SECOND AMENDMENT TO CREDIT AGREEMENT

EX-10.16 11 exhibit1016.htm EXHIBIT 10.16

EXHIBIT 10.16

EXECUTION COPY

SECOND AMENDMENT TO CREDIT AGREEMENT

AND WAIVER

THIS SECOND AMENDMENT TO CREDIT AGREEMENT AND WAIVER, dated as of June 9, 2004 (this “Amendment”), is by and among DIMON INCORPORATED, a Virginia corporation (the “Borrower”), each of the Domestic Subsidiaries of the Borrower identified as a “Guarantor” on the signature pages hereto (the “Guarantors”), the several banks and other financial institutions identified on the signature pages hereto (the “Lenders”) and WACHOVIA BANK, NATIONAL ASSOCIATION, as administrative agent for the Lenders (in such capacity, the “Administrative Agent’).

WITNESSETH:

WHEREAS, pursuant to a Credit Agreement dated as of October 27, 2003 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”) among the Borrower, the Guarantors identified therein, the Lenders and the Administrative Agent, the Lenders have extended commitments to make certain credit facilities available to the Borrower;

WHEREAS, the Borrower has requested that the Credit Agreement be amended as described herein;

WHEREAS, the Borrower has requested that the Lenders waive the Borrower’s compliance with Section 5.9(c) of the Credit Agreement for the fiscal quarter of the Company ended on March 31, 2004;

WHEREAS, the Lenders are willing to make such amendments to the Credit Agreement and to grant such waivers, subject to the terms and conditions hereof;

NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereby agree as follows:

PART I

DEFINITIONS

SUBPART 1.1 Certain Definitions. Unless otherwise defined herein or the context otherwise requires, the following terms used in this Amendment, including its preamble and recitals, have the following meanings:

“Amendment Effective Date” is defined in Subpart 4.1.


SUBPART 1.2. Other Definitions. Unless otherwise defined herein or the context otherwise requires, terms used in this Amendment, including its preamble and recitals, have the meanings provided in the Credit Agreement (as amended hereby).

PART II
AMENDMENT TO CREDIT AGREEMENT

Effective on (and subject to the occurrence of) the Amendment Effective Date, the Credit Agreement is hereby amended in accordance with this Part II.

SUBPART 2.1 Amendments to Section 5.9(c). Section 5.9(c) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

(c ) Consolidated Fixed Charge Coverage Ratio. Maintain at all times a Consolidated Fixed Charge Coverage Ratio of not less than the following:

	Period	Ratio

	Closing Date through and including	1.10 to 1.00
	December 31, 2003

	January 1, 2004 through and	0.75 to 1.00
	including September 29, 2004

	September 30, 2004 through and	0.90 to 1.00
	Including December 30, 2004

	December 31, 2004 through and	1.05 to 1.00
	Including March 30, 2005

	March 31, 2005 and thereafter	1.25 to 1.00

SUBPART 2.2 Amendments to Section 6.1 (b). Clause (iii) in Section 6.1(b) of the Credit Agreement is hereby deleted in its entirety and replaced with the following:

(iii) additional Indebtedness, including Indebtedness arising under any Guaranty Obligations permitted by Section 6.3(i)-(iii), which in the aggregate does not exceed (A) $60,000,000 for Domestic Subsidiaries, and (B) (I) from the Closing Date through March 31, 2005, $420,000,000 and (II) thereafter, $600,000,000, for Foreign Subsidiaries;


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PART III

WAIVER

SUBPART 3.1 Waiver of Section 5.9(c). Notwithstanding the provisions of the Credit Agreement to the contrary, the Lenders hereby waive, on a limited, one-time basis, (a) the requirements of Section 5.9(c) of the Credit Agreement and (b) the Events of Default under the Credit Agreement arising from the Company’s failure to comply with Section 5.9(c) of the Credit Agreement, in each case, on or prior to the date hereof.

PART IV

CONDITIONS TO EFFECTIVENESS

SUBPART 4.1 Amendment Effective Date. This Amendment shall be and become effective as of the date hereof (the “Amendment Effective Date”) when all of the conditions set forth in this Subpart 4.1 shall have been satisfied.

SUBPART 4.1.1. Execution of Counterparts of Amendments. The

Administrative Agent shall have received counterparts of this Amendment,

which collectively shall have been duly executed on behalf of the Borrower and

the Required Lenders.

SUBPART 4.1.2. Amendment Fee. The Borrower shall have paid or caused

to be paid an amendment fee to the Administrative Agent in connection with

this Amendment for the account of each Lender that shall have returned

executed signature pages to this Amendment no later than 5:00 p.m. on

Wednesday, June 9, 2004, as directed by the Administrative Agent, in an

aggregate amount equal to 0.25% multiplied by the aggregate Commitment of

such Lenders in effect as of the date hereof on a pro rata basis according to such

Lender’s aggregate Commitment as of the date hereof.

SUBPART 4.1.3. Other Documents. The Administrative Agent shall have

received such other documentation as the Administrative Agent may reasonably

request in connection with the foregoing, all in form reasonably satisfactory to

the Administrative Agent.

PART V

REPRESENTATIONS AND WARRANTIES

SUBPART 5.1. The Borrower hereby represents and warrants that (i) the representations and warranties contained in Article III of the Credit Agreement are true and correct in all material respects on and as of the date hereof as though made on and as of such date (except for those which by their terms expressly relate to an earlier date) and

after giving effect to the transactions contemplated herein, (ii) no Default or Event of Default has occurred and is continuing on and as of the date hereof and after giving effect to the transactions contemplated herein, (iii) it has the corporate power and authority to execute and deliver this Amendment and to perform its obligations hereunder and has taken all necessary corporate action to authorize the execution, delivery and performance by it of this Amendment, and (iv) it has duly executed and delivered this Amendment, and the Amendment constitutes its legal, valid and binding obligation enforceable in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency or other similar laws affecting the rights of creditors generally or by general principles of equity.

PART VI

MISCELLANEOUS

SUBPART 6.1. Cross-References. References in this Amendment to any Part or Subpart are, unless otherwise specified, to such Part or Subpart of this Amendment.

SUBPART 6.2. Instrument Pursuant to Credit Agreement. This Amendment is a Credit Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with the terms and provisions of the Credit Agreement.

SUBPART 6.3. References in Other Credit Documents. At such time as this Amendment shall become effective pursuant to the terms of Subpart 4.1, all references in the Credit Documents to the “Credit Agreement” shall be deemed to refer to the Credit Agreement as amended by this Amendment.

SUBPART 6.4. Survival. Except as expressly modified and amended in this Amendment, all of the terms and provisions and conditions of each of the Credit Documents shall remain unchanged.

SUBPART 6.5. Counterparts. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement.

SUBPART 6.6. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NORTH CAROLINA WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.

SUBPART 6.7. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

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Each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.

BORROWER:	DIMON INCORPORATED

	By: /s/ James A. Cooley
	Name: James A. Cooley
	Title: Sr. Vice President – Chief Financial Officer


	By: /s/ Ritchie L. Bond
	Name: Ritchie L. Bond
	Title: Sr. Vice President and Treasurer

GUARANTORS:	[NONE]


	S-1


ADMINISTRATIVE AGENT AND LENDERS:	WACHOVIA BANK, NATIONAL ASSOCIATAION, as Administrative Agent and as a Lender


	By: /s/ T.L. James
	Name: T.L. James
	Title: Managing Director



	S-2


	ING BANK N.V., London Branch, as a Lender


	By: /s/ A.J. Houlding
	Name: A.J. Houlding
	Title: Managing Director


	By: /s/ Peter Mitchell
	Names: Peter Mitchell
	Title: Vice President


	S-3


	DEUTSCHE BANK LUXEMBOURG S.A., as a Lender


	By:
	Name:
	Title:


	By:
	Name:
	Title:


	S-4


	FORTIS CAPITAL CORP., as a Lender


	By: /s/ Cristina E. Roberts /s/ Edward F. Aldrich
	Name: Cristina E. Roberts Edward F. Aldrich
	Title: Managing Director Director


	S-5


	NATEXIS BANQUES POPULAIRES, as a Lender


	By: /s/ Stephen A. Jendras
	Name: Stephen A. Jendras
	Title: Vice President


	By: /s/ Guillaume de Parscau
	Name: Guillaume de Parscau
	Title: First Vice President & Manager
	Commodities Finance Group


	S-6


	AGFIRST FARM CREDIT BANK, as a Lender


	By: /s/ John W. Burnside Jr.
	Name: John W. Burnside Jr.
	Title: Vice President


	S-7


	AGSTAR FINANCIAL SERVICES, PCA, as a Lender


	By: /s/ Donald G. Lindeman
	Name: Donald G. Lindeman
	Title: Vice President, Capital Markets


	S-8