with respect to any Person, that (a) the fair saleable value of each such Person’s assets, measured on a going concern basis, exceeds all probable liabilities of such Person (including any liabilities to be incurred pursuant to this Agreement), (b) such Person does not have unreasonably small capital in relation to the business in which it is or proposes to be engaged and (c) such Person has not incurred debts beyond its ability to pay such debts as they become due.

 

“ Specified Sales ” shall mean (a) the sale, transfer, lease or other disposition of inventory and materials in the ordinary course of business and (b) the conversion of cash into Cash Equivalents or Cash Equivalents into cash.

 

“ Split-Dollar Agreement ” shall mean an agreement between the Company or any of its Subsidiaries and an employee of the Company or such Subsidiary (or one or more affiliates of such employee that shall be the owner of the policy of life insurance referred to below), pursuant to which the Company or such Subsidiary shall agree to fund non-scheduled premiums under a policy of insurance on the life of such employee and such employee (or such affiliate or affiliates) shall agree to reimburse the Company or such Subsidiary for such non-scheduled premiums upon the termination of such agreement.

 

“ Split-Dollar Assignment ” shall mean a collateral assignment executed and delivered in connection with a Split-Dollar Program by an employee of the Company or one of its Subsidiaries (or one or more affiliates of such employee that shall be the owner of the policy of life insurance referred to below), by which such employee (or such affiliate or affiliates), as collateral security for such employee’s (or such affiliate’s or affiliates’) obligations under the Split-Dollar Agreement executed and delivered in connection with such Split-Dollar Program, assigns to the Company or such Subsidiary the policy of insurance on the life of such employee contemplated by such Split-Dollar Agreement.

 

“ Split-Dollar Program ” shall mean an arrangement, established under a Split-Dollar Agreement between the Company or any of its Subsidiaries and an employee thereof (or one or more affiliates of such employee), whereby the Company or such Subsidiary establishes a split-dollar life insurance program for the benefit of such employee and agrees to pay non-scheduled premiums under the life insurance policy issued in connection therewith, subject to the obligation of such employee (or such affiliate or affiliates) to reimburse the aggregate amount of such nonscheduled premiums upon the termination of such program.

 

27

“ Standard ” shall mean Standard Commercial Corporation, a North Carolina corporation, predecessor by merger to the Company.

 

“ Subordinated Debt Securities ” shall mean any one of the 6 1/4% Convertible Subordinated Debentures due March 31, 2007, in an original aggregate principal amount of $140,000,000, issued by the Company (successor by merger to DIMON) pursuant to the Subordinated Debt Indenture (of which original principal amount, $73,328,440.00 is outstanding as of the Closing Date), as such Subordinated Debt Securities may be supplemented, amended or otherwise modified from time to time.

 

“ Subordinated Indebtedness ” shall mean any Indebtedness incurred by any Credit Party which by its terms is specifically subordinated in right of payment to the prior payment of the Credit Party Obligations on terms acceptable to the Administrative Agent, including, without limitation, the Subordinated Debt Securities and the Senior Subordinated Notes.

 

“ Subordinated Indenture ” shall mean that certain Indenture, dated as of April 1, 1997, by and among the Company (successor by merger to DIMON) and LaSalle National Bank, as trustee, as supplemented, amended or otherwise modified from time to time.

 

“ Subsidiary ” shall mean, as to any Person, a corporation, partnership, limited liability company or other entity of which shares of stock or other ownership interests having ordinary voting power (other than stock or such other ownership interests having such power only by reason of the happening of a contingency) to elect a majority of the board of directors or other managers of such corporation, partnership, limited liability company or other entity are at the time owned, or the management of which is otherwise controlled, directly or indirectly through one or more intermediaries, or both, 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.

 

“ Swingline Commitment ” shall mean the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding up to the Swingline Committed Amount, and the commitment of the Lenders to purchase Participation Interests in the Swingline Loans as provided in Section 2.2(b)(ii), as such amounts may be increased or reduced from time to time in accordance with the provisions hereof.

 

“ Swingline Committed Amount ” shall have the meaning set forth in Section 2.2(a).

 

“ Swingline Lender ” shall mean Wachovia, in its capacity as such, or any successor swingline lender hereunder.

 

“ Swingline Loan ” or “ Swingline Loans ” shall have the meaning set forth in Section 2.2(a).

 

“ Swingline Note ” shall mean the promissory notes of the Borrowers in favor of the Swingline Lender evidencing the Swingline Loans provided pursuant to Section 2.2(d), as such

 

28

promissory note may be amended, modified, supplemented, extended, renewed or replaced from time to time.

 

“ Taxes ” shall have the meaning set forth in Section 2.18.

 

“ Term Loan ” or “ Term Loans ” shall mean the Term Loan A and/or the Term Loan B as appropriate.

 

“ Term Loan A ” shall have the meaning set forth in Section 2.4(a).

 

“ Term Loan A Commitment ” shall mean, with respect to each Term Loan A Lender, the commitment of such Term Loan A Lender to make its portion of the Term Loan A in a principal amount equal to such Term Loan A Lender’s Term Loan A Commitment Percentage of the Term Loan A Committed Amount.

 

“ Term Loan A Commitment Fee ” shall have the meaning set forth in Section 2.6(a).

 

“ Term Loan A Commitment Percentage ” shall mean, for any Term Loan A Lender, the percentage identified as its Term Loan A Commitment Percentage in its Lender Commitment Letter or in the Commitment Transfer Supplement pursuant to which such Term Loan A Lender became a Lender hereunder, in each case as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6.

 

“ Term Loan A Committed Amount ” shall have the meaning set forth in Section 2.4(a).

 

“ Term Loan A Lender ” shall mean, as of any date of determination, any Lender holding a Term Loan A Commitment and/or a portion of the outstanding Term Loan A on such date.

 

“ Term Loan A Note ” or “ Term Loan A Notes ” shall mean the promissory notes of the Borrowers in favor of each of the Term Loan A Lenders evidencing the portion of the Term Loan A provided by any such Term Loan A Lender pursuant to Section 2.4(e), individually or collectively, as appropriate, as such promissory notes may be amended, modified, restated, amended and restated, supplemented, extended, renewed or replaced from time to time.

 

“ Term Loan B ” shall have the meaning set forth in Section 2.5(a).

 

“ Term Loan B Commitment ” shall mean, with respect to each Term Loan B Lender, the commitment of such Term Loan B Lender to make its portion of the Term Loan B in a principal amount equal to such Term Loan B Lender’s Term Loan B Commitment Percentage of the Term Loan B Committed Amount.

 

“ Term Loan B Commitment Percentage ” shall mean, for any Term Loan B Lender, the percentage identified as its Term Loan B Commitment Percentage in its Lender Commitment Letter or in the Commitment Transfer Supplement pursuant to which such Term Loan B Lender became a Lender hereunder, in each case as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 9.6.

 

29

“ Term Loan B Committed Amount ” shall have the meaning set forth in Section 2.5(a).

 

“ Term Loan B Lender ” shall mean, as of any date of determination, any Lender holding a Term Loan B Commitment and/or a portion of the outstanding Term Loan B on such date.

 

“ Term Loan B Note ” or “ Term Loan B Notes ” shall mean the promissory notes of the Borrowers in favor of each of the Term Loan B Lenders evidencing the portion of the Term Loan B provided by any such Term Loan B Lender pursuant to Section 2.5(e), individually or collectively, as appropriate, as such promissory notes may be amended, modified, restated, amended and restated, supplemented, extended, renewed or replaced from time to time.

 

“ Term Loans ” shall mean collectively, the Term Loan A and the Term Loan B.

 

“ Term Loan Note ” or “ Term Loan Notes ” shall mean the Term Loan A Note, and/or the Term Loan B Note, as appropriate.

 

“ Tranche ” shall mean the collective reference to LIBOR Rate Loans whose Interest Periods begin and end on the same day. A Tranche may sometimes be referred to as a “LIBOR Tranche”.

 

“ Transfer Effective Date ” shall have the meaning set forth in each Commitment Transfer Supplement.

 

“ Type ” shall mean, as to any Loan, its nature as an Alternate Base Rate Loan, LIBOR Rate Loan or Swingline Loan, as the case may be.

 

“ Uncommitted Inventories ” shall mean tobacco inventories for which a Borrower has not received a Confirmed Order.

 

“ Voting Stock ” shall mean, with respect to any Person, Capital Stock issued by such Person the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even though the right so to vote has been suspended by the happening of such a contingency.

 

“ Wachovia ” shall mean Wachovia Bank, National Association, a national banking association, together with its successors and/or assigns.

 

“ Wool Division ” shall mean shall mean the plant, property and equipment of the discontinued wool division of Standard.

 

Section 1.2 Other Definitional Provisions .

 

(a) Unless otherwise specified therein, all terms defined in this Agreement shall have the defined meanings when used in the Notes or other Credit Documents or any certificate or other document made or delivered pursuant hereto.

 

30

(b) The words “hereof”, “herein” and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement, and Section, Subsection, Schedule and Exhibit references are to this Agreement 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.

 

Section 1.3 Accounting Terms .

 

Unless otherwise specified herein, all accounting terms used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared in accordance with GAAP applied on a basis consistent with the most recent audited consolidated financial statements of the Company delivered to the Lenders; provided that, if the Administrative Borrower notifies the Administrative Agent that it wishes to amend any covenant in Section 5.9 to eliminate the effect of any change in GAAP on the operation of such covenant (or if the Administrative Agent notifies the Administrative Borrower that the Required Lenders wish to amend Section 5.9 for such purpose), then the Borrowers’ compliance with such covenant shall be determined on the basis of GAAP in effect immediately before the relevant change in GAAP became effective, until either such notice is withdrawn or such covenant is amended in a manner satisfactory to the Borrowers and the Required Lenders.

 

The Administrative Borrower shall deliver to the Administrative Agent and each Lender at the same time as the delivery of any annual or quarterly financial statements given in accordance with the provisions of Section 5.1, (i) a description in reasonable detail of any material change in the application of accounting principles employed in the preparation of such financial statements from those applied in the most recently preceding quarterly or annual financial statements as to which no objection shall have been made in accordance with the provisions above and (ii) a reasonable estimate of the effect on the financial statements on account of such changes in application.

 

ARTICLE II

 

THE LOANS; AMOUNT AND TERMS

 

Section 2.1 Revolving Loans .

 

(a) Revolving Commitment . During the Commitment Period, subject to the terms and conditions hereof, each Revolving Lender severally agrees to make revolving credit loans (“ Revolving Loans ”) to the Borrowers from time to time for the purposes hereinafter set forth; provided , however , that (i) the aggregate principal amount of outstanding Revolving Loans and Swingline Loans made to the Company plus the outstanding Company LOC Obligations shall not exceed $150,000,000 at any time

 

31

outstanding, (ii) no more than $75,000,000 of Revolving Loans may be borrowed on the Closing Date, (iii) with regard to each Revolving Lender individually, the sum of such Revolving Lender’s Revolving Commitment Percentage of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not exceed such Revolving Lender’s Revolving Commitment and (iv) with regard to the Revolving Lenders collectively, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loan plus outstanding LOC Obligations shall not exceed the lesser of (A) the Revolving Committed Amount and (B) the Borrowing Base. For purposes hereof, the aggregate amount of Revolving Loans available hereunder shall be THREE HUNDRED MILLION DOLLARS ($300,000,000) (as reduced from time to time in accordance with the terms of Section 2.7, the “ Revolving Committed Amount ”). Revolving Loans may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Administrative Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof. LIBOR Rate Loans shall be made by each Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(b) Revolving Loan Borrowings .

 

(i) Notice of Borrowing . The Administrative Borrower shall request a Revolving Loan borrowing by delivering to the Administrative Agent a Notice of Borrowing (or telephone notice promptly confirmed in writing by delivering to the Administrative Agent a Notice of Borrowing, which delivery may be by fax) not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day prior to the date of the requested borrowing in the case of Alternate Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans. Each such Notice of Borrowing shall be irrevocable and shall specify (A) that a Revolving Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed, (D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor and (E) the Borrower requesting such borrowing. If the Administrative Borrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Revolving Loan requested, then such notice shall be deemed to be a request for an Alternate Base Rate Loan hereunder. The Administrative Agent shall give notice to each Revolving Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Revolving Lender’s share thereof.

 

(ii) Minimum Amounts . Each Revolving Loan borrowing shall be in a minimum aggregate principal amount of (A) with respect to LIBOR Rate Loans, $3,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less) or (B) with

 

32

respect to Alternate Base Rate Loans, $1,000,000 and integral multiples of $500,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).

 

(iii) Advances . Each Revolving Lender will make its Commitment Percentage of each Revolving Loan borrowing available to the Administrative Agent for the account of the Applicable Borrower at the office of the Administrative Agent specified in Schedule 9.2 , or at such other office as the Administrative Agent may designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing in Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Applicable Borrower by the Administrative Agent by crediting the account of such Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Revolving Lenders and in like funds as received by the Administrative Agent.

 

(c) Repayment . The principal amount of all Revolving Loans shall be due and payable in full on the Maturity Date.

 

(d) Interest . Subject to the provisions of Section 2.9, Revolving Loans shall bear interest as follows:

 

(i) Alternate Base Rate Loans . During such periods as Revolving Loans shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage; and

 

(ii) LIBOR Rate Loans . During such periods as Revolving Loans shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

Interest on Revolving Loans shall be payable in arrears on each Interest Payment Date.

 

(e) Revolving Notes . Each Revolving Lender’s Revolving Commitment shall be evidenced by duly executed promissory notes of the Borrowers to such Revolving Lender in substantially the form of Schedule 2.1(e) .

 

Section 2.2 Swingline Loan Subfacility .

 

(a) Swingline Commitment . During the Commitment Period, subject to the terms and conditions hereof, the Swingline Lender, in its individual capacity, agrees to make certain revolving credit loans to the Borrowers (each a “ Swingline Loan ” and, collectively, the “ Swingline Loans ”) from time to time for the purposes hereinafter set forth; provided , however , (i) the aggregate amount of Swingline Loans outstanding at any

 

33

time shall not exceed TWENTY-FIVE MILLION DOLLARS ($25,000,000) (the “ Swingline Committed Amount ”), (ii) the aggregate principal amount of outstanding Revolving Loans and Swingline Loans made to the Company plus the outstanding Company LOC Obligations shall not exceed $150,000,000 at any time outstanding and (iii) the sum of the aggregate amount of outstanding Revolving Loans plus Swingline Loans plus LOC Obligations shall not exceed the lesser of (A) the Revolving Committed Amount and (B) the Borrowing Base. Swingline Loans hereunder may consist of Alternate Base Rate Loans or Quoted Rate Swingline Loans, as the Administrative Borrower may request, and may be repaid and reborrowed in accordance with the provisions hereof.

 

(b) Swingline Loan Borrowings .

 

(i) Notice of Borrowing and Disbursement . The Administrative Borrower shall request a Swingline Loan borrowing by delivering to the Administrative Agent a Notice of Borrowing (or telephone notice promptly confirmed in writing by delivering to the Administrative Agent a Notice of Borrowing, which delivery may be by fax) not later than 12:00 Noon (Charlotte, North Carolina time) on the date of the requested borrowing. Each such Notice of Borrowing shall be irrevocable and shall specify (A) that a Swingline Loan is requested, (B) the date of the requested borrowing (which shall be a Business Day), (C) the aggregate principal amount to be borrowed and (D) the Borrower requesting such borrowing. The Administrative Agent shall give notice to the Swingline Lender promptly upon receipt of each Notice of Borrowing and the contents thereof. Swingline Loan borrowings hereunder shall be made in minimum amounts of $100,000 and in integral amounts of $100,000 in excess thereof.

 

(ii) Repayment of Swingline Loans . The principal amount of all Swingline Loans shall be due and payable in full on the Maturity Date. The Swingline Lender may, at any time, in its sole discretion, by written notice to the Administrative Borrower and the Administrative Agent, demand repayment of its Swingline Loans by way of a Revolving Loan borrowing, in which case the Applicable Borrower or Applicable Borrowers shall be deemed to have requested a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans in the amount of such Swingline Loans; provided , however , that any such demand shall also be deemed to have been given one (1) Business Day prior to each of the following: (i) the Maturity Date for Swingline Loans, (ii) the occurrence of any Event of Default described in Section 7.1(e), (iii) the acceleration of the Credit Party Obligations hereunder, whether on account of an Event of Default described in Section 7.1(e) or any other Event of Default, and (iv) the exercise of remedies in accordance with the provisions of Section 7.2 hereof (each such Revolving Loan borrowing made on account of any such deemed request therefor as provided herein being hereinafter referred to as a “ Mandatory Swingline Borrowing ”). The Administrative Agent shall give notice to each Revolving Lender promptly upon receipt from the Swingline Lender of demand for

 

34

repayment of its Swingline Loans and upon any deemed request for repayment through a Mandatory Swingline Borrowing. Each Revolving Lender hereby irrevocably agrees to fund its Revolving Commitment Percentage of each such Revolving Loan on the date such notification is received if such notification is received by such Revolving Lender at or before 12:00 Noon, otherwise such payment shall be made at or before 12:00 Noon on the next succeeding Business Day, in each case notwithstanding (I) the amount of such Revolving Loan may not comply with the minimum amount for borrowings of Revolving Loans otherwise required hereunder, (II) whether any conditions specified in Section 4.2 are then satisfied, (III) whether a Default or an Event of Default then exists, (IV) failure of any such request or deemed request for a Revolving Loan to be made by the time otherwise required in Section 2.1(b)(i), (V) the date of such Revolving Loan borrowing, or (VI) any reduction in the Revolving Committed Amount or termination of the Revolving Commitments immediately prior to such Revolving Loan borrowing or contemporaneously therewith. In the event that any Mandatory Swingline Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Code with respect to a Borrower), then each Revolving Lender hereby agrees that it shall forthwith purchase (as of the date the Mandatory Swingline Borrowing would otherwise have occurred, but adjusted for any payments received from the Applicable Borrower on or after such date and prior to such purchase) from the Swingline Lender such Participation Interest in the outstanding Swingline Loans as shall be necessary to cause each such Revolving Lender to share in such Swingline Loans ratably based upon its respective Revolving Commitment Percentage (determined before giving effect to any termination of the Commitments pursuant to Section 7.2); provided that (A) all interest payable on the Swingline Loans shall be for the account of the Swingline Lender until the date as of which the respective Participation Interest is purchased, and (B) at the time any purchase of a Participation Interest pursuant to this sentence is actually made, the purchasing Revolving Lender shall be required to pay to the Swingline Lender interest on the principal amount of such Participation Interest purchased for each day from and including the day upon which the Mandatory Swingline Borrowing would otherwise have occurred to but excluding the date of payment for such Participation Interest, at the rate equal to, if paid within two (2) Business Days of the date of the Mandatory Swingline Borrowing, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(c) Interest on Swingline Loans . Subject to the provisions of Section 2.9, Swingline Loans shall bear interest at a per annum rate equal to (i) the Alternate Base Rate plus the Applicable Percentage for Revolving Loans that are Alternate Base Rate Loans or (ii) the Quoted Rate; provided that, any Swingline Loan bearing interest at the Quoted Rate on the date that the Revolving Lenders purchase participation interests in such Swingline Loan in accordance with the terms of Section 2.2(b)(ii) shall on and after such date accrue interest at the Alternate Base Rate plus the Applicable Percentage for Revolving Loans that are Alternate Base Rate Loans. Interest on Swingline Loans shall

 

35

be payable in arrears on each Interest Payment Date or as may be mutually agreed upon by the Borrowers and the Swingline Lender.

 

(d) Swingline Note . The Swingline Loans shall be evidenced by duly executed promissory notes of the Borrowers to the Swingline Lender in the original amount of the Swingline Committed Amount and substantially in the form of Schedule 2.2(d) .

 

Section 2.3 Letter of Credit Subfacility .

 

(a) Issuance . Subject to the terms and conditions hereof and of the LOC Documents, if any, and any other terms and conditions which the Issuing Lender may reasonably require, during the Commitment Period the Issuing Lender shall issue, and the Revolving Lenders shall participate in, standby Letters of Credit for the account of the Applicable Borrower from time to time upon request by the Administrative Borrower in a form acceptable to the Issuing Lender; provided , however , that (i) the aggregate amount of LOC Obligations shall not at any time exceed TEN MILLION DOLLARS ($10,000,000) (the “ LOC Committed Amount ”), (ii) the aggregate principal amount of outstanding Revolving Loans and Swingline Loans made to the Company plus the outstanding Company LOC Obligations shall not exceed $150,000,000 at any time outstanding, (iii) the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations shall not at any time exceed the lesser of (A) the Revolving Committed Amount and (B) the Borrowing Base, (iv) all Letters of Credit shall be denominated in Dollars and (v) Letters of Credit shall be issued for any lawful corporate purposes of the Applicable Borrower and its Subsidiaries and may be issued as standby letters of credit, including in connection with workers’ compensation and other insurance programs, and trade letters of credit. Except as otherwise expressly agreed upon by all the Revolving Lenders, no Letter of Credit shall have an original expiry date more than twelve (12) months from the date of issuance; provided , however , so long as no Default or Event of Default has occurred and is continuing and subject to the other terms and conditions to the issuance of Letters of Credit hereunder, the expiry dates of Letters of Credit may be extended annually or periodically from time to time on the request of the Administrative Borrower or by operation of the terms of the applicable Letter of Credit to a date not more than twelve (12) months from the date of extension; provided , further , that no Letter of Credit, as originally issued or as extended, shall have an expiry date extending beyond the date which is five (5) Business Days prior to the Maturity Date for LOC Obligations. Each Letter of Credit shall comply with the related LOC Documents. The issuance and expiry date of each Letter of Credit shall be a Business Day. Any Letters of Credit issued hereunder shall be in a minimum original face amount of $100,000. Unless otherwise agreed, Wachovia shall be the Issuing Lender on all Letters of Credit issued on or after the Closing Date; provided , however , to the extent Wachovia shall be unable to provide any Letter of Credit requested by a Borrower, either ING Bank N.V., London Branch or Deutsche Bank AG New York Branch may serve as the Issuing Lender for such Letter of Credit.

 

36

(b) Notice and Reports . The request for the issuance of a Letter of Credit shall be submitted by the Administrative Borrower to the Issuing Lender at least five (5) Business Days prior to the requested date of issuance pursuant to a Letter of Credit application or other form of request acceptable to the Issuing Lender. The Issuing Lender will provide on a quarterly basis, and otherwise will promptly upon request provide, to the Administrative Agent for dissemination to the Revolving Lenders a detailed report specifying the Letters of Credit which are then issued and outstanding and any activity with respect thereto which may have occurred since the date of any prior report, and including therein, among other things, the account party, the beneficiary, the face amount, expiry date as well as any payments or expirations which may have occurred. The Issuing Lender will further provide to the Administrative Agent promptly upon request copies of the Letters of Credit. The Issuing Lender will provide to the Administrative Agent promptly upon request a summary report of the nature and extent of LOC Obligations then outstanding.

 

(c) Participations . Each Revolving Lender upon issuance of any Letter of Credit, shall be deemed to have purchased without recourse a risk participation from the Issuing Lender in such Letter of Credit and the amount available to be drawn thereunder and any collateral relating thereto, in each case in an amount equal to its Revolving Commitment Percentage of the amount available to be drawn under such Letter of Credit and shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and be obligated to pay to the Issuing Lender therefor and discharge when due, its Revolving Commitment Percentage of the amounts drawn under such Letter of Credit; provided that any Person that becomes a Revolving Lender after the Closing Date shall be deemed to have purchased a risk participation in all outstanding Letters of Credit on the date it becomes a Revolving Lender hereunder and any Letter of Credit issued on or after such date, in each case in accordance with the foregoing terms. Without limiting the scope and nature of each Revolving Lender’s participation in any Letter of Credit, to the extent that the Issuing Lender has not been reimbursed as required hereunder or under any LOC Document, each such Revolving Lender shall pay to the Issuing Lender its Revolving Commitment Percentage of such unreimbursed drawing in same day funds on the day of notification by the Issuing Lender of an unreimbursed drawing pursuant to the provisions of subsection (d) hereof if such notification is received by such Revolving Lender at or before 12:00 Noon, otherwise such payment shall be made at or before 12:00 Noon on the next succeeding Business Day. The obligation of each Revolving Lender to so reimburse the Issuing Lender shall be absolute and unconditional and shall not be affected by the occurrence of a Default, an Event of Default or any other occurrence or event. Any such reimbursement shall not relieve or otherwise impair the obligation of the Applicable Borrower to reimburse the Issuing Lender under any Letter of Credit, together with interest as hereinafter provided.

 

(d) Reimbursement . In the event of any drawing under any Letter of Credit, the Issuing Lender will promptly notify the Administrative Borrower and the Administrative Agent. The Applicable Borrower shall reimburse the Issuing Lender on the day of drawing under any Letter of Credit (with the proceeds of a Revolving Loan obtained hereunder or otherwise) in same day funds as provided herein or in the LOC

 

37

Documents. If the Applicable Borrower shall fail to reimburse the Issuing Lender as provided herein, the unreimbursed amount of such drawing shall bear interest at a per annum rate equal to the Default Rate for Alternate Base Rate Loans set forth in Section 2.9. Unless the Administrative Borrower shall immediately notify the Issuing Lender and the Administrative Agent of the Applicable Borrower’s intent to otherwise reimburse the Issuing Lender, the Applicable Borrower shall be deemed to have requested a Mandatory LOC Borrowing in the amount of the drawing as provided in subsection (e) hereof, the proceeds of which will be used to satisfy the Reimbursement Obligations. The Applicable Borrower’s Reimbursement Obligations hereunder shall be absolute and unconditional under all circumstances irrespective of any rights of set-off, counterclaim or defense to payment the Applicable Borrower may claim or have against the Issuing Lender, the Administrative Agent, the Revolving Lenders, the beneficiary of the Letter of Credit drawn upon or any other Person, including, without limitation, any defense based on any failure of the Applicable Borrower to receive consideration or the legality, validity, regularity or unenforceability of the Letter of Credit. The Issuing Lender will promptly notify the other Revolving Lenders of the amount of any unreimbursed drawing and each Revolving Lender shall promptly pay to the Administrative Agent for the account of the Issuing Lender in Dollars and in immediately available funds, the amount of such Revolving Lender’s Revolving Commitment Percentage of such unreimbursed drawing. Such payment shall be made on the day such notice is received by such Revolving Lender from the Issuing Lender if such notice is received at or before 12:00 Noon, otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the day such notice is received. If such Revolving Lender does not pay such amount to the Issuing Lender in full upon such request, such Revolving Lender shall, on demand, pay to the Administrative Agent for the account of the Issuing Lender interest on the unpaid amount during the period from the date of such drawing until such Revolving Lender pays such amount to the Issuing Lender in full at a rate per annum equal to, if paid within two (2) Business Days of the date of drawing, the Federal Funds Effective Rate and thereafter at a rate equal to the Alternate Base Rate. Each Revolving Lender’s obligation to make such payment to the Issuing Lender, and the right of the Issuing Lender to receive the same, shall be absolute and unconditional, shall not be affected by any circumstance whatsoever and without regard to the termination of this Credit Agreement or the Commitments hereunder, the existence of a Default or Event of Default or the acceleration of the Credit Party Obligations hereunder and shall be made without any offset, abatement, withholding or reduction whatsoever.

 

(e) Repayment with Revolving Loans . On any day on which a Borrower shall have requested, or been deemed to have requested, a Revolving Loan to reimburse a drawing under a Letter of Credit, the Administrative Agent shall give notice to the Revolving Lenders that a Revolving Loan has been requested or deemed requested in connection with a drawing under a Letter of Credit, in which case a Revolving Loan borrowing comprised entirely of Alternate Base Rate Loans (each such borrowing, a “ Mandatory LOC Borrowing ”) shall be immediately made (without giving effect to any termination of the Commitments pursuant to Section 7.2) pro rata based on each Revolving Lender’s respective Revolving Commitment Percentage (determined before

 

38

giving effect to any termination of the Commitments pursuant to Section 7.2) and the proceeds of such Mandatory LOC Borrowing shall be paid directly to the Issuing Lender for application to the respective LOC Obligations. Each Revolving Lender hereby irrevocably agrees to make such Revolving Loans on the day such notice is received by the Revolving Lenders from the Administrative Agent if such notice is received at or before 12:00 Noon, otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the day such notice is received, in each case notwithstanding (i) the amount of Mandatory LOC Borrowing may not comply with the minimum amount (or integral amount in excess thereof) for borrowings of Revolving Loans otherwise required hereunder, (ii) whether any conditions specified in Section 4.2 are then satisfied, (iii) whether a Default or an Event of Default then exists, (iv) failure of any such request or deemed request for Revolving Loan to be made by the time otherwise required in Section 2.1(b)(i), (v) the date of such Mandatory LOC Borrowing, or (vi) any reduction in the Revolving Committed Amount after any such Letter of Credit may have been drawn upon. In the event that any Mandatory LOC Borrowing cannot for any reason be made on the date otherwise required above (including, without limitation, as a result of the commencement of a proceeding under the Bankruptcy Event), then, in satisfaction of its obligations under Section 2.3(c), each such Revolving Lender hereby agrees that it shall forthwith fund (on the Business Day notice to fund is received by such Revolving Lender from the Issuing Lender if such notice is received at or before 12:00 Noon, otherwise such payment shall be made at or before 12:00 Noon on the Business Day next succeeding the Business Day such notice is received) its Participation Interests in the outstanding LOC Obligations; provided , further , that in the event any Revolving Lender shall fail to fund its Participation Interest on the day the Mandatory LOC Borrowing would otherwise have occurred, then the amount of such Revolving Lender’s unfunded Participation Interest therein shall bear interest payable by such Revolving Lender to the Issuing Lender upon demand, at the rate equal to, if paid within two (2) Business Days of such date, the Federal Funds Effective Rate, and thereafter at a rate equal to the Alternate Base Rate.

 

(f) Modification, Extension . The issuance of any supplement, modification, amendment, renewal, or extension to any Letter of Credit shall, for purposes hereof, be treated in all respects the same as the issuance of a new Letter of Credit hereunder.

 

(g) Uniform Customs and Practices . The Issuing Lender shall have the right to require that the Letters of Credit be subject to The Uniform Customs and Practice for Documentary Credits, as published as of the date of issue by the International Chamber of Commerce (the “ UCP ”), in which case the UCP may be incorporated therein and deemed in all respects to be a part thereof.

 

(h) Conflict with LOC Documents . In the event of any conflict between this Credit Agreement and any LOC Document, this Credit Agreement shall control.

 

39

Section 2.4 Term Loan A Facility .

 

(a) Term Loan A . Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each Term Loan A Lender severally agrees to make available to the Administrative Agent on the Closing Date and on the Delayed Draw Funding Date such Term Loan A Lender’s Term Loan A Commitment Percentage of a term loan to the Dutch Borrower in Dollars (the “ Term Loan A ”) in the aggregate principal amount (for all Term Loan A Lenders) of ONE HUNDRED FIFTY MILLION DOLLARS ($150,000,000) (the “ Term Loan A Committed Amount ”) for the purposes set hereinafter set forth; provided , however , that (i) no more than $75,000,000 of the Term Loan A may be borrowed on the Closing Date (the “ Initial Term Loan A Funding ”) and (ii) the remaining $75,000,000 of the Term Loan A (the “ Delayed Draw Term Loan A Funding ”) may be borrowed in a single draw on or before the date which is sixty (60) days after the Closing Date (the “ Delayed Draw Funding Date ”). Upon receipt by the Administrative Agent of the proceeds of the Initial Term Loan A Funding or the Delayed Draw Term Loan A Funding, such proceeds will then be promptly made available to the Dutch Borrower by the Administrative Agent by crediting the account of the Dutch Borrower on the books of the office of the Administrative Agent specified in Section 9.2, or at such other office as the Administrative Agent may designate in writing, with the aggregate of such proceeds made available to the Administrative Agent by the Term Loan A Lenders and in like funds as received by the Administrative Agent (or by crediting such other account(s) as directed by the Dutch Borrower). The Term Loan A may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Dutch Borrower may request; provided , however , that on the Closing Date and for the three (3) Business Days following the Closing Date the Term Loan A shall bear interest at the Alternate Base Rate unless three (3) Business Days prior to the Closing Date the Dutch Borrower executes a funding indemnity letter in form and substance satisfactory to the Administrative Agent. Amounts repaid or prepaid on the Term Loan A may not be reborrowed. LIBOR Rate Loans shall be made by each Term Loan A Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(b) Term Loan A Funding Mechanics.

 

(i) Notice of Borrowing . The Dutch Borrower shall request the Initial Term Loan A Funding and the Delayed Draw Term Loan A Funding by delivering to the Administrative Agent a Notice of Borrowing (or telephone notice promptly confirmed in writing by delivering to the Administrative Agent a Notice of Borrowing, which delivery may be by fax) not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day prior to the date of the requested borrowing (or at such later time as agreed to by the Administrative Agent) in the case of Alternate Base Rate Loans, and on the third Business Day prior to the date of the requested borrowing in the case of LIBOR Rate Loans. Each such Notice of Borrowing shall be irrevocable and shall specify (A) that the Initial Term Loan A Funding or the Delayed Draw Term Loan A Funding is requested, (B) the date of the requested borrowing (which shall be a Business

 

40

Day), (C) the aggregate principal amount to be borrowed and (D) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor. If the Dutch Borrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Loan requested, then such notice shall be deemed to be a request for an Alternate Base Rate Loan hereunder. The Administrative Agent shall give notice to each Term Loan A Lender promptly upon receipt of each Notice of Borrowing, the contents thereof and each such Term Loan A Lender’s share thereof.

 

(ii) Minimum Amounts . Each Term Loan A borrowing shall be in a minimum aggregate principal amount of (A) with respect to LIBOR Rate Loans, $3,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Term Loan A Committed Amount, if less) or (B) with respect to Alternate Base Rate Loans, $1,000,000 and integral multiples of $500,000 in excess thereof (or the remaining amount of the Term Loan A Committed Amount, if less).

 

(iii) Advances . Each Term Loan A Lender will make its Commitment Percentage of each Term Loan A borrowing available to the Administrative Agent for the account of the Dutch Borrower at the office of the Administrative Agent specified in Schedule 9.2 , or at such other office as the Administrative Agent may designate in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the date specified in the applicable Notice of Borrowing in Dollars and in funds immediately available to the Administrative Agent. Such borrowing will then be made available to the Dutch Borrower by the Administrative Agent by crediting the account of the Dutch Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Term Loan A Lenders and in like funds as received by the Administrative Agent.

 

(c) Repayment of Term Loan A . The principal amount of the Term Loan A shall be repaid in twelve (12) consecutive calendar quarterly installments as follows, unless accelerated sooner pursuant to Section 7.2:

 

 

41

 

(d) Interest on the Term Loan A . Subject to the provisions of Section 2.9, the Term Loan A shall bear interest as follows:

 

(i) Alternate Base Rate Loans . During such periods as the Term Loan A shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage.

 

(ii) LIBOR Rate Loans . During such periods as the Term Loan A shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

Interest on the Term Loan A shall be payable in arrears on each Interest Payment Date.

 

(e) Term Loan A Notes . The Dutch Borrower’s obligation to pay each Term Loan A Lender’s portion of the Term Loan A shall be evidenced, upon such Term Loan A Lender’s request, by a Term Loan A Note made payable to such Term Loan A Lender in substantially the form of Schedule 2.4(d) . The Dutch Borrower covenants and agrees to pay the Term Loan A in accordance with the terms of this Credit Agreement and the Term Loan A Note or Term Loan A Notes.

 

Section 2.5 Term Loan B Facility .

 

(a) Term Loan B . Subject to the terms and conditions hereof and in reliance upon the representations and warranties set forth herein, each Term Loan B Lender severally agrees to make available to the Administrative Agent on the Closing Date such Term Loan B Lender’s Term Loan B Commitment Percentage of a term loan to the Dutch Borrower in Dollars (the “ Term Loan B ”) in the aggregate principal amount (for all Term Loan B Lenders) of TWO HUNDRED MILLION DOLLARS ($200,000,000)

 

42

(the “ Term Loan B Committed Amount ”) for the purposes set hereinafter set forth. The Term Loan B may consist of Alternate Base Rate Loans or LIBOR Rate Loans, or a combination thereof, as the Dutch Borrower may request; provided , however , that on the Closing Date and for the three (3) Business Days following the Closing Date the Term Loan B shall bear interest at the Alternate Base Rate unless three (3) Business Days prior to the Closing Date the Dutch Borrower executes a funding indemnity letter in the form and substance satisfactory to the Administrative Agent. Amounts repaid or prepaid on the Term Loan B may not be reborrowed. LIBOR Rate Loans shall be made by each Term Loan B Lender at its LIBOR Lending Office and Alternate Base Rate Loans at its Domestic Lending Office.

 

(b) Term Loan B Funding Mechanics .

 

(i) Notice of Borrowing . The Dutch Borrower shall request the Term Loan B by delivering to the Administrative Agent a Notice of Borrowing (or telephone notice promptly confirmed in writing by delivering to the Administrative Agent a Notice of Borrowing, which delivery may be by fax) not later than 11:00 A.M. (Charlotte, North Carolina time) on the Business Day prior to the Closing Date (or at such later time as agreed to by the Administrative Agent) in the case of Alternate Base Rate Loans, and on the third Business Day prior to the Closing Date in the case of LIBOR Rate Loans. Such Notice of Borrowing shall be irrevocable and shall specify (A) that the Term Loan B is requested, (B) the date of the requested borrowing (which shall be the Closing Date) and (C) whether the borrowing shall be comprised of Alternate Base Rate Loans, LIBOR Rate Loans or a combination thereof, and if LIBOR Rate Loans are requested, the Interest Period(s) therefor. If the Dutch Borrower shall fail to specify in any such Notice of Borrowing (I) an applicable Interest Period in the case of a LIBOR Rate Loan, then such notice shall be deemed to be a request for an Interest Period of one month, or (II) the type of Loan requested, then such notice shall be deemed to be a request for an Alternate Base Rate Loan hereunder. The Administrative Agent shall give notice to each Term Loan B Lender promptly upon receipt of such Notice of Borrowing, the contents thereof and such Term Loan B Lender’s share thereof.

 

(ii) Minimum Amounts . The portion of the Term Loan B consisting of (A) LIBOR Rate Loans shall be in a minimum aggregate principal amount of $3,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Term Loan B Committed Amount, if less) and (B) Alternate Base Rate Loans shall be in a minimum aggregate principal amount of $1,000,000 and integral multiples of $500,000 in excess thereof (or the remaining amount of the Term Loan B Committed Amount, if less).

 

(iii) Advances . Each Term Loan B Lender will make its Commitment Percentage of the Term Loan B available to the Administrative Agent for the account of the Dutch Borrower at the office of the Administrative Agent specified in Schedule 9.2 , or at such other office as the Administrative Agent may designate

 

43

in writing, by 1:00 P.M. (Charlotte, North Carolina time) on the Closing Date. Such borrowing will then be made available to the Dutch Borrower by the Administrative Agent by crediting the account of the Dutch Borrower on the books of such office with the aggregate of the amounts made available to the Administrative Agent by the Term Loan B Lenders and in like funds as received by the Administrative Agent.

 

(c) Repayment of Term Loan B . The principal amount of the Term Loan B shall be repaid in twenty (20) consecutive calendar quarterly installments as follows, unless accelerated sooner pursuant to Section 7.2:

 

 

44

(d) Interest on the Term Loan B . Subject to the provisions of Section 2.9, the Term Loan B shall bear interest as follows:

 

(i) Alternate Base Rate Loans . During such periods as the Term Loan B shall be comprised of Alternate Base Rate Loans, each such Alternate Base Rate Loan shall bear interest at a per annum rate equal to the sum of the Alternate Base Rate plus the Applicable Percentage.

 

(ii) LIBOR Rate Loans . During such periods as the Term Loan B shall be comprised of LIBOR Rate Loans, each such LIBOR Rate Loan shall bear interest at a per annum rate equal to the sum of the LIBOR Rate plus the Applicable Percentage.

 

Interest on the Term Loan B shall be payable in arrears on each Interest Payment Date.

 

(e) Term Loan B Notes . The Dutch Borrower’s obligation to pay each Term Loan B Lender’s portion of the Term Loan B shall be evidenced, upon such Term Loan B Lender’s request, by a Term Loan B Note made payable to such Term Loan B Lender in substantially the form of Schedule 2.5(d) . The Dutch Borrower covenants and agrees to pay the Term Loan B in accordance with the terms of this Credit Agreement and the Term Loan B Note or Term Loan B Notes.

 

Section 2.6 Fees .

 

(a) Commitment Fee . In consideration of the Commitments, (i) each of the Borrowers agrees to pay to the Administrative Agent for the ratable benefit of the Revolving Lenders one-half of a commitment fee (the “ Revolving Commitment Fee ”) in an aggregate amount equal to the Applicable Percentage per annum on the average daily unused amount of the Revolving Committed Amount and (ii) the Dutch Borrower agrees to pay to the Administrative Agent for the ratable benefit of the Term Loan A Lenders a commitment fee (the “ Term Loan A Commitment Fee ”; together with the Revolving Commitment Fee, collectively, the “ Commitment Fee ”) in an aggregate amount equal to the Applicable Percentage per annum on the average daily unused amount of the Term Loan A Committed Amount. For purposes of computing the Revolving Commitment Fee hereunder, Swingline Loans shall be considered usage under the Revolving Committed Amount but shall be considered usage only under the Revolving Commitment of the Swingline Lender (with respect to its pro rata share thereof as a Revolving Lender based on its Revolving Commitment Percentage) unless and until Lenders other than the Swingline Lender purchase Participation Interests in such Swingline Loans pursuant to Section 2.2(b)(ii). The Revolving Commitment Fee and the Term Loan A Commitment Fee shall be payable quarterly in arrears on the 15th day following the last day of each calendar quarter for the prior calendar quarter.

 

(b) Letter of Credit Fees . In consideration of the LOC Commitments, the Applicable Borrower agrees to pay to the Administrative Agent, for the ratable benefit of

 

45

the Revolving Lenders, a fee (the “ Letter of Credit Fee ”) equal to the Applicable Percentage for LIBOR Rate Loans per annum on the average daily maximum amount available to be drawn under each Letter of Credit issued for the account of such Borrower from the date of issuance to the date of expiration. In addition to such Letter of Credit Fee, the Applicable Borrower agrees to pay to the Issuing Lender for its own account without sharing by the other Lenders, an additional fronting fee (the “ Fronting Fee ”) of one-eighth of one percent (0.125%) per annum on the average daily maximum amount available to be drawn under each Letter of Credit issued for the account of such Borrower. The Letter of Credit Fee and the Fronting Fee shall each be payable quarterly in arrears on the last Business Day of each calendar quarter.

 

(c) Issuing Lender Fees . In addition to the Letter of Credit Fees and Fronting Fees payable pursuant to subsection (b) hereof, the Applicable Borrower shall pay to the Issuing Lender for its own account without sharing by the other Lenders the reasonable and customary charges from time to time of the Issuing Lender with respect to the amendment, transfer, administration, cancellation and conversion of, and drawings under, the Letters of Credit issued for the account of such Borrower (collectively, the “ Issuing Lender Fees ”).

 

(d) Administrative Fee . Each Borrower agrees to pay to the Administrative Agent one–half of the annual administrative fee as described in the Fee Letter.

 

Section 2.7 Commitment Reductions .

 

(a) Voluntary Reductions . The Administrative Borrower shall have the right to terminate or permanently reduce the unused portion of the Revolving Committed Amount at any time or from time to time upon not less than five (5) Business Days’ prior notice to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable) of each such termination or reduction, which notice shall specify the effective date thereof and the amount of any such reduction which shall be in a minimum amount of $10,000,000 or a whole multiple of $1,000,000 in excess thereof and shall be irrevocable and effective upon receipt by the Administrative Agent; provided that no such reduction or termination shall be permitted if after giving effect thereto, and to any prepayments of the Revolving Loans made on the effective date thereof, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus outstanding LOC Obligations would exceed the lesser of (i) the Revolving Committed Amount or (ii) the Borrowing Base.

 

(b) Maturity Date . The Revolving Commitment, the Swingline Commitment and the LOC Commitment shall automatically terminate on the Maturity Date for the Revolving Loans.

 

Section 2.8 Prepayments .

 

(a) Optional Prepayments . Each Borrower shall have the right to prepay Loans made to it in whole or in part from time to time; provided , however , that (i) each

 

46

partial prepayment of Revolving Loans, the Term Loan A and the Term Loan B shall be in a minimum principal amount of $1,000,000 and integral multiples of $500,000 in excess thereof; provided , that any prepayment of the Term Loan B as a result of any issuance of Indebtedness or any issuance of Capital Stock or other equity issuance by the Company or any of its Subsidiaries during the first year following the Closing Date shall be made at 101% of par, and thereafter shall be made at par, and (ii) each prepayment of Swingline Loans shall be in a minimum principal amount of $100,000 and integral multiples of $100,000 in excess thereof. The Administrative Borrower shall give three (3) Business Days’ irrevocable notice in the case of LIBOR Rate Loans and one (1) Business Day’s irrevocable notice in the case of Alternate Base Rate Loans, to the Administrative Agent (which shall notify the Lenders thereof as soon as practicable). All prepayments under this Section 2.8(a) shall be subject to Section 2.17, but otherwise without premium or penalty and shall be applied as the Administrative Borrower may elect; provided , however , any prepayment of the Term Loan A or the Term Loan B pursuant to this Section 2.8(a) shall be applied ratably to the remaining amortization payments set forth in Section 2.4(c) and Section 2.5(c), respectively. Interest accrued through the date of prepayment on the principal amount prepaid shall be payable (A) with respect to any Alternate Base Rate Loan, on such date of prepayment and (B) with respect to any LIBOR Rate Loan, on the next occurring Interest Payment Date that would have occurred had such Loan not been prepaid or, at the request of the Administrative Agent, such interest shall be payable on such date of prepayment. Amounts prepaid on the Revolving Loans and Swingline Loans may be reborrowed in accordance with the terms hereof, but amounts prepaid on the Term Loan A or the Term Loan B may not be reborrowed. All amounts prepaid pursuant to this Section 2.8(a) shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans and Quoted Rate Swingline Loans in direct order of Interest Period maturities.

 

(b) Mandatory Prepayments .

 

(i) Revolving Committed Amount . If at any time after the Closing Date, the sum of the aggregate principal amount of outstanding Revolving Loans plus outstanding Swingline Loans plus LOC Obligations shall exceed the lesser of (A) the Revolving Committed Amount or (B) the Borrowing Base, each Borrower immediately shall prepay its Revolving Loans and the Swingline Loans in an amount sufficient to eliminate such excess. Each Revolving Lender shall receive its pro rata share of any such prepayment based on its Revolving Commitment Percentage.

 

(ii) Asset Dispositions . Promptly following the receipt by a Credit Party or any of its Subsidiaries of the proceeds of any Asset Disposition, the Loans shall be prepaid in an aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds derived from such Asset Disposition (such prepayment to be applied as set forth in clause (vi) below); provided that (A) the Net Cash Proceeds from Asset Dispositions in any fiscal year shall not be required to be so applied until the aggregate amount of such Net Cash Proceeds is equal to or greater than $5,000,000 for such fiscal year, (B) the Borrowers shall

 

47

be permitted to reinvest the Net Cash Proceeds received from Asset Dispositions in fixed or capital assets for the benefit of the Borrowers or any of their Subsidiaries so long as (1) no Default or Event of Default shall have occurred and be continuing at the time of such Asset Disposition and at the time of such reinvestment and (2) such reinvestments are consummated within 270 days of the receipt of such Net Cash Proceeds; it being understood and agreed that any such Net Cash Proceeds that are not reinvested as permitted pursuant to this Section 2.8(b)(ii) immediately shall be used to prepay the Loans (such prepayment to be applied as set forth in clause (vi) below).

 

(iii) Debt and Equity Issuances . Immediately upon receipt by a Credit Party or any of its Subsidiaries of proceeds from (A) any Debt Issuance, the Loans shall be prepaid in an aggregate amount equal to one hundred percent (100%) of the Net Cash Proceeds of such Debt Issuance (such prepayment to be applied as set forth in clause (vi) below) or (B) any Equity Issuance, the Loans shall be prepaid in an aggregate amount equal to fifty percent (50%) of the Net Cash Proceeds of such Equity Issuance (such prepayment to be applied as set forth in clause (vi) below); provided , that any prepayment of the Term Loan B as a result of a mandatory prepayment under this Section 2.8(b)(iii) during the first year following the Closing Date shall be made at 101% of par, and thereafter shall be made at par.

 

(iv) Recovery Event . Promptly following any Recovery Event, the Loans shall be prepaid in an aggregate amount equal to one-hundred percent (100%) of the Net Cash Proceeds derived from such Recovery Event (such prepayment to be applied as set forth in clause (vi) below); provided that (A) the Net Cash Proceeds from Recovery Events in any fiscal year shall not be required to be so applied until the aggregate amount of such Net Cash Proceeds is equal to or greater than $5,000,000 for such fiscal year, (B) the Borrowers shall be permitted to reinvest the Net Cash Proceeds received from Recovery Events to repair, replace or relocate the damaged assets and property subject to such Recovery Events or to reinvest such Net Cash Proceeds in other fixed or capital assets for the benefit of the Company or any of its Subsidiaries so long as (1) no Default or Event of Default shall have occurred and be continuing at the time of such Recovery Event and at the time of such reinvestment and (2) such reinvestments are committed to within 180 days of the receipt of such Net Cash Proceeds and are consummated within 270 days of the receipt of such Net Cash Proceeds; it being understood and agreed that any such Net Cash Proceeds that are not reinvested as permitted pursuant to this Section 2.8(b)(iv) immediately shall be used to prepay the Loans (such prepayment to be applied as set forth in clause (vi) below).

 

(v) Excess Cash Flow . Within ninety (90) days after the end of each fiscal year (commencing with the fiscal year ending March 31, 2006), the Loans shall be prepaid in an amount equal to 50% of the Excess Cash Flow earned

 

48

during such prior fiscal year (such prepayments to be applied as set forth in clause (vi) below).

 

(vi) Application of Mandatory Prepayments . All amounts required to be paid pursuant to Section 2.8(b)(ii) through (v) shall be applied (a) first, ratably to the Term Loan A and the Term Loan B (on a pro rata basis across the remaining amortization payments set forth in Section 2.4(c) and Section 2.5(c) respectively), (b) second, subject to the terms of Section 2.21, to the outstanding Revolving Loans (without a corresponding reduction in the Revolving Commitments or the Revolving Committed Amount); provided that, so long as there are amounts outstanding under the Term Loan A or the Revolving Loans, any Term Loan B Lender may decline to accept any such prepayment (collectively, the “ Declined Amount ”), in which case the Declined Amount shall be distributed (1) first, to repay the portion of the Term Loan B held by the accepting Term Loan B Lenders, (2) second, to repay amounts outstanding under the Term Loan A, and (3) third, subject to the terms of Section 2.21, to repay amounts outstanding under the Revolving Loans (without a corresponding reduction in the Revolving Commitments or the Revolving Committed Amount). Within the parameters of the applications set forth above, prepayments shall be applied first to Alternate Base Rate Loans and then to LIBOR Rate Loans in direct order of Interest Period maturities. Each Lender shall receive its pro rata share of any such prepayment based on its applicable Commitment Percentage. All prepayments under this Section 2.8(b) shall be subject to Section 2.17 and be accompanied by interest on the principal amount prepaid through the date of prepayment.

 

(c) Secured Hedging Obligations Unaffected . Any prepayment made pursuant to this Section 2.8 shall not affect the Credit Parties’ obligations to continue making payments under any Secured Hedging Agreement, and any such Secured Hedging Agreement shall remain in full force and effect notwithstanding such prepayment, subject to the terms of such Secured Hedging Agreement.

 

Section 2.9 Default Rate and Payment Dates .

 

Upon the occurrence, and during the continuance, of an Event of Default, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 2% greater than the rate which would otherwise be applicable (or if no rate is applicable, whether in respect of interest, fees or other amounts, then the Alternate Base Rate plus the highest Applicable Percentage (Level I) plus 2%) (the “ Default Rate ”); provided , however , that the Default Rate shall apply to the Loans and other amounts owing hereunder and under the other Credit Documents to the extent that either Borrower shall fail to pay any principal, reimbursement obligation, interest, fee or other amount upon the same becoming due and payable (whether at the stated maturity, by acceleration or otherwise).

 

49

Section 2.10 Conversion Options .

 

(a) The Administrative Borrower may, in the case of Revolving Loans and the Term Loans, elect from time to time to convert Alternate Base Rate Loans to LIBOR Rate Loans, by giving the Administrative Agent irrevocable written notice of such election not later than 11:00 A.M. (Charlotte, North Carolina time) on the date which is three Business Days prior to the requested date of conversion. A form of Notice of Conversion/Extension is attached as Schedule 2.10 . If the date upon which an Alternate Base Rate Loan is to be converted to a LIBOR Rate Loan is not a Business Day, then such conversion shall be made on the next succeeding Business Day and during the period from such last day of an Interest Period to such succeeding Business Day such Loan shall bear interest as if it were an Alternate Base Rate Loan. All or any part of outstanding Alternate Base Rate Loans may be converted as provided herein, provided that (i) no Loan may be converted into a LIBOR Rate Loan when any Default or Event of Default has occurred and is continuing and (ii) partial conversions shall be in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof.

 

(b) Any LIBOR Rate Loans may be continued as such upon the expiration of an Interest Period with respect thereto by the Administrative Borrower giving the Administrative Agent irrevocable written notice of such election not later than 11:00 A.M. (Charlotte, North Carolina time) on the date which is three Business Days prior to the requested date of continuation; provided , that no LIBOR Rate Loan may be continued as such when any Default or Event of Default has occurred and is continuing, in which case such Loan shall be automatically converted to an Alternate Base Rate Loan at the end of the applicable Interest Period with respect thereto. If the Administrative Borrower shall fail to give timely notice of an election to continue a LIBOR Rate Loan, or the continuation of LIBOR Rate Loans is not permitted hereunder, such LIBOR Rate Loans shall be automatically converted to Alternate Base Rate Loans at the end of the applicable Interest Period with respect thereto.

 

Section 2.11 Computation of Interest and Fees .

 

(a) Interest payable hereunder with respect to Alternate Base Rate Loans based on the Prime Rate shall be calculated on the basis of a year of 365 days (or 366 days, as applicable) for the actual days elapsed. All other fees, interest and all other amounts payable hereunder shall be calculated on the basis of a 360 day year for the actual days elapsed. The Administrative Agent shall as soon as practicable notify the Administrative Borrower and the Lenders of each determination of a LIBOR Rate on the Business Day of the determination thereof. Any change in the interest rate on a Loan resulting from a change in the Alternate Base Rate shall become effective as of the opening of business on the day on which such change in the Alternate Base Rate shall become effective. The Administrative Agent shall as soon as practicable notify the Administrative Borrower and the Lenders of the effective date and the amount of each such change.

 

50

(b) Each determination of an interest rate by the Administrative Agent pursuant to any provision of this Agreement shall be conclusive and binding on the Borrowers and the Lenders in the absence of manifest error. The Administrative Agent shall, at the request of a Borrower, deliver to such Borrower a statement showing the computations used by the Administrative Agent in determining any interest rate.

 

Section 2.12 Pro Rata Treatment and Payments .

 

(a) Each borrowing of Loans and any reduction of the Revolving Commitments shall be made pro rata according to the respective Commitment Percentages of the Lenders. Each payment under this Agreement or any Note made by an Applicable Borrower shall be applied, first , to any fees then due and owing by such Borrower pursuant to Section 2.6, second , to interest then due and owing in respect of its Loans and, third , to principal then due and owing in respect of its Loans. Each payment made by an Applicable Borrower on account of any fees pursuant to Section 2.6 shall be made pro rata in accordance with the respective amounts due and owing by such Borrower. Each payment (other than prepayments) made by an Applicable Borrower on the principal amount of and interest on its Revolving Loans and, in the case of the Dutch Borrower, the Term Loans shall be made pro rata according to the respective amounts due and owing (to be applied pro rata among the Lenders entitled to receive such payment). Each optional prepayment made by an Applicable Borrower on the principal amount of its Loans shall be applied in accordance with the terms of Section 2.8(a) (to be applied pro rata among the Lenders entitled to receive such payment). Each mandatory prepayment made by an Applicable Borrower on the principal amount of its Loans shall be applied in accordance with Section 2.8(b); provided , that prepayments made pursuant to Section 2.15 shall be applied in accordance with such Section. All payments (including prepayments) to be made by the Borrowers on account of principal, interest and fees shall be made without defense, set-off or counterclaim and shall be made to the Administrative Agent for the account of the Lenders at the Administrative Agent’s office specified on Schedule 9.2 in Dollars and in immediately available funds not later than 1:00 P.M. (Charlotte, North Carolina time) on the date when due. The Administrative Agent shall distribute such payments to the Lenders entitled thereto promptly upon receipt in like funds as received. If any payment hereunder (other than payments on the LIBOR Rate 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 on a LIBOR Rate Loan becomes due and payable on a day other than a Business Day, the maturity thereof shall be extended to the next succeeding Business Day unless the result 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 Business Day.

 

(b) Allocation of Payments After Exercise of Remedies . Notwithstanding any other provisions of this Credit Agreement to the contrary (except Section 2.21), after the exercise of remedies (other than the invocation of default interest pursuant to Section 2.9) by the Administrative Agent or the Lenders pursuant to Section 7.2 (or after the

 

51

Commitments shall automatically terminate and the Loans (with accrued interest thereon) and all other amounts under the Credit Documents shall automatically become due and payable in accordance with the terms of such Section), all amounts collected or received by the Administrative Agent or any Lender on account of the Credit Party Obligations or any other amounts outstanding under any of the Credit Documents or in respect of the Collateral shall be paid over or delivered as follows (irrespective of whether the following costs, expenses, fees, interest, premiums, scheduled periodic payments or Credit Party Obligations are allowed, permitted or recognized as a claim in any proceeding resulting from the occurrence of a Bankruptcy Event):

 

FIRST, to the payment of all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees) of the Administrative Agent in connection with enforcing the rights of the Lenders under the Credit Documents and any protective advances made by the Administrative Agent with respect to the Collateral under or pursuant to the terms of the Security Documents;

 

SECOND, to payment of any fees owed to the Administrative Agent and the Issuing Lenders;

 

THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including, without limitation, reasonable attorneys’ fees) of each of the Lenders in connection with enforcing its rights under the Credit Documents or otherwise with respect to the Credit Party Obligations owing to such Lender;

 

FOURTH, to the payment of all of the Credit Party Obligations consisting of accrued fees and interest, including, with respect to any Secured Hedging Agreement, any fees, premiums and scheduled periodic payments due under such Secured Hedging Agreement and any interest accrued thereon;

 

FIFTH, to the payment of the outstanding principal amount of the Credit Party Obligations, including the payment or cash collateralization of the outstanding LOC Obligations and, with respect to any Secured Hedging Agreement, any breakage, termination or other payments due under such Secured Hedging Agreement and any interest accrued thereon;

 

SIXTH, to all other Credit Party Obligations and other obligations which shall have become due and payable under the Credit Documents or otherwise and not repaid pursuant to clauses “FIRST” through “FIFTH” above; and

 

SEVENTH, to the payment of the surplus, if any, to whomever may be lawfully entitled to receive such surplus.

 

In carrying out the foregoing, (i) amounts received shall be applied in the numerical order provided until exhausted prior to application to the next succeeding category; (ii) each of the Lenders and Hedging Agreement Providers

 

52

shall receive an amount equal to its pro rata share (based on the proportion that the then outstanding Loans and LOC Obligations held by such Lender or the outstanding obligations payable to such Hedging Agreement Provider bears to the aggregate then outstanding Loans, LOC Obligations and obligations payable under all Secured Hedging Agreements) of amounts available to be applied pursuant to clauses ”THIRD”, “FOURTH”, “FIFTH” and “SIXTH” above; and (iii) to the extent that any amounts available for distribution pursuant to clause “FIFTH” above are attributable to the issued but undrawn amount of outstanding Letters of Credit, such amounts shall be held by the Administrative Agent in a cash collateral account and applied (A) first, to reimburse the Issuing Lender from time to time for any drawings under such Letters of Credit and (B) then, following the expiration of all Letters of Credit, to all other obligations of the types described in clauses “FIFTH” and “SIXTH” above in the manner provided in this Section 2.12(b). Notwithstanding the foregoing terms of this Section 2.12, (1) only Collateral proceeds and payments under the Guaranty with respect to Secured Hedging Agreements (as opposed to ordinary course principal, interest and fee payments hereunder) shall be applied to obligations under any Secured Hedging Agreement and (2) neither the Dutch Borrower nor DIAG shall be required to repay or prepay, or to guarantee, nor shall any amount paid by the Dutch Borrower or DIAG be applied to, the Credit Party Obligations of the Company.

 

Section 2.13 Non-Receipt of Funds by the Administrative Agent .

 

(a) Unless the Administrative Agent shall have been notified in writing by a Lender prior to the date a Loan is to be made by such Lender (which notice shall be effective upon receipt) that such Lender does not intend to make the proceeds of such Loan available to the Administrative Agent, the Administrative Agent may assume that such Lender has made such proceeds available to the Administrative Agent on such date, and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to the Applicable Borrower a corresponding amount. If such corresponding amount is not in fact made available to the Administrative Agent, the Administrative Agent shall be able to recover such corresponding amount from such Lender. If such Lender does not pay such corresponding amount forthwith upon the Administrative Agent’s demand therefor, the Administrative Agent will promptly notify the Administrative Borrower, and the Applicable Borrower shall immediately pay such corresponding amount to the Administrative Agent. The Administrative Agent shall also be entitled to recover from the Lender or the Applicable Borrower, as the case may be, interest on such corresponding amount in respect of each day from the date such corresponding amount was made available by the Administrative Agent to the Applicable Borrower to the date such corresponding amount is recovered by the Administrative Agent at a per annum rate equal to (i) from the Applicable Borrower at the applicable rate for the applicable borrowing pursuant to the Notice of Borrowing and (ii) from a Lender at the Federal Funds Effective Rate.

 

53

(b) Unless the Administrative Agent shall have been notified in writing by the Administrative Borrower, prior to the date on which any payment is due from it hereunder (which notice shall be effective upon receipt) that a Borrower does not intend to make such payment, the Administrative Agent may assume that such Borrower has made such payment when due, and the Administrative Agent may in reliance upon such assumption (but shall not be required to) make available to each Lender on such payment date an amount equal to the portion of such assumed payment to which such Lender is entitled hereunder, and if such Borrower has not in fact made such payment to the Administrative Agent, such Lender shall, on demand, repay to the Administrative Agent the amount made available to such Lender. If such amount is repaid to the Administrative Agent on a date after the date such amount was made available to such Lender, such Lender shall pay to the Administrative Agent on demand interest