As filed with the Securities and Exchange Commission on August 8, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
DIMON Incorporated
(Exact name of registrant as specified in its charter)
Virginia 54-1746567
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
512 Bridge Street
Danville, Virginia 24541
(804) 792-7511
(Address, including zip code, and telephone
number, including area code, of registrant's principal executive offices)
Claude B. Owen, Jr.
Chairman of the Board and Chief Executive Officer
512 Bridge Street
Danville, Virginia 24541
(804) 792-7511
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
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Thurston R. Moore
Randall S. Parks Gregory A. Fernicola Raymond B. Check
Hunton & Williams Skadden, Arps, Slate, Meagher & Flom LLP Cleary, Gottlieb, Steen & Hamilton
951 East Byrd Street 919 Third Avenue One Liberty Plaz
Richmond, Virginia 23219 New York, New York 10022 New York, New York 10006
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Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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Title of each class Proposed maximum Proposed maximum
of securities to be Amount to be offering price aggregate offering Amount of
registered registered (1) per share (2) price (2) registration fee
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Common Stock, no par value(3)........ 2,040,000 $24.56 $50,102,400.00 $15,182.55
Common Stock, no par value(4)........ 3,484,104 $24.56 $85,569,594.24 $25,930.18
Common Stock Purchase Rights (5) 5,524,104 N/A N/A N/A
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(1) Includes 624,104 shares subject to the Underwriters' over-allotment
option.
(2) Estimated solely for the purpose of calculating the filing fee pursuant
to Rule 457(c) under the Securities Act of 1933. Based upon the average
of the high and low prices of the Company's Common Stock as reported in
the consolidated reporting system of the New York Stock Exchange on
August 1, 1997.
(3) Shares which may be offered by the selling stockholders listed herein.
(4) Shares which may be distributed by DECS Trust pursuant to the terms of
DECS representing beneficial interests in DECS Trust as described
herein.
(5) The Common Stock Purchase Rights will be attached to and trade with the
Common Stock.
The registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that the Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act, or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may
determine.
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EXPLANATORY NOTE
This Registration Statement contains two forms of prospectus: (1) a
prospectus relating to the distribution by DECS Trust (the "Trust"), pursuant to
the DECS representing beneficial ownership interests in the Trust (the "DECS")
of Common Stock of the Registrant that the Trust may receive from the Selling
Stockholders referred to herein, pursuant to the terms of Purchase Agreements
between the Trust and the Selling Stockholders; and (2) a prospectus relating to
the offer by the Selling Stockholders of Common Stock of the Registrant (the
"Alternate Prospectus"). The alternate pages for the Alternate Prospectus are
marked "Alternate Prospectus."
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Subject to Completion
August 8, 1997
Prospectus
[logo]
3,100,000 Shares
DIMON Incorporated
Common Stock
(no par value)
Pursuant to the terms of the ___% DECS(SM) (the "DECS") representing beneficial
ownership interests in DECS Trust, a Delaware business trust (the "Trust"), the
Trust may distribute to the holders of the DECS common stock, no par value
("Common Stock"), of DIMON Incorporated ("DIMON" or the "Company") on or about
___________, 2000 (the "Exchange Date") or upon earlier liquidation of the Trust
in certain circumstances. This Prospectus relates to the distribution by the
Trust pursuant to the DECS of up to 3,100,000 shares of Common Stock, plus up to
an additional 384,104 shares of Common Stock with respect to over-allotments and
DECS subscribed for and purchased by Salomon Brothers Inc in connection with the
organization of the Trust (collectively, the "Shares"), that the Trust may
receive from the selling stockholders listed herein (the "Selling
Stockholders"), under the terms of separate Purchase Agreements, each dated
________, 1997, between the Trust and the Selling Stockholders (the
"Contracts"). This Prospectus accompanies a prospectus of the Trust (the "DECS
Prospectus") relating to the sale of 3,100,000 DECS, plus up to an additional
_______ DECS solely to cover over-allotments (the "DECS Offering"). The Company
will not receive any of the proceeds from the sale of the DECS or delivery of
the Common Stock to which this Prospectus relates pursuant to the terms of the
Contracts and the DECS. See "Use of Proceeds". The Company takes no
responsibility for any information included in or omitted from the DECS
Prospectus. The DECS Prospectus does not constitute a part of this Prospectus
nor is it incorporated by reference herein.
The Registration Statement of which this Prospectus forms a part also includes a
Prospectus relating to the offering (the "Stock Offering") of up to 1,800,000
shares of Common Stock by the Selling Stockholders, plus up to an additional
240,000 shares of Common Stock solely to cover over-allotments.
The Company and the Selling Stockholders have agreed, subject to certain
exceptions, not to sell, without the prior written consent of Salomon Brothers
Inc, any Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock for a period of 90 days after the date of this
Prospectus. See "Plan of Distribution."
The Common Stock is listed for trading on the New York Stock Exchange, Inc. (the
"NYSE") under the symbol "DMN." On August 7, 1997, the last reported sale price
of the Common Stock on the NYSE Composite Tape was $25.44 per share. See
"Price Range of Common Stock and Dividends."
"DECS(SM)" is a service mark of Salomon Brothers Inc.
See "Risk Factors" beginning on page 9 for a discussion of certain factors
that should be carefully considered by prospective purchasers.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is _____________, 1997.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
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CERTAIN PERSONS PARTICIPATING IN THE STOCK OFFERING AND THE DECS OFFERING
MAY ENGAGE IN TRANSACTIONS THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE
PRICE OF THE COMMON STOCK OR THE DECS, INCLUDING PURCHASES OF THE COMMON STOCK
OR THE DECS TO STABILIZE THEIR MARKET PRICES, PURCHASES OF THE COMMON STOCK OR
THE DECS TO COVER SOME OR ALL OF SHORT POSITIONS IN THE COMMON STOCK OR THE DECS
MAINTAINED BY THE RESPECTIVE UNDERWRITERS OF THE STOCK OFFERING AND THE DECS
OFFERING AND IN THE CASE OF A STOCK OFFERING THE IMPOSITION OF A PENALTY BID.
FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "PLAN OF DISTRIBUTION."
FORWARD LOOKING STATEMENTS
Certain information that is included or incorporated by reference into
this Prospectus under the captions "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations," "Business" and
elsewhere include "forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, and is subject to the safe harbor
created by that Act. These forward-looking statements, which include statements
regarding changes in the tobacco industry and the international tobacco market,
anticipated expenditures and cost savings related to the Intabex Acquisition and
the Merger (each as defined below), regulatory reform and future sales trends,
are generally identified by phrases such as "the Company expects" or words of
similar import. Actual results may differ materially from those anticipated by
the forward-looking statements contained in such discussions for a number of
reasons, as discussed in those sections and in the documents incorporated by
reference herein.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington,
D.C. 20549, and at the Commission's Regional Offices at Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such material can be
obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. Copies of material
filed electronically by the Company may be obtained without charge on the
worldwide web site maintained by the Commission at http://www.sec.gov. Such
reports, proxy statements and other information concerning the Company may also
be inspected at the offices of the New York Stock Exchange, Inc. at 20 Broad
Street, New York, New York 10005.
The Company has filed with the Commission in Washington, D.C. a
registration statement (herein, together with all amendments and exhibits
thereto, referred to as the "Registration Statement") under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to the Shares to which
this Prospectus relates. As permitted by the Rules and Regulations of the
Commission, this Prospectus does not contain all the information set forth in
the Registration Statement, including the exhibits and schedules thereto. Such
documents may be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates or may be
examined without charge at the public reference facilities of the Commission.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of the Company filed with the Commission (File No.
1-13684) are incorporated herein by reference:
(i) the Company's Annual Report on Form 10-K for the year ended
June 30, 1996;
(ii) the Company's Quarterly Reports on Form 10-Q for the fiscal
quarters ended September 30, 1996, December 31, 1996, and
March 31, 1997;
(iii) the Company's Current Reports on Form 8-K filed February 24,
1997, and April 16, 1997, and the Company's Current Report on
Form 8-K/A filed June 16, 1997; and
(iv) the Company's Registration Statement on Form 8-B filed on
March 21, 1995.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the Offering shall be deemed to be incorporated in this
Prospectus by reference and to be a part hereof from the date of filing of such
documents. Any statement contained herein or in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The Company will provide, without charge to any person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person,
a copy of any document incorporated by reference herein, other than exhibits
to such documents unless such exhibits are specifically incorporated by
reference in such document. Requests shall be directed to 512 Bridge Street, P.
O. Box 681, Danville, Virginia 24541, Attention: Secretary. The Company's
telephone number is (804) 792-7511.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial data appearing elsewhere or incorporated by reference
in this Prospectus. Unless the context requires otherwise "DIMON" or the
"Company" refers to DIMON Incorporated and its consolidated subsidiaries. Unless
otherwise indicated, all information contained herein assumes no exercise of the
underwriters' over-allotment options. See "Plan of Distribution."
The Company
DIMON is the second largest independent leaf tobacco merchant in the
world. The Company acquired Intabex Holdings Worldwide S.A. ("Intabex") on April
1, 1997 (the "Intabex Acquisition"), and is the successor to Dibrell Brothers,
Incorporated ("Dibrell") and Monk-Austin, Inc. ("Monk-Austin"), which merged in
April 1995 (the "Merger"). Through the Intabex Acquisition, the Company
increased its tobacco-related revenues for the twelve months ended March 31,
1997, by 36%, from $2,338 million to $3,183 million on a pro forma basis, and
increased its market share in the established worldwide leaf tobacco market from
approximately 30% to approximately 37% on a pro forma basis. In addition, DIMON
strengthened its presence in several important tobacco growing regions,
including Brazil, Argentina, Malawi, Thailand and Zimbabwe.
Increased demand and strong brand growth have resulted in increased
production of American blend cigarettes. American blend cigarettes contain
flue-cured, burley and oriental tobacco ("American blend tobacco"), contain less
tar and nicotine, and taste milder than locally produced cigarettes containing
dark and semi-oriental tobacco historically consumed in certain parts of the
world. According to the Tobacco Merchants Association (the "TMA"),
American blend cigarette consumption (excluding China) has increased from 1.7
trillion units in calendar 1990 to 1.9 trillion units in calendar 1996, an
increase of 10.8%. The TMA estimates that worldwide American blend cigarette
consumption (excluding China) will increase an additional 5.5% to more than 2.0
trillion units by the year 2000. The TMA also estimates that worldwide American
blend cigarette consumption (excluding China), as a percentage of total
consumption, has also experienced substantial growth, increasing from 47.9% in
1990 to 52.5% in 1996, and is projected to reach 54.3% by the year 2000. As
American blend cigarettes have continued to gain global market share, the demand
for export quality flue-cured, burley and oriental tobacco sourced and processed
by leaf tobacco merchants has grown accordingly. Large multinational cigarette
manufacturers, with one principal exception, rely primarily on the three global
independent leaf tobacco merchants, including the Company, to supply the
majority of their leaf tobacco needs.
As a result of the strong worldwide demand for tobacco products and
tightening of worldwide tobacco inventories, the global leaf tobacco industry
experienced continued improvement in profitability in the nine months ended
March 31, 1997. These factors, together with increased demand for American blend
cigarettes and improved efficiencies resulting from the Merger, have contributed
to substantial improvement in the Company's net revenues, operating margins and
net income. For the nine months ended March 31, 1997, compared to the same
period in 1996, the Company's net revenues increased 10.1% to $1.850 billion
from $1.680 billion, while operating income and net income increased to $114.0
million and $51.1 million, respectively, as compared to $90.2 million and $32.1
million, respectively, for the same period last year. The global leaf tobacco
industry has recovered after experiencing a disruption in demand and reduction
in pricing during 1993 and 1994 that was primarily the result of legislation
(the "75/25 Rule"), which was later repealed, requiring that cigarettes
manufactured in the U.S. for domestic consumption and export contain at least
75% domestically grown tobacco.
The Company sells tobacco predominantly to the large multinational
cigarette manufacturers including Philip Morris Companies, Inc. ("Philip
Morris"), Japan Tobacco, Inc. ("Japan Tobacco"), RJR Tobacco Company, Inc.
("RJR"), Lorillard Tobacco Company, Reemstma Cigarettenfabriken GmbH,
Tabacalera, S.A. and Rothmans International PLC. The Company, through its
predecessors, generally has maintained relationships with its customers for
over seventy years. In fiscal 1996, tobacco shipped to non-U.S. customers
accounted for approximately 62% of the Company's tobacco sales. The Company
believes a significant portion of the tobacco shipped to U.S. destinations is
later exported from the U.S. by customers in the form of manufactured
cigarettes.
<PAGE>
The Company has developed an extensive international network through which
it purchases and sells tobacco grown globally. Prior to the Intabex Acquisition,
the Company purchased tobacco in approximately 26 countries, generally at
auction or directly from growers. The Company now purchases tobacco in 32
countries and has expanded its purchasing capabilities significantly in Brazil,
Argentina, Malawi, Thailand and Zimbabwe. The Company believes it has access to
a diverse supply of tobacco grown in a number of regions throughout the world
and can respond quickly to factors that may cause fluctuations in the quality,
yield or price of tobacco grown in any one region. The tobacco purchased by the
Company is processed at 30 facilities around the world, nine of which were
acquired in the Intabex Acquisition. In addition to facilities in Virginia and
North Carolina, the Company owns or has an interest in processing facilities in
Brazil and Zimbabwe, the two most significant non-U.S. exporters of flue-cured
tobacco, Malawi and Mexico, two of the leading non-U.S. exporters of burley
tobacco, and Greece and Turkey, the leading exporters of oriental tobacco. The
Company also has processing facilities in Italy and Germany. In addition, the
Company has entered into contracts, joint ventures and other arrangements for
the purchase and processing of tobacco grown in substantially all other
countries that produce export-quality flue-cured and burley tobacco, including
Argentina, Canada, China, India and Tanzania.
Business Strategy
The Company's primary business objective is to capitalize on the growth in
worldwide consumption of American blend cigarettes by becoming the low-cost,
preferred supplier of leaf tobacco to the large multinational manufacturers of
American blend cigarettes. To achieve this objective, the Company has designed a
strategy to position itself to meet the needs of its cigarette manufacturing
customers throughout the world by expanding its global operations directly in
the major tobacco exporting countries and by forming strategic partnerships with
its major customers in countries with emerging tobacco production. As part of
this strategy, the Company acquired Intabex on April 1, 1997. The Company
believes the Intabex Acquisition will further enhance the Company's global
tobacco purchasing capabilities, expand and diversify its customer base and
expand its geographic reach. The Company's ability to respond to the global
expansion and changing needs of the large multinational cigarette manufacturers
is a critical factor in developing and expanding customer relationships. The
principal components of the Company's business strategy are as follows:
Increase the Company's operations in low-cost tobacco growing regions. To
ensure breadth and depth of supply of tobacco, particularly the tobacco used in
American blend cigarettes, the Company has expanded and plans to continue to
expand its operations in South America, Africa and China, the largest production
areas of flue-cured and burley tobacco outside of the U.S. As part of the
Intabex Acquisition, the Company acquired additional sources of supply in
Brazil, Argentina, Zimbabwe and Malawi, allowing the Company to significantly
enhance its market share in these countries, and established a new presence in
Mozambique, Spain, Sri Lanka, Thailand, Zaire and Zambia. The Company intends to
utilize both its agronomy expertise in helping to develop low-cost sources of
American blend quality tobacco and its existing relationships with the major
multinational cigarette manufacturers to gain market share in these emerging
growth regions.
Capitalize on outsourcing trends. The Company anticipates further
outsourcing of leaf tobacco purchasing and processing by cigarette
manufacturers. This outsourcing trend is driven by the (i) higher margins in
cigarette production, (ii) increased sophistication required in sourcing leaf
tobacco on a global basis and (iii) continued privatization of tobacco and
cigarette production operations in other countries. In 1994, the Company began
providing all leaf tobacco auction buying in the U.S. for RJR, the second
largest cigarette producer in the U.S. In 1995, the Company began to purchase
and process all of Lorillard's auction market tobacco requirements in the U.S.
With the improved tobacco purchasing capabilities and expanded geographic reach
resulting from the Intabex Acquisition, the Company believes it will continue to
be a major beneficiary of the outsourcing trends in the tobacco industry.
<PAGE>
Improve efficiency and reduce operating costs. The Company realized
substantial operating efficiencies and operating cost reductions following the
Merger and anticipates achieving similar cost savings from the Intabex
Acquisition. In connection with the Merger, the Company initiated a
restructuring plan for its operations. The plan was designed to eliminate
unprofitable locations, consolidate duplicative processing facilities, reduce
the salaried workforce, improve operating efficiencies and increase regional
unit accountability. This initiative resulted in the recognition of various
charges in fiscal 1996, aggregating $11.8 million, net of tax, and in fiscal
1995, aggregating $17.8 million, net of tax. This initiative reduced the
Company's annual operating costs and expenses by approximately $25 million in
fiscal 1997. In the Intabex Acquisition, the Company acquired facilities in
Malawi, Italy, Germany, Zimbabwe, and the U.S., countries where the Company
already had facilities. By eliminating redundant facilities and realizing other
efficiencies similar to those achieved in the Merger, the Company anticipates
savings in annual operating costs as a result of the Intabex Acquisition of
approximately $23 million in fiscal 1998.
Expand operations in new markets. During the last decade, several of the
large multinational cigarette manufacturers have expanded their global
operations, particularly into Central and Eastern Europe and the former Soviet
Union, in order to increase their access to and penetration of new markets. The
Company believes this will increase demand for local sources of leaf tobacco and
local tobacco processing due to the semi-perishable nature of unprocessed
tobacco and the existence of domestic content laws in certain foreign countries.
The Company believes these factors will cause manufacturers to place greater
reliance on the services of financially strong leaf tobacco merchants with the
ability to source and process tobacco on a global basis and to help develop
higher quality local sources of leaf tobacco.
Recent Developments
Intabex Acquisition
On April 1, 1997, DIMON acquired all of the outstanding capital stock and
other rights of Intabex Holdings Worldwide S.A., a privately-owned Luxembourg
holding company. DIMON believes Intabex was the fourth largest independent leaf
tobacco merchant in the world. It owns and operates leaf tobacco buying,
processing and exporting operations in principal tobacco markets around the
world including the U.S., Brazil, Argentina, Italy and Thailand. Intabex is also
a major supplier of Malawian, Zimbabwean and other African grown tobacco to the
cigarette industry. As part of the transaction, Anthony C.B. Taberer, the former
Chairman of the Board of Intabex, joined the Company's Board of Directors and
became non-executive Chairman of the Board of Intabex.
The $264 million aggregate purchase price for Intabex and certain other
rights consisted of 1.70 million shares of Common Stock, $140 million in
10-year, 6.25 percent subordinated debentures convertible into 4.866 million
shares of Common Stock at $28.77 per share (the "Convertible Debentures"), and
$86 million in cash. Intabex's former shareholders, Folium Inc. ("Folium"),
Tabacalera, S.A. ("Tabacalera"), and Leaf Management Investments Ltd.
(collectively, the "Intabex Group"), have agreed to indemnify the Company
against certain liabilities in connection with the Intabex Acquisition, subject
to a maximum of $90 million. The Company is discussing with the Intabex Group
certain post-closing adjustments to the purchase price provided for in the stock
purchase agreement. The proposed adjustments are not material to the Company's
consolidated financial position. The Company may set-off any unpaid purchase
price adjustment or liabilities against $90 million of the Convertible
Debentures held by Folium and Tabacalera.
New Credit Facility
On June 27, 1997, the Company entered into a $500 million revolving credit
facility (the "New Credit Facility") with a syndicate of banks. The New Credit
Facility provides for improved pricing and less restrictive covenants than the
$240 million revolving credit facility that it replaced. Like the prior
facility, the New Credit Facility is primarily used by the Company to reclassify
short-term working capital borrowings to long-term debt. The Company expects
that the expanded New Credit Facility will be adequate to reclassify the
additional working capital debt generated by Intabex operations. See
<PAGE>
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Liquidity and Capital Resources."
The Offerings
The DECS are being offered by the Trust in the DECS Offering pursuant to
the DECS Prospectus. Pursuant to the terms of the DECS, the Trust may deliver
Common Stock to the holders of the DECS on the Exchange Date. This Prospectus
relates to the delivery by the Trust pursuant to the DECS of up to 3,100,000
shares of Common Stock, plus up to an additional _______ shares of Common Stock
that may be delivered pursuant to (a) DECS that may be issued to cover
over-allotments and (b) DECS subscribed for and purchased by Salomon Brothers
Inc in connection with the organization of the Trust, that the Trust may receive
from the Selling Stockholders under the terms of the Contracts.
The Selling Stockholders are also offering, for sale in the Stock
Offering, 1,800,000 shares of Common Stock, plus up to an additional 240,000
shares of Common Stock solely to cover over-allotments.
Selected Consolidated Financial Data
The following table presents summary selected pro forma and historical
consolidated financial information of the Company, as of the dates and for the
periods indicated. The historical financial data for the nine months ended March
31, 1997 and 1996 have been derived from the Company's unaudited interim
financial statements. The historical financial data for the fiscal years ended
June 30, 1996 and 1995, have been derived from the Company's financial
statements, which have been audited by Price Waterhouse LLP, independent
accountants. The historical financial data for the year ended June 30, 1994,
have been derived from the Company's financial statements that were audited by
Ernst & Young LLP, independent accountants. The summary historical financial
information should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Company's
financial statements and notes thereto incorporated by reference herein.
The unaudited pro forma financial data for the twelve months ended March
31, 1997 have been prepared using the purchase method of accounting to reflect
the acquisition of Intabex by the Company for a purchase price of $256.12
million (excluding $12 million of Zimbabwean assets and including $3.9 million
of other transaction costs). The pro forma financial data are presented as if
the acquisition of Intabex had occurred on April 1, 1996. The Company calculated
its pro forma financial information for the twelve months ended March 31, 1997,
by combining unaudited financial data for the nine months ended March 31, 1997,
and for the three months ended June 30, 1996. The Company's actual fiscal year
end will remain June 30. The unaudited pro forma financial data are presented
for illustrative purposes only and are not necessarily indicative of the
financial position or results of operations of the Company if the transaction
had been consummated on April 1, 1996, nor is such information indicative of
future results. No adjustments have been made to reflect the benefit of any
savings that may occur as a result of the integration of the business of the
Company and Intabex or miscellaneous non-recurring costs of that integration.
The unaudited pro forma financial data are based on preliminary allocations of
fair market value to assets and liabilities acquired. Final allocation of the
purchase price or adjustments to the purchase price may result in adjustments to
the amounts shown. The unaudited pro forma financial data should be read in
conjunction with the unaudited pro forma financial statements of the Company and
the historical financial statements of the Company and Intabex, and the
respective notes thereto, incorporated by reference herein.
<PAGE>
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Pro Forma Nine Months
Twelve Months Ended
Ended March 31, Year Ended June 30,
March 31, 1997 1997 1996 1996 1995 1994
-------------- ---- ---- ---- ---- ----
(in thousands, except per share data) (unaudited) (unaudited)
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Income Statement Data:
Net sales of goods and services.. $3,182,748 $1,850,221 $1,680,202 $2,167,473 $1,941,188 $1,464,778
Cost of goods and services sold.. 2,781,513 1,645,054 1,481,743 1,904,992 1,759,364 1,317,705
--------- --------- --------- --------- --------- ---------
Gross profit..................... 401,235 205,167 198,459 262,481 181824 147,073
Selling, general and administrative
expenses...................... 189,426 91,207 102,736 132,710 132,802 117,311
Restructuring and merger-related
costs......................... 9,792 - 5,568 15,360 25,955 -
--------- ------ --------- --------- --------- ------
Operating income................. 202,017 113,960 90,155 114,411 23,067 29,762
Interest expense................. 104,454 30,614 38,036 46,924 45,231 35,117
------- -------- ------ ------ ------ ------
Income (loss) from continuing
operations before income taxes,
minority interest, equity in
net income of investee companies,
extraordinary items and cumulative
effect of accounting changes... 97,563 83,346 52,119 67,487 (22,164) (5,355)
Income taxes..................... 39,165 32,780 20,847 26,995 5,980 2,767
Income (loss) applicable to
minority interest................ (618) 114 242 292 216 466
Equity in net income of investee
companies (net of taxes)...... 656 691 (290) (330) (1,805) 98
========= ========= ======== ======= ========== =======
Income (loss) from continuing
operations before extraordinary
items and cumulative effect of
accounting changes............ 59,672 51,143 30,740 39,870 (30,165) (8,490)
Extraordinary item (1)........... - - 1,400 1,400 - -
Net income (loss)................ $59,672 $51,143 $32,140 $41,270 $(30,165) $(8,490)
======= ======= ======= ======= ========= ========
Earnings (loss) per share, primary (2) $1.35 $1.20 $0.83 $1.04 (0.79) (0.22)
===== ===== ===== ===== ======= ========
Weighted average shares
outstanding, primary.......... 44,349 42,692 38,739 39,671 38,100 38,091
Earnings (loss) per share, fully-
diluted (2)(3)................ $1.19 $0.80 $1.01
===== ===== =====
Weighted average shares
outstanding, fully-diluted.... 49,420 42,853 42,467 42,464 42,355 42,297
Other Data:
Gross Margin..................... 12.6% 11.0% 12.0% 12.1% 9.4% 10.0%
Operating Margin................. 6.3% 6.2% 5.4% 5.3% 1.0% 2.0%
Tobacco inventory................ $466,049 $310,674 $343,484 $315,476 $410,431 $403,211
Depreciation and amortization.... 46,550 24,462 24,234 33,780 31,852 28,862
Capital Expenditures............. 52,532 21,082 20,609 41,266 27,036 32,382
Balance Sheet Data (end of period):
Working capital.................. $417,697 $455,473 $388,710 $401,489 $277,597 $217,667
Total assets..................... 1,996,111 1,059,561 1,011,291 1,020,014 1,093,608 1,043,816
Total debt....................... 1,203,351 319,153 388,710 265,871 594,192 515,133
Stockholders' equity............. 386,175 348,105 311,232 315,848 238,806 288,31
- ----------------
(1) Extraordinary item is a partial recovery in fiscal 1996 against an
extraordinary trade receivable reserve of $1.4 million, net of tax,
established in a prior period.
(2) Includes non-recurring restructuring and merger related costs of: $0.28
and $0.42 per share for the fiscal year ended June 30, 1996, and the
fiscal year ended June 30, 1995, respectively; $0.09 per share for the
nine months ended March 31, 1996; and $0.19 per share for the pro forma
twelve months ended March 31, 1997.
(3) Anti-dilutive for the fiscal years ended June 30, 1995 and 1994 and for
the pro forma twelve months ended March 31, 1997.
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following factors in
evaluating an investment in the Shares offered hereby.
Governmental Intervention; Proposed Settlement of Tobacco Litigation
In recent years, governmental entities in the U.S. at all levels have
taken or have proposed actions that may have the effect of reducing consumption
of cigarettes. These activities have included: (i) the U.S. Environmental
Protection Agency's decision to classify tobacco environmental smoke as a "Group
A" (known human) carcinogen; (ii) restrictions on the use of tobacco products in
public places and places of employment including a proposal by the U.S.
Occupational Safety and Health Administration to ban smoking in the work place;
(iii) proposals by the U.S. Food and Drug Administration to sharply restrict
cigarette advertising and promotion and to regulate nicotine as a drug; (iv)
increases in tariffs on imported tobacco; (v) proposals to increase the U.S.
excise tax and state taxes on cigarettes; (vi) the policy of the U.S. government
to link certain federal grants to the enforcement of state laws banning the sale
of tobacco products to minors; and (vii) recent filings of lawsuits against
cigarette manufacturers by many U.S. states and others seeking reimbursement of
Medicaid and other expenditures claimed to have been made by such states to
treat diseases allegedly caused by cigarette smoking. In 1993, Congress enacted
a law (the 75/25 Rule) requiring that all domestically manufactured cigarettes
contain at least 75% domestically grown tobacco. Although that law was repealed
in 1995 and was replaced with import quotas designed to assist domestic tobacco
growers, the law had the effect of drastically decreasing demand for foreign
tobacco in the domestic production of cigarettes. It is not possible to predict
the extent to which governmental activities might affect the Company's business.
On June 20, 1997, representatives of the leading U.S. manufacturers of
consumer tobacco products, several state attorneys general and certain private
plaintiffs jointly announced a proposed settlement of certain significant
lawsuits pending against the manufacturers. The proposed settlement, which must
be enacted into federal law to become effective, is expected to cost the
nation's leading cigarette manufacturers, all of whom are customers of the
Company, approximately $368 billion in cash outlays over the next 25 years.
Cigarette manufacturers may attempt to recover a portion of these costs by
demanding price and other concessions from suppliers such as the Company. Such
concessions could materially and adversely affect the Company's margins and its
results of operations.
The proposed settlement also would permit federal regulation of cigarette
production and would severely curtail advertising of tobacco products, banning
many of the marketing methods currently utilized by the cigarette industry. The
settlement may therefore materially adversely impact sales of tobacco in the
U.S. and, possibly, overseas. Certain customers have expressed their uncertainty
regarding the impact of the proposed settlement and a substantial risk exists
that past growth trends in tobacco sales may not continue and that existing
sales may decline as a result of the proposed settlement. In addition, in
response to the proposed settlement, groups representing tobacco farmers have
proposed certain measures, including measures similar to the 75/25 Rule, that
could adversely affect the Company's business. However, it is not possible to
predict whether or in what form the proposed settlement or any additional
measures will be approved by Congress and the President or the extent to which
any settlement or such measures may affect the Company's business.
A number of foreign nations also have taken steps to restrict or prohibit
cigarette advertising and promotion, to increase taxes on cigarettes and to
discourage cigarette smoking. In some cases, such restrictions are more onerous
than those in the U.S. For example, advertising and promotion of cigarettes has
been banned or severely restricted for a number of years in Australia, Canada,
Finland, France, Italy, Singapore and a number of other countries. It is
impossible to predict the extent to which these and any additional restrictions
might affect the Company's business.
<PAGE>
Smoking and Health Issues
Reports and speculation with respect to the alleged harmful physical
effects of cigarette smoking have been publicized for many years and, together
with restrictions on cigarette advertisements, requirements that warning
statements be placed on cigarette packaging and in advertising, increased taxes
on tobacco products and controls in certain foreign countries on production and
prices, decreased social acceptance of smoking and increased pressure from
anti-smoking groups have had an ongoing adverse effect on sales of tobacco
products. In addition, subject in some cases to the settlement discussed above,
litigation is pending against the leading U.S. manufacturers of consumer tobacco
products seeking damages for health problems alleged to have resulted from the
use of tobacco in various forms. It is not possible to predict the outcome of
such litigation or what effect adverse developments in pending or future
litigation against manufacturers might have on the business of the Company.
Variability of Annual and Quarterly Financial Results
The comparability of the Company's financial results, particularly the
quarterly financial results, may be significantly affected by fluctuations in
tobacco growing seasons and customer instructions with regard to the shipment of
processed tobacco. The cultivation period for tobacco is dependent upon a number
of factors, including the weather and other natural events, and the Company's
processing schedule can be significantly altered by variations in harvesting
periods.
Further, it is not possible to predict with precision the timing of orders
or shipments, and the Company may from time to time in the ordinary course of
business keep a significant amount of processed tobacco in inventory for its
customers to accommodate their inventory management and other needs. Sales and
revenue recognition by the Company and its subsidiaries is based on the passage
of ownership, usually with shipment of tobacco. Since individual shipments may
represent significant amounts of revenue, the Company's quarterly and annual
financial results may vary significantly depending on its customers' needs and
shipping instructions. In particular, because deliveries of Brazilian tobacco
are made at the end of the fourth fiscal quarter of each year or the beginning
of the first quarter of the following year, significant amounts of revenue and
operating profits may shift from fiscal year to fiscal year. See "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Business - Tobacco - Seasonality" and "Business - Flowers - Seasonality."
Reliance on Significant Customers
The Company's customers are manufacturers of consumer tobacco products
located in approximately 60 countries around the world. Several of these
customers individually account for a significant portion of the Company's sales
in a normal year, and the loss of any one or more of such customers could have a
material adverse effect on the Company's results of operations. Approximately
56% and 46% of the Company's consolidated tobacco sales for the nine months
ended March 31, 1997, and fiscal 1996, respectively, were made to 37 customers
that the Company believes are owned or under common control of Japan Tobacco,
Philip Morris, or RJR, each of which contributed in excess of 10% of
consolidated tobacco sales, with Philip Morris and RJR accounting for
significantly larger portions of the Company's sales than Japan Tobacco. See
"Business - Tobacco - Operations Selling."
Failure to Realize Acquisition Cost Savings and Potential Sales Losses
Although the Company anticipates that it will achieve significant cost
savings related to the integration and rationalization of the operations of
Intabex, these savings may not be achieved in the amount or as quickly as
expected. Further, the Company expects that certain customers may reduce the
combined volume of tobacco purchased through the Company from volumes previously
purchased separately from Intabex and the Company for reasons unrelated to the
Company's products or performance, such as a desire to manage dependence on any
one supplier. In addition, the Company anticipates that certain of Intabex's
former customers may not be retained and that sales may be reduced as a result.
The Company is unable to predict whether or to what extent any such reductions
may occur.
<PAGE>
International Business Risks
The Company's international operations are subject to international
business risks, including unsettled political conditions, expropriation, import
and export restrictions, exchange controls, inflationary economies and currency
risks and risks related to the restrictions of repatriation of earnings or
proceeds from liquidated assets of foreign subsidiaries. In certain countries,
the Company has advanced substantial sums or guaranteed local loans or lines of
credit in substantial amounts for the purchase of tobacco from growers. Risk of
repayment is normally limited to the tobacco season, and the maximum exposure
occurs within a shorter period.
The Company's tobacco business is generally conducted in U.S. dollars, as
is the business of the industry as a whole. Accordingly, there is minimal
currency risk related to the sale of tobacco. However, local country operating
costs, including the purchasing and processing costs for tobacco, are subject to
the effects of exchange fluctuations of the local currency against the U.S.
dollar. The Company attempts to minimize such currency risks by matching the
timing of its working capital borrowing needs against the tobacco purchasing and
processing funds requirements in the currency of the country of tobacco origin.
Fluctuations in the value of foreign currencies can significantly affect the
Company's operating results. See Note N to the Company's Consolidated Financial
Statements for the year ended June 30, 1996, incorporated herein by reference to
the Company's Annual Report on Form 10-K.
Restrictions on Dividends
Under the terms of the Indenture, dated May 29, 1996, between the Company
and Crestar Bank, as trustee (the "Indenture"), relating to the Company's 8-7/8%
Senior Notes due 2006 (the "Notes"), the Company will not be permitted to make
certain restricted payments, including cash dividends on Common Stock, under
certain circumstances. The Company generally may make such restricted payments,
provided that (i) the Company is not in default under the Indenture, (ii) the
Company is able to incur at least $1.00 of additional indebtedness under a
consolidated interest coverage ratio test set forth in the Indenture, and (iii)
the aggregate amount of the payments to be made is less than the total of (a)
$20.0 million, (b) 50% of the Company's consolidated net income for the period
from April 1, 1996, through the end of the Company's most recent fiscal quarter
and (c) the net cash proceeds from the sale by the Company of any equity
securities or debt securities that are converted into equity securities. At
March 31, 1997, the Company was permitted to make restricted payments, including
cash dividends on its Common Stock, of up to $29.4 million.
Significant Stockholders
Upon completion of the Offering, members of the Monk family will own
approximately 17.1% of the Company's Common Stock. If they determined to vote
together, subject to the restrictions regarding proxy solicitations contained in
the Company's shareholder rights plan, described herein, the Monk family might
influence the outcome of any issues submitted to a vote of the Company's
stockholders, including election of the Company's Board of Directors, adoption
of amendments to the Company's Articles of Incorporation and approvals of
mergers or sales of the Company's assets. See "Selling Stockholders" and
"Description of Capital Stock - Rights Plan."
USE OF PROCEEDS
All of the Shares offered hereby are being offered and sold by the Selling
Stockholders. Accordingly, the Company will not receive any of the proceeds from
the Stock Offering or the DECS Offering.
<PAGE>
PRICE RANGE OF COMMON STOCK AND DIVIDENDS
The Company's Common Stock is traded on the NYSE under the symbol "DMN."
The following table sets forth for the periods indicated the high and low sales
prices of the Common Stock as reported by the NYSE and the amount of dividends
declared per share for the periods indicated.
</TABLE>
<TABLE>
<CAPTION>
Dividends
High Low Declared
---- ---- ---------
<S> <C>
Fiscal Year 1998
- ----------------
First Quarter (through August 7, 1997)............... $ 26 1/2 $ 22 3/4 --
Fiscal Year 1997
- ----------------
Fourth Quarter....................................... $ 26 3/4 $ 19 3/4 $ .150
Third Quarter........................................ 26 21 3/4 .150
Second Quarter....................................... 23 1/4 17 7/8 .150
First Quarter........................................ 19 7/8 17 7/8 .135
Fiscal Year 1996
- ----------------
Fourth Quarter....................................... $ 19 1/2 $ 16 1/8 $ .135
Third Quarter........................................ 20 7/8 16 .135
Second Quarter....................................... 18 3/4 13 3/4 .135
First Quarter........................................ 17 5/8 14 5/8 .135
</TABLE>
The last sale price of the Common Stock as reported on the NYSE on August
7, 1997, was $25.44. As of June 30, 1997, there were 1,198 holders of record of
the Common Stock. Management of the Company believes that there are in excess of
4,200 beneficial holders of its Common Stock. The Company pays dividends
quarterly.
The Company is subject to certain restrictions on its ability to pay
dividends on its Common Stock under the Indenture. See "Risk Factors -
Restrictions on Dividends."
<PAGE>
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents summary selected pro forma and historical
consolidated financial information of the Company, as of the dates and for the
periods indicated. The Company's consolidated financial statements, including
financial statement schedules, incorporated by reference in this Prospectus for
the fiscal years ended June 30, 1996, and 1995, except as they relate to the
financial statements of the former Dibrell as of June 30, 1994, and for the year
ended June 30, 1994, have been audited by Price Waterhouse LLP, independent
accountants, and insofar as they relate to the Dibrell financial statements
referred to above, by Ernst & Young, independent accountants, as stated in their
respective reports therein, and have been incorporated herein on the authority
of such firms as experts in auditing and accounting. The summary historical
financial information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Company's financial statements and notes thereto incorporated by reference
herein.
The unaudited pro forma financial data for the twelve months ended March
31, 1997 have been prepared using the purchase method of accounting to reflect
the acquisition of Intabex by the Company for a purchase price of $256.12
million (excluding $12 million of Zimbabwe assets and including $3.9 million of
other transaction costs). The pro forma financial data are presented as if the
acquisition of Intabex had occurred on April 1, 1996. The Company calculated its
pro forma financial information for the twelve months ended March 31, 1997, by
combining unaudited financial data for the nine months ended March 31, 1997, and
for the three months ended June 30, 1996. The Company's actual fiscal year end
will remain June 30. The unaudited pro forma financial data are presented for
illustrative purposes only and are not necessarily indicative of the financial
position or results of operations of the Company if the transaction had been
consummated on April 1, 1996, nor is such information indicative of future
results. No adjustments have been made to reflect the benefit of any savings
that may occur as a result of the integration of the business of the Company and
Intabex or miscellaneous non-recurring costs of that integration. The unaudited
pro forma financial data are based on preliminary allocations of fair market
value to assets and liabilities acquired. Final allocation of the purchase price
or adjustments to the purchase price may result in adjustments to the amounts
shown. The unaudited pro forma financial data should be read in conjunction with
the unaudited pro forma financial statements of the Company and the historical
financial statements of the Company and Intabex, and the respective notes
thereto, incorporated by reference herein.
<PAGE>
<TABLE>
<CAPTION>
Nine Months
Pro Forma Ended
Twelve Months March 31, Year Ended June 30,
Ended --------- -------------------
March 31, 1997 1997 1996 1996 1995 1994
-------------- ---- ---- ---- ---- ----
(in thousands, except per share data) (unaudited) (unaudited)
<S> <C>
Income Statement Data:
Net sales of goods and services.. $3,182,748 $1,850,221 $1,680,202 $2,167,473 $1,941,188 $1,464,778
Cost of goods and services sold.. 2,781,513 1,645,054 1,481,743 1,904,992 1,759,364 1,317,705
--------- --------- --------- --------- --------- ---------
Gross profit..................... 401,235 205,167 198,459 262,481 181824 147,073
Selling, general and administrative
expenses...................... 189,426 91,207 102,736 132,710 132,802 117,311
Restructuring and merger-related
costs......................... 9,792 - 5,568 15,360 25,955 -
--------- ------ --------- --------- -------- ------
Operating income................. 202,017 113,960 90,155 114,411 23,067 29,762
Interest expense................. 104,454 30,614 38,036 46,924 45,231 35,117
------- -------- ------ ------ ------ ------
Income (loss) from continuing
operations before income taxes,
minority interest, equity in net
income of investee companies,
extraordinary items and cumulative
effect of accounting changes... 97,563 83,346 52,119 67,487 (22,164) (5,355)
Income taxes..................... 39,165 32,780 20,847 26,995 5,980 2,767
Income (loss) applicable to
minority interest................ (618) 114 242 292 216 466
Equity in net income of investee
companies (net of taxes)...... 656 691 (290) (330) (1,805) 98
========= ========= ========= ======= ========= =======
Income (loss) from continuing
operations before extraordinary
items and cumulative effect of
accounting changes............ 59,672 51,143 30,740 39,870 (30,165) (8,490)
Extraordinary item (1)........... - - 1,400 1,400 - -
Net income (loss)................ $59,672 $51,143 $32,140 $41,270 $(30,165) $(8,490)
======= ======= ======= ======= ========= ========
Earnings (loss) per share, primary (2) $1.35 $1.20 $0.83 $1.04 (0.79) (0.22)
===== ======= ======= ======= ========= =======
Weighted average shares
outstanding, primary.......... 44,349 42,692 38,739 39,671 38,100 38,091
Earnings (loss) per share, fully-
diluted (2)(3)................ $1.19 $0.80 $1.01
===== ===== =====
Weighted average shares
outstanding, fully-diluted.... 49,420 42,853 42,467 42,464 42,355 42,297
Other Data:
Gross Margin..................... 12.6% 11.0% 12.0% 12.1% 9.4% 10.0%
Operating Margin................. 6.3% 6.2% 5.4% 5.3% 1.0% 2.0%
Tobacco inventory................ $466,049 $310,674 $343,484 $315,476 $410,431 $403,211
Depreciation and amortization.... 46,550 24,462 24,234 33,780 31,852 28,862
Capital Expenditures............. 52,532 21,082 20,609 41,266 27,036 32,382
Balance Sheet Data (end of period):
Working capital.................. $417,697 $455,473 $388,710 $401,489 $277,597 $217,667
Total assets..................... 1,996,111 1,059,561 1,011,291 1,020,014 1,093,608 1,043,816
Total debt....................... 1,203,351 319,153 388,710 265,871 594,192 515,133
Stockholders' equity............. 386,175 348,105 311,232 315,848 238,806 288,31
- ----------------
</TABLE>
(1) Extraordinary item is a partial recovery in fiscal 1996 against an
extraordinary trade receivable reserve of $1.4 million, net of tax,
established in a prior period.
(2) Includes non-recurring restructuring and merger related costs of: $0.28
and $0.42 per share for the fiscal year ended June 30, 1996, and the
fiscal year ended June 30, 1995, respectively; $0.09 per share for the
nine months ended March 31, 1996; and $0.19 per share for the pro forma
twelve months ended March 31, 1997.
(3) Anti-dilutive for the fiscal years ended June 30, 1995 and 1994 and for
the pro forma twelve months ended March 31, 1997.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General
The Company believes that it is the world's second largest independent
purchaser and processor of leaf tobacco. Approximately 82% and 80% of the
Company's revenues in fiscal 1996 and fiscal 1995, respectively, were derived
from its tobacco operations. The Company's tobacco operating profits fluctuate
from year to year, primarily due to changes in worldwide supply and demand and
government regulations. See "Risk Factors Variability of Annual and Quarterly
Financial Results."
The Company's tobacco business is generally conducted in U.S. dollars, as
is the business of the industry as a whole. Accordingly, there is minimal
currency risk related to the sale of tobacco. However, local country operating
costs, including the purchasing and processing costs for tobacco, are subject to
the effects of exchange fluctuations of the local currency against the U.S.
dollar. The Company attempts to minimize such currency risks by matching the
timing of its working capital borrowing needs against the tobacco purchasing and
processing funds requirements in the individual countries of tobacco origin.
Fluctuations in the value of foreign currencies can significantly affect the
Company's operating results. See "Risk Factors - International Business Risks"
and Note N to the Company's Consolidated Financial Statements for the year ended
June 30, 1996, incorporated herein by reference to the Company's Annual Report
on Form 10-K for the year ended June 30, 1996.
The remainder of the Company's revenues are derived from purchasing and
selling fresh-cut flowers. Florimex has two principal operations, importing,
exporting and wholesaling fresh-cut flowers, and exporting fresh-cut flowers
purchased primarily from the major flower auctions in The Netherlands.
Approximately 18% of the Company's 1996 revenues were derived from its flower
operations.
On April 1, 1997, the Company acquired all the outstanding capital stock
of Intabex. The acquisition of Intabex has been accounted for under the purchase
method of accounting and, accordingly, no restatement has been made to the
Company's historical financial information. The financial information of the
Company will prospectively include that of Intabex for periods beginning after
March 31, 1997.
On April 1, 1995, Dibrell and Monk-Austin merged into DIMON. The Merger
has been accounted for as a pooling of interests and all consolidated financial
statements have been restated to include the historical results of operations of
both Dibrell and Monk-Austin including the effects of conforming the accounting
policies of the two former entities. Recorded assets and liabilities have been
carried forward at their historical book values.
In connection with the Merger, the Company initiated a restructuring plan
including both the tobacco and flower businesses. The plan was designed to
eliminate unprofitable locations, consolidate duplicative processing facilities,
reduce the salaried workforce, improve operating efficiencies and increase
regional unit accountability. This initiative resulted in the recognition of
various charges in fiscal 1996, aggregating $11.8 million, net of tax, and in
fiscal 1995, aggregating $17.8 million, net of tax.
<PAGE>
Results of Operations
The following table expresses items in the Statement of Consolidated
Income as a percentage of sales for each of the three most recent fiscal years
and for the nine-month periods ended March 31, 1997 and 1996. Any reference in
the table and the following discussion to any given year is a reference to the
Company's fiscal year ended June 30.
<TABLE>
<CAPTION>
Nine Months Ended
March 31, Year Ended June 30,
--------- -------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C>
Net sales of goods and services......... 100.0% 100.0% 100.0% 100.0% 100.0%
Cost of goods and services sold......... 88.9 88.0 87.9 90.6 90.0
---- ---- ---- ---- ----
Gross margin............................ 11.1% 11.8% 12.1% 9.4% 10.0%
Selling, general and administrative
expenses............................. 4.9 6.1 6.1 6.9 8.0
Restructuring and merger related
costs................................ - 0.3 0.7 1.4 -
Operating income........................ 6.2 5.4 5.3 1.2 2.0
Interest Expense........................ 1.7 2.3 2.2 2.3 2.4
Income (loss) before income taxes,
minority interest, equity in net
income of investee companies and
cumulative effect of accounting
changes.............................. 4.5 3.1 3.1 (1.2) (0.4)
Income taxes............................ 1.8 1.2 1.2 0.3 0.2
Equity in net income of investee
companies............................ - - - (0.1) -
Extraordinary items..................... - 0.1 0.1 - -
Cumulative effect of accounting
changes.............................. - - - - -
Net income (loss)....................... 2.8% 1.9% 1.9% (1.6)% (0.6)%
==== ==== ==== ====== ======
- ---------------
</TABLE>
Comparison of Nine Months Ended March 31, 1997 to Nine Months Ended March 31,
1996
Sales and other operating revenues for the nine-month period ended March
31, 1997 were $1.850 billion, an increase of 10.1% from $1.680 billion for the
nine-month period ended March 31, 1996. Sales from tobacco operations increased
12.4%, to $1.553 billion in the nine-month period ended March 31, 1997 from
$1.382 billion in the corresponding period in 1996. The increase in tobacco
sales was due to higher average prices of foreign grown tobacco, increased
quantities, increased average prices and increased service revenues from U.S.
tobacco, partially offset by decreased quantities of foreign grown tobacco. The
increase in average prices for foreign grown tobacco, increased quantities,
higher average prices and increased service revenues accounted for $121.1
million, $51.7 million, $9.1 million and $14.1 million of the increase in
tobacco revenues, respectively, offset by a $25.8 million decrease due to
decreased quantities of foreign grown tobacco. The increased U.S. and foreign
tobacco sales, primarily Africa and Asia, are due to product mix.
Sales from flower operations decreased .5%, from $298.3 million in the
nine-month period ended March 31, 1996 to $297.0 million for the nine-month
period ended March 31, 1997. This decrease in flower sales was primarily due to
an approximate $20.2 million decrease due to the effect of applying U.S. dollar
exchange rates, offset partially by increases in European operations and
Baardse.
<PAGE>
Cost of sales and expenses for the nine-month period ended March 31, 1997,
were $1.736 billion, an increase of $151.8 million, or 9.6%, from $1.584
billion, before the $5.6 million charge for restructuring costs, for the
nine-month period ended March 31, 1996. Cost of sales and expenses for the
tobacco operations increased $157.5 million, or 12.3%, in the nine-month period
ended March 31, 1997 over the corresponding period in 1996, primarily due to the
higher sales in the period for tobacco grown in the U.S., Africa and Asia. The
gross profit for the tobacco operations increased 4.0% for the nine-month period
ended March 31, 1997 over the corresponding period in 1996, primarily due to
increased sales and gross margins on the operations in Africa, Asia and South
America, offset partially by decreased gross margins on the U.S. operations. The
Company's gross margin percentage for tobacco operations decreased to 11.2% for
the nine-month period ended March 31, 1997 from 12.1% for the corresponding
period in 1996, due to lower gross margins in the U.S. operations, offset
partially by higher gross margins in Africa, Asia and South America. Cost of
sales and expenses for the flower operations decreased $3.1 million or 1.1%, in
the nine-month period ended March 31, 1997 from the corresponding period in 1996
primarily due to the effect of applying U.S. dollar exchange rates. The
Company's gross margin percentage for flower operations was the same at 10.7%
for the nine-month period ended March 31, 1997 and for the corresponding period
in 1996. Corporate expenses decreased $2.6 million, or 23.0%, for the nine-month
period ended March 31, 1997 from the corresponding period in 1996, primarily due
to decreased personnel costs.
Interest expense decreased $7.4 million (19.5%) due to decreased
rates, partially offset by increased borrowings.
The effective tax rate decreased to 39.3% for the nine-month period ended
March 31, 1997 from 40.0% for the corresponding period in 1996, based on
estimates of taxable income projected for each year.
Equity in net income of the tobacco investee companies increased $981
thousand for the nine-month period ended March 31, 1997 from the corresponding
period in 1996. The increase is primarily due to the loss for the tobacco
operations investee in Brazil which was sold during fiscal 1996 and to increased
income in the tobacco operations in the U.S. and Greece.
Comparison of Year Ended June 30, 1996 to Year Ended June 30, 1995
The Company's sales and other operating revenues in 1996 were $2.167
billion, an increase of 11.7% from $1.941 billion in 1995. Sales from tobacco
operations increased 13.8%, from $1.555 billion in 1995 to $1.770 billion in
1996, primarily due to higher prices on tobacco from South America and increased
quantities sold primarily from Europe and Africa. The sales from South America
increased in the fourth quarter in 1996 compared to 1995 as demand improved, but
the amount is not expected to reduce sales in 1997. The higher tobacco prices
from Europe and Africa accounted for $85.5 million and $29.4 million,
respectively. The increased sales of tobacco from Europe resulted from the
operations acquired in Greece, Italy and Turkey.
Sales and other operating revenues of flowers increased 2.9%, from $385.9
million in 1995 to $397.3 million in 1996. The increase in the Company's sales
of flowers was primarily due to the increased export sales from The Netherlands.
Cost of sales and expenses of the Company's tobacco operations before
restructuring and merger related costs increased 9.2% in 1996 from 1995 due
primarily to the 13.8% increase in net sales. The world oversupply of tobacco,
which began in 1993, started to improve in 1995 and further improved in 1996
which, along with early consolidation-related cost savings, generated the
improvement in the tobacco operating margin (operating income). As a percent of
net sales, operating income, excluding restructuring costs, increased to 7.8% in
1996 compared to 3.9% in 1995.
Cost of sales and expenses of the flower operations before restructuring
costs increased by 0.8% in 1996 from 1995 primarily due to the sales increase of
2.9% offset partially by implementing cost-cutting measures, revising credit
policies which decreased bad debts and the closing of unprofitable operations in
1995. The flower operating income (loss) excluding restructuring costs,
increased from a (0.1%) loss as a percent of net sales in 1995 to a positive
2.0% of net sales in 1996, primarily due to increased gross margins of the
export operations in The Netherlands and by decreased costs mentioned above.
<PAGE>
Corporate expenses before restructuring costs increased $4.6 million, or
40.7%, to $15.9 million in 1996 from $11.3 million in 1995, due primarily to
increased personnel costs and bonuses and legal and professional expenses in
1996. Some of the increased costs for personnel relate to reassigning
departments to corporate that were previously in the tobacco operations.
Restructuring charges in 1996 for the tobacco operations and corporate
amounted to $11.5 million and $4.4 million, respectively. The flower operations
had a $.5 million recovery of restructuring costs. The net charges are comprised
of $15.7 million for employee separations, a credit of $1.2 million for facility
sales and closures and $.9 million for asset writedowns and other items.
Interest expense increased $1.7 million in 1996 primarily due to higher
borrowings because of increased average tobacco purchases and, to a lesser
extent, higher average interest rates.
The effective tax rate for 1996 was 40%. In 1995, the Company had tax
expense in spite of the overall pre-tax loss due to the effects of foreign tax
rates, the mix of income and losses of subsidiaries, the currency effect in
Brazil and non-deductible merger expenses.
The $1.5 million decrease in equity in net loss of investee companies in
1996 was due primarily to the sale of the investee in Brazil which had a loss in
1995.
Comparison of the Year Ended June 30, 1995 to the Year Ended June 30, 1994
The Company's net sales of goods and services in 1995 were $1.941 billion,
an increase of 32.5% from $1.465 billion in 1994. Net sales from tobacco
operations increased 41.9%, from $1.096 billion in 1994 to $1.555 billion in
1995, primarily due to higher prices and increased production primarily from the
U.S. and Brazil. The higher tobacco prices and increased production quantities
from the U.S. accounted for $88.1 million and $248.5 million, respectively,
while the increased production quantities from Brazil accounted for
substantially all of the increase from Brazil. The Company's increase in net
sales of U.S. tobacco was primarily attributable to the Company's 1994 agreement
to purchase the U.S. tobacco needs for RJR. The increased sales of tobacco from
Brazil resulted from the sales of uncommitted stocks from prior year crops.
Net sales of flowers increased 4.6%, from $369.1 million in 1994 to $385.9
million in 1995. The increase in the Company's sales of flowers was primarily
due to the favorable effect of applying U.S. dollar exchange rates to European
operations, but these favorable effects were partially offset by decreased sales
of certain North American operations that were closed during the year. The
application of exchange rates increased sales by $35.5 million and the closing
of operations decreased sales by $15.7 million.
Cost of sales and expenses of the Company's tobacco operations increased
40.6% in 1995 from 1994 due primarily to the 41.9% increase in net sales. The
world oversupply of tobacco, which began in fiscal 1993, started to improve in
fiscal 1995 as indicated by the improvement in the tobacco operating margin
(operating income), before restructuring and merger related costs. As a percent
of net sales, operating margins increased to 3.9% in 1995 compared to 3.0% in
1994. See "Business - Tobacco - The Leaf Tobacco Industry - Improved Market
Conditions." However, sales prices continued to be negatively affected by the
oversupply, causing the Company to reduce the carrying amount of its tobacco
inventory at year end by $9.2 million, reflecting the revaluation of that
inventory at the lower of its cost or market value.
Cost of sales and expenses of the flower operations increased by 5.4% in
1995 from 1994 primarily due to the sales increase of 4.6% and increased bad
debts associated with flower operations now closed and other costs, inclusive of
restructuring costs. The flower operating income decreased from 0.7% of net
sales in 1994 to (0.1)% of net sales in 1995, primarily due to decreased gross
margins of both the U.S. operations that were closed and the Baardse operations
and by increased costs mentioned above. Corporate expenses increased $5.6
million, or 97.7%, to $11.3 million in 1995 from $5.7 million in 1994, due
primarily to increased personnel costs and legal and professional expenses in
1995 and reversals of prior accruals in 1994 for stock appreciation rights and
certain stock options. Some of the increased costs for personnel relate to
reassigning departments to corporate that were previously in tobacco operations.
<PAGE>
Restructuring charges for the tobacco and flower operations amounted to
$15.2 million and $2.6 million, respectively. The charges are comprised of $12.6
million for employee separations, $2.8 million for facility closures, $2.4
million for asset writedowns and other items. In addition the Company incurred
$8.1 million for merger related charges for legal, accounting and financial
advisors.
Interest expense increased $10.1 million in 1995, primarily due to higher
borrowings because of increased average tobacco inventories and, to a lesser
extent, higher average interest rates.
The Company had tax expense in spite of the overall pre-tax loss in 1995
due to the effects of foreign tax rates, the mix of income and losses of
subsidiaries, the currency effect in Brazil and non-deductible merger expenses.
The $1.9 million decrease in equity in net income of investee companies in
1995 was due primarily to the devaluations of the local currency for the
Company's investee with operations in Zimbabwe and decreased earnings for the
operations in Malawi and Brazil.
Liquidity and Capital Resources
The following table summarizes items from the Company's Consolidated
Balance Sheet and the Statement of Consolidated Cash Flows.
<TABLE>
<CAPTION>
Nine Months Ended
March 31, Year Ended June 30,
--------- -------------------
1997 1996 1996 1995 1994
---- ---- ---- ---- ----
<S> <C>
(in thousands, except for current ratio) (unaudited)
Cash and cash equivalents............... $ 35,575 $ 12,148 $ 53,820 $ 42,326 $ 12,471
Net trade receivables................... 213,461 195,999 190,898 182,750 164,314
Inventories and advances on purchases
of tobacco........................... 435,311 438,383 408,210 468,989 469,015
Total current assets.................... 707,150 662,756 668,775 731,119 685,443
Notes payable to banks.................. 52,717 101,288 - 233,736 255,607
Accounts payable........................ 105,631 126,514 104,506 90,446 112,310
Total current liabilities............... 253,671 363,994 246,433 453,522 467,776
Current ratio........................... 2.8 to 1 1.8 to 1 2.7 to 1 1.6 to 1 1.5 to 1
Revolving credit notes and other
long-term debt....................... $ 266,436 $ 278,440 $ 265,871 $ 292,528 $ 188,825
Senior Notes............................ 125,000 - 125,000 - -
Convertible subordinated debentures..... - - - 56,370 56,475
Stockholders' equity.................... 348,105 311,232 315,848 238,806 288,314
Purchase of property and equipment...... 21,082 20,609 41,266 27,036 32,382
Proceeds from sale of property and
equipment............................ 7,429 3,273 8,605 4,877 5,991
Depreciation and amortization........... 24,462 24,234 33,780 31,852 28,862
</TABLE>
The purchasing and processing activities of the Company's tobacco business
are seasonal. The Company's need for capital fluctuates accordingly and, at any
of several seasonal peaks, the Company's outstanding indebtedness may be
significantly greater or lesser than at year end. The Company historically has
needed capital in excess of cash flow from operations to finance inventory and
accounts receivable and, more recently, to finance acquisitions of foreign
tobacco operations and flower operations. The Company also prefinances tobacco
crops in certain foreign countries by making cash advances to farmers prior to
and during the growing season.
<PAGE>
Reflecting the seasonal increase in the tobacco operations, the Company's
working capital increased from $422.3 million at June 30, 1996, to $453.5
million at March 31, 1997. The current ratio of 2.7 to 1 at June 30, 1996,
increased to 2.8 to 1 at March 31, 1997. At March 31, 1997, current assets
increased $38.4 million, or 5.7%, and current liabilities increased $7.2
million, or 2.9%, from June 30, 1996. Current assets increased primarily due to
increases in Trade receivables and Advances on purchases of tobacco. Current
liabilities increased primarily due to increases in Notes payable to banks,
Accounts payable-other, partially offset by decreases in Advances from customers
and Accrued expenses.
Cash flows provided by operating activities decreased $176.6 million from
$146.6 million to $29.9 million of cash flows used for the nine months ended
March 31, 1997 from the same period last year, due primarily to increases in
Trade receivables and Advances on purchases of tobacco and decreases in Advances
from customers and in Accounts payable and Accrued expenses. Cash flows used in
investing activities increased $19.7 million reflecting sale of RGT shares and
Philip Morris shares in 1995, the Prepaid purchase cost-Intabex and offset
partially by the 1995 purchase of a subsidiary. Cash flows used by financing
activities increased $205.5 million to $41.2 million of cash flows provided
primarily due to net increased borrowings.
At March 31, 1997, the Company had seasonally adjusted lines of credit of
$955.4 million, excluding the long-term credit agreements. These lines bear
interest at rates ranging from 1.7% to 11.6%. At March 31, 1997, unused lines of
credit amounted to $536.2 million net of $155.1 million of letters of credit and
guarantees that reduce lines of credit. Total maximum outstanding short-term
borrowings during the nine months ended March 31, 1997 were $566.5 million.
On June 27, 1997, the Company entered into the New Credit Facility with a
syndicate of banks. The Company used its previous $240 million revolving credit
facility to reclassify $240 million of its short-term debt as long-term debt at
March 31, 1997, and will use the $500 million New Credit Facility similarly. The
interest rates available under the New Credit Facility depend on the type of
advance selected and are based either on the agent bank's base lending rate
(which was 8.50% at March 31, 1997, and is adjusted with changes in interest
rates generally) or LIBOR plus 0.70%, through September 30, 1997, and thereafter
plus a spread of 0.40% to 1.00% based on the ratings assigned to the Company's
outstanding senior debt. The New Credit Facility is subject to certain
commitment fees and covenants that among other things require the Company to
maintain minimum working capital and tangible net worth amounts, require
specific liquidity and long-term solvency ratios and restrict acquisitions.
The Company has historically financed its operations through a combination
of short-term lines of credit, customer advances, cash from operations and
equity and equity-linked securities. At March 31, 1997, the Company had no
material capital expenditure commitments other than the acquisition of Intabex
as of April 1, 1997. The Company believes that these sources of funds combined
with the New Credit Facility are sufficient to fund the Company's purchasing and
capital needs for fiscal 1998 and the foreseeable future.
The Company's off-balance-sheet financing is not material. Certain
operating leases were acquired with the acquisition of, or have been added by,
several foreign tobacco processing facilities and the flower subsidiaries.
However, most operating assets are of long-term and continuing benefit and the
Company has generally purchased these assets.
The Board of Directors of the Company, at its meeting held on May 23,
1997, declared a quarterly dividend of $0.15 per share.
Tax and Repatriation Matters
The Company and its subsidiaries are subject to income tax laws in each of
the countries in which they do business through wholly-owned subsidiaries and
through affiliates. The Company makes a comprehensive review of the income tax
requirements of each of its operations, files appropriate returns and makes
appropriate income tax planning analyses directed toward the minimization of its
income tax obligations in these countries. Appropriate income tax provisions are
determined on an individual subsidiary level and at the corporate level on both
an interim and annual basis. These processes are followed using an appropriate
combination of internal staff at both the subsidiary and corporate levels as
well as independent outside advisors in review of the various tax laws and in
compliance reporting for the various operations.
<PAGE>
Dividend distributions are regularly made from certain subsidiaries while
the undistributed earnings of certain foreign subsidiaries are not subject to
additional foreign income taxes nor considered to be subject to U.S. income
taxes unless remitted as dividends. The Company intends to reinvest such
undistributed earnings indefinitely; accordingly, no provision has been made for
U.S. taxes on those earnings. The Company regularly reviews the status of the
accumulated earnings of each of its U.S. and foreign subsidiaries and
reevaluates the aforementioned dividend policy as part of its overall financing
plans.
Accounting Matters
In October 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation," which will be effective for the Company's fiscal year 1997
statements. SFAS No. 123 defines a fair value based method of accounting for
stock-based compensation and requires certain disclosures to be made by entities
electing not to adopt this method. The Company has studied the implications of
the statement, and based on its initial evaluation, does not expect it to have a
material impact on the Company's financial condition or results of operations
upon adoption.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128. "Earnings per
Share" which simplifies the earnings per share ("EPS") computation and replaces
the presentation of primary EPS with a presentation of basic EPS. This statement
also requires dual presentation of basic and diluted EPS on the face of the
income statement for entities with a complex capital structure and requires a
reconciliation of the numerator and denominator used for the basic and diluted
EPS computation. This statement will be effective for the Company's March 31,
1998, interim statements and will require the restatement of all prior-period
earnings per share data presented. The Company has studied the implications of
the statement, and based on its initial evaluation, does not expect it to have a
material impact on the Company's financial condition or results of operations
upon adoption.
In June 1997, the Financial Accounting Standards Board issued SFAS No.
130, "Reporting Comprehensive Income" which establishes standards for reporting
and display of comprehensive income and its components in a full set of
general-purpose financial statements. This statement will be effective for the
Company's March 31, 1998, interim statements and will require the restatement of
all prior-periods presented. The Company has studied the implications of the
statement, and based on its initial evaluation, does not expect it to have a
material impact on the Company's financial condition or results of operations
upon adoption.
In June 1997, the Financial Accounting Standards Board issued SFAS No.
131, "Disclosures About Segments of an Enterprise and Related Information" which
requires that public business enterprises report certain information about
operating segments in complete sets of financial statements of the enterprise
and in condensed financial statements of interim periods issued to shareholders.
It also requires that public business enterprises report certain information
about their products and services, the geographic areas in which they operate,
and their major customers. This Statement is effective for the Company's June
30, 1998, year end financial statements. The Company has studied the
implications of the statement, and based on its initial evaluation, does not
expect it to have a material impact on the Company's financial condition or
results of operations upon adoption.
<PAGE>
BUSINESS
DIMON is the second largest independent leaf tobacco merchant in the
world. The Company acquired Intabex on April 1, 1997, and is the successor to
Dibrell and Monk-Austin, which merged on April 1, 1995. Through the Intabex
Acquisition, the Company increased its tobacco-related revenues for the twelve
months ended March 31, 1997, by 36%, from $2,338 million to $3,183 million on a
pro forma basis, and increased its market share in the established worldwide
leaf tobacco market from approximately 30% to approximately 37% on a pro forma
basis. In addition, DIMON strengthened its presence in several important tobacco
growing regions, including Brazil, Argentina, Malawi, Thailand and Zimbabwe. The
Company's address is 512 Bridge Street, Danville, Virginia 24541 and its
telephone number is (804) 792-7511. See Note M to the Company's Consolidated
Financial Statements for the year ended June 30, 1996, incorporated herein by
reference to the Company's Annual Report on Form 10-K, for detailed information
regarding each of the Company's business segments.
Tobacco
The Leaf Tobacco Industry
The world's large multinational cigarette manufacturers, with one
exception, rely on independent leaf tobacco merchants such as the Company to
supply the majority of their leaf tobacco needs. Leaf tobacco merchants select,
purchase, process, store, pack, ship and, in certain developing markets, provide
agronomy expertise and financing for growing leaf tobacco. At the present time,
there are three major global leaf tobacco merchants, including the Company.
These three merchants source, process and ship leaf tobacco around the world,
for delivery to manufacturers of cigarettes and other tobacco products. The
Company believes that the leaf tobacco industry is characterized by the
following trends:
Growth of American Blend Cigarettes. American blend cigarettes have gained
market share in several major foreign markets, including Asia (particularly the
Pacific Rim), Europe and the Middle East in recent years. American blend
cigarettes contain approximately 50% flue-cured, 35% burley and 15% oriental
tobacco, contain less tar and nicotine and taste milder than locally produced
cigarettes containing dark and semi-oriental tobacco historically consumed in
certain parts of the world. According to the TMA, American blend cigarette
consumption (excluding China) has increased from 1.7 trillion units in calendar
1990 to 1.9 trillion units in calendar 1996, an increase of 10.8%. The TMA
estimates that worldwide American blend tobacco consumption (excluding China)
will increase an additional 5.5% to more than 2.0 trillion units by the year
2000. The TMA also estimates that worldwide American blend cigarette consumption
(excluding China), as a percentage of total consumption, has also experienced
substantial growth, increasing from 47.9% in 1990 to 52.5% in 1996, and is
projected to reach 54.3% by the year 2000. As American blend cigarettes have
continued to gain global market share, the demand for export quality flue-cured,
burley and oriental tobacco sourced and processed by the three independent leaf
tobacco merchants, including the Company, has grown accordingly.
Growth in Foreign Operations of Large Cigarette Manufacturers. Several of
the large multinational cigarette manufacturers have expanded their operations
throughout the world, particularly in Central and Eastern Europe and the former
Soviet Union, in order to increase their access to and penetration of these
markets. As cigarette manufacturers expand their global operations, the Company
believes there will be increased demand for local sources of leaf tobacco and
local tobacco processing and distribution, primarily due to the semi-perishable
nature of unprocessed leaf tobacco and the existence of domestic content laws in
certain countries. The Company believes that the international expansion of the
large multinational cigarette manufacturers will cause these manufacturers to
place greater reliance on the services of financially strong leaf tobacco
merchants with the ability to source and process tobacco on a global basis and
to help develop higher quality local sources of tobacco.
<PAGE>
Growth in Foreign Sourced Tobacco. In an effort to respond to cigarette
manufacturers' increasing demand for lower cost American blend cigarette
ingredients, the major leaf tobacco merchants have made significant investments
in South America, Africa and Asia, the principal sources of flue-cured and
burley tobacco outside the U.S. This trend is expected to continue in the
foreseeable future as the quality of foreign grown tobacco continues to improve.
Improved Market Conditions. The global leaf tobacco industry has recovered
from a disruption in demand and reduction in pricing during 1993 and 1994. The
disruption of the industry in the U.S. during these years occurred primarily
because of (i) the enactment of the domestic content 75/25 Rule, (ii) a poor
quality 1993 flue-cured tobacco crop in the U.S. and (iii) the introduction of
legislation in the summer of 1993 to increase significantly the federal excise
tax on cigarettes that resulted in manufacturers' reluctance to build
inventories. Concurrent with the reduction in demand for international tobacco
related to the 75/25 Rule and lower than expected initial demand for imported
tobacco products in Central and Eastern Europe and the former Soviet Union, the
worldwide price of tobacco declined due to oversupply attributable to record
foreign tobacco crops. This combination of reduced demand and lower prices had a
negative impact on the financial performance of the leaf tobacco merchants and
resulted in significant increases in uncommitted tobacco inventories among the
merchants.
In recent years, the demand and supply imbalance in the worldwide tobacco
market has improved. Leaf tobacco production outside the U.S. was curtailed in
response to the high levels of uncommitted tobacco inventories. The 75/25 Rule
was repealed due to its violation of GATT and was replaced by a series of less
stringent import quotas. This resulted in cigarette manufacturers in the U.S.
resuming their purchases of tobacco grown outside the U.S. The combination of
lower levels of tobacco production and increased demand had a positive impact on
worldwide tobacco prices, a corresponding positive impact on the profitability
of the industry, and resulted in significant reductions in uncommitted tobacco
inventories.
Business Strategy
The Company's primary business objective is to capitalize on growth in
worldwide consumption of American blend cigarettes by becoming the low-cost
preferred supplier of leaf tobacco to the large multinational manufacturers of
American blend cigarettes. To achieve this objective, the Company has
implemented a strategy to position itself to meet the needs of its cigarette
manufacturing customers throughout the world by expanding its global operations
directly in the major tobacco exporting countries and by forming strategic
partnerships with its major customers in countries with emerging tobacco
production. As part of its strategy, the Company acquired Intabex on April 1,
1997. The Company believes the Intabex Acquisition will further enhance the
Company's global tobacco purchasing capabilities, expand and diversify its
customer base and expand its geographic reach. The Company's ability to respond
to the global expansion and changing needs of the large multinational cigarette
manufacturers is a critical factor in developing and expanding customer
relationships. The principal components of the Company's business strategy are
as follows:
Increase the Company's operations in low-cost tobacco growing regions. To
ensure breadth and depth of supply of tobacco, particularly the tobacco used in
American blend cigarettes, the Company has expanded and plans to continue to
expand its operations in South America, Africa and China, the largest production
areas of flue-cured and burley tobacco outside of the U.S. The April 1, 1997
acquisition of Intabex and certain assets of Tabex (PVT) Limited in Zimbabwe
substantially expanded the Company's presence in Brazil, Argentina, Zimbabwe and
Malawi, allowing the Company to significantly enhance its market share in these
countries, and established a new presence in Mozambique, Spain, Sri Lanka,
Thailand, Zaire and Zambia. In 1995, the Company signed an agreement with the
China National Tobacco Corporation to provide additional access to a
state-of-the art processing facility and tobacco sources in the province of
Yunnan. The Company also made acquisitions in 1995 in Bulgaria, Greece and
Turkey, which the Company believes positions DIMON as the largest worldwide
merchant of oriental tobacco. The Company intends to utilize its agronomy
expertise in helping to develop low-cost sources of American blend quality
tobacco and its existing relationships with the major multinational cigarette
manufacturers to gain market share in these growth regions.
<PAGE>
Capitalize on outsourcing trends. The Company anticipates further
outsourcing of leaf tobacco purchasing and processing by cigarette
manufacturers. This outsourcing trend is driven by (i) higher margins in
cigarette production, (ii) the increasing sophistication required in sourcing
leaf tobacco on a global basis, and (iii) continued privatization of tobacco and
cigarette production operations in other countries. In 1994, the Company began
providing all leaf tobacco auction buying in the U.S. for RJR, the second
largest cigarette producer in the U.S. In 1995, the Company began to purchase
and process all of Lorillard Tobacco Company's ("Lorillard") auction market
tobacco requirements in the U.S. With the improved tobacco purchasing
capabilities and expanded geographic reach resulting from the Intabex
Acquisition, the Company believes it will continue to be a major beneficiary of
the outsourcing trends in the tobacco industry.
Improve efficiency and reduce operating costs. The Company realized
substantial operating efficiencies and operating cost reductions following the
Merger and anticipates achieving similar benefits in the integration of Intabex.
In connection with the Merger, the Company initiated a restructuring plan for
its operations. The plan was designed to eliminate unprofitable locations,
consolidate duplicative processing facilities, reduce the salaried workforce,
improve operating efficiencies and increase regional unit accountability. This
initiative resulted in the recognition of various charges in fiscal 1996,
aggregating $11.8 million, and in fiscal 1995, aggregating $17.8 million. These
initiatives reduced the Company's annual operating costs and expenses by
approximately $25 million in fiscal 1997. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
In the Intabex Acquisition, the Company acquired facilities in Malawi,
Italy, Germany, Zimbabwe, and the U.S., countries where the Company already had
facilities. By eliminating redundant facilities and realizing other efficiencies
similar to those achieved in the Merger, the Company anticipates savings in
annual operating costs relating to the integration of Intabex of approximately
$23 million in fiscal 1998.
In most major tobacco producing areas, the Company and Intabex had similar
operations, which created opportunities for significant cost savings. Since the
acquisition of Intabex, the Company has completed the following in connection
with its consolidation:
- Integration of the African operations of Intabex, including
personnel reductions and consolidation of administrative offices;
- Integration of the Latin American operations of Intabex, including
personnel reductions, consolidation of administrative offices, the
sale of the manufacturing assets of a tobacco processing facility to a
third party and the conversion of that facility into a tobacco storage
warehouse;
- Integration of North American operations of Intabex including the
consolidation of the former joint venture partnership Eastern Carolina
Leaf Processors, consolidation of administrative offices and personnel
reductions; and
- Integration of Asian operations, consisting primarily of personnel
reductions and consolidation of some administrative offices.
Expand operations in new markets. During the last decade, several of the
large multinational cigarette manufacturers have expanded their global
operations, particularly into Central and Eastern Europe and the former Soviet
Union, in order to increase their access to and penetration of new markets. The
Company believes this will increase demand for local sources of leaf tobacco and
local tobacco processing due to the semi-perishable nature of unprocessed
tobacco and the existence of domestic content laws in certain foreign countries.
The Company believes these factors will cause manufacturers to place greater
reliance on the services of financially strong leaf tobacco merchants with the
ability to source and process tobacco on a global basis and to help develop
higher quality local sources of leaf tobacco. Intabex's presence in emerging
tobacco markets provides new sources of supply for the Company. Intabex brings
new sources of tobacco in the countries of Mozambique, Spain, Sri Lanka,
Thailand, Zaire and Zambia. In addition, the Company believes Intabex's tobacco
operations in the emerging markets of Africa and Asia will significantly enhance
its strength in these low-cost tobacco growing regions.
<PAGE>
Operations
The Company has developed an extensive international network through which
it purchases, processes and sells tobacco. In addition to its processing
facilities in Virginia and North Carolina, the Company owns or has an interest
in processing facilities in Brazil and Zimbabwe, the two most significant
non-U.S. exporters of flue-cured tobacco, Malawi and Mexico, two of the leading
non-U.S. exporters of burley tobacco, and Greece and Turkey, the leading
exporters of oriental tobacco. The Company also has processing facilities in
Italy and Germany. Intabex owned and operated leaf processing facilities in
Argentina, Sri Lanka and Thailand. The Company and Intabex have historically
contracted with third parties for the processing of tobacco in certain
countries. Including Intabex operations, the Company contracts with third
parties for leaf processing in Canada, Chile, China, Guatemala, India,
Mozambique, Spain, Zaire and Zambia and certain countries of the former Soviet
Union. In addition, the Company has entered into contracts, joint ventures and
other arrangements for the purchase of tobacco grown in substantially all
countries that produce export-quality, flue-cured and burley tobacco, including
Argentina, Canada, China, India and Tanzania.
Purchasing. Prior to the Intabex acquisition, the Company purchased
tobacco in approximately 26 countries, generally at auction or directly from
growers. The Company now purchases tobacco in an additional six countries and
has expanded its purchasing capabilities significantly in Brazil, Argentina,
Malawi, Thailand and Zimbabwe. Although the majority of the dollar value of
tobacco sold by the Company is produced domestically, the relative importance of
tobacco grown overseas to the Company's profitability has increased steadily.
During fiscal 1996, approximately 56% of the dollar value of tobacco purchased
by the Company was purchased in the U.S. Approximately 17%, 10% and 3% of the
dollar value of tobacco purchased by the Company during fiscal 1996 were
purchased in Brazil, Zimbabwe and Malawi, respectively. The balance of the
Company's tobacco purchases during 1996 were made in other tobacco growing
countries, including Argentina, Bulgaria, Canada, China, Germany, France,
Greece, India, Italy, Mexico, Poland, the former Soviet Union, Tanzania and
Turkey. The Company believes it has access to a diverse supply of tobacco grown
in a number of regions throughout the world and can respond quickly to factors
that may cause fluctuations in the quality, yield or price of tobacco crops
grown in any one region.
Tobacco generally is purchased at auction or directly from growers.
Tobacco grown in the U.S., Canada, Malawi and Zimbabwe is purchased by the
Company principally on auction markets. The Company purchases domestic tobacco
on the flue-cured, burley and air-cured auction markets in Florida, Georgia,
Kentucky, Maryland, North Carolina, South Carolina, Tennessee and Virginia for
shipment to the Company's facilities in North Carolina and Virginia for
processing to customer specification. The Company usually purchases tobacco at
the auction markets after receiving specific customer orders or indications of
customers' upcoming needs. The Company's network of more than 100 tobacco buyers
allows the Company to cover the major auctions of flue-cured and burley tobacco
throughout the world. These buyers are experts in differentiating hundreds of
grades of tobacco based on customer specifications and preferences that take
into account, among other factors, the texture, visual appearance and aroma of
the tobacco.
In non-auction markets such as Argentina, Brazil, Greece and Turkey, the
Company purchases tobacco directly from farmers or from local entities that have
arranged for purchase from farmers. These direct purchases are often made by the
Company based upon its projection of the needs of its long-standing customers
rather than against specific purchase orders. The Company's arrangements with
farmers vary from locale to locale depending on the Company's predictions of
future supply and demand, local historical practice and availability of capital.
For example, in Brazil, the Company generally contracts to purchase a farmer's
entire tobacco crop at the market price at the time of harvest based on the
quality of the tobacco delivered. Pursuant to these purchase contracts, the
Company provides farmers with fertilizer and other materials necessary to grow
tobacco and may extend loans to farmers to finance the crop. Under longer-term
arrangements with farmers, the Company may also finance farmers' construction of
curing barns. In addition, the Company's agronomists maintain frequent contact
with farmers prior to and during the growing and curing seasons to provide
technical assistance to improve the quality and yield of the crop. In other
non-auction markets, such as Argentina and India, the Company buys tobacco from
local entities that have purchased tobacco from farmers and supervises the
processing of that tobacco by those local entities. The Company believes that
its long-standing relationships with its customers are vital to its operations
outside of the auction markets.
<PAGE>
Processing. The Company processes tobacco to meet each customer's
specifications as to quality, yield, chemistry, particle size, moisture content
and other characteristics. The Company processes purchased tobacco in 30
facilities located throughout the world, nine of which were acquired in the
Intabex Acquisition. Unprocessed tobacco is a semi-perishable commodity that
generally must be processed within a relatively short period of time to prevent
fermentation or deterioration in quality. Accordingly, the Company has located
its processing facilities in proximity to its principal sources of tobacco.
Upon arrival at the Company's processing plants, flue-cured and burley
tobacco is first reclassified according to grade. Most of that tobacco is then
blended to meet customer specifications regarding color, body and chemistry,
threshed to remove the stem from the leaf and further processed to produce
strips of tobacco and sieve out small scrap. The Company also sells a small
amount of processed but unthreshed flue-cured and burley tobacco in loose-leaf
and bundle form to certain of its customers.
Processed flue-cured and burley tobacco is redried to remove excess
moisture so that it can be held in storage by customers or the Company for long
periods of time. After redrying, whole leaves, bundles, strips or stems are
separately packed in cases, bales, cartons or hogsheads for storage and
shipment. Packed flue-cured and burley tobacco generally is transported in the
country of origin by truck or rail, and exports are moved by ship. Prior to and
during processing, steps are taken to ensure consistent quality of the tobacco,
including the regrading and removal of undesirable leaves, dirt and other
foreign matter. Customer representatives are frequently present at the Company's
facilities to monitor the processing of their particular orders. Increased
consumption of discount and value-priced cigarettes and competition among leaf
merchants have led to improvements in processing designed to minimize waste and
thereby increase yield. Throughout the processing, Company technicians use
laboratory test equipment for quality control to ensure that the product meets
all customer specifications.
From time to time, the Company processes and stores tobacco acquired by
various stabilization cooperatives under the U.S.'s price support program. The
Company can derive significant revenues from the fees charged for such services,
particularly in years when a substantial portion of the domestic tobacco crop is
acquired by such cooperatives under the program. While these revenues are not
material to the Company's net sales, they result in additional recovery of fixed
cost which may be significant to gross profit.
Selling. The Company sells its tobacco to manufacturers of cigarettes and
other consumer tobacco products located in about 60 countries around the world.
The Company ships tobacco to international locations designated by these
manufacturers. A majority of the shipments of tobacco are to factories of these
manufacturers that are located outside the U.S. In certain countries, the
Company also uses sales agents to supplement its selling efforts. Several of
these customers individually account for a significant portion of the Company
sales in a normal year. The loss of any one or more of such customers could have
a materially adverse effect on the tobacco business of the Company.
The consumer tobacco business in most markets is dominated by a relatively
small number of large multinational cigarette manufacturers and by government
controlled entities. Approximately 56% and 55% of the Company's consolidated
tobacco sales for the nine months ended March 31, 1997, and fiscal year 1996,
respectively, were contracted to be delivered to 37 customers which the Company
believes are owned by or under common control of Japan Tobacco, Philip Morris or
RJR and each of which contributed in excess of 10% of total tobacco sales, with
Phillip Morris and RJR accounting for significantly larger portions of the
Company's sales than Japan Tobacco. No other customer accounts for more than 10%
of the Company's sales. See "- Global Operations - United States" and Note M to
the Company's Consolidated Financial Statements for the year ended June 30,
1996, incorporated by reference herein to the Company's Annual Report on form
10-K. The Company generally has maintained relationships with its customers for
over forty years. In fiscal 1996, the Company delivered approximately 38% of its
tobacco sales to customers in the U.S., approximately 32% to customers in Europe
and the remainder to customers located in Asia, South America and elsewhere. The
Intabex Acquisition significantly increases the international presence of the
Company.
<PAGE>
As of March 31, 1997, the Company's and Intabex's consolidated entities
had tobacco inventories of approximately $579.2 million and approximately $404.6
million in commitments or indications from customers for purchases of tobacco.
Substantially all of the March 31, 1997, orders are expected to be delivered in
fiscal 1998. The level of purchase commitments for tobacco fluctuates from
period to period and is significant only to the extent it reflects short-term
changes in demand for leaf tobacco. The Company typically makes 80-95% of its
leaf tobacco purchases pursuant to customer orders or supply contracts or
customer indications of anticipated need, with most purchases made based on
indications. Customers are legally bound to purchase tobacco purchased by the
Company pursuant to orders, but no contractual obligation exists with respect to
tobacco purchased in response to indications. However, the Company has done
business with most of its customers for many years and has never experienced a
significant failure of customers to purchase tobacco for which they have given
indications. Other than the contracts with RJR and Lorillard described below
under "- Global Operations - United States" and an agreement between Intabex and
Tabacalera S.A. providing that Intabex will provide a significant portion of
Tabacalera's tobacco needs, the Company has no significant supply agreements
with its customers.
The Company typically makes sales based on a customer's letter of credit,
by cash against documents or by payment against invoice. Virtually all of the
Company's sales throughout the world are denominated in U.S. dollars. While
payment for tobacco sold by the Company is usually received after the tobacco
has been processed and shipped, some customers make advances to the Company
periodically throughout the buying season as tobacco is purchased by the Company
for their accounts. Distribution of processed tobacco is made by delivery from
the Company's storage facilities directly to customers, by truck or rail to
customers' storage or manufacturing facilities or to port for shipping.
Global Operations
United States. The Company owns and operates four processing facilities in
North Carolina and Virginia. The price of tobacco grown in the U.S. is supported
under a government price support program which also establishes quotas for
production. Consequently, U.S.-grown tobacco is typically more expensive than
tobacco grown elsewhere. Although domestic tobacco historically has accounted
for the majority of the Company's sales, the Company expects that, because of
this price differential and its generally increasing business outside of the
U.S., sales of flue-cured and burley tobacco grown in the U.S. and related
services will be less significant than in the past. The Company believes that
any short-term decline in its domestic business should be offset in the
short-term by increased foreign operations.
In late fiscal 1994, Monk-Austin entered into an agreement with RJR to
purchase all of RJR's U.S. auction market tobacco requirements. In late fiscal
1995, Dibrell entered into an agreement with Lorillard pursuant to which the
Company will purchase and process all of Lorillard's domestic auction market
tobacco requirements. Generally, the contracts establish a framework for pricing
the Company's services (which generally is negotiated with respect to crop year,
grade of tobacco leaf or type of service provided based on market prices), do
not provide for minimum purchases and are terminable upon reasonable notice. The
Company expects that purchases under these agreements will account for a
substantial portion of its tobacco purchases in the U.S. in the future.
Brazil. The Company believes it is one of the two largest independent leaf
tobacco merchants in Brazil. The Company exports the majority of the tobacco
that it processes in Brazil to its customers around the world. In fiscal 1996,
the Company derived approximately 24% of its tobacco revenue from its Brazilian
operations.
<PAGE>
In fiscal 1996, the Company merged its two wholly-owned subsidiaries,
Tabra and Dibrell do Brazil to form DIMON do Brazil. DIMON do Brazil has three
modern tobacco processing facilities located in the center of Brazil's tobacco
production area. Brazil represents the Company's most significant foreign
operation in virtually all respects, including purchasing volume, processing and
storage capacities and operating income potential. Through the Merger and
resulting reduction in duplicative functions and facilities the Company reduced
annual operating costs.
Africa. The Company purchases flue-cured and burley tobacco at auction for
customer orders in Zimbabwe and Malawi. The tobacco is threshed and packed for
export at facilities in each country. The Company exports the majority of the
tobacco it processes in Zimbabwe and Malawi to its customers around the world.
In fiscal 1996, the Company derived approximately 12% of its revenue from its
Zimbabwean and Malawian tobacco operations.
Intabex's business in Africa allows the Company to significantly increase
market share in the established markets of Zimbabwe and Malawi. The addition of
Intabex's business also creates a significant presence for the Company in South
Africa, Tanzania, Zambia, Mozambique, and Zaire.
In fiscal 1995, the Company combined the former Dibrell and Monk-Austin
operations in Zimbabwe and Malawi to form two wholly-owned subsidiaries, DIMON
Zimbabwe and DIMON Malawi. Through DIMON Zimbabwe the Company purchases,
processes in two facilities and exports flue-cured and burley tobacco grown in
Zimbabwe. Through DIMON Malawi the Company purchases, processes in one facility
and exports flue-cured and burley tobacco grown in Malawi.
Greece and Turkey. The Company believes it is the largest exporter of
processed oriental tobacco in the world. Greece and Turkey are the most
important producers of oriental tobacco. Through its wholly-owned subsidiaries,
DIMON Hellas Tobacco SA, Georges Allamanis Tobacco International SA and DIMON
Turk Tutun AS, the Company buys, exports and processes, in two facilities in
each country, oriental tobacco grown in each country.
Other Foreign Operations. The Company also has foreign subsidiaries, joint
ventures and affiliates that purchase and sell tobacco grown in other countries
throughout the world. The Intabex Acquisition provided the Company a significant
presence in the established burley tobacco market in Thailand, a new presence in
Spain and, through a wholly-owned subsidiary, new business as a supplier of
premium cigar and other dark-air cured tobacco to the resurgent cigar industry.
In addition, the Company owns and operates processing facilities in Italy,
Germany and Mexico.
In certain countries, such as China and India, the Company has processing
agreements with other processors to use their facilities under the supervision
of the Company's employees. In several South American countries where the
Company operates, tobacco is bought from the farmers by the processors at
negotiated prices, and it is necessary to prefinance the crop by making advances
of cash or materials to the farmers prior to and during the growing season.
<PAGE>
Tobacco Facilities
The Company operates each of its tobacco processing plants for seven to
nine months during the year to correspond with the applicable growing seasons.
While the Company believes its processing facilities are being efficiently
utilized, the Company also believes its domestic processing facilities and
certain foreign processing facilities have the capacity to process additional
volumes of tobacco if required by customer demand.
The following is a listing of the various properties used in the tobacco
operations:
Location Use
- -------- ---
United States
Danville, VA Storage
Danville, VA Factory
Kenbridge, VA Storage
Greenville, NC* Factory/Storage
Farmville, NC Factory/Storage
Kinston, NC Factory/Storage
Sanford, NC Storage
Greenville, TN Storage
Mullins, SC Storage
Lake City, SC Storage
South America
Santa Cruz, Brazil Factory/Storage
Venancio Aires, Brazil Factory/Storage
Vera Cruz, Brazil Factory/Storage
Mexico City, Mexico Factory
Zacapa, Guatemala Factory
Africa
Lilongwe, Malawi Factory
Harare, Zimbabwe* Factories(2)/Storage
Europe
Karlsruhe, Germany Factory/Storage
Izmir, Turkey Factories(2)/Storage
Sparanise, Italy Factory/Storage
Thessaloniki, Greece Factories(3)/Storage
- -------------
*The Greenville, NC and one of the Harare, Zimbabwe factories were formerly
joint ventures between the Company and Intabex.
<PAGE>
The following is a listing of properties acquired as a result of the Intabex
Acquisition:
Intabex Holdings Worldwide S.A.
-------------------------------
Location Use
-------- ---
South America
Venancio Aires, Brazil Storage
Provinicia de Jujuy, Argentina Factory/Storage
Bogota, Columbia Factory/Storage*
Bahia, Brazil Factory/Storage*
Santiago de los Caballeros,
Dominican Republic Factory/Storage*
Asuncion, Paraguay Factory/Storage*
Africa
Lilongwe, Malawi Factory/Storage
Limbe, Malawi Factory/Storage
Europe
Glauzig, Germany Factory/Storage
Palona, Italy Factory/Storage
Asia
Columbo, Sri Lanka Factory/Storage
Chiang Mai, Thailand Factory/Storage
Manila, Philippines Storage*
*Dark air-cured operations
Competition
The leaf tobacco industry is highly competitive. Competition among dealers
in leaf tobacco is based on the price charged for products and services as well
as the dealers' ability to meet customer specifications in the buying,
processing and financing of tobacco. The Company believes that it is well
positioned to meet this competition, particularly in view of its important
processing facilities in the U.S., Brazil and other major tobacco growing
countries. Prior to the Intabex acquisition, the Company competed with three
major tobacco processors and had significantly less market share than the
world's largest processor. Following the acquisition, the Company's principal
competitors are Universal Corporation ("Universal") and Standard Commercial
Corporation and the Company's market share has increased from approximately 30%
to 37% on a pro forma basis. Of the independent leaf tobacco merchants, the
Company believes that, based on revenues, it ranks second in established
worldwide market share. The Company further believes that among independent leaf
tobacco merchants, it has the largest or second largest market share in Brazil,
Greece, Turkey, the U.S. and Zimbabwe. Universal's market share in the U.S. is
considerably greater than that of the Company.
Seasonality
The purchasing and processing activities of the Company's tobacco business
are seasonal. Flue-cured tobacco grown in the U.S. generally is purchased during
the five-month period beginning in July and ending in November. U.S.-grown
burley tobacco is usually purchased from late November through January or
February. Tobacco grown in Brazil usually is purchased from January through June
and delivered from May to September. Other markets around the world last for
similar periods, although at different times of the year, and as the importance
of these markets has grown the seasonality in the Company's business has
decreased.
<PAGE>
Mature tobacco, prior to being processed and packed, is a semi-perishable
commodity. The production cycle for redrying and packing is relatively short.
For example, flue-cured tobacco in the U.S. is processed, packed and invoiced
within the same five-month period (July through November) that it is purchased.
During this period inventories of unprocessed tobacco, inventories of redried
tobacco and trade accounts receivable normally reach peak levels in succession.
Current liabilities, particularly advances from customers and short-term notes
payable to banks, normally reach their peak in this period as a means of
financing the seasonal expansion of current assets. Increasing amounts of
U.S.-grown burley and foreign tobacco are now being processed in periods other
than July through November, reducing the seasonal fluctuations in working
capital. At June 30, the end of the Company's fiscal year, the seasonal
components of the Company's working capital reflect primarily the operations
related to foreign grown tobacco.
Flowers
The Company's fresh-cut flower operations consist of buying flowers from
sources throughout the world and transporting them, normally by air, to
operating units for resale to wholesalers and retailers through its wholly-owned
flowers subsidiary, Florimex. For the twelve months ended March 31, 1997, the
Company's flower operations produced approximately 12% of the Company's pro
forma revenues, and at March 31, 1997, represented approximately 10% of the
Company's consolidated assets. The Company does not view its flowers operations
as a core business and will continue to evaluate its strategic alternatives with
respect to Florimex.
Florimex operates through 51 offices in 18 countries, including Austria,
Canada, Colombia, the Czech Republic, Ecuador, France, Germany, Hungary, Italy,
Japan, Poland, The Netherlands, Spain, Switzerland, the United Kingdom and the
U.S. The activities of certain of these offices are limited to acquiring flowers
in the country of origin, but most are engaged in importation and distribution.
Florimex is also engaged in additional value-added services through the design
and assembly of floral bouquets for sale to supermarket retailers. Virtually all
offices are operated as corporate profit centers with the general manager
receiving a bonus related to the financial performance of the operation.
Florimex's Dutch exporting operations, Baardse, are headquartered in
Aalsmeer, The Netherlands, inside the premises of the world's largest flower
auction facilities. In addition to the Aalsmeer auction, Florimex routinely
acquires flowers from all principal Dutch flower auctions. Florimex's Dutch
exporting operations sell and ship product directly to Florimex's fresh-cut
flower operations and its competitors.
Florimex sells to thousands of wholesalers and retailers throughout
Europe, North America and Asia. No customer accounts for a significant portion
of Florimex's sales in a normal year, and the loss of any one customer or a
group of related customers should not have a material adverse effect on
Florimex's business.
Employees
The Company's consolidated entities employed about 2,800 persons,
excluding seasonal employees, in its worldwide tobacco operations at June 30,
1996. In the U.S. tobacco operations the Company's consolidated entities
employed about 900 persons, excluding 1,200 seasonal employees at June 30, 1996.
Most seasonal employees are covered by collective bargaining agreements with
several U.S. labor unions. Most of the full-time employees of the Company are
not covered by collective bargaining agreements. In the non-U.S. tobacco
operations the Company's consolidated entities employed about 1,900 persons,
excluding 6,650 seasonal employees at June 30, 1996. The Company's worldwide
consolidated cut flower operation entities employ about 1,300 persons, excluding
seasonal employees. The Company considers its employee relations to be
satisfactory.
<PAGE>
Government Regulation and Environmental Compliance
In recent years, governmental entities in the U.S. at all levels have
taken or have proposed actions that may have the effect of reducing consumption
of cigarettes. These activities have included: (i) the U.S. Environmental
Protection Agency's decision to classify tobacco environmental smoke as a "Group
A" (known human) carcinogen; (ii) restrictions on the use of tobacco products in
public places and places of employment including a proposal by the U.S.
Occupational Safety and Health Administration to ban smoking in the work place;
(iii) proposals by the U.S. Food and Drug Administration to sharply restrict
cigarette advertising and promotion and to regulate nicotine as a drug; (iv)
increases in tariffs on imported tobacco; (v) proposals to increase the U.S.
excise tax and state taxes on cigarettes; (vi) the policy of the U.S. government
to link certain federal grants to the enforcement of state laws banning the sale
of tobacco products to minors; and (vii) recent filings of lawsuits against
cigarette manufacturers by many U.S. states and others seeking reimbursement of
Medicaid and other expenditures claimed to have been made by such states to
treat diseases allegedly caused by cigarette smoking. In 1993, Congress enacted
a law (the 75/25 Rule) requiring that all domestically manufactured cigarettes
contain at least 75% domestically grown tobacco. Although that law was repealed
in 1995 and was replaced with import quotas designed to assist domestic tobacco
growers, the law had the effect of drastically decreasing demand for foreign
tobacco in the domestic production of cigarettes. It is not possible to predict
the extent to which governmental activities might affect the Company's business.
On June 20, 1997, representatives of the leading U.S. manufacturers of
consumer tobacco products, several state attorneys general and certain private
plaintiffs jointly announced a proposed settlement of certain significant
lawsuits pending against the manufacturers. The proposed settlement, which must
be enacted into federal law to become effective, is expected to cost the
nation's leading cigarette manufacturers, all of whom are customers of the
Company, approximately $368 billion in cash outlays over the next 25 years.
Cigarette manufacturers may attempt to recover a portion of these costs by
demanding price and other concessions from suppliers such as the Company. Such
concessions could materially and adversely affect the Company's margins and its
results of operations.
The proposed settlement also would permit federal regulation of cigarette
production and would severely curtail advertising of tobacco products, banning
many of the marketing methods currently utilized by the cigarette industry. The
settlement may therefore materially adversely impact sales of tobacco in the
U.S. and, possibly, overseas. A substantial risk exists that past growth trends
in tobacco sales may not continue and that existing sales may decline as a
result of the proposed settlement. In addition, in response to the proposed
settlement, groups representing tobacco farmers have proposed certain measures,
including measures similar to the 75/25 Rule, that could adversely affect the
Company's business. However, it is not possible to predict whether or in what
form the proposed settlement or any additional measures will be approved by
Congress and the President or the extent to which any settlement or such
measures may affect the Company's business.
A number of foreign nations also have taken steps to restrict or prohibit
cigarette advertising and promotion, to increase taxes on cigarettes and to
discourage cigarette smoking. In some cases, such restrictions are more onerous
than those in the U.S. For example, advertising and promotion of cigarettes has
been banned or severely restricted for a number of years in Australia, Canada,
Finland, France, Italy, Singapore and a number of other countries. It is
impossible to predict the extent to which these and any additional restrictions
might affect the Company's business.
<PAGE>
MANAGEMENT
The directors and principal officers of the Company are as follows:
<TABLE>
<CAPTION>
Name Age Position
<S> <C>
Claude B. Owen, Jr. 52 Chairman of the Board and Chief Executive Officer
Albert C. Monk III 57 President and Director
Brian J. Harker 47 Executive Vice President and Chief Financial Officer
Richard D. O'Reilly 48 Senior Vice President-Human Resources
James A. Cooley 46 Vice President and Treasurer
R. Stuart Dickson 67 Director
John M. Hines 57 Director
Norman A. Scher 59 Director
James E. Johnson, Jr. 67 Director
Joseph L. Lanier, Jr. 65 Director
Robert T. Monk, Jr. 49 Director
Louis N. Dibrell, III 52 Director
Henry F. Frigon 62 Director
Dr. Thomas F. Keller 65 Director
William R. Slee 56 Director
Anthony C.B. Taberer 61 Director
</TABLE>
Claude B. Owen, Jr. was elected Chairman of the Board and Chief Executive
Officer of the Company on October 21, 1994. He also served as Chairman, Chief
Executive Officer and President of Dibrell from July 1993 until the effective
time of the Merger and as Chairman of the Board and Chief Executive Officer of
Dibrell from February 1990 until July 1993. Mr. Owen also serves as a
director for American National Bankshares, Inc. and Richfood Holdings,
Inc.
Albert C. Monk III was elected President of the Company on October 21,
1994 and President and Chief Executive Officer of DIMON International on January
23, 1995. He also served as Chairman, Chief Executive Officer and President of
Monk-Austin beginning from November 8, 1994 until the effective time of the
Merger, Chief Executive Officer and President of Monk-Austin since 1992 and
President of Monk-Austin since 1990. Mr. Monk is the first cousin of Robert T.
Monk, Jr.
John M. Hines, a director of the Company since October 21, 1994, was
Executive Vice President of the Company from February 22, 1995 until his
retirement on July 1, 1996. Mr. Hines also served as Executive Vice President
and Chief Financial Officer of Monk-Austin from 1990 to the effective time of
the Merger.
Richard D. O'Reilly was appointed Senior Vice President - Human Resources
May 16, 1995. From 1989 to 1995, he served as Vice President - Human Resources
at Sweetheart Cup Company, Chicago, Illinois.
James A. Cooley was appointed Vice President and Treasurer on April 1,
1995. He also served as Vice President and Treasurer of Dibrell from January
1994 to the effective time of the Merger, and Vice President-Tax of Dibrell from
October 1988 to January 1994.
Brian J. Harker was elected Executive Vice President and Chief Financial
Officer on October 1, 1996. He served as Senior Vice President of DIMON
International from April 1995 to October 1996 and as Senior Vice
President-Director International Operations of Monk-Austin from July 1991 to
April 1995. Prior thereto he served as Vice President of Monk-Austin.
<PAGE>
R. Stuart Dickson, a director of the Company since November 17, 1995,
has been Chairman of the Executive Committee of Ruddick Corporation since
February 1994. Ruddick Corporation owns Harris-Teeter Supermarkets and A&E
Mills, a leading thread producer. He also served as Chairman of the Board of
Ruddick from 1968 to 1994. Mr. Dickson also serves as a director of First Union
Corporation, PCA International, Inc., Textron, Inc. and United Dominion
Industries.
Norman A. Scher, a director of the Company since April 1, 1995, has been
Executive Vice President and Chief Financial Officer of Tredegar Industries,
Inc. since July 1989. Tredegar is a manufacturer of plastics and metal
products.
James E. Johnson, Jr., a director of the Company since April 1, 1995, has
been a partner of Womble Carlyle Sandridge & Rice, PLLC (a law firm based in
Charlotte, North Carolina) since 1989.
Joseph L. Lanier, Jr., a director of the Company since April 1, 1995,
is currently Chairman and Chief Executive Officer of Dan River, Inc. Mr.
Lanier is also a director of SunTrust Banks, Inc., Flowers Industries, Inc.
and Torchmark Corporation.
Robert T. Monk, Jr., director of the Company since April 1, 1995, was
Senior Vice President of DIMON International from April 1, 1995 until his
retirement on June 30, 1996. He served as Vice President and Director of
Processing Operations of Monk-Austin since 1990. Mr. Monk is the first cousin of
Albert C. Monk III.
Louis N. Dibrell, III, a director of the Company since April 1, 1995, is
currently a Senior Vice President of DIMON International, Inc. Prior thereto he
served as Senior Vice President of Dibrell.
Henry F. Frigon, a director of the Company since April 1, 1995, is
currently retired. Prior to his retirement he served as Executive Vice
President and Chief Financial Officer of Hallmark Cards, Inc. since
December 1990. Mr. Frigon also serves as a director of H&R Block, Inc.,
Circle K Stores and Group Technologies Corporation.
Dr. Thomas F. Keller, director of the Company since April 1, 1995, is
currently retired. Prior to his retirement he served as Dean and R.J. Reynolds
Industries Professor at the Fuqua School of Business at Duke University in
Durham, North Carolina. He has also served as a director of American Business
Products, LADD Furniture, Inc., Nations Funds Trust, Mentor Series Trust,
Hatteras Income Securities, Inc., and Wendy's International, Inc.
William R. Slee, a director of the Company since November 15, 1996, has
been a Senior Advisor to Schroders PLC, a merchant bank in London, U.K., since
1995. Prior thereto, he was a Group Managing Director with Schroders PLC.
Anthony C.B. Taberer, a director of the Company since April 1, 1997, was
formerly the Chairman of the Board and Chief Executive Officer of Intabex, and
upon joining the Board of the Company became the non-executive Chairman of
Intabex. Mr. Taberer will serve as a consultant to a trading subsidiary of
Intabex under an agreement with an initial term expiring in October 2000.
<PAGE>
SELLING STOCKHOLDERS
The following table sets forth information with respect to the beneficial
ownership of shares of the Common Stock as of June 30, 1997, and as adjusted to
reflect the sale by the Selling Stockholders of the shares in the Stock
Offering.
<TABLE>
<CAPTION> Maximum
Number of
Number of Shares to be
Beneficial Ownership Shares to be Beneficial Ownership Sold in the
Prior to the Offerings Sold in the After the Stock Offering DECS
Name Shares Percent(1) Stock Offering Shares Percent(1) Offering(2)
---- ------ --------- ------------- ------ ---------- -----------
<S> <C>
A. C. Monk, Jr. 562,382 1.3% 0 562,382 1.3% 115,000
A. C. Monk, III 1,202,330 2.7 0 1,202,330 2.7 600,000
A. C. Monk, IV 227,727 170,000 57,727 0
Linda Monk Page 1,094,091 2.4 314,232 779,859 1.8 385,868
William S. Page 80,168 0 80,168 60,500
Tracy Gray Monk 227,727 170,000 57,727 0
Penelope Monk Page 64,105 25,768 38,337 0
W. C. Monk 1,741,452 3.9 0 1,741,452 3.9 787,368
W. C. Monk, Jr. 145,388 20,000 125,388 0
W. C. Monk, Jr. Trust 525,130 1.2 320,000 205,130 187,000
Molly G. Monk 164,088 20,000 144,088 0
Molly G. Monk Trust 525,130 1.2 320,000 205,130 187,000
Robert T. Monk 974,359 2.2 0 974,359 2.2 365,000
Francis J. Monk 38,691 0 38,691 15,000
Robert T. Monk, Jr. 1,000,000 2.3 56,500 943,500 2.1 441,368
Robert T. Monk, Jr. Trust 175,476 160,000 15,476 0
Robert T. Monk, III 141,810 125,000 16,810 0
Emily Monk Davidson 165,549 0 165,549 130,500
Emily Monk Davidson Trust 462,976 1.0 252,000 210,976 209,500
Emily Monk Davidson
Foundation 43,500 43,500 0 0
Piper H. Monk 49,,266 43,000 6,266
------- --------- ------- ------- ----- ---------
0
Total 9,611,345 21.7% 2,040,000 7,571,345 17.1% 3,484,104
========= ===== ========= ========= ===== =========
</TABLE>
- --------
(1) Percentages less than 1% of the outstanding Common Stock are omitted.
(2) The Selling Stockholders may deliver up to 3,484,104 shares upon termination
of the Trust on ___, 2000. If the Selling Stockholders deliver the maximum
number of shares, they will own an aggregate of ---- shares of Common Stock, or
- ---% of the shares outstanding at June 30, 1997, assuming no change in the
number of shares owned by them or outstanding. The Selling Stockholders may
deliver fewer shares or may choose to settle their obligations under the DECS in
cash. See the DECS Prospectus for a description of the obligations of the
Selling Stockholders in the DECS Offering.
<PAGE>
DESCRIPTION OF CAPITAL STOCK
General
The Company is authorized to issue up to 125,000,000 shares of Common
Stock, no par value per share, and up to 10,000,000 shares of Preferred Stock,
no par value per share. As of June 30, 1997 there were 44,312,349 outstanding
shares of Common Stock and no outstanding shares of Preferred Stock.
Common Stock
Each share of Common Stock is entitled to one vote on all matters
submitted to a vote at any meeting of shareholders. Holders of Common Stock are
entitled to receive dividends when, as and if declared by the Board of Directors
out of funds legally available therefor and, upon liquidation, to receive pro
rata all assets, if any, of the Company available for distribution after the
payment of necessary expenses and all prior claims. Holders of Common Stock have
no preemptive, redemption, conversion, subscription or sinking fund rights, and
all outstanding shares of Common Stock are fully paid and nonassessable. Holders
of Common Stock have no right to cumulate votes in the election of directors.
The rights and privileges of holders of Common Stock are subject to any
preferences provided for by resolution of the Board of Directors for any series
of Preferred Stock that the Company may issue in the future.
Preferred Stock
Under the Company's Amended and Restated Articles of Incorporation (the
"Articles"), the Board of Directors may issue shares of Preferred Stock in one
or more series as may be determined by the Board of Directors, which may
establish, from time to time, the number of shares to be included in each
series, may fix the designation, powers, preferences and rights of the shares of
each such series and any qualifications, limitations or restrictions thereof,
and may increase or decrease the number of shares of any series without any
further vote or action by the shareholders. Any Preferred Stock so issued may
rank senior to the Common Stock with respect to the payment of dividends or
amounts upon liquidation, dissolution or winding up of the Company, or both. In
addition, any such shares of Preferred Stock may have class or series voting
rights. Under certain circumstances, the issuance of Preferred Stock or the
existence of the unissued Preferred Stock may tend to discourage or render more
difficult a merger or other change in control of the Company. No shares of
Preferred Stock have been issued and the Company has no present plans to issue
any shares of Preferred Stock.
Rights Plan
Pursuant to a Rights Agreement, dated as of March 31, 1995, between the
Company and First Union National Bank of North Carolina, as Rights Agent (the
"Rights Plan"), one right to purchase Common Stock (a "Right") is attached to
each share of Common Stock issued prior to the Distribution Date, as defined
below. Except as described below, the Rights are evidenced by certificates for
the Common Stock, and no separate certificates will be distributed.
Each Right entitles the registered holder thereof to purchase from the
Company at any time following the Distribution Date and prior to the earlier of
(a) March 31, 2005, or (b) the time at which the Rights are redeemed (the
"Expiration Date"), one share of Common Stock at a price of $65.00, as adjusted
in certain circumstances described below (the "Purchase Price").
The Rights will separate from the Common Stock and a "Distribution Date"
will occur upon the earliest of (a) the tenth business day after the date on
which there is a public announcement that a person or group of affiliated or
associated persons acting in concert has acquired either (i) beneficial
ownership of an additional 10% or more of outstanding Common Stock or (ii) that
amount of Common Stock that results in such person or group owning both (x) more
than 10% of outstanding Common Stock and (y) that percentage of Common Stock
equal to 3% or more over the percentage of outstanding Common Stock owned by
such person or group at the effective time of the Merger (the "Effective Time")
(an "Acquiring Person"), provided that "Acquiring Person" will not include (i)
any person who becomes an Acquiring Person solely as a result of a reduction in
the number of shares of Common Stock outstanding due to the repurchase of shares
of Common Stock by the Company or solely as a result of acquisition of shares
pursuant to benefit plans adopted by the Board, unless and until such person
shall purchase or otherwise become the beneficial owner of additional shares of
Common Stock constituting 1% or more of the then outstanding shares of Common
Stock or (ii) any person who the Board determines has become an Acquiring Person
inadvertently if such person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such person would no longer be an
Acquiring Person as defined under the Rights Plan, (b) the tenth business day
after the date of commencement of a tender or exchange offer if upon
consummation thereof the offeror, including affiliates and associates, would be
the beneficial owner of 10% or more of the Common Stock (a "Tender Offer") or
(c) the tenth business day after the commencement of a proxy solicitation in
which any Affiliate (as hereinafter defined) of the Company participates,
provided that such tenth business day occurs prior to the third anniversary of
the Effective Time (a "Proxy Solicitation"). For purposes of the Rights Plan,
"Affiliate" means any person or group that beneficially owns 10% or more of the
shares of Common Stock then outstanding; any director of executive officer of
the Company; any person, firm or corporation that directly or indirectly
controls, is controlled by or is under common control with the Company; and any
member of the immediate family of any of the foregoing.
<PAGE>
Until the Distribution Date (a) the Rights are evidenced by the Common
Stock certificates and may be transferred with and only with such certificates,
(b) Common Stock certificates issued after the Effective Time will contain a
notation incorporating the Rights Plan by reference and (c) the surrender for
transfer of any certificate for Common Stock outstanding will also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate. Pursuant to the Rights Plan, the Company will reserve the right to
require prior to the occurrence of a Triggering Event (as hereinafter defined)
that upon exercise of Rights, a number of Rights be exercised so that only whole
shares of Common Stock will be issued.
The Rights are not exercisable until the Distribution Date and will expire
at the close of business on the Expiration Date, unless earlier redeemed by the
Company as described below.
As soon as practicable after the Distribution Date, certificates will be
mailed to holders of record of the Common Stock as of the close of business on
the Distribution Date and, thereafter, the separate certificates alone will
represent the Rights. Only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that at any time following the date (a) any person becomes an
Acquiring Person or acquires 10% or more of the Common Stock in a Tender Offer
(either, a "Stock Acquisition Date") or (b) if prior to April 1998, a Proxy
Solicitation is commenced and continues for 10 business days, each holder of a
Right will thereafter have the right to receive, upon exercise, Common Stock
(or, in certain circumstances, cash, property or other securities of Company)
having a value equal to two times the exercise price of the Right.
Notwithstanding the foregoing, following the occurrence of any such event, all
Rights that are, or (under certain circumstances specified in the Rights Plan)
were, beneficially owned by any Acquiring Person (or certain related parties)
or, in the case of a Proxy Solicitation, by an Affiliate who participates in
such Proxy Solicitation, will be null and void.
In the event that, at any time following the Stock Acquisition Date, the
Company is acquired in a merger or other business combination transaction in
which the Company is not the surviving corporation or more than 50% of Company's
assets or earning power is sold or transferred, each holder of a Right (except
Rights which previously have been voided as described above) will thereafter
have the right to receive, upon exercise, common stock of the acquiring company
(the "Acquiring Company") having a value equal to two times the exercise price
of the Right. The events set forth in this paragraph and in the preceding
paragraph are referred to as the "Triggering Events."
<PAGE>
At any time following the existence of an Acquiring Person or the
commencement and continuance of a Proxy Solicitation for more than 10 business
days, the Board of Directors may, at its option, exchange all or any part of the
Rights (other than Rights held by an Acquiring Person or an Affiliate who
participates in a Proxy Solicitation) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, provided that such exchange may
not be effected at any time after any person or group acquires 50% or more of
the shares of Common Stock then outstanding.
The Purchase Price payable, and the number of other securities or property
issuable, upon exercise of the Rights are subject to adjustment from time to
time to prevent dilution (a) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Stock, (b) if
holders of the Common Stock are granted certain rights or warrants to subscribe
for Common Stock or convertible securities at less than the current market price
of the Common Stock or (c) upon the distribution to holders of the Common Stock
of evidences of indebtedness or assets (excluding regular quarterly cash
dividends) or of subscription rights or warrants (other than those referred to
above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the Common Stock
on the last trading date prior to the date of exercise.
At any time prior to the close of business on the earlier of (a) the Stock
Acquisition Date or (b) the tenth business day after commencement of a Proxy
Solicitation, the Company may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (payable in cash, Common Stock or other consideration
deemed appropriate by the Board of Directors). Immediately upon the action of
the Board of Directors ordering redemption of the Rights, the Rights will
terminate and the only right of the holders of Rights will be to receive the
$.01 per Right redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to shareholders or to the Company, shareholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for Common Stock (or other consideration) of the Company or for
common stock of the Acquiring Company as set forth above.
The provisions of the Rights Plan may be amended by the Board of Directors
in order to cure any ambiguity, to make changes which do not adversely affect
the interests of holders of Rights (excluding the interests of any Acquiring
Person or certain related persons or any Affiliate participating in a Proxy
Solicitation), or to shorten or lengthen any time period under the Rights Plan;
provided, however, that no amendment to adjust the time period governing
redemption may be made at such time as the Rights are not redeemable. The Rights
Plan may not be amended to change the redemption price, the Expiration Date, the
Purchase Price or the number of shares of Common Stock for which a Right is
exercisable, provided that at any time (a) prior to the existence of an
Acquiring Person, (b) prior to the commencement of a Tender Offer or (c) prior
to the commencement of a Proxy Solicitation, provided that such Proxy
Solicitation is commenced before the third anniversary of the Effective Time,
the Board of Directors may amend the Rights Plan to increase the Purchase Price
or extend the Expiration Date.
The Rights may have the effect of delaying or preventing a change in
control of the Company by significantly increasing the cost of acquiring the
Company. If a person were to attempt to acquire control of the Company without
the approval of the Board of Directors, the Rights, should they become
exercisable, would substantially dilute the purchaser's stock position in
Company, thereby increasing the effective cost of control commensurately.
<PAGE>
Certain Provisions of the VSCA, Company Articles and Company Bylaws
General
A number of provisions of the VSCA, the Articles and the Company's Bylaws
(the "Bylaws") deal with matters of corporate governance and the rights of
shareholders. Certain of these provisions, as well as the ability of the Board
of Directors to issue shares of Preferred Stock and to set the voting rights,
preferences and other terms thereof, may be deemed to have an anti-takeover
effect and may delay or prevent takeover attempts not first approved by the
Board of Directors (including takeovers which certain shareholders may deem to
be in their best interests). These provisions also could delay or frustrate the
removal of incumbent directors or the assumption of control by shareholders. The
Company believes that these provisions are appropriate to protect the interests
of the Company and all of its shareholders. The following describes the
principal provisions of the VSCA, the Articles and the Bylaws that may be deemed
to have anti-takeover effects.
Certain Business Combinations
The VSCA generally requires that any merger, share exchange or sale of
substantially all of the assets of a corporation not in the ordinary course of
business be approved by at least two-thirds of the votes entitled to be cast by
each voting group entitled to vote, unless the articles of incorporation provide
for a greater or lesser vote (but in no event less than a majority of votes cast
by each such voting group at a meeting at which a quorum of the voting group
exists). The Articles generally require that any merger, share exchange or sale
of substantially all the assets of DIMON not in the ordinary course of business
be approved by at least two-thirds of the votes entitled to be cast by each
voting group that is entitled to vote on such transactions. In addition to any
vote required by the provisions of VSCA described below, the Articles provide
that any transactions with DIMON or a subsidiary of DIMON that constitutes or
involves an "Affiliated Transaction" with an "Interested Shareholder," as such
terms are defined in Section 13.1-725 of the VSCA, must be approved by a
majority of the votes entitled to be cast by the members of each voting group
that is entitled to vote on such transaction other than votes entitled to be
cast by such interested shareholder and all "affiliates" and "associates" of
such interested shareholder, as such terms are defined in Section 13.1-725 of
the VSCA, unless such affiliated transaction is approved in advance by the vote
of a majority of the members of the DIMON Board (other than such interested
shareholder and any of his affiliates and associates who may be directors at the
time of such vote). The Bylaws require the affirmative vote of two-thirds of the
directors then in office to approve any merger, statutory share exchange, sale
or other disposition of all or substantially all of DIMON's assets, or any sale,
lease, transfer, distribution or other disposition of any business constituting
a "significant subsidiary" of DIMON for purposes of Regulation S-X under the
Securities Act, or any dissolution of DIMON.
The VSCA contains provisions governing "Affiliated Transactions." These
provisions, with several exceptions discussed below, require approval of
material acquisition transactions between a Virginia corporation and any holder
of more than 10% of any class of its outstanding voting shares (an "Interested
Shareholder") by the holders of at least two-thirds of the remaining voting
shares. Affiliated Transactions subject to this approval requirement include
mergers, share exchanges, material dispositions of corporate assets not in the
ordinary course of business, any dissolution of the corporation proposed by or
on behalf of an Interested Shareholder, or any reclassification, including
reverse stock splits, recapitalization or merger of the corporation with its
subsidiaries which increases the percentage of voting shares owned beneficially
by an Interested Shareholder by more than five percent.
For three years following the time that an Interested Shareholder becomes
an owner of 10% of the outstanding voting shares, a Virginia corporation cannot
engage in an Affiliated Transaction with such Interested Shareholder without
approval of two-thirds of the voting shares other than those shares beneficially
owned by the Interested Shareholder, and majority approval of the "Disinterested
Directors." A Disinterested Director means, with respect to a particular
Interested Shareholder, a member of the board of directors who was (a) a member
on the date on which an Interested Shareholder became an Interested Shareholder
and (b) recommended for election by, or was elected to fill a vacancy and
received the affirmative vote of, a majority of the Disinterested Directors then
on the board. At the expiration of the three-year period, the statute requires
approval of Affiliated Transactions by two-thirds of the voting shares other
than those beneficially owned by the Interested Shareholder.
<PAGE>
The principal exceptions to the special voting requirement apply to
transactions proposed after the three-year period has expired and require either
that the transaction be approved by a majority of the corporation's
Disinterested Directors or that the transaction satisfy the fair-price
requirements of the statute. In general, the fair-price requirement provides
that in a two-step acquisition transaction, the Interested Shareholder must pay
the shareholders in the second step either the same amount of cash or the same
amount and type of consideration paid to acquire the Virginia corporation's
shares in the first step.
None of the foregoing limitations and special voting requirements applies
to a transaction with an Interested Shareholder (a) whose acquisition of shares
making such person an Interested Shareholder was approved by a majority of the
Virginia corporation's Disinterested Directors or (b) who was an Interested
Shareholder on the date the corporation became subject to these provisions by
virtue of its having 300 shareholders of record.
These provisions were designed to deter certain takeovers of Virginia
corporations. In addition, the statute provides that, by affirmative vote of a
majority of the voting shares other than shares owned by any Interested
Shareholder, a corporation can adopt an amendment to its articles of
incorporation or bylaws providing that the Affiliated Transactions provisions
shall not apply to the corporation. DIMON has not "opted out" of the Affiliated
Transactions provisions.
The VSCA also contains provisions regulating certain "control share
acquisitions," which are transactions causing the voting strength of any person
acquiring beneficial ownership of shares of a public corporation in Virginia to
meet or exceed certain threshold percentages (20%, 33 1/3% or 50%) of the total
votes entitled to be cast for the election of directors. Shares acquired in a
control share acquisition have no voting rights unless (a) the voting rights are
granted by a majority vote of all outstanding shares other than those held by
the acquiring person or any officer or employee director of the corporation, or
(b) the articles of incorporation or bylaws of the corporation provide that
these Virginia law provisions do not apply to acquisitions of its shares. The
acquiring person may require that a special meeting of the shareholders be held
to consider the grant of voting rights to the shares acquired in the control
share acquisition. These provisions were designed to deter certain takeovers of
Virginia public corporations. DIMON has not adopted an amendment to its Articles
or Bylaws making these provisions inapplicable to acquisition of its shares.
Provisions Regarding Board of Directors
Certain provisions of the Articles with respect to the classification of
the Board of Directors and the removal of directors could have the effect of
making it more difficult for a third party to acquire, or of discouraging a
third party from acquiring, control of Company.
Advance Notice Requirements for Shareholder Proposals and Director Nominations
The Bylaws establish advance notice procedures for shareholder proposals
and the nomination, other than by or at the direction of the Board of Directors
or a committee thereof, of candidates for election as directors. With respect to
shareholder nominations for the election of directors, the Bylaws provide that,
commencing with the 1996 annual shareholders' meeting, any shareholder entitled
to vote in the election of directors generally may nominate at a meeting one or
more persons for election as a director only if written notice of such
nomination or nominations is delivered or mailed to the secretary of the Company
(a) in the case of an annual meeting of shareholders that is called for a date
that is within 30 days before or after the anniversary date of the immediately
preceding annual meeting of shareholders, not less than 50 days nor more than 75
days prior to such anniversary date and (b) in the case of an annual meeting of
shareholders that is called for a date that is not within 30 days before or
after the anniversary date of the immediately preceding annual meeting of
shareholders, or in the case of a special meeting of shareholders, not later
than the close of business on the tenth day following the day on which the
notice of meeting was mailed or public disclosure of the date of the meeting was
made, whichever occurs first. Such notification must contain the following
information to the extent known by the notifying shareholder: (a) the name, age
and address of each proposed nominee; (b) the principal occupation of each
proposed nominee; (c) the nominee's qualifications to serve as a director; (d)
the name and residence address of the notifying shareholder; and (e) the number
of shares owned by the notifying shareholder. The secretary of the Company will
deliver such notices to the Nominating Committee of the Board of Directors, to
such other committee as may be appointed from time to time by the Board of
Directors for the purpose of recommending to the Board of Directors candidates
to serve as directors or, in the absence of any such committee, to the Board of
Directors, for review. The Nominating Committee or such other committee will
thereafter make its recommendation to the Board of Directors, and the Board of
Directors will thereafter make its determination, with respect to whether such
candidate should be nominated for election as a director. Nominations not made
in accordance with the foregoing provisions will be disregarded by the chairman
of the meeting and all votes cast for each such nominee may be disregarded.
<PAGE>
With respect to other shareholder proposals, the Bylaws provide that a
shareholder desiring to make such a proposal must give notice thereof to the
secretary of the Company, not less than 60 days before the first anniversary of
the date of the Company's proxy statement in connection with the last annual
meeting. Such notice must set forth as to each matter the shareholder proposes
to bring before the annual meeting (a) a brief description of the business
desired to be brought before the annual meeting and the reason for conducting
such business at the annual meeting, (b) the name and record address of the
shareholder proposing such business, (c) the class, series and number of the
Company's shares that are beneficially owned by the shareholder, and (d) any
material interest of the shareholder in such business. In the event that a
shareholder attempts to bring business before an annual meeting without
complying with the foregoing provisions, the chairman of the meeting may, if the
facts warrant, determine that the business was not properly brought before the
meeting in accordance with the foregoing procedures, and, if he so determines,
he will declare to the meeting and such business will not be transacted.
The foregoing provisions may preclude shareholders from bringing matters
before other shareholders at an annual or special meeting, including making
nominations for directors.
Meetings of Shareholders
Under the Bylaws, meetings of the shareholders may be called by the
chairman of the board, the president or a majority of the Board of Directors.
This provision could have the effect of delaying until the next annual
shareholders' meeting shareholder actions which are favored by the holders of a
majority of the outstanding voting securities of the Company, because such
person or entity, even if it acquired a majority of the outstanding voting
securities of the Company, would be able to take action as a shareholder (such
as electing new directors or approving a merger) only at a duly called
shareholders' meeting.
Amendment of Articles and Bylaws
Subject to the VSCA, the Articles may be amended by the affirmative vote
of the holders of a majority of the outstanding votes entitled to be cast by
each voting group entitled to vote thereon. Notwithstanding the foregoing, the
amendment or repeal of certain provisions of the Articles relating to the
approval of certain business combinations as described below and certain other
matters require the affirmative vote of the holders of two-thirds of the votes
entitled to be cast by each voting group that is entitled to vote on such
amendment or repeal.
Indemnification
The Articles and the Bylaws provide that directors and officers of the
Company will be indemnified by the Company to the fullest extent authorized by
Virginia law, as it now exists or may in the future be amended, against all
expenses and liabilities reasonably incurred in connection with service for or
on behalf of the Company.
<PAGE>
Limitation of Liability
In addition, the Articles provides that directors of the Company will not
be personally liable for monetary damages to the Company for certain breaches of
their fiduciary duty as directors, unless they violated their duty of loyalty to
the Company or its stockholders, acted in bad faith, knowingly or intentionally
violated the law, authorized illegal dividends or redemptions or derived an
improper personal benefit from their action as directors. This provision would
have no effect on the availability of equitable remedies or non-monetary relief,
such as an injunction or rescission for breach of the duty of care. In addition,
the provision applies only to claims against a director arising out of his role
as a director and not in any other capacity (such as an officer or employee of
the Company). Further, liability of a director for violations of the federal
securities laws will not be limited by this provision.
Transfer Agent
First Union National Bank of North Carolina is the Transfer Agent for the
Common Stock.
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE
As of June 30, 1997, the Company had outstanding 44,312,349 shares of
Common Stock, of which 35,895,344 shares are freely tradeable. All of the
shares in the Common Stock Offering and any Shares distributed to holders of
DECS will be freely transferable and may be resold without further registration
under the Securities Act. As of July 24, 1997, the Company had outstanding
options to purchase 1,873,889 shares of Common Stock at an average exercise
price of $16.79 per share, of which 1,092,446 were exercisable at an average
exercise price of $16.21 per share.
Approximately 8,417,005 shares of the Company's Common Stock (including
56,500 shares to be sold in the Common Stock Offering and 1,041,368 shares
included in the DECS Offering that are subject to the restrictions described in
the DECS Prospectus) are held by persons who may be deemed to be "affiliates" of
the Company under the Securities Act and may be resold by them only in
transactions registered under the Securities Act or permitted by the provisions
of Rule 144. Persons who may be deemed to be affiliates include individuals or
entities that control, are controlled by, or are under common control with such
party and may include certain officers, directors and principal shareholders of
such party. In general, under Rule 144 as currently in effect, a person (or
persons whose shares are aggregated) who has beneficially owned "restricted
securities" for at least one year may, under certain circumstances, resell
within any three-month period such number of shares as does not exceed the
greater of 1% of the then outstanding shares or the average weekly trading
volume during the four calendar weeks prior to such resale. Rule 144 also
permits, under certain circumstances, the resale of shares without any quantity
limitation by a person who has satisfied a two-year holding period and who is
not, and has not been for the preceding three months, an affiliate of the
Company. In addition, holding periods of successive non-affiliate owners are
aggregated for purposes of determining compliance with these one-and two-year
holding period requirements.
In connection with the Intabex Acquisition, the Company issued 1,701,444
shares of Common Stock and $140 million principal amount of Convertible
Debentures. Folium and Tabacalera, formerly the largest shareholders of Intabex,
received an aggregate of 1,190,750 of these shares and all of the Convertible
Debentures. The Convertible Debentures are convertible into an aggregate of
4,866,180 shares of Common Stock at a price per share of $28.77. The shares of
Common Stock and the Convertible Debentures were sold in off-shore transactions
pursuant to Regulation S under the Securities Act and, consequently, currently
may be resold in the U.S. market without restriction. The Company granted Folium
and Tabacalera the right to require DIMON to register under the Securities Act
the shares of Common Stock, the Convertible Debentures and the Common Stock
issuable upon conversion of the Convertible Debentures. This right is
exercisable by each of Tabacalera and Folium not more than twice between April
1, 1998, and March 31, 2001, subject to extension in certain circumstances. The
Company is not required to register (i) less than 1,000,000 shares of Common
Stock or shares of Common Stock having a market value of less than $20 million,
or (ii) less than $35 million in aggregate principal amount of Convertible
Debentures. In addition, the Company granted Folium, Tabacalera and the other
former shareholders of Intabex "piggy-back" registration rights permitting them
to participate in certain offerings of Common Stock during the same period.
The availability of shares for sale or actual sales under Rule 144,
Regulation S or otherwise may have an adverse effect on the market price of the
Common Stock. Sales under Rule 144, Regulation S or otherwise also could impair
the Company's ability to market additional equity securities.
<PAGE>
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the Underwriting
Agreement (the "Underwriting Agreement") among the Trust, the Company, the
Selling Stockholders and Salomon Brothers Inc (the "Underwriter"), the Trust has
agreed to sell to the Underwriter, and the Underwriter has agreed to purchase,
the number of DECS set forth below:
Number
Underwriter of DECS
- ---------- -------
Salomon Brothers Inc. ............................. 3,100,000
=========
In the Underwriting Agreement, the Underwriter has agreed, subject to the
terms and conditions set forth therein, that the obligations of the Underwriter
are subject to certain conditions precedent and that the Underwriter will be
obligated to purchase all of the DECS offered pursuant to the DECS Prospectus if
any of the DECS are purchased.
The Trust has been advised by the Underwriter that it proposes to offer
the DECS directly to the public initially at the public offering price set forth
on the cover of the DECS Prospectus and to certain dealers at such prices less a
concession not in excess of $_____________ per DECS. The Underwriter may allow,
and such dealers may reallow, a concession not in excess of $____________ per
DECS to other dealers. After the initial public offering, such public offering
price and such concession and reallowance may be changed.
The Company and the Selling Stockholders have each agreed that they will
not offer, sell, contract to sell or otherwise transfer or dispose of, directly
or indirectly, or approve an offering of, any shares of Common Stock or any
securities convertible into, or exchangeable for, Common Stock for a period of
90 days from the date of this Prospectus without the prior written consent of
the Underwriter; provided, however, that the foregoing shall not restrict the
ability of the Company and the Selling Stockholders to take any of the foregoing
actions in connection with (i) the offering by the Trust of the DECS or any
delivery of shares of Common Stock pursuant to the terms of the DECS or (ii) in
connection with any employee stock option plan, stock ownership plan or dividend
reinvestment plan of the Company in effect at the date of this Prospectus.
The Trust has granted to the Underwriter an option, exercisable for the
30-day period after the date of the DECS Prospectus, to purchase up to an
additional _______ DECS from the Trust, at the same price per DECS as the
initial DECS to be purchased by the Underwriter. The Underwriter may exercise
such option only for the purpose of covering over-allotments, if any, incurred
in connection with the sale of DECS offered pursuant to the DECS Prospectus. In
addition, Salomon Brothers Inc purchased ____ DECS in connection with the
organization of the Trust.
The DECS will be a new issue of securities with no established trading
market. The DECS have been approved for listing on the NYSE under the symbol
"_______," subject to official notice of issuance. The Underwriter intends to
make a market in the DECS, subject to applicable laws and regulations. However,
the Underwriter is not obligated to do so and any such market-making may be
discontinued at any time at the sole discretion of the Underwriter without
notice. Accordingly, no assurance can be given as to the liquidity of such
market.
The Underwriting Agreement provides that the Company and the Selling
Stockholders will indemnify the Underwriter and the Trust against certain
liabilities, including liabilities under the Securities Act, or contribute to
payments the Underwriter or the Trust may be required to make in respect
thereof.
<PAGE>
Pursuant to the Contracts, the Trust has agreed, subject to the terms and
conditions set forth therein, to purchase from the Selling Stockholders an
aggregate number of shares of Common Stock equal to the aggregate number of DECS
to be purchased by the Underwriter from the Trust pursuant to the Underwriting
Agreement (including any DECS to be purchased by the Underwriter upon exercise
of the over-allotment option plus the number of DECS purchased by Salomon
Brothers Inc in connection with the organization of the Trust). Pursuant to the
terms of the Contracts, the Selling Stockholders will be obligated to deliver to
the Trust at the Exchange Date of the DECS a number of shares of Common Stock
(or, at the Selling Stockholders' option, the cash equivalent) and/or such other
consideration as permitted or required by the terms of the Contracts, that are
expected to have the same value as the shares of Common Stock delivered pursuant
to the DECS. The closing of the offering of the DECS is conditioned upon the
closing of the purchase of the Common Stock pursuant to the Contracts. For
further information, see the DECS Prospectus.
In connection with the DECS Offering and the Stock Offering, certain
underwriters and selling group members and their respective affiliates may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the DECS or the Common Stock. Such transactions may include
stabilization transactions effected in accordance with Rule 104 of Regulation M,
pursuant to which such persons may bid for or purchase DECS or Common Stock for
purposes of stabilizing their market prices. The underwriters also may create
short positions for the account of the underwriters by selling more DECS or
Common Stock in connection with the DECS Offering or the Stock Offering than
they are committed to purchase from the Trust or the Selling Stockholders, and
in such case may purchase DECS or Common Stock in the open market following the
completion of the DECS Offering or the Stock Offering to cover all or a portion
of such short positions. The underwriters may also cover all or a portion of
such short positions by exercising the underwriters' over-allotment options in
the DECS Offering and the Stock Offering. In addition, in the case of the Stock
Offering, Salomon Brothers Inc, on behalf of the underwriters, may impose
"penalty bids" under contractual arrangements with the underwriters whereby it
may reclaim from an underwriter (or dealer participating in the Stock Offering)
for the account of the other underwriters, the selling concession with respect
to Common Stock that is distributed in the Stock Offering but subsequently
purchased for the account of the underwriters in the open market. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the DECS or the Common Stock at a level above that which might
otherwise prevail in the open market. None of the transactions described in this
paragraph is required, and, if they are undertaken, they may be discontinued at
any time.
The Selling Stockholders have entered into a separate underwriting
agreement with the group of underwriters named therein providing for the offer
and sale of 1,800,000 shares of Common Stock, plus up to an additional 240,000
shares of Common Stock solely to cover over-allotments. The closings of the DECS
Offering and the Stock Offering are not conditioned upon each other.
In the ordinary course of their respective businesses, the Underwriter and
its affiliates have engaged in and may in the future engage in commercial and
investment banking transactions with the Company and its affiliates.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered hereby
will be passed upon for the Company by Hunton & Williams, Richmond, Virginia,
for the Underwriter by Cleary, Gottlieb, Steen & Hamilton, New York, New York
and for the Selling Stockholders by Skadden, Arps, Slate, Meagher & Flom LLP,
New York, New York.
<PAGE>
EXPERTS
The Company's consolidated financial statements, including financial
statement schedules, incorporated by reference in this Prospectus for the fiscal
years ended June 30, 1996, and 1995, except as they relate to the financial
statements of the former Dibrell as of June 30, 1994, and for the year ended
June 30, 1994, have been audited by Price Waterhouse LLP, independent
accountants, and insofar as they relate to the Dibrell financial statements
referred to above, by Ernst & Young LLP, independent accountants, as stated in
their respective reports therein, and have been incorporated herein on the
authority of such firms as experts in auditing and accounting.
The consolidated financial statements of Intabex, incorporated by
reference in this Prospectus, at March 31, 1997 and 1996, and for each of the
three years in the period ended March 31, 1997, have been audited by Ernst &
Young, LLP, independent auditors, as set forth in their report thereon,
incorporated by reference herein. Such consolidated financial statements are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firm as experts in accounting and auditing.
<PAGE>
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made by this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or the Underwriter. Neither the delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that there has been no change in the affairs of the Company
since the dates as of which information is given in this Prospectus. This
Prospectus does not constitute an offer or solicitation by any person in any
jurisdiction in which such offer or solicitation is not authorized or in which
the person making such offer or solicitation is not qualified to do so or to any
person to whom it is unlawful to make such offer or solicitation.
------------------
Table Of Contents
Page
----
Forward Looking Statements..........................2
Available Information...............................2
Incorporation of Certain Documents by Reference.....2
Prospectus Summary..................................4
Risk Factors........................................9
Use of Proceeds.....................................11
Price Range of Common Stock and Dividends...........12
Selected Consolidated Financial Data................13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations......................................15
Business............................................22
Management..........................................33
Selling Stockholders................................35
Description of Capital Stock........................36
Shares Eligible for Future Sale.....................43
Plan of Distribution................................44
Legal Matters.......................................45
Experts.............................................46
Index to Consolidated Financial Statements.........F-1
3,100,000 Shares
DIMON Incorporated
Common Stock
(no par value)
[Logo]
Prospectus
Dated August __, 1997
<PAGE>
[Alternate Prospectus]
Subject to Completion
August 8, 1997
Prospectus
[logo]
1,800,000 Shares
DIMON Incorporated
Common Stock
(no par value)
All of the 1,800,000 shares of common stock, no par value ("Common Stock"), of
DIMON Incorporated (the "Company") offered hereby (the "Shares") are being sold
by certain stockholders of the Company (the "Selling Stockholders"). See
"Selling Stockholders." The Company is not offering any shares for sale
hereunder and will not receive any of the proceeds from the Shares sold by the
Selling Stockholders in this offering (the "Stock Offering").
The Common Stock is traded on the New York Stock Exchange (the "NYSE") under the
symbol "DMN." On August 7, 1997, the last reported sale price of the Common
Stock was $25.44 per share. See "Price Range of Common Stock and Dividends."
Pursuant to a separate prospectus (the "DECS Prospectus"), DECS Trust (the
"Trust") is concurrently offering for sale in a separate offering 3,100,000 DECS
representing beneficial ownership interests in the Trust (the "DECSSM"), plus up
to an additional _______ DECS solely to cover over-allotments (the "DECS
Offering"). On or about ____________, 2000 or upon earlier liquidation of the
Trust in certain circumstances, the Trust may distribute shares of Common Stock
to the holders of DECS.
See "Risk Factors" beginning on page __ of this Prospectus for a discussion of
certain factors that should be considered by prospective investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
Proceeds to
Price to Underwriting Selling
Public Discount Stockholders(1)
<S> <C>
Per Share............................... $__________ $_________ $_________
Total(2)................................ $__________ $_________ $_________
</TABLE>
(1) Expenses of issuance and distribution estimated at $230,000 are payable by
the Company.
(2) The Selling Stockholders have granted the Underwriters an option,
exercisable within 30 days of the date hereof, to purchase up to an
additional 240,000 shares of Common Stock solely to cover over-allotments,
if any. If such option is exercised in full, the total Price to Public,
Underwriting Discount and Proceeds to Selling Stockholders will be
$___________, $____________ and $___________, respectively. See "Plan of
Distribution."
The Shares are offered subject to receipt and acceptance by the Underwriters, to
prior sale and the Underwriters' right to reject any order in whole or in part
and to withdraw, cancel or modify the offer without notice. It is expected that
delivery of the Shares will be made at the office of Salomon Brothers Inc, Seven
World Trade Center, New York, New York, or through the facilities of The
Depositary Trust Company, on or about September __, 1997.
Salomon Brothers Inc Wheat First Butcher Singer
The date of this Prospectus is ___________, 1997.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
<TABLE>
<CAPTION>
The Stock Offering
<S> <C>
Common Stock being offered by Selling Shareholders............ 1,800,000
Common Stock to be outstanding after the offerings............ 44,312,349 shares
Use of proceeds............................................... All of the proceeds will be received by
the Selling Stockholders. None of the
proceeds will be received by DIMON.
New York Stock Exchange Symbol................................ DMN
</TABLE>
(1)Does not include 1,913,191 shares subject to options at an average exercise
price of $16.79 per share of which 842,373 were exercisable at an average
exercise price of $17.58 per share.
The DECS Offering
The Trust is also offering for sale in a separate offering 3,100,000 DECS,
plus up to an additional _______ DECS solely to cover over-allotments. On or
about ________, 2000 or upon earlier liquidation of the Trust in certain
circumstances, the Trust will distribute Common Stock (or, at the Selling
Stockholders' option, the cash equivalent) and/or such other consideration as is
delivered by the Selling Stockholders to the Trust pursuant to their Contracts,
to the holders of the DECS, at the rate specified in the DECS Prospectus.
<PAGE>
PLAN OF DISTRIBUTION
Subject to the terms and conditions set forth in the underwriting
agreement (the "Underwriting Agreement"), among the Company, the Selling
Stockholders and Salomon Brothers Inc and Wheat, First Securities, Inc., as
representatives (the "Representatives") of the underwriters set forth below (the
"Underwriters"), the Selling Stockholders have agreed to sell to the
Underwriters, and each of the Underwriters has severally agreed to purchase from
the Selling Stockholders, the aggregate number of shares of Common Stock set
forth opposite its name below:
Number
Underwriter of Shares
- ----------- ---------
Salomon Brothers Inc...........................
Wheat, First Securities, Inc...................
--------
Total.......................................... 1,800,000
=========
In the Underwriting Agreement, the Underwriters have severally
agreed, subject to the terms and conditions set forth therein, to purchase
all of the shares of Common Stock offered hereby if any such shares are
purchased. In the event of a default by any Underwriter, the Underwriting
Agreement provides that, in certain circumstances, the purchase commitments
of the non-defaulting Underwriters may be increased or the Underwriting
Agreement may be terminated.
The Company has been advised by the Representatives that the several
Underwriters propose initially to offer the shares of Common Stock to the
public at the public offering price set forth on the cover page of this
Prospectus, and to certain dealers at such price less a concession not
in excess of $____ per share. The Underwriters may allow, and such dealers
may reallow, a concession not in excess of $___ per share to certain other
dealers. After the initial public offering, the public offering price and such
concessions may be changed.
The Selling Stockholders have granted to the Underwriters an
option to purchase up to an additional 240,000 shares of Common Stock at the
initial offering price less the aggregate underwriting discounts, solely to
cover over-allotments. The option may be exercised at any time up to 30 days
after the date of this Prospectus. To the extent that the Underwriters exercise
such option, each Underwriter will be committed, subject to certain
conditions, to purchase a number of option shares proportionate to such
underwriter's initial commitment.
The Underwriting Agreement provides that the Company and the Selling
Stockholders will indemnify the several Underwriters against certain
liabilities, including liabilities under the Securities Act, or contribute to
payments the Underwriters may be required to make in respect thereof.
The Company and the Selling Stockholders have each agreed that they
will not offer, sell, contract to sell or otherwise transfer or dispose of,
directly or indirectly, or approve an offering of, any shares of Common Stock or
any securities convertible into, or exchangeable for, Common Stock for a period
of 90 days from the date of this Prospectus without the prior written consent of
the Salomon Brothers Inc; provided, however, that the foregoing shall not
restrict the ability of the Company and the Selling Stockholders to take any of
the foregoing actions in connection with (i) the offering by the Trust of the
DECS or any delivery of shares of Common Stock pursuant to the terms of the DECS
or (ii) in connection with any employee stock option plan, stock ownership plan
or dividend reinvestment plan of the Company in effect at the date of this
Prospectus.
In connection with the DECS Offering and the Stock Offering, certain
underwriters and selling group members and their respective affiliates may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the DECS or the Common Stock. Such transactions may include
stabilization transactions effected in accordance with Rule 104 of Regulation M,
pursuant to which such persons may bid for or purchase DECS or Common Stock for
purposes of stabilizing their market prices. The underwriters also may create
short positions for the account of the underwriters by selling more DECS or
Common Stock in connection with the DECS Offering or the Stock Offering than
they are committed to purchase from the Trust or the Selling Stockholders, and
in such case may purchase DECS or Common Stock in the open market following the
completion of the DECS Offering or the Stock Offering to cover all or a portion
of such short positions. The underwriters may also cover all or a portion of
such short positions by exercising the underwriters' over-allotment options in
the DECS Offering and the Stock Offering. In addition, in the case of the Stock
Offering, Salomon Brothers Inc, on behalf of the underwriters, may impose
"penalty bids" under contractual arrangements with the underwriters whereby it
may reclaim from an underwriter (or dealer participating in the Stock Offering)
for the account of the other underwriters, the selling concession with respect
to Common Stock that is distributed in the Stock Offering but subsequently
purchased for the account of the underwriters in the open market. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the DECS or the Common Stock at a level above that which might
otherwise prevail in the open market. None of the transactions described in this
paragraph is required, and, if they are undertaken, they may be discontinued at
any time.
<PAGE>
The Selling Stockholders and the Trust have entered into a separate
underwriting agreement with Salomon Brothers Inc providing for the offer and
sale by the Trust to Salomon Brothers Inc of 3,100,000 DECS, plus up to an
additional 384,104 DECS solely to cover over-allotments. On or about
___________, 2000, or upon earlier liquidation of the Trust in certain
circumstances, the Trust will distribute Common Stock (or, at the Selling
Stockholders' option, the cash equivalent value and/or such other consideration
as is delivered by the Selling Stockholders to the Trust pursuant to their
Contracts) to the holders of the DECS at the rate specified in the DECS
Prospectus. The closings of the Stock Offering and the DECS Offering are not
conditioned upon each other.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Hunton & Williams, Richmond, Virginia, and for the Underwriters by
Cleary, Gottlieb, Steen & Hamilton, New York, New York. Certain legal matters
will be passed upon for the Selling Stockholders by Skadden, Arps, Slate,
Meagher & Flom LLP, New York, New York.
EXPERTS
The Company's consolidated financial statements, including financial
statement schedules, incorporated by reference in this Prospectus for the fiscal
years ended June 30, 1996, and 1995, except as they relate to the financial
statements of the former Dibrell as of June 30, 1994, and for the year ended
June 30, 1994, have been audited by Price Waterhouse LLP, independent
accountants, and insofar as they relate to the Dibrell financial statements
referred to above, by Ernst & Young LLP, independent accountants, as stated in
their respective reports therein, and have been incorporated herein on the
authority of such firms as experts in auditing and accounting.
The consolidated financial statements of Intabex, incorporated by
reference in this Prospectus, at March 31, 1997 and 1996, and for each of the
three years in the period ended March 31, 1997 have been audited by Ernst &
Young, LLP, independent auditors, as set forth in their report thereon,
incorporated by reference herein. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given on the
authority of such firm as experts in accounting and auditing.
<PAGE>
[Alternate Prospectus]
No dealer, salesperson or any other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus in connection with the offer made by this Prospectus and, if given or
made, such information or representations must not be relied upon as having been
authorized by the Company or any Underwriter, agent or dealer. Neither the
delivery of this Prospectus nor any sale made hereunder shall under any
circumstances create any implication that there has been no change in the
affairs of the Company since the dates as of which information is given in this
Prospectus. This Prospectus does not constitute an offer or solicitation by any
person in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so or to any person to whom it is unlawful to make such offer or solicitation.
------------------
Table Of Contents
Page
----
Forward Looking Statements..........................2
Available Information...............................2
Incorporation of Certain Documents by Reference.....3
Prospectus Summary..................................4
Risk Factors........................................9
Use of Proceeds.....................................11
Price Range of Common Stock and Dividends...........12
Selected Consolidated Financial Data................13
Management's Discussion and Analysis of
Financial Condition and Results of
Operations.....................................15
Business............................................22
Management..........................................33
Selling Stockholders................................35
Description of Capital Stock........................36
Shares Eligible for Future Sale.....................43
Plan of Distribution................................44
Legal Matters.......................................45
Experts.............................................46
Index to Consolidated Financial Statements.........F-1
1,800,000 Shares
DIMON Incorporated
Common Stock
(no par value)
[Logo]
Salomon Brothers Inc
Wheat First Butcher Singer
Prospectus
Dated August __, 1997
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are as
follows:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee.................................. $41,112.73
Blue Sky fees and expenses........................................................... 5,000.00
Legal fees........................................................................... 100,000.00
Accounting fees...................................................................... 50,000.00
Printing and postage expenses........................................................ 25,000.00
Transfer agent's fees................................................................ 5,000.00
Miscellaneous expenses............................................................... 3,887.17
------
Total....................................................................... $230,000.00
===========
</TABLE>
Item 15. Indemnification of Directors and Officers
The Virginia Stock Corporation Act permits and the Articles of
Incorporation of DIMON Incorporated (the "Company") require, indemnification of
the directors and officers the Company in a variety of circumstances, which may
include liabilities under the Securities Act. Under sections 13.1-697 and
13.1-702 of the Virginia Stock Corporation Act, a Virginia corporation generally
is authorized to indemnify its directors and officers in civil or criminal
actions if they acted in good faith and, in the case of criminal actions, had no
reasonable cause to believe that the conduct was unlawful. The Articles of the
Company require indemnification of directors and officers with respect to any
liability, expenses incurred by them by reason of having been a director or
officer, except in the case of willful misconduct or a knowing violation of
criminal law. The Articles of the Company provide that, to the full extent, that
the Virginia Stock Corporation Act permits elimination of the liability of
directors of officers, no director or officer of the Company shall be liable to
the Company or its shareholders for any monetary damages. The Company may
purchase insurance on behalf of directors, officers, employees and agents that
may cover liabilities under the Securities Act.
Item 16. Exhibits
1.1 Form of Underwriting Agreement*
3.1 Amended and Restated Articles of Incorporation of DIMON
Incorporated (incorporated herein by reference to Appendix
VII to DIMON Incorporated's Joint Proxy Statement included
in DIMON Incorporated's Registration Statement on Form S-4 (File
No. 33-89780))
3.2 Amended and Restated By-Laws of DIMON Incorporated (incorporated
herein by reference to Exhibit 3.2 to DIMON Incorporated's
Registration Statement on Form S-4 (File No. 33-89780))
4.1 Specimen of Common Stock Certificate (incorporated herein by
reference to Exhibit 4.1 to DIMON Incorporated's Registration
Statement on Form S-4 (File No. 33-89780))
4.2 Article III of the Amended and Restated Articles of
Incorporation of DIMON Incorporated (included in Exhibit 3.01)
4.3 Article III of the Amended and Restated By-Laws of DIMON
Incorporated (included in Exhibit 3.02)
4.4 Rights Agreement, dated as of March 31, 1995, between DIMON
Incorporated and First Union National Bank of North Carolina, as
Rights Agent (incorporated herein by reference to Exhibit 4 to
DIMON Incorporated's Current Report on Form 8-K, dated April 1,
1995)
5.1 Opinion of Hunton & Williams as to certain legal matters
10.1 $500,000,000 Credit Agreement, dated as of June 27, 1997,
among the Company, the lenders named therein, NationsBank,
N.A., as administrative agent, First Union National Bank, as
documentation agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., Rabobank Nederland, New York
Branch, and Societe Generale, as co-agents (the "Credit
Agreement")
10.2 Form of Note issued by the Company in connection with the Credit
Agreement
10.3 Guaranty, dated as of June 27, 1997, by DIMON International,
Inc. and Florimex Worldwide, Inc. of the obligations of the
Company arising under the Credit Agreement
23.1 Consent of Price Waterhouse LLP*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Ernst & Young LLP*
23.4 Consent of Price Waterhouse*
23.5 Consent of Price Waterhouse*
23.6 Consent of Price Waterhouse*
23.7 Consent of Nanayakkara & Co.*
23.8 Consent of John A. Geddes*
23.9 Consent of Peat Marwick*
23.10 Consent of Peat Marwick*
23.11 Consent of Peat Marwick*
23.12 Consent of Peat Marwick*
23.13 Consent of Peat Marwick*
23.14 Consent of Price Waterhouse*
23.15 Consent of Bureau Sugee*
23.16 Consent of Hunton & Williams (included in Exhibit 5)
24 Powers of Attorney of Directors and Officers of the Registrant
(included on the signature pages attached hereto)
- --------------------
*To be filed by amendment.
<PAGE>
Item 17. Undertakings
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the
most recent post-effective amendment thereto) which,
individually or in the aggregate, represent a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration
statement.
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement of any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrants pursuant to the foregoing provisions, or otherwise,
the registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933 and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid by a director, officer
or controlling person of the registrants in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrants will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
<PAGE>
(6) For purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to
be part of this registration statement as of the time it was declared effective.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Danville, Commonwealth of Virginia, on August 8,
1997.
DIMON INCORPORATED
(Registrant)
By:/s/ Brian J. Harker
---------------------
Brian J. Harker
Executive Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 8, 1997. Each of the directors and/or officers of
DIMON Incorporated whose signature appears below hereby appoints Claude B. Owen,
Jr. and Brian J. Harker, and each of them severally, as his attorney-in-fact to
sign in his name and behalf in any and all capacities stated below and to file
with the Securities and Exchange Commission, any and all amendments, including
post-effective amendments to this registration statement, making such changes in
the registration statement as appropriate, and generally to do all things in
their behalf in their capacities as officers and directors to enable DIMON
Incorporated to comply with the provisions of the Securities Act of 1933, and
all requirements of the Securities and Exchange Commission.
Signature Title
--------- -----
/s/ Claude B. Owen, Jr. Chairman of the Board and
Claude B. Owen, Jr. Chief Executive Officer
/s/ Brian J. Harker Executive Vice President and
Brian J. Harker Chief Financial Officer
/s/ Jerry L. Parker Vice President-Controller
Jerry L. Parker (Principal Accounting Officer)
/s/ Louis N. Dibrell, III Director
Louis N. Dibrell, III
/s/ R. Stuart Dickson Director
R. Stuart Dickson
<PAGE>
/s/ Henry F. Frigon Director
Henry F. Frigon
/s/ John M. Hines Director
John M. Hines
/s/ James E. Johnson, Jr. Director
James E. Johnson, Jr.
/s/ Thomas F.Keller Director
Thomas F. Keller
/s/ Joseph L. Lanier, Jr. Director
Joseph L. Lanier, Jr.
/s/ Albert C. Monk, III Director
Albert C. Monk, III
/s/ Robert T. Monk, Jr. Director
Robert T. Monk, Jr.
/s/ Norman A. Scher Director
Norman A. Scher
/s/ William R. Slee Director
William R. Slee
/s/ Anthony C.B. Taberer Director
Anthony C.B. Taberer
<PAGE>
EXHIBIT INDEX
Exhibit
Number Exhibit Page
- ------ ------- ----
1.1 Form of Underwriting Agreement*
3.1 Amended and Restated Articles of Incorporation of DIMON
Incorporated (incorporated by reference to Appendix VII to
DIMON Incorporated's Joint Proxy Statement included in
DIMON Incorporated's Registration Statement on Form S-4 (File
No. 33-89780))
3.2 Amended and Restated By-Laws of DIMON Incorporated
(incorporated herein by reference to Exhibit 3.2 to DIMON
Incorporated's Registration Statement on Form S-4 (File No.
33-89780))
4.1 Specimen of Common Stock Certificate (incorporated herein
by reference to Exhibit 4.1 to DIMON Incorporated's
Registration Statement on Form S-4 (File No. 33-89780))
4.2 Article III of the Amended and Restated Articles of
Incorporation of DIMON Incorporated (included in Exhibit
3.01)
4.3 Article III of the Amended and Restated By-Laws of DIMON
Incorporated (included in Exhibit 3.02)
4.4 Rights Agreement, dated as of March 31, 1995, between DIMON
Incorporated and First Union National Bank of North Carolina,
as Rights Agent (incorporated by reference to Exhibit 4 to
DIMON Incorporated's Current Report on Form 8-K, dated April
1, 1995)
[5.1 Opinion of Hunton & Williams as to certain legal matters]
10.1 $500,000,000 Credit Agreement, dated as of June 27, 1997,
among the Company, the lenders named therein, NationsBank,
N.A., as administrative agent, First Union National Bank, as
documentation agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., Rabobank Nederland, New York
Branch, and Societe Generale, as co-agents (the "Credit
Agreement")
10.2 Form of Note issued by the Company in connection with the
Credit Agreement
10.3 Guaranty, dated as of June 27, 1997, by DIMON
International, Inc. and Florimex Worldwide, Inc. of the
obligations of the Company arising under the Credit Agreement
23.1 Consent of Price Waterhouse LLP*
23.2 Consent of Ernst & Young LLP*
23.3 Consent of Ernst & Young*
23.4 Consent of Price Waterhouse*
23.5 Consent of Price Waterhouse*
23.6 Consent of Price Waterhouse*
23.7 Consent of Nanayakkara & Co.*
23.8 Consent of John A. Geddes*
23.9 Consent of Peat Marwick*
23.10 Consent of Peat Marwick*
23.11 Consent of Peat Marwick*
23.12 Consent of Peat Marwick*
23.13 Consent of Peat Marwick*
23.14 Consent of Price Waterhouse*
23.15 Consent of Bureau Sugee*
23.16 Consent of Hunton & Williams (included in Exhibit 5)
24 Powers of Attorney of Directors and Officers of the
Registrant (included on the signature pages attached
hereto)
- --------------------
*To be filed by amendment.
Exhibit 5.1
FILE NO.: 21449.203
August 8, 1997
Board of Directors
DIMON Incorporated
512 Bridge Street
Danville, Virginia 24541
Registration Statement on Form S-3
DIMON Incorporated
------------------
Ladies and Gentlemen:
We are acting as counsel for DIMON Incorporated (the "Company") in
connection with its registration under the Securities Act of 1933 of up to
5,524,104 shares of its common stock, no par value per share (the "Shares"),
which are proposed to be offered and sold as described in the Company's
Registration Statement on Form S-3 (the "Registration Statement") to be filed
with the Securities and Exchange Commission (the "Commission") on August 8,
1997.
In rendering this opinion, we have relied upon, among other things, our
examination of such records of the Company and certificates of its officers and
of public officials as we have deemed necessary.
Based upon the foregoing, we are of the opinion that:
1. The Company is a corporation duly incorporated and validly
existing under the laws of the Commonwealth of Virginia.
2. The Shares have been duly authorized and, when the Shares have
been offered and sold as described in the Registration Statement,
will be legally issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion with the Commission as
an exhibit to the Registration Statement and the reference to our firm under the
heading "Legal Matters" in the Registration Statement.
Very truly yours,
/s/ Hunton & Williams
$500,000,000
CREDIT AGREEMENT
dated as of June 27, 1997
among
DIMON INCORPORATED
As Borrower
THE LENDERS NAMED HEREIN
as Lenders
NATIONSBANK, N.A.
as Administrative Agent
FIRST UNION NATIONAL BANK
as Documentation Agent
and
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A.,
"RABOBANK NEDERLAND," NEW YORK BRANCH
and
SOCIETE GENERALE
as Co-Agents
<PAGE>
TABLE OF CONTENTS
ARTICLE I GENERAL DEFINITIONS................................................1
Section 1.1 Definitions.............................................1
Section 1.2 Other Interpretative Provisions........................17
Section 1.3 Accounting Terms and Determinations.....................18
ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES................................19
Section 2.1 The Advances............................................19
Section 2.2 Evidence of Debt........................................19
Section 2.3 Making the Advances.....................................20
Section 2.4 Conversion and Continuation Elections...................21
Section 2.5 Termination or Reduction of Commitments.................22
Section 2.6 Prepayments.............................................23
Section 2.7 Repayment of the Obligations............................24
Section 2.8 Extension of Termination Date...........................24
Section 2.9 Interest................................................25
Section 2.10 Fees...................................................26
Section 2.11 Payments and Computations..............................26
Section 2.12 Sharing of Payments, Etc...............................27
Section 2.13 Limitation of Interest.................................28
Section 2.14 Use of Proceeds........................................28
ARTICLE III YIELD PROTECTION, INTEREST RATE DETERMINATION, TAXES, ETC........28
Section 3.1 Additional Interest on Eurodollar Rate Advances.........29
Section 3.2 Interest Rate Determination and Protection..............29
Section 3.3 Increased Costs.........................................30
Section 3.4 Illegality..............................................31
Section 3.5 Taxes...................................................31
Section 3.6 Funding Losses..........................................34
Section 3.7 Certificates of Lenders.................................34
Section 3.8 Replacement of a Lender.................................35
Section 3.9 Survival...............................................35
ARTICLE IV CONDITIONS PRECEDENT.............................................35
Section 4.1 Conditions of Initial Borrowing.........................35
Section 4.2 Conditions to All Borrowings............................38
<PAGE>
ARTICLE V REPRESENTATIONS AND WARRANTIES....................................38
Section 5.1 Corporate Existence and Power...........................38
Section 5.2 Corporate and Governmental Authorization; Contravention.39
Section 5.3 Binding Effect..........................................39
Section 5.4 Financial Information...................................39
Section 5.5 Litigation..............................................40
Section 5.6 Marketable Title........................................40
Section 5.7 Filings.................................................41
Section 5.8 Regulation U............................................41
Section 5.9 Subsidiaries and Affiliates.............................41
Section 5.10 Solvency...............................................41
Section 5.11 ERISA Compliance.......................................41
Section 5.12 Taxes..................................................42
Section 5.13 Environmental Matters..................................42
Section 5.14 Regulated Entities.....................................43
Section 5.15 No Burdensome Restrictions.............................43
Section 5.16 Labor Relations........................................43
Section 5.17 Copyrights, Patents, Trademarks and Licenses, etc......43
Section 5.18 Compliance With Laws...................................43
Section 5.19 Broker's Fees; Transaction Fees........................44
Section 5.20 Full Disclosure........................................44
ARTICLE VI FINANCIAL COVENANTS..............................................44
Section 6.1 Consolidated Working Capital............................44
Section 6.2 Minimum Consolidated Tangible Net Worth.................44
Section 6.3 Consolidated Fixed Charge Coverage Ratio................45
Section 6.4 Consolidated Leverage Ratio.............................45
ARTICLE VII AFFIRMATIVE COVENANTS...........................................46
Section 7.1 Information.............................................46
Section 7.2 Payment of Obligations..................................49
Section 7.3 Maintenance of Property; Insurance......................49
Section 7.4 Conduct of Business and Maintenance of Existence........50
Section 7.5 Compliance with Laws....................................50
Section 7.6 Accounting; Inspection of Property, Books and Records...50
Section 7.7 Additional Guarantors...................................50
Section 7.8 ERISA...................................................51
<PAGE>
ARTICLE VIII NEGATIVE COVENANTS.............................................51
Section 8.1 Restriction on Liens....................................51
Section 8.2 Debt....................................................53
Section 8.3 Guarantees..............................................53
Section 8.4 Consolidations, Mergers and Sale of Assets..............53
Section 8.5 Acquisitions and Investments............................54
Section 8.6 Transactions with Other Persons.........................57
Section 8.7 Transactions with Affiliates............................57
Section 8.8 Compliance with ERISA...................................57
Section 8.9 Change in Structure.....................................57
Section 8.10 Restrictions on Negative Pledges.......................57
Section 8.11 Limitation on Dividend Restrictions....................58
Section 8.12 Payments of Subordinated Debt Securities...............58
ARTICLE IX EVENTS OF DEFAULT................................................58
Section 9.1 Events of Default.......................................58
Section 9.2 Remedies................................................61
ARTICLE X ADMINISTRATIVE AGENT, DOCUMENTATION AGENT AND CO-AGENTS...........62
Section 10.1 Authorization and Action...............................62
Section 10.2 Administrative Agent's Reliance, etc...................62
Section 10.3 NationsBank, FUNB, Rabobank, SocGen and Affiliates.....63
Section 10.4 Lender Credit Decision.................................63
Section 10.5 Indemnification........................................63
Section 10.6 Successor Administrative Agent.........................64
Section 10.7 Notice of Default......................................64
Section 10.8 Administrative Agent's Fee.............................64
ARTICLE XI MISCELLANEOUS....................................................65
Section 11.1 Notices................................................65
Section 11.2 No Waivers.............................................65
Section 11.3 Expenses; Indemnity....................................65
Section 11.4 Amendments, etc........................................66
Section 11.5 Successors and Assigns.................................67
Section 11.6 Right of Set-off.......................................69
Section 11.7 CONSENT TO JURISDICTION................................70
Section 11.8 VIRGINIA LAW...........................................71
Section 11.9 Counterparts; Effectiveness............................71
Section 11.10 WAIVER OF JURY TRIAL..................................71
Section 11.11 Termination of Existing Credit Agreement..............71
Section 11.12 Confidentiality.......................................71
<PAGE>
SCHEDULES AND EXHIBITS
Schedule 1.1 - Applicable Margin Calculation
Schedule 2.10 - Commitment Fee Calculation
Schedule 5.5 - Litigation
Schedule 5.9 - List of Subsidiaries and Affiliates
Schedule 5.13 - Environmental Matters
Schedule 5.17 - Intellectual Property Matters
Schedule 8.1 - Existing Liens
Exhibit A - Form of Assignment and Acceptance
Exhibit B - Form of Subsidiary Guaranty
Exhibit C - Form of Promissory Note
Exhibit D - Form of Notice of Borrowing
Exhibit E - Form of Notice of Continuation/Conversion
Exhibit F - Opinion of Counsel to the Borrower and the Guarantors
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of June 27, 1997 by and among
DIMON INCORPORATED, a Virginia corporation ("Borrower"), the lenders listed on
the signature pages hereof (each, a "Lender" and collectively, together with
their successors and permitted assigns, the "Lenders"), NATIONSBANK, N.A., a
national banking association ("NationsBank"), as administrative agent for the
Lenders hereunder (in such capacity, the "Administrative Agent"), FIRST UNION
NATIONAL BANK ("FUNB"), as documentation agent for the Lenders hereunder (in
such capacity, the "Documentation Agent"), and COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND," NEW YORK BRANCH
("Rabobank") and SOCIETE GENERALE ("SocGen"), as co-agents for the Lenders
hereunder (in such capacity, the "Co-Agents").
ARTICLE I
GENERAL DEFINITIONS
Section 1.1 Definitions.
The following terms, as used herein, shall have the following meanings:
"Acquisition" shall mean any transaction, or any series of related
transactions, by which the Borrower 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.
"Administrative Agent" shall mean NationsBank or any successor
administrative agent appointed pursuant to Article X.
"Advance" shall mean an advance by a Lender to the Borrower pursuant to
Article II, and refers to a Base Rate Advance or a Eurodollar Rate Advance (each
of which shall be a "Type" of Advance).
"Affiliate" shall mean, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. A Person shall be deemed to control another Person if
the controlling Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of the other Person, whether
through the ownership of voting securities, by contract or otherwise. Without
limitation, any beneficial owner of ten percent (10%) or more of the equity of a
Person shall, for the purposes of this Agreement, be deemed to control the other
Person.
"Aggregate Commitment" shall mean the combined Commitments of the
Lenders in the amount of Five Hundred Million Dollars ($500,000,000), as such
amount may be reduced from time to time pursuant to this Agreement.
"Agreement" shall mean this Credit Agreement, together with all
Schedules and Exhibits hereto, each as amended, modified or supplemented from
time to time in accordance with the terms hereof.
"Applicable Lending Office" shall mean, with respect to each Lender,
such Lender's Domestic Lending Office in the case of a Base Rate Advance and
such Lender's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.
"Applicable Margin" shall mean (a) with respect to each Base Rate
Advance, zero percent (0%) per annum, and (b) with respect to each Eurodollar
Rate Advance, (i) 0.70% per annum from the Closing Date through the date on
which the Administrative Agent first receives the officer's certificate to be
furnished by the Borrower pursuant to Section 7.1(c) of this Agreement, and (ii)
thereafter, the rate per annum derived from the formula set forth on Schedule
1.1 attached hereto. The Applicable Margin with respect to both Base Rate
Advances and Eurodollar Rate Advances shall be increased upon the occurrence and
during the continuance of an Event of Default (including after the acceleration
of the Obligations), by an additional two percent (2%) per annum.
"Approved Accounting Firm" shall mean Price Waterhouse LLP, Ernst &
Young LLP or any other independent public accountants selected by the Borrower
and satisfactory to the Required Lenders.
"Asset Sale" shall have the meaning given to such term in the Senior
Indenture.
"Assignment and Acceptance" shall mean an assignment and acceptance
entered into by a Lender and an Eligible Assignee and consented to by the
Borrower and the Administrative Agent, in substantially the form of Exhibit A
hereto or such other form as shall be accepted by the Administrative Agent.
"Base Rate" shall mean, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall at all
times be equal to the highest of:
(i) the rate of interest announced publicly by NationsBank in
Charlotte, North Carolina, from time to time, as NationsBank's prime
rate; or
(ii) one half of one percent (1/2 of 1%) per annum above
the latest three-week moving average of secondary market morning
offering rates in the United States for three-month certificates of
deposit of major United States money center banks, such three-week
moving average being determined weekly on each Monday (or, if any such
day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by NationsBank on the
basis of such rates reported by certificate of deposit dealers to and
published by the Federal Reserve Bank of New York or, if such
publication shall be suspended or terminated, on the basis of
quotations for such rates received by NationsBank from three New York
certificate of deposit dealers of recognized standing selected by
NationsBank, in either case adjusted to the nearest one sixteenth of
one percent (1/16 of 1%) or, if there is no nearest one sixteenth of
one percent (1/16 of 1%), to the next higher one sixteenth of one
percent (1/16 of 1%); or
(iii) one half of one percent (1/2 of 1%) per annum above the
Federal Funds Rate.
"Base Rate Advance" shall mean an Advance which bears interest as
provided in Section 2.9(a).
"Borrower" shall mean DIMON Incorporated, a Virginia corporation, and
its successors.
"Borrowing" shall mean a borrowing consisting of Advances of the same
Type made on the same day by the Lenders, and in the case of Eurodollar Rate
Advances, with the same Interest Period. All Advances made as, Converted to, or
Continued as, the same Type and (in the case of Eurodollars Advances) with the
same Interest Period on the same day shall be deemed to constitute a single
Borrowing until paid, prepaid or next Converted or Continued.
"Brazilian Tax Assessment" shall mean that certain assessment imposed
on the Borrower by the Brazilian taxing authorities in 1993 in an amount,
together with all interest and penalties, not exceeding $41,577,000 as of June
30, 1996, as more fully described in Note O to the Borrower's consolidated
financial statements for the fiscal year ended June 30, 1996 and incorporated
into the Borrower's 1996 Annual Report.
"Business Day" shall mean a day of the year on which banks are not
required or authorized to close in Charlotte, North Carolina or New York City
and, if the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings in Dollars are carried on in the London interbank market.
"Calculation Period" shall mean (i) as of June 30, 1997, the one
fiscal-quarter period of the Borrower ending on such date, (ii) as of September
30, 1997, the two fiscal-quarter period of the Borrower ending on such date,
(iii) as of December 31, 1997, the three fiscal-quarter period of the Borrower
ending on such date and (iv) as of March 31, 1998 and the last day of any fiscal
quarter occurring thereafter, the four fiscal-quarter period of the Borrower
ending on such date.
"Capital Lease" shall mean a lease that should be capitalized on a
balance sheet of the lessee prepared in accordance with GAAP.
"Change of Control" means such time as:
(i) any Person or group (within the meaning of Section 13(d)
or 14(d) of the Securities Exchange Act) (excluding one or more members
of the Monk Family) 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 Borrower on a fully-diluted
basis, after giving effect to the conversion and exercise of all
outstanding warrants, options and other securities of the Borrower
convertible into or exercisable for Voting Stock of the Borrower
(whether or not such securities are then currently convertible or
exercisable); or
(ii) the sale, lease or transfer of all or substantially all
of the consolidated assets of the Borrower to any Person or group; or
(iii) during any period of two consecutive calendar years,
individuals who at the beginning of such period constituted the Board
of Directors of the Borrower, 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 Borrower 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 Borrower then in office; or
(iv) the Borrower consolidates with or merges with or into
another Person or any Person consolidates with, or merges with or into,
the Borrower (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 Borrower immediately prior to such
consummation shall cease to own a majority of the Voting Stock of the
Borrower; or
(v) the occurrence of a "Change of Control" under and as
defined in the Subordinated Indenture.
"Closing Date" shall mean June 27, 1997, the date as of which this
Agreement and the other Loan Documents were executed and delivered by the
parties hereto.
"Co-Agents" shall mean Rabobank and SocGen
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" shall have the meaning set forth in Section 2.1.
"Commitment Percentage" shall mean, as to any Lender, the percentage
equivalent of such Lender's Commitment divided by the Aggregate Commitment.
"Confirmed Order" shall mean an order by a customer not an Affiliate of
the Borrower which has been accepted in the ordinary course of business by
representatives of the Borrower or an Affiliate of the Borrower and recorded on
the inventory records of such Affiliate or the Borrower.
"Consolidated Capital Expenditures" shall mean, for any fiscal period
of the Borrower, all expenditures by the Borrower and its Subsidiaries during
such period 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 and which are or should be reflected on the
Borrower's consolidated statement of cash flows for such period as capital
expenditures in accordance with GAAP.
"Consolidated EBIT" shall mean, for any fiscal period of the Borrower,
the sum (without duplication) of (i) Consolidated Net Income of the Borrower for
such period, plus (ii) the Consolidated Income Tax Expense deducted in
determining such Consolidated Net Income, plus (iii) the Consolidated Interest
Expense deducted in determining such Consolidated Net Income, minus (iv) any
extraordinary items of gain included in Consolidated Net Income for such period,
determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP, plus (v) any extraordinary items of loss deducted from
Consolidated Net Income of the Borrower for such period, determined for the
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated EBITDA" shall mean, for any fiscal period of the
Borrower, the sum of (i) Consolidated EBIT for such period, plus (ii) the
aggregate amount of the Borrower's depreciation expense and amortization expense
for such period to the extent deducted in determining Consolidated Net Income,
determined on a consolidated basis for the Borrower and its Subsidiaries in
accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" shall mean, at any date, the
ratio of (a) the sum of (i) Consolidated EBITDA for the Calculation Period
ending on such date, minus (ii) Consolidated Income Tax Expense for such
Calculation Period, minus (iii) Consolidated Capital Expenditures for such
Calculation Period, plus (iv) Consolidated Rental Expense for such Calculation
Period to (b) the sum of (i) scheduled payments of principal of the Borrower's
Consolidated Funded Debt during such Calculation Period (including, without
limitation, the principal component of scheduled payments under Capital Leases),
plus (ii) Consolidated Interest Expense for such Calculation Period, plus (iii)
the amount of dividends, distributions, stock repurchases and stock redemptions
paid in cash by the Borrower or any of its Subsidiaries (other than any such
dividend, distribution, stock repurchase or stock redemption payments made to
the Borrower or any of its Subsidiaries) during such Calculation Period, plus
(iv) Consolidated Rental Expense for such Calculation Period, in each case
determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Consolidated Funded Debt" shall mean, at any date, all liabilities of
the Borrower and its Subsidiaries that are or should be reflected at such date
on the Borrower'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, for any fiscal period of
the Borrower, the Borrower's income tax expense for such period, determined for
the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Interest Expense" shall mean, for any fiscal period of
the Borrower, the Borrower's interest expense for such period (including,
without limitation, the interest component of payments under Capital Leases),
determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Consolidated Leverage Ratio" shall mean, at any date, the ratio of (a)
Consolidated Total Debt to (b) the sum of (i) Consolidated Net Worth, plus (ii)
Consolidated Total Debt.
"Consolidated Net Income" shall mean, for any fiscal period of the
Borrower, the Borrower's net income (or net loss) for such period, determined
for the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Net Worth" shall mean, at any date, (a) the Borrower's
total stockholders' equity at such date, without giving effect to (i) the effect
of foreign currency translation adjustments under Financial Accounting Standards
Board Statement No. 52, "Foreign Currency Translation", (ii) the effect of the
adjustments to the value of the Borrower's investments in debt and equity
securities under Financial Accounting Standards Board Statement No. 115,
"Accounting For Certain Investments In Debt And Equity Securities", and (iii)
the effect of the cost of postretirement benefits to employees of the Borrower
under Financial Accounting Standards Board Statement No. 106, "Employer's
Accounting for Postretirement Benefits Other Than Pensions", minus (b) any
write-up of the Borrower's assets subsequent to June 30, 1997, determined for
the Borrower and its Subsidiaries on a consolidated basis in accordance with
GAAP.
"Consolidated Rental Expense" shall mean, for any fiscal period of the
Borrower, the Borrower's rental expense under Operating Leases for such period,
determined for the Borrower and its Subsidiaries on a consolidated basis in
accordance with GAAP.
"Consolidated Tangible Net Worth" shall mean, at any date, the sum of
(i) Consolidated Net Worth, minus (ii) the amount of the Borrower's intangible
assets 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
Borrower and its Subsidiaries on a consolidated basis in accordance with GAAP.
"Consolidated Total Assets" shall mean, at any date, the Borrower's
total assets, as determined for the Borrower and its Subsidiaries on a
consolidated basis in accordance with GAAP.
"Consolidated Total Debt" shall mean, at any date, the aggregate amount
of all Debt which creates Consolidated Interest Expense, whether or not such
interest is deferred.
"Consolidated Working Capital" shall mean, at any date, the amount by
which the Borrower's current assets exceed its current liabilities at such date,
determined on a consolidated basis for the Borrower and its Subsidiaries in
accordance with GAAP.
"Continue", "Continuation" and "Continued" shall each refer to the
continuation of a Borrowing comprised of Eurodollar Rate Advances for a
subsequent Interest Period upon the expiration of the preceding Interest Period
pursuant to Section 2.4.
"Convert", "Conversion" and "Converted" shall each refer to a
conversion of Advances of one Type into Advances of another Type pursuant to
Section 2.4 or Section 3.2.
"Covenant Defeasance" shall mean an election by the Borrower under the
Senior Indenture to release the obligations of the Borrower under the Senior
Debt Securities with respect to certain covenants set forth in the Senior
Indenture.
"Debt" of any Person shall mean, at any date, without duplication, (i)
all obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
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), (iv) all obligations of such Person as lessee under Capital Leases,
(v) 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, (vi) 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 and (vii) all obligations of others secured by a Lien on any
asset of such Person, whether or not such obligation is assumed by such Person.
"Default" shall mean any condition or event specified in Section 9.1
which with the giving of notice or lapse of time or both would, unless cured or
waived, become an Event of Default.
"DIMON International" shall mean DIMON International, Inc., a North
Carolina corporation.
"Documentation Agent" shall mean FUNB.
"Dollars" and "$" the sign shall each mean the lawful currency of the
United States of America.
"Domestic Lending Office" shall mean, with respect to each Lender, its
office located at its address set forth on the signature pages hereof (or
identified on the signature pages hereof as its Domestic Lending Office) or such
other office as such Lender may hereafter designate as its Domestic Lending
Office by notice to the Borrower and the Administrative Agent.
"Domestic Subsidiary" shall mean any Subsidiary of the Borrower which
is not a Foreign Subsidiary.
"Eligible Assignee" shall mean (i) a commercial bank organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (ii) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development (the "OECD"), or a political subdivision of
any such country, and having a combined capital and surplus of at least
$100,000,000, provided that such bank is acting through a branch or agency
located in the United States; (iii) a Lender or any Affiliate of a Lender; and
(iv) any other Person approved by the Administrative Agent and the Borrower;
provided, however, that no Person who is a nonresident alien or a foreign entity
for United States income tax purposes (except a commercial bank of the type
described in clause (ii) above), may be an Eligible Assignee unless each Note to
be acquired by such Person is reissued in registered form prior to transfer.
"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 Borrower 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
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.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" shall mean any Person who for purposes of Title IV of
ERISA would, together with the Borrower or any of its Subsidiaries, be treated
as members of the same "controlled group" within the meaning of Section
4001(a)(14) of ERISA.
"ERISA Event" shall mean (i) a Reportable Event, unless the 30-day
notice requirement with respect thereto has been waived by the PBGC; (ii) the
provision by the administrator of any Plan of a notice of intent to terminate
such Plan, pursuant to Section 4041(a)(2) of ERISA (including any such notice
with respect to a plan amendment referred to in Section 4041(e) of ERISA); (iii)
the cessation of operations at a facility in the circumstances described in
Section 4062(e) of ERISA; (iv) the withdrawal by the Borrower or an ERISA
Affiliate from a Multiemployer Plan during a plan year for which it was a
substantial employer, as defined in Section 4001(a)(2) of ERISA; (v) the failure
by the Borrower or any ERISA Affiliate to make a payment to a Plan required
under Section 302(f)(1) of ERISA, which Section imposes a lien for failure to
make required payments; (vi) the adoption of an amendment to a Plan requiring
the provision of security to such Plan, pursuant to Section 307 of ERISA; or
(vii) the institution by the PBGC of proceedings to terminate a Plan, pursuant
to Section 4042 of ERISA, or the occurrence of any event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, a Plan.
"Eurocurrency Liabilities" shall have the meaning assigned to that term
in Regulation D of the Federal Reserve Board, as in effect from time to time.
"Eurodollar Lending Office" shall mean, with respect to each Lender,
its office, branch or affiliate located at its address set forth on the
signature pages hereof (or identified on the signature pages hereof as its
Eurodollar Lending Office) or such other office, branch or affiliate of such
Lender as it may hereafter designate as its Eurodollar Lending Office by notice
to the Borrower and the Administrative Agent.
"Eurodollar Rate" shall mean, for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing, an interest rate
per annum equal to the average (rounded upward to the nearest whole multiple of
1/16 of 1% per annum, if such average is not such a multiple) of the rate per
annum at which deposits in Dollars are offered by the principal office of each
of the Reference Lenders to prime banks in the London interbank market at 11:00
A.M. (London, England time) two Business Days before the first day of such
Interest Period in an amount substantially equal to such Reference Lender's
Eurodollar Rate Advance comprising part of such Borrowing and for a period equal
to such Interest Period. The Eurodollar Rate for any Interest Period for each
Eurodollar Rate Advance comprising part of the same Borrowing shall be
determined by the Administrative Agent on the basis of applicable rates
furnished to and received by the Administrative Agent from the Reference Lenders
two Business Days before the first day of such Interest Period, subject,
however, to the provisions of Section 3.2.
"Eurodollar Rate Advance" shall mean an Advance which bears interest is
provided in Section 2.9(b).
"Eurodollar Rate Reserve Percentage", of any Lender for any Interest
Period for any Eurodollar Rate Advance, shall mean the reserve percentage
applicable during such Interest Period (or if more than one such percentage
shall be so applicable, the daily average of such percentages for those days in
such Interest Period during which any such percentage shall be so applicable)
under regulations issued from time to time by the Federal Reserve Board for
determining the maximum reserve requirement (including, without limitation, any
emergency, supplemental or other marginal reserve requirement) for such Lender
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Event of Default" shall have the meaning set forth in Section 9.1;
provided that any requirement for notice or lapse of time or both shall have
been satisfied.
"Excess Proceeds" shall have the meaning given to such term in the
Senior Indenture.
"Exempt Asset Sale" shall have the meaning given to such term in the
Senior Indenture.
"FUNB" shall mean First Union National Bank and its successors.
"Federal Funds Rate" shall mean, for any period, a fluctuating interest
rate per annum equal for each day during such period to 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 for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three federal funds
brokers of recognized standing selected by it.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System, or any successor thereto.
"Fee Letter" shall mean the fee letter agreement, dated April 24, 1997,
among the Borrower, NationsBank and NCMI.
"Florimex" shall mean Florimex Worldwide, Inc., a Virginia corporation.
"Foreign Subsidiary" shall mean any Subsidiary of the Borrower (i)
which is organized under the laws of any jurisdiction outside of the United
States of America, (ii) which conducts the major portion of its business outside
of the United States of America and (iii) all or substantially all of the
property and assets of which are located outside of the United States of
America.
"GAAP" shall mean generally accepted accounting principles in the
United States, as set forth from time to time in the opinions and pronouncements
of the Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial Accounting
Standards Board (or agencies with similar functions of comparable stature and
authority within the accounting profession), which are applicable to the
circumstances as of the date of determination; provided, however, that, in the
event any changes are mandated by any of the accounting authorities noted above,
such changes shall be included in GAAP as applicable to the Borrower (and its
Subsidiaries) only from and after such date as the Borrower and the Required
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants set forth in Article VI hereto (and any
related defined terms).
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guarantee" shall mean, with respect to any Person, any obligation,
contingent or otherwise, of such Person directly or indirectly guaranteeing, or
making such Person contingently liable for, any Debt or other obligation of any
other Person and, without limiting the generality of the foregoing, includes any
obligation, direct or indirect, contingent or otherwise, of such Person (i) to
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
take-or-pay, or to maintain financial statement conditions or otherwise), (ii)
entered into for the purpose of assuring in any other manner the obligee of such
Debt or other obligation of the payment thereof or to protect such obligee
against loss in respect thereof (in whole or in part) or (iii) to reimburse any
bank or other Person in respect of amounts paid or payable 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; provided, that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guarantors" shall mean, collectively, (i) each of DIMON International
and Florimex, which will become parties to the Subsidiary Guaranty on the
Closing Date; and (ii) each of the other Material Domestic Subsidiaries of the
Borrower which becomes a party to the Subsidiary Guaranty pursuant to Section
7.7 hereof.
"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.
"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.
"Insolvency Proceeding" shall mean (a) any case, action or proceeding
before any court or other Governmental Authority relating to bankruptcy,
reorganization, insolvency, liquidation, receivership, dissolution, winding-up
or relief of debtors, or (b) any general assignment for the benefit of
creditors, composition, marshaling of assets for creditors or other, similar
arrangement in respect of its creditors generally or any substantial portion of
its creditors; in the case of each of clauses (a) and (b), undertaken under U.S.
federal, state or foreign law, including the Bankruptcy Reform Act of 1978 (12
U.S.C. ss. 101, et seq.), as amended.
"Insufficiency" shall mean, with respect to any Plan, the amount, if
any, of its unfunded benefit liabilities, as defined in Section 4001(a)(18) of
ERISA.
"Intabex" shall mean Intabex Holdings Worldwide S.A., a Luxembourg
holding company.
"Interest Period" shall mean, for each Eurodollar Rate Advance
comprising part of the same Borrowing, the period commencing on the date of such
Advance or the date of the Conversion of any Base Rate Advance into a Eurodollar
Rate Advance or of the Continuation of a Eurodollar Rate Advance and ending on
the last day of the period selected by the Borrower pursuant to the provisions
below and, thereafter, each subsequent period commencing on the last day of the
immediately preceding Interest Period and ending on the last day of the period
selected by the Borrower pursuant to the provisions below. The duration of each
such Interest Period shall be one, two, three or six months, in each case as the
Borrower may, upon notice received by the Administrative Agent not later than
11:00 A.M. (Charlotte, North Carolina time) on the second Business Day prior to
the first day of such Interest Period, select; provided, that:
(i) no Interest Period may extend beyond the Termination Date;
(ii) Interest Periods commencing on the same date for Advances
comprising part of the same Borrowing shall be of the same duration;
(iii) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day; provided, that if such extension would cause the last day
of such Interest Period to occur in the next following calendar month,
the last day of such Interest Period shall occur on the next preceding
Business Day; and
(iv) there shall not be more than five (5) Interest Periods
under this Agreement in effect at any time.
"Investment" shall mean, with respect to any Person, any investment by
that Person in any other Person, whether by means of the purchase or other
acquisition of any stock, evidence of indebtedness or other security of such
Person, the making of any loan, advance, guarantee or contribution of capital to
such Person, or the purchase of any other debt or equity participation or
interest in such Person, in each case other than an Acquisition. Each Investment
shall be valued as of the date made; provided that any Investment or portion of
an Investment consisting of Debt shall be valued at the outstanding principal
balance thereof as of the date of determination.
"IRS" shall mean the Internal Revenue Service, an agency of the United
States government, or any successor thereto.
"Legal Defeasance" shall mean an election by the Borrower under the
Senior Indenture to discharge the obligations of the Borrower and the guarantors
of the Senior Debt Securities under or in respect of the Senior Debt Securities.
"Lender" shall have the meaning assigned to such term in the heading
hereof.
"Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,
assignment, charge or deposit arrangement, encumbrance, lien (statutory or
other) or preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including those created by,
arising under or evidenced by any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any of the foregoing, or the
filing of any financing statement naming the owner of the asset to which such
lien relates as debtor, under the UCC or any comparable law) and any contingent
or other agreement to provide any of the foregoing, but not including the
interest of a lessor under an Operating Lease.
"Loan Documents" shall mean a collective reference to this Agreement,
the Notes, the Subsidiary Guaranty, the Fee Letter, each Notice of Borrowing,
each Notice of Continuation/Conversion and all documents delivered to the
Administrative Agent, the Documentation Agent, the Co-Agents or the Lenders in
connection therewith.
"Margin Stock" shall mean margin stock, as such term is defined in
Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" shall mean (a) a material adverse change in,
or a material adverse effect, at such time or in the future, in or upon the
operations, business, properties or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole; (b) a material impairment of the
ability of the Borrower or any Guarantor to perform its obligations under any
Loan Document to which it is a party; or (c) a material adverse effect upon the
legality, validity, binding effect or enforceability of any Loan Document.
"Material Domestic Subsidiary" shall mean any Subsidiary of the
Borrower which is organized under the laws of the United States, any state
thereof or the District of Columbia and would constitute a "significant
subsidiary" of the Borrower 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 each Foreign Subsidiary which
constitutes a "significant subsidiary" as such term is defined in Rule 1.02 of
Regulation S-X promulgated by the Securities and Exchange Commission.
"Material Subsidiary" shall mean, collectively, each of the Material
Domestic Subsidiaries and the Material Foreign Subsidiaries.
"Monk Family" shall have the meaning assigned to such term in the
Senior Indenture.
"Multiemployer Plan" shall mean a "multiemployer plan" (as defined in
Section 4001(a)(3) of ERISA) to which the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate is or has been obligated to contribute.
"NationsBank" shall mean NationsBank, N.A., and its successors.
"NCMI" shall mean NationsBanc Capital Markets, Inc., and its
successors.
"Net Proceeds" shall have the meaning given to such term in the Senior
Indenture.
"Note" shall mean a promissory note of the Borrower payable to the
order of any Lender, in substantially the form of Exhibit C hereto, evidencing
the aggregate indebtedness of the Borrower to such Lender resulting from the
Advances made by such Lender.
"Notice of Borrowing" shall mean a notice from the Borrower to the
Administrative Agent substantially in the form of Exhibit D.
"Notice of Continuation/Conversion" shall mean a notice from the
Borrower to the Administrative Agent substantially in the form of Exhibit E.
"Obligations" shall mean all present and future indebtedness,
liabilities and obligations of the Borrower and each of the Guarantors owing to
the Administrative Agent, any Lender, or any Person entitled to indemnification
pursuant to Section 11.3, or any of their respective successors, permitted
transferees or permitted assigns, arising under or in connection with this
Agreement, the Notes, the Subsidiary Guaranty, the Fee Letter or any other Loan
Document.
"Operating Lease" shall mean any lease which is not a Capital Lease.
"Other Taxes" shall have the meaning set forth in Section 3.5(b).
"Payment Office" shall mean the office of the Administrative Agent set
forth on the Administrative Agent's signature page to this Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Liens" shall mean the Liens referred to in clauses (a)
through (m) of Section 8.1.
"Person" shall mean an individual, a corporation, a partnership, a
limited liability company, an association, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Plan" shall mean any "employee pension benefit plan" (as defined in
section 3(2) of ERISA) maintained by or on behalf of the Borrower or any ERISA
Affiliate or to which the Borrower or any ERISA Affiliate is obligated to
contribute for any employees or former employees of the Borrower or any ERISA
Affiliate and which is subject to the provisions of Title IV Of ERISA (including
a Multiemployer Plan).
"Pro Forma Basis" means, with respect to any transaction, that such
transaction shall be deemed to have occurred as of the first day of the four
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 7.1(a) or (b), as applicable. As used herein,
"transaction" means (i) any incurrence, assumption or retirement of Debt as
referred to in Section 8.2, (ii) any corporate merger or consolidation as
referred to in Section 8.4 or (iii) any Investment as referred to in Section
8.5(n). With respect to any transaction of the type described in clause (i)
above regarding Debt which has a floating or formula rate, the implied rate of
interest for such Debt for the applicable period for purposes of this definition
shall be determined by utilizing the rate which is or would be in effect with
respect to such Debt as at the relevant date of determination.
"Rabobank" shall mean Cooperatieve Centrale Raiffeisen-Boerenleenbank
B.A., "Rabobank Nederland," New York Branch, and its successors.
"Reference Lenders" shall mean NationsBank, FUNB, Rabobank and SocGen
and each such other Lender as may be appointed pursuant to Section 11.5(j).
"Register" shall have the meaning given such term in Section 11.5(c).
"Reportable Event" means any of the reportable events described in
Section 4043 of ERISA.
"Requirement of Law" shall mean, as to any Person, any law (statutory
or common), treaty, rule or regulation or determination of an arbitrator or of a
Governmental Authority, in each case applicable to or binding upon the Person or
any of its property or to which the Person or any of its property is subject.
"Required Lenders" shall mean at any time Lenders holding at least 51%
of the aggregate unpaid principal amount of the Notes or, if no Advances are at
the time outstanding hereunder, Lenders having at least 51% of the Aggregate
Commitment.
"Responsible Officer" shall mean any of the president, chief executive
officer, chief financial officer, chief accounting officer, treasurer, executive
vice presidents or senior vice presidents of the Borrower.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
"Senior Debt Securities" shall mean any one of the 8 7/8% Senior Notes
Due 2006, in an aggregate principal amount of $125,000,000, issued by the
Borrower pursuant to the Senior Indenture, as such Senior Debt Securities may be
supplemented, amended or otherwise modified from time to time.
"Senior Indenture" shall mean that certain Indenture, dated as of May
29, 1996, by and among the Borrower, as issuer, DIMON International and
Florimex, as guarantors, and Crestar Bank, as trustee, as supplemented, amended
or otherwise modified from time to time.
"SocGen" shall mean Societe Generale and its successors.
"Solvent" shall mean, as to the Borrower or any Guarantor at any time,
that (i) each of the fair value and the present fair saleable value of such
Person's assets (including any rights of subrogation or contribution to which
such Person is entitled, under any of the Loan Documents or otherwise) is
greater than such Person's debts and other liabilities (including contingent,
matured and unliquidated debts and liabilities) and the maximum estimated amount
required to pay such debts and liabilities as such debt and liabilities mature
or otherwise become payable; (ii) such Person is able and expects to be able to
pay its debts and other liabilities (including, without limitation, contingent,
unmatured and unliquidated debts and liabilities) as they mature; and (iii) such
Person does not have unreasonably small capital to carry on its business as
conducted and as proposed to be conducted.
"Split-Dollar Agreement" shall mean an agreement between the Borrower
or any of its Subsidiaries and an employee of the Borrower 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 Borrower 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 Borrower 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
Borrower 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 Borrower 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 Borrower or any of its Subsidiaries and an
employee thereof (or one or more affiliates of such employee), whereby the
Borrower 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.
"Subordinated Debt Securities" shall mean any one of the 6 1/4%
Convertible Subordinated Debentures due March 31, 2007, in an aggregate
principal amount of $140,000,000, issued by the Borrower pursuant to the
Subordinated Indenture, as such Subordinated Debt Securities may be
supplemented, amended or otherwise modified from time to time.
"Subordinated Indenture" shall mean that certain Indenture, dated as of
April 1, 1997, by and among the Borrower and LaSalle National Bank, as trustee,
as supplemented, amended or otherwise modified from time to time.
"Subsidiary" shall mean any corporation or other entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are at the time directly or indirectly owned by the Borrower.
"Subsidiary Guaranty" shall mean that certain continuing guaranty to be
executed and delivered by each of the Material Domestic Subsidiaries of the
Borrower, in substantially the form of Exhibit B attached hereto, guaranteeing
all of the Obligations, subject to the limitations set forth therein, as
hereafter amended, modified or supplemented.
"Taxes" shall have the meaning set forth in Section 3.5(a).
"Termination Date" shall mean the earlier to occur of (i) June 27, 2000
or such later anniversary thereof as the Commitments may have extended by the
Lenders pursuant to Section 2.8, or (ii) the date of termination in whole of the
Aggregate Commitment pursuant to Section 2.5 or 9.2.
"UCC" shall mean the Uniform Commercial Code as in effect in the
Commonwealth of Virginia from time to time.
"Unutilized Commitment" shall mean, with respect to each Lender as of
any date, an amount equal to (i) the Commitment of such Lender as of such date,
minus (ii) the aggregate principal amount of such Lender's Advances outstanding
on such date.
"Voting Stock" shall mean, at any time, all classes of capital stock of
the Borrower then outstanding and normally entitled to vote in the election of
directors.
"Wholly Owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding capital stock or other ownership interests of
which (other than directors' qualifying shares) shall at the time be owned by
such Person or by one or more Wholly Owned Subsidiaries of such Person or, in
the case of Subsidiaries that are not organized under the laws of the United
States of America, one of the fifty states thereof or the District of Columbia,
by one or more nominees of such Person.
"Withdrawal Liability" shall have the meaning given such term under
Part 1 of Subtitle E of Title IV of ERISA.
Section 1.2 Other Interpretative Provisions.
(a) Defined Terms. Unless otherwise specified herein or
therein, all terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or
delivered pursuant hereto. The meaning of defined terms shall be
equally applicable to the singular and plural forms of the defined
terms. Terms (including uncapitalized terms) not otherwise defined
herein and that are defined in the UCC shall have the meanings therein
described.
(b) This Agreement. The words "hereof", "herein", "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, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) Certain Common Terms.
(i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures,
notices and other writings, however evidenced.
(ii) The term "including" is not limiting and
means including without limitation.
(d) Performance; Time. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be due
or required to be satisfied on a day other than a Business Day, such
performance shall be made or satisfied on the next succeeding Business
Day. In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including". If any provision of this Agreement
refers to any action taken or to be taken by any Person, or which such
Person is prohibited from taking, such provision shall be interpreted
to encompass any and all means, direct or indirect, of taking, or not
taking, such action.
(e) Contracts. Unless otherwise expressly provided herein,
references to agreements and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications
thereto, but only to the extent such amendments and other modifications
are not prohibited by the terms of any Loan Document.
(f) Laws. References to any statute or regulation are to be
construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting the
statute or regulation.
(g) Captions. The captions and headings of this Agreement are
for convenience of reference only and shall not affect the
interpretation of this Agreement.
(h) Independence of Provisions. The parties acknowledge that
this Agreement and other Loan Documents may use several different
limitations, tests or measurements to regulate the same or similar
matters, and that such limitations, tests and measurements are
cumulative and must each be performed, except as expressly stated to
the contrary in this Agreement.
Section 1.3 Accounting Terms and Determinations.
(a) 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 as in
effect from time to time, applied on a basis consistent (except for
changes concurred in by the Borrower's Approved Accounting Firm) with
the audited consolidated financial statements of the Borrower and its
Subsidiaries for the fiscal year ended June 30, 1996; provided, that if
any change in GAAP after June 30, 1996 in itself materially affects the
calculation of any financial covenant in Article VI, the Borrower may
by notice to the Administrative Agent, or the Administrative Agent (at
the request of the Required Lenders) may by notice to the Borrower,
require that such covenant thereafter be calculated in accordance with
GAAP as in effect, and applied by the Borrower, immediately before such
change in GAAP occurs. If such notice is given, the compliance
certificates delivered pursuant to Section 7.1 after such change occurs
shall be accompanied by reconciliations of the difference between the
calculations set forth therein and a calculation made in accordance
with GAAP as in effect from time to time after such change occurs.
(b) References herein to "fiscal year" and "fiscal quarter"
refer to such fiscal periods of the Borrower unless the context clearly
indicates otherwise.
ARTICLE II
AMOUNTS AND TERMS OF THE ADVANCES
Section 2.1 The Advances.
Each Lender severally agrees, on the terms and conditions hereinafter
set forth, to make Advances to this Borrower from time to time on any Business
Day during the period from the Closing Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding the amount set forth on
such Lender's signature page hereto under the heading "Commitment," as such
amount may be increased pursuant to Section 2.8, reduced pursuant to Section 2.5
or increased or reduced as a result of one or more assignments pursuant to
Section 11.5 (such amount, as increased or reduced, hereinafter referred to as
such Lender's "Commitment"); provided, however, that after giving effect to any
Borrowing, the aggregate principal amount of all outstanding Borrowings shall
not exceed the Aggregate Commitment. Each Borrowing shall consist of Advances of
the same Type made on the same day by the Lenders ratably according to their
respective Commitment Percentages. Within the limits of each Lender's
Commitment, and subject to the other terms and conditions of this Agreement, the
Borrower may borrow, prepay pursuant to Section 2.6 and reborrow pursuant to
this Section 2.1.
Section 2.2 Evidence of Debt.
(a) The Advances made by each Lender pursuant to its
Commitment shall be evidenced by a Note payable to the order of that
Lender in an amount equal to its Commitment and, in accordance with the
provisions of this Section 2.2, by the books and records of the
Administrative Agent and the Lenders.
(b) Each Lender shall maintain an account or accounts
evidencing each Advance made by such Lender to the Borrower from time
to time, including the amounts of principal and interest payable and
paid to such Lender from time to time under this Agreement.
(c) The Administrative Agent shall maintain the Register
pursuant to Section 11.5(c), and a subaccount for each Lender, in which
Register and subaccounts (taken together) shall be recorded (i) the
amount, type and Interest Period of each such Advance hereunder, (ii)
the amount of any principal or interest due and payable or to become
due and payable to each Lender hereunder and (iii) the amount of any
sum received by the Administrative Agent hereunder from or for the
account of the Borrower and each Lender's share thereof.
(d) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (c) of this Section 2.2 (and, if
consistent with the entries of the Administrative Agent, subsection
(b)) shall be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded; provided, however, that
any error or omission in such account, such Register or such
subaccount, as applicable, shall not in any manner affect the
obligation of the Borrower to repay the Advances made by such Lender in
accordance with the terms hereof.
Section 2.3 Making the Advances.
(a) Each Borrowing shall be made upon the Borrower's prior
written notice delivered to the Administrative Agent in accordance with
Section 11.1 in the form of a Notice of Borrowing (which notice of
Borrowing must be received by the Administrative Agent prior to 11:00
A.M. (Charlotte, North Carolina time) (x) three Business Days prior to
the requested date of the Borrowing, in the case of a Borrowing
comprised of Eurodollar Rate Advances; and (y) on the requested, date
of the Borrowing, in the case of a Borrowing comprised of Base Rate
Advances, and shall be irrevocable upon receipt by the Administrative
Agent), specifying:
(i) the amount of the Borrowing, which shall be
in an aggregate minimum principal amount of Ten Million
Dollars ($10,000,000) or any integral multiple of One Million
Dollars ($1,000,000) in excess thereof;
(ii) the requested Business Day on which the
Borrowing is to be made;
(iii) whether the Borrowing is to be comprised
of Eurodollar Rate Advances, or Base Rate Advances; and
(iv) in the case of a Borrowing comprised of
Eurodollar Rate Advances, the duration of the Interest Period
applicable to such Borrowing. If the Notice of Borrowing shall
fail to specify the duration of the Interest Period for any
Borrowing comprised of Eurodollar Rate Advances, such Interest
Period shall be one month.
(b) Upon receipt of the Notice of Borrowing, the
Administrative Agent shall promptly notify each Lender thereof and of
the amount of such Lender's Advance.
(c) Each Lender will make the amount of its Advance available
to the Administrative Agent through such Lender's Applicable Lending
Office for the account of the Borrower at the Administrative Agent's
Payment Office by 1:00 P.M. (Charlotte, North Carolina time) on the
date for such Borrowing requested by the Borrower in funds immediately
available to the Administrative Agent in Dollars. Subject to the
requirements of Article IV, the proceeds of all such Borrowings will
then be made available to the Borrower by the Administrative Agent at
such office by crediting the account of the Borrower on the books of
the Administrative Agent with the aggregate of the amounts made
available to the Administrative Agent by the Lenders and in like funds
as received by the Administrative Agent.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will
not make available to the Administrative Agent the amount of such
Lender's Advance, the Administrative Agent may (but shall not be
required to) assume that such Lender has made such amount available to
the Administrative Agent on the date of such Borrowing in accordance
with Section 2.3(c), and the Administrative Agent may, in reliance upon
such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall not
have so made such amount available to the Administrative Agent, such
Lender and the Borrower severally agree to repay to the Administrative
Agent forthwith on demand such corresponding amount, together with
interest thereon, for each day from the date such amount is made
available to the Borrower until the date such amount is repaid to the
Administrative Agent, at (i) in the case of the Borrower, the interest
rate applicable at the time to the Advances comprising such Borrowing
and (ii) in the case of such Lender, the Federal Funds Rate on each
such day. If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount so repaid shall constitute such
Lender's Advance as part of such Borrowing for purposes of this
Agreement.
(e) The failure of any Lender to make its Advance in
connection with any Borrowing shall not relieve any other Lender of its
obligation, if any, hereunder to make its Advance on the date of such
Borrowing, but no Lender shall be responsible for the failure of any
other Lender to make the Advance to be made by such other Lender on the
date of any Borrowing.
(f) Unless the Required Lenders shall otherwise agree, during
the existence of a Default or an Event of Default, the Borrower may not
elect to have a Borrowing be made as, or Converted into or Continued
as, a Borrowing comprised of Eurodollar Rate Advances.
Section 2.4 Conversion and Continuation Elections.
(a) The Borrower may, upon written notice to the
Administrative Agent in accordance with Section 2.4(b):
(i) elect to Convert on any Business Day any Borrowing
comprised of Base Rate Advances (or any part thereof in an
aggregate minimum principal amount of $10,000,000 or any
integral multiple of $1,000,000 in excess thereof) into a
Borrowing comprised of Eurodollar Rate Advances; or
(ii) elect to Convert on the last day of the
applicable Interest Period any Borrowing comprised of
Eurodollar Rate Advances having Interest Periods maturing on
such day (or any part thereof in an aggregate minimum
principal amount of $10,000,000 or any integral multiple of
$1,000,000 in excess thereof) into a Borrowing comprised of
Base Rate Advances; or
(iii) elect to Continue on the last day of the
applicable Interest Period any Borrowing comprised of
Eurodollar Rate Advances having Interest Periods maturing on
such day (or any part thereof in an aggregate minimum
principal amount of $10,000,000 or any integral multiple of
$1,000,000 in excess thereof).
(b) The Borrower shall deliver a Notice of
Continuation/Conversion in accordance with Section 11.1 (which Notice
of Continuation/Conversion must be received by the Administrative Agent
not later than 11:00 A.M. (Charlotte, North Carolina time) at least (x)
three Business Days in advance of the date of Conversion or
Continuation, as applicable, if the Advances are to be Converted into
or Continued as Eurodollar Rate Advances; and (y) on the date of
Conversion if the Advances are to be Converted into Base Rate Advances,
and shall be irrevocable upon receipt by the Administrative Agent),
specifying:
(i) the proposed date of Conversion or
Continuation, as applicable;
(ii) the aggregate amount of the Borrowing or
part thereof to be Converted or Continued;
(iii) the nature of the proposed Conversion or
Continuation; and
(iv) except in the case of the Conversion of
Eurodollar Rate Advances into Base Rate Advances, the duration
of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable
to a Borrowing comprised of Eurodollar Rate Advances, the Borrower has
failed to select timely a new Interest Period to be applicable to such
Borrowing, the Borrower shall be deemed to have elected to Convert such
Borrowing into a Borrowing comprised of Base Rate Advances effective as
of the expiration of such current Interest Period.
(d) Upon receipt of a Notice of Continuation/Conversion, the
Administrative Agent will thereafter promptly notify each Lender
thereof, or, if no timely notice is provided by the Borrower with
respect to a Borrowing comprised of Eurodollar Rate Advances subject to
an expiring Interest Period, the Administrative Agent will promptly
notify each Lender of the automatic Conversion of such Advances to Base
Rate Advances.
Section 2.5 Termination or Reduction of Commitments.
(a) Voluntary. The Borrower may, upon not less than three Business
Days' prior notice to the Administrative Agent, terminate the Aggregate
Commitment or permanently reduce the Aggregate Commitment by an aggregate
minimum amount of $10,000,000 or any integral multiple of $1,000,000 in excess
thereof; provided, that, no such reduction or termination shall be permitted if,
after giving effect thereto and to any prepayments of the Borrowings made on the
effective date thereof, the then-outstanding principal amount of the Borrowings
would exceed the amount of the Aggregate Commitment then in effect and,
provided, further, that once reduced in accordance with this Section 2.5, the
Aggregate Commitment may not be increased.
(b) Mandatory. On any date that the Advances are required to be prepaid
and the Commitments are required to be reduced pursuant to the terms of Section
2.6(b), the Aggregate Commitment automatically shall be permanently reduced
(without duplication) by the amount of such required prepayment and reduction.
(c) General. Any reduction of the Aggregate Commitment shall be applied
to each Lender's Commitment in accordance with such Lender's Commitment
Percentage. All commitment fees accrued to, but not including, the effective
date of any reduction or termination of the Aggregate Commitment shall be paid
on the effective date of such reduction or termination.
Section 2.6 Prepayments.
(a) Optional. Subject to Section 3.4, the Borrower may, at any time or
from time to time, upon at least three (3) Business Days' notice with respect to
Borrowings comprised of Eurodollar Rate Advances, and same Business Day's notice
with respect to Borrowings comprised of Base Rate Advances, to the
Administrative Agent received by 11:00 A.M. (Charlotte, North Carolina time),
ratably prepay Borrowings in whole or in part, in amounts of $10,000,000 or any
integral multiple of $1,000,000 in excess thereof, together with interest
thereon and (in the case of a prepayment of any Borrowings comprised of
Eurodollar Rate Advances on a day that is not the last day of the Interest
Period applicable thereto) any cost, loss or expense specified in Section 3.6.
Such notice of prepayment shall specify the date and amount of such prepayment
and whether such prepayment is of Borrowings comprised of Base Rate Advances, or
Borrowings comprised of Eurodollar Rate Advances, or any combination thereof.
Such notice shall not thereafter be revocable by the Borrower and the
Administrative Agent will promptly notify each Lender thereof and of the amount
of such Lender's Commitment Percentage of such prepayment. If such notice is
given by the Borrower, the Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein, together with accrued interest to each such date on the amount prepaid
and (in the case of a prepayment of any Borrowings comprised of Eurodollar Rate
Advances on a day that is not the last day of the Interest Period applicable
thereto) any amounts required pursuant to Section 3.6.
(b) Mandatory. In the event that Borrower or any of its Subsidiaries
intends to make any Asset Sale (other than an Exempt Asset Sale) that would
involve an aggregate sale price (including cash and non-cash consideration) in
excess of 10% of Consolidated Total Assets as of the most recent fiscal year end
with respect to which the Administrative Agent and the Lenders shall have
received the financial statements referred to in Section 7.1(a)(i):
(i) the Borrower will give the Administrative Agent, not
later than the date of such Asset Sale, written notice thereof
specifying the manner in which the Borrower intends to apply the Net
Proceeds of such Asset Sale, and, in the event that the Borrower elects
to make a voluntary prepayment, repurchase, redemption or retirement of
any of the Senior Debt Securities with any of such Net Proceeds, then,
at the request of the Required Lenders, the Borrower shall
simultaneously pay or prepay the outstanding Advances, if any, and
reduce the Commitments, in the amount specified by the Required
Lenders, such amount in any event not to exceed the amount equal to the
percentage of the Net Proceeds applied or to be applied to such
voluntary prepayment, repurchase, redemption or retirement of Senior
Debt Securities obtained by dividing (1) the then current Aggregate
Commitment by (2) the sum of (x) the aggregate then outstanding
principal amount of all Senior Debt Securities plus (y) the then
current Aggregate Commitment; and
(ii) if the Borrower shall not previously have made any
payment or prepayment of the Advances with the Net Proceeds of such
Asset Sale pursuant to the terms of clause (i) above, the Borrower will
give the Administrative Agent, not later than the date which is 250
days after the date of such Asset Sale, written notice specifying the
amount of the Net Proceeds of such Asset Sale which, on the date which
is 270 days after the date of such Asset Sale, are expected by the
Borrower to become Excess Proceeds, then, at the request of the
Required Lenders, the Borrower shall, simultaneously with the purchase
of any Senior Debt Securities pursuant to the Senior Indenture, pay or
prepay the outstanding Advances, if any, and reduce the Commitments, in
the amount specified by the Required Lenders, such amount in any event
not to exceed the amount equal to the percentage of the Net Proceeds of
such Asset Sale exceeding $10,000,000.00 obtained by dividing (1) the
then current Aggregate Commitment by (2) the sum of (x) the aggregate
then outstanding principal amount of all Senior Debt Securities plus
(y) the Aggregate Commitment; and
The Administrative Agent hereby agrees to promptly notify each of the Lenders of
receipt by the Administrative Agent of any notice from the Borrower pursuant to
this Section 2.6(b).
Payments and prepayments pursuant to this Section 2.6(b) shall be applied, first
to Base Rate Advances and then to Eurodollar Rate Advances in direct order of
Interest Period maturities.
(c) General. All prepayments of Advances shall be subject to Section
3.6 but otherwise without premium or penalty and shall be accompanied by accrued
interest on the principal amount being prepaid to the date of prepayment and all
other amounts due and payable hereunder with respect to such Loans.
Section 2.7 Repayment of the Obligations.
The Borrower shall repay in full the aggregate outstanding Obligations
on the Termination Date.
Section 2.8 Extension of Termination Date.
(a) The Borrower may request an extension of the initial
Termination Date, or if previously extended, the then-applicable
Termination Date, for an additional twelve (12) month period in the
case of each such extension by delivering an irrevocable written notice
to the Administrative Agent, accompanied by projections prepared by the
Borrower with respect to such extension period containing such
information as may be reasonably requested by the Administrative Agent
(which notice, together with such projections, shall promptly be
forwarded by the Administrative Agent to the Lenders), not more than
one hundred twenty (120) nor less than ninety (90) days prior to the
anniversary of the Closing Date that precedes the then-effective
Termination Date by one year (any such request, an "Extension
Request"). Upon receipt of such Extension Request, each Lender shall
respond to the Borrower and the Administrative Agent in writing no
later than sixty (60) days prior to such anniversary of the Closing
Date, either irrevocably consenting to such Extension Request or
declining to extend such Lender's Commitment. Any determination by any
Lender to consent to an extension of the Termination Date shall be in
its sole and absolute discretion and, subject to receipt by the
Borrower and the Administrative Agent of such consent, there shall be
no obligation on the part of any Lender hereunder, whether express or
implied, to extend the Termination Date. Any Lender which fails to
respond by the date set forth above shall be deemed to have declined
the Extension Request. Upon receipt of the written consent to such
Extension Request by the Borrower and the Administrative Agent from
Lenders holding 100% of the Aggregate Commitment, the Administrative
Agent shall notify the Borrower and the Lenders that the Termination
Date has been extended for an additional twelve (12) month period.
(b) In the event any Lender shall fail to consent to an
Extension Request within the time provided in paragraph (a) above (each
such Lender, a "Non-Extending Lender"), the Borrower may obtain one or
more other Lenders or, with the consent of the Administrative Agent,
one or more other Eligible Assignees willing to replace such
Non-Extending Lender (each such Eligible Assignee, a "Replacement
Lender"); provided, that, any replacement must occur on or prior to the
anniversary of the Closing Date that precedes the then-effective
Termination Date by one year. Any Non-Extending Lender that is being
replaced shall assign its Advances and its Commitment hereunder to any
Replacement Lender upon not less than five (5) days' prior written
notice from the Borrower in accordance with the assignment procedure
set forth in Section 11.5 hereof; provided that the Borrower shall pay
the administrative fee for such assignment to the Administrative Agent
specified in Section 11.5. Upon receipt of duly executed Assignment and
Acceptances with respect to the Commitments and outstanding Advances of
each Non-Extending Lender and the satisfaction of the conditions set
forth therein and in Section 11.5, the Administrative Agent shall
notify the Borrower and the Lenders that the Termination Date has been
extended for an additional twelve (12) month period.
(c) If the Borrower does not replace each Non-Extending Lender
with one or more Replacement Lenders assuming all of the Advances and
Commitments of such Non-Extending Lenders by the anniversary of the
Closing Date that precedes the then-Effective Termination Date by one
year, the Termination Date shall not be extended beyond its
then-existing date unless the Borrower, the Administrative Agent and
each of the Lenders (other than any Non-Extending Lenders) shall
otherwise agree; provided that, the Non-Extending Lenders shall not be
bound by any such agreement.
Section 2.9 Interest.
The Borrower shall pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until such principal
amount shall be paid in full, at the following rates per annum:
(a) Base Rate Advance. During such periods as such Advance is
a Base Rate Advance, a rate per annum at all times equal to the sum of
the Base Rate in effect from time to time plus the Applicable Margin,
payable in arrears (i) quarterly on the last day of each calendar
quarter during such periods, (ii) on the date such Base Rate Advance
shall be Converted or paid in full and (iii) on the Termination Date.
(b) Eurodollar Rate Advances. During such periods as such
Advance is a Eurodollar Rate Advance, a rate per annum at all times
during each Interest Period for such Advance equal to the sum of the
Eurodollar Rate for such Interest Period for such Advance plus the
Applicable Margin, payable in arrears (i) on the last day of such
Interest Period, (ii) if any Interest Period exceeds three months, on
the last day of each three month period comprising such Interest
Period, (iii) on the date such Eurodollar Rate Advance shall be paid in
full and (iv) on the Termination Date.
(c) Interest After Default. While any Event of Default exists
(including after the acceleration of the Obligations), in addition to
paying accrued interest on the outstanding Advances, the Borrower shall
pay interest on the amount of all other outstanding Obligations
(including accrued but unpaid interest to the extent permitted by law)
at a rate per annum equal to the Base Rate plus the Applicable Margin
then in effect for Base Rate Advances. While any Event of Default
exists (including after the acceleration of the Obligations), the
Borrower shall pay interest on all of the Obligations upon demand of
the Administrative Agent and interest shall continue to accrue on the
unpaid Obligations after as well as before entry of judgment thereon to
the extent permitted by law.
Section 2.10 Fees.
The Borrower agrees to pay to the Administrative Agent, for the account
of each Lender, a commitment fee on the average daily Unutilized Commitment of
such Lender, from the date hereof in the case of each Lender named on the
signature pages to this Agreement and from the effective date specified in the
Assignment and Acceptance pursuant to which it became a Lender in the case of
each other Lender, until the Termination Date, payable quarterly on the last day
of each calendar quarter during the term of such Lender's Commitment, commencing
on September 30, 1997, and on the Termination Date, at the rate equal to (i) one
quarter of one percent (1/4 of 1%) per annum from the Closing Date through the
date on which the Administrative Agent first receives the officer's certificate
to be furnished by the Borrower pursuant to Section 7.1(c) of this Agreement,
and (ii) thereafter, the rate determined by reference to the formula set forth
on Schedule 2.10. The commitment fees provided in this Section 2.10 shall accrue
at all times after the date hereof, including any time during which one or more
conditions in Article IV are not met.
Section 2.11 Payments and Computations.
(a) The Borrower shall make each payment hereunder and under
the Notes not later than 11:00 A.M. (Charlotte, North Carolina time) on
the day when due in Dollars to the Administrative Agent at its Payment
Office in same day funds. The Administrative Agent will promptly
thereafter cause to be distributed like funds relating to the payment
of principal or interest or fees ratably in accordance with such
Lender's Commitment Percentage (other than amounts payable pursuant to
Article III) to the Lenders for the account of their respective
Applicable Lending Offices, and like funds relating to the payment of
any other amount payable to any Lender to such Lender for the account
of its Applicable Lending Office, in each case to be applied in
accordance with the terms of this Agreement.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made by the Borrower pursuant
to the terms hereof, when due hereunder or under the Note held by such
Lender, to charge from time to time against any or all of the
Borrower's accounts with such Lender any amount so due.
(c) All computations of interest based on the Base Rate shall
be made by the Administrative Agent on the basis of a year of 365 or
366 days, as the case may be, and all computations of interest based on
the Eurodollar Rate or the Federal Funds Rate and of fees shall be made
by the Administrative Agent, and all computations of interest pursuant
to Section 3.1 shall be made by a Lender, on the basis of a year of 360
days, in each case for the actual number of days (including the first
day but excluding the last day) occurring in the period for which such
interest or fees are payable. Each determination by the Administrative
Agent (or, in the case of Section 3.1, by a Lender) of an interest rate
hereunder shall be conclusive and binding for all purposes, absent
manifest error.
(d) Whenever any payment hereunder or under the Notes shall be
stated to be due on a day other than a Business Day, such payment shall
be made on the next succeeding Business Day, and such extension of time
shall in such case be included in the computation of payment of
interest or fees, as the case may be.
(e) Unless the Administrative Agent shall have received notice
from the Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in full,
the Administrative Agent may assume that the Borrower has made such
payment in full to the Administrative Agent on such date, and the
Administrative Agent may (but shall not be required to), in reliance
upon such assumption, cause to be distributed to each Lender on such
due date an amount equal to the amount then due such Lender. If and to
the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each Lender shall repay to the Administrative
Agent forthwith on demand such amount distributed to such Lender
together with interest thereon, for each day from the date such amount
is distributed to such Lender until the date such Lender repays; such
amount to the Administrative Agent, at the Federal Funds Rate as in
effect for each such day.
Section 2.12 Sharing of Payments, Etc.
If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of the Advances made by it (other than pursuant to Article III) in
excess of its ratable share of payments on account of the Advances obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participations in the Advances made by them as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each of them;
provided, that if all or any portion of such excess payment is thereafter
recovered from such purchasing Lender, such Purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the purchase
price to the extent of such recovery together with an amount equal to such
Lender's ratable share (according to the proportion of (i) the amount of such
Lender's required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 2.12 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.13 Limitation of Interest.
It is the intention of the parties hereto that each of the Lenders
shall conform strictly to usury laws applicable to it, if any. Accordingly, if
the transactions with the Lenders contemplated hereby would be usurious under
applicable law, if any, then, in that event, notwithstanding anything to the
contrary in the Notes, this Agreement or any other Loan Document it is agreed as
follows: (i) the aggregate of all consideration which constitutes interest under
applicable law that is contracted for, taken, reserved, charged or received by
the Lenders under any Note, this Agreement or under any other Loan Document
shall under no circumstances exceed the maximum amount allowed by such
applicable law and any excess shall be canceled automatically, and if
theretofore paid, shall at the option of any Lender be credited by such Lender
on the principal amount of the Obligations owed to such Lender by the Borrower
or refunded by such Lender to the Borrower, and (ii) in the event that the
maturity of any Note or other Obligation payable to any Lender is accelerated or
in the event of any required or permitted prepayment, then such consideration
that constitutes interest under law applicable to any Lender may never include
more than the maximum amount allowed by such applicable law and all interest in
excess of such lawful amount, if any, payable to any Lender under this Agreement
or otherwise shall be canceled automatically as of the date of such acceleration
or prepayment and, if theretofore paid, shall, at the option of any Lender be
credited by such Lender on the principal amount of the Obligations owed to such
Lender by the Borrower or refunded by such Lender to the Borrower.
Section 2.14 Use of Proceeds.
The proceeds of all Advances made hereunder shall be used by the
Borrower for its working capital and general corporate purposes, including
Acquisitions permitted by this Agreement.
ARTICLE III
YIELD PROTECTION, INTEREST RATE
DETERMINATION, TAXES, ETC.
Section 3.1 Additional Interest on Eurodollar Rate Advances.
The Borrower shall pay to each Lender, so long as such Lender shall be
required under regulations of the Federal Reserve Board to maintain reserves
with respect to liabilities or assets consisting of or including Eurocurrency
Liabilities, additional interest on the unpaid principal amount of each
Eurodollar Rate Advance, from the date of such Advance until such principal
amount is paid in full, at an interest rate per annum equal at all times to the
remainder obtained by subtracting (i) the Eurodollar Rate for each Interest
Period for such Eurodollar Rate Advance from (ii) the rate obtained by dividing
such Eurodollar Rate by a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage of such Lender for such Interest Period, payable on each date
on which interest is payable on such Eurodollar Rate Advance. Such additional
interest shall be determined by such Lender and notified to the Borrower through
the Administrative Agent.
Section 3.2 Interest Rate Determination and Protection.
(a) Each Reference Lender agrees to furnish to the
Administrative Agent timely information for the purpose of determining
each Eurodollar Rate. If any one of the Reference Lenders shall not
furnish such timely information to the Administrative Agent for the
purpose of determining any such Eurodollar Rate, the Administrative
Agent shall determine such Eurodollar Rate on the basis of timely
information furnished by the two remaining Reference Lenders.
(b) The Administrative Agent shall give prompt notice to the
Borrower and the Lenders of the applicable interest rate determined by
the Administrative Agent for purposes of Section 2.9(a) or (b), and the
applicable rate, if any, furnished by each Reference Lender for the
purpose of determining the applicable interest rate under Section
2.9(b).
(c) If more than one of the Reference Lenders fails to furnish
timely information to the Administrative Agent for determining the
Eurodollar Rate for any Eurodollar Rate Advances,
(i) the Administrative Agent shall forthwith
notify the Borrower and the Lenders that the interest rate
cannot be determined for such Eurodollar Rate Advances,
(ii) each outstanding Eurodollar Rate Advance
will automatically, on the last day of the then-existing
Interest Period therefor, Convert into a Base Rate Advance,
and
(iii) the obligation of the Lenders to make, or
to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
(d) If, with respect to any Eurodollar Rate Advances, the
Required Lenders notify the Administrative Agent that the Eurodollar
Rate for any Interest Period for such Advances will not equal or exceed
the cost to such Required Lenders of making, funding or maintaining
their respective Eurodollar Rate Advances for such Interest Period, the
Administrative Agent shall forthwith so notify the Borrower and the
Lenders, whereupon
(i) each Eurodollar Rate Advance will
automatically, on the last day of the then-existing Interest
Period therefor, Convert into a Base Rate Advance, and
(ii) the obligation of the Lenders to make, or
to Convert Advances into, Eurodollar Rate Advances shall be
suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such
suspension no longer exist.
(e) On the date on which the aggregate unpaid principal amount
of any Eurodollar Rate Advances comprising any Borrowing shall be
reduced, by payment or prepayment or otherwise, to less than
$10,000,000, such Advances shall automatically Convert into Base Rate
Advances, and thereafter, for purposes of prepayment pursuant to
Section 2.6 and Conversion pursuant to Section 2.4, all outstanding
Base Rate Advances shall be deemed to be part of one Borrowing.
Section 3.3 Increased Costs.
(a) If, due to either (i) the introduction of or any change
(other than any change by way of imposition or increase of reserve
requirements included in the Eurodollar Rate Reserve Percentage) in or
in the interpretation of any law or regulation, in each case, after the
Closing Date, or (ii) the compliance with any guideline or request from
any Governmental Authority (whether or not having the force of law)
made after the Closing Date, there shall be any increase in the cost to
any Lender of agreeing to make or making, funding or maintaining
Eurodollar Rate Advances (except as otherwise provided in Sections 3.1
and 3.5 hereof), then the Borrower shall, within three days after
demand by such Lender (with a copy of such demand to the Administrative
Agent), pay to the Administrative Agent for the account of such Lender
additional amounts sufficient to compensate such Lender for such
increased cost.
(b) If any Lender determines that compliance with any law or
regulation enacted or promulgated after the Closing Date or any
guideline or request made after the Closing Date from any Governmental
Authority (whether or not having the force of law and except as
otherwise provided in Section 3.5 hereof) affects or would affect the
amount of capital required or expected to be maintained by such Lender
or any corporation controlling such Lender and that the amount of such
capital is increased by or based upon the existence of such Lender's
commitment to lend hereunder and other commitments of this type, then,
upon demand by such Lender (with a copy of such demand to the
Administrative Agent), the Borrower shall pay, within three days after
demand, to the Administrative Agent for the account of such Lender,
from time to time as specified by such Lender, additional amounts
sufficient to compensate such Lender or such corporation in the light
of such circumstances, to the extent that such Lender reasonably
determines such increase in capital to be allocable to the existence of
such Lender's commitment to lend hereunder.
Section 3.4 Illegality.
Notwithstanding any other provision of this Agreement, if any Lender
shall notify the Administrative Agent that the introduction of or any change in
or in the interpretation of any law or regulation, in each case, after the
Closing Date, makes it unlawful, or any Governmental Authority asserts that it
is unlawful, for any Lender or its Eurodollar Lending Office to perform its
obligations hereunder to make Eurodollar Rate Advances or to fund or maintain
Eurodollar Rate Advances hereunder, (i) the obligation of the Lenders to make,
or to Convert Advances into, Eurodollar Rate Advances shall be suspended until
the Administrative Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist and (ii) the Borrower
shall forthwith prepay in full all Eurodollar Rate Advances of all Lenders then
outstanding, together with interest accrued thereon, unless the Borrower, within
five Business Days of notice from the Administrative Agent, Converts all
Eurodollar Rate Advances of all Lenders then outstanding into Base Rate Advances
in accordance with Section 2.4.
Section 3.5 Taxes.
(a) Any and all payments by the Borrower hereunder or under
the Notes shall be made, in accordance with Section 2.11 free and clear
of and without deduction for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding in the case of each Lender
and the Administrative Agent, taxes imposed on or measured by all or
part of its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender or the Administrative
Agent (as the case may be) is organized or any political subdivision
thereof or, in the case of each Lender, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision thereof
(all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note to any Lender or
the Administrative Agent, (i) the sum payable shall be increased as may
be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section
3.5) such Lender or the Administrative Agent (as the case may be)
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and
(iii) the Borrower shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable
law.
(b) In addition, the Borrower agrees to pay any present or
future stamp, documentary or intangibles taxes or any other similar
taxes, charges or levies which arise from any payment made hereunder or
under the Notes or from the execution, delivery or registration of, or
otherwise with respect to, this Agreement, the Notes or any of the
other Loan Documents (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed by any
jurisdiction on amounts payable under this Section 3.5) paid by such
Lender or the Administrative Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other
Taxes were correctly or legally asserted. This indemnification shall be
made within thirty (30) days from the date such Lender or the
Administrative Agent (as the case may be) makes written demand
therefor. The Administrative Agent or any Lender claiming
indemnification pursuant to this Section 3.5(c) shall make written
demand therefor no later than one (1) year after the earlier of (i) the
date on which such Lender or the Administrative Agent makes payment of
such Taxes or Other Taxes and (ii) the date on which the appropriate
Governmental Authority makes written demand on such Lender or the
Administrative Agent for payment of such Taxes or Other Taxes.
(d) If a Lender or the Administrative Agent shall become
entitled to claim a refund, credit or reduction in respect of Taxes or
Other Taxes as to which it has been indemnified by the Borrower, or
with respect to which the Borrower has made payments pursuant to this
Section 3.5, such Lender or the Administrative Agent shall, within
ninety (90) days after receipt of a written request by the Borrower and
at Borrower's sole expense, make an appropriate filing or claim with
the appropriate Governmental Authority to obtain or use such refund,
credit or reduction. Upon a written request of the Borrower, each
Lender or the Administrative Agent shall use reasonable efforts to
cooperate with the Borrower in determining whether or not the
Administrative Agent or such Lender is entitled to such a refund,
credit or reduction. If a Lender or the Administrative Agent receives a
refund or realizes the benefit of a credit or reduction in respect of
any such Taxes or other Taxes (whether or not as a result of a filing
or claim made pursuant to the first sentence of this paragraph), such
Lender or the Administrative Agent shall within ninety (90) days from
the date of such receipt or realization pay over the amount of such
refund, credit or reduction to the Borrower (but only to the extent of
indemnity payments made or other amounts paid by the Borrower under
this Section 3.5 with respect to such Taxes or Other Taxes), net of all
reasonable out-of-pocket expenses of such Lender or the Administrative
Agent and without interest (other than interest paid by the relevant
Governmental Authority with respect to such refund, credit or
reduction); provided that the Borrower (upon the written request of
such Lender or the Administrative Agent) agrees to repay the amount
paid over to the Borrower to such Lender or the Administrative Agent
(together with any interest payable to the relevant Governmental
Authority) in the event such Lender or the Administrative Agent is
required to repay such refund, credit or reduction to such Governmental
Authority.
(e) Within forty-five (45) days after the date of any payment
of Taxes by the Borrower, the Borrower will furnish to the
Administrative Agent, at its address referred to in Section 11.1, the
original or a certified copy of a receipt (if any) evidencing payment
thereof.
(f) Each Lender that is a non-resident alien or is organized
under the laws of a jurisdiction outside the United States, on or prior
to the date of its execution and delivery of this Agreement (or, in the
case of any Person becoming a Lender after the Closing Date, on or
prior to the effective date of the Assignment and Acceptance pursuant
to which it becomes a Lender), from time to time thereafter if
requested in writing by the Borrower, and upon any change in
designation of the Lender's Applicable Lending Office (but only so long
as such Lender remains lawfully able to do so), shall provide each of
the Borrower and the Administrative Agent (i) if such Lender is not a
bank within the meaning of Section 881(c)(3)(A) of the Code, a duly
completed original U.S. Treasury Department Form W-8 (or successor
form) certifying that such Lender is not a United States citizen or
resident (or that such Lender is filing for a foreign corporation,
partnership, estate or trust) and providing the name and address of the
Lender, together with a certificate representing that it is not a bank
within the meaning of Section 881(c)(3)(A) of the Code and is not a ten
percent (10%) shareholder (within the meaning of Section 871(h)(3)(B)
of the Code) with respect to the Borrower, or (ii) if such Lender is a
bank within the meaning of Section 881(c)(3)(A) of the Code, a duly
completed original U.S. Treasury Department Form 4224 or Form 1001 (or
successor form), whichever is applicable, properly claiming complete
exemption from United States withholding tax on payments by the
Borrower pursuant to this Agreement and under the Notes.
(g) The Borrower shall not be required to indemnify any Lender
or the Administrative Agent, or to pay any other amount to any such
Lender, in respect of any Tax pursuant to this Section 3.5 to the
extent that: (i) in the case of a Lender that is a non-resident alien
or is organized under the laws of a jurisdiction outside the United
States, the obligation to make such indemnification or to pay such
other amount would not have arisen but for a failure by such
non-resident Lender to comply with the provisions of Section 3.5(f),
unless such failure is due to a change in law occurring subsequent to
the date on which a form originally was required to be provided;
provided, however, that should a Lender be subject to withholding Tax
because of such failure, the Borrower shall take such steps (at
Lender's expense) as the Lender shall reasonably request in writing to
assist the Lender to recover such Tax; or (ii) such Tax was applicable
on the date such Lender or Administrative Agent became a party to this
Agreement or, with respect to payments to a new Applicable Lending
Office, the date such Lender designated such Applicable Lending Office;
provided, however, that this clause (ii) shall not apply to any Lender
or new Applicable Lending Office that becomes a Lender or Applicable
Lending Office as a result of an assignment or designation made at the
request of the Borrower, and provided further that this clause (ii)
shall not apply to the extent the indemnity payment or other amount any
transferee Lender, or a Lender through a new Applicable Lending Office,
would be entitled to receive does not exceed the indemnity payment or
other amount that the Lender making the assignment, or making the
designation of such new Applicable Lending Office, would have been
entitled to receive in the absence of such assignment or designation.
(h) Subject to Section 3.8, in the event that a Lender that
originally provided such form as may be required under Section 3.5(f)
thereafter ceases to qualify for complete exemption from United States
withholding tax, such Lender may assign its interest under this
Agreement to any Eligible Assignee in accordance with Section 11.5 and
such Eligible Assignee shall be entitled to the same benefits under
this Section 3.5 as the assignor provided that the rate of United
States withholding tax (and the rate of any Taxes or Other Taxes)
applicable to such Eligible Assignee shall not exceed the rate then
applicable to the assignor.
Section 3.6 Funding Losses.
The Borrower agrees to reimburse each Lender and to hold each Lender
harmless from any loss or expense (including loss of anticipated profits) which
the Lender may sustain or incur as a consequence of:
(a) the failure of the Borrower to borrow, or to Continue or
Convert to a Borrowing comprised of Eurodollar Rate Advances after the
Borrower has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Continuation/Conversion;
(b) the failure of the Borrower to make any prepayment after
the Borrower has given a notice in accordance with Section 2.6;
(c) the payment or prepayment (including pursuant to Section
2.6) of a Borrowing comprised of Eurodollar Rate Advances on a day
which is not the last day of the Interest Period with respect thereto;
or
(d) the Conversion of any Borrowing comprised of Eurodollar
Rate Advances to a Borrowing comprised of Base Rate Advances on a day
that is not the last day of the respective Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Eurodollar Rate Advances hereunder or
from fees payable to terminate the deposits from which such funds were obtained.
Solely for purposes of calculating amounts payable by the Borrower to the
Lenders under this Section 3.6 and under Section 3.3(a), each Eurodollar Rate
Advance made by a Lender (and each related reserve, special deposit or similar
requirement) shall be conclusively deemed to have been funded at the Eurodollar
Rate used in determining the rate of interest for such Eurodollar Rate Advance
by a matching deposit or other borrowing in the London interbank market for a
comparable amount and for a comparable period, whether or not such Eurodollar
Rate Advance is in fact so funded.
Section 3.7 Certificates of Lenders.
(a) Any Lender claiming reimbursement or compensation pursuant
to this Article III shall deliver to the Borrower (with a copy to the
Administrative Agent) a certificate setting forth in reasonable detail
the amount payable to such Lender hereunder and such certificate shall
be prima facie evidence of the amount of compensation due to such
Lender in the absence of manifest error.
(b) Prior to giving such certificate to the Administrative
Agent pursuant to Sections 3.1, 3.3, or 3.5, or notifying the
Administrative Agent pursuant to Section 3.4 that such Lender is unable
to make Eurodollar Advances, the affected Lender shall designate a
different Applicable Lending Office if such designation would eliminate
the need to give such certificate or certification and would not, in
the judgment of such Lender, be illegal or otherwise disadvantageous to
such Lender.
(c) Any Lender claiming reimbursement or compensation pursuant
to Section 3.3 shall deliver the demand required by Section 3.3(a) or
(b), as applicable, in the form of the certificate described in
paragraph (a) no later than one (1) year after such Lender obtains
knowledge of such additional cost, and if any Lender fails to give
notice to the Borrower within such period, the Borrower shall have no
obligation to pay any amount accrued prior to the date which is one
year prior to delivery of such certificate.
Section 3.8 Replacement of a Lender.
If the Borrower shall: (i) as a result of the requirements of Sections
3.1, 3.3 or 3.5, be required to pay any Lender the additional interest referred
to in such Section 3.1, the additional costs referred to in such Section 3.3 or
the Taxes or Other Taxes referred to in such Section 3.5, which interests, costs
or taxes are not imposed by all of the other Lenders, and the Borrower deems
such additional amounts to be material; (ii) as a result of the requirements of
Section 3.4, be required to prepay all Eurodollar Rate Advances; or (iii) as a
result of the failure of any Lender to make available to the Administrative
Agent the amount of such Lenders Advance, be required to repay to the
Administrative Agent such corresponding amount pursuant to Section 2.3(d)
hereof, then, in each case, the Borrower may obtain one or more other Lenders
or, with the consent of the Administrative Agent, one or more other Eligible
Assignees willing to replace such Lender, and such Lender shall execute and
deliver to such Eligible Assignee an Assignment and Acceptance with respect to
such Lender's entire interest under this Agreement and the Notes, and upon the
execution by such Eligible Assignee of such Assignment and Acceptance and
compliance with the requirements of Section 11.5 hereof, such Eligible Assignee
shall succeed to all of such Lender's rights and duties under this Agreement. If
the Borrower exercises its election under this Section 3.8 to replace a Lender,
the Borrower shall pay the administrative fee payable to the Administrative
Agent under Section 11.5 hereof.
Section 3.9 Survival.
The agreements and obligations of the Borrower in this Article III
shall survive the payment of all other Obligations and the termination of this
Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions of Initial Borrowing.
The obligation of each Lender to make its initial Advance hereunder is
subject to the satisfaction, prior to or simultaneously with the making of such
Advance, of the following conditions:
(a) This Agreement. The Administrative Agent shall have
received, on or before the Closing Date, counterparts of this Agreement
executed by the Borrower, the Documentation Agent, the Co-Agents and
each of the Lenders in the manner specified in Section 11.9 hereof, in
sufficient numbers so that each Lender shall retain a counterpart
thereof.
(b) Other Documents. The Administrative Agent shall have
received, on or before the Closing Date, the following, each dated as
of such date, in form and substance satisfactory to the Administrative
Agent and in sufficient copies (except for the Notes) for each Lender:
(i) Notes. The Notes, payable to the order of
each of the Lenders, duly executed by the Borrower;
(ii) Subsidiary Guaranty. The Subsidiary
Guaranty, duly executed by each of the Guarantors;
(iii) Resolutions; Incumbency.
(A) copies of the resolutions of the board
of directors of the Borrower approving and authorizing
the execution, delivery and performance by the
Borrower of this Agreement and the other Loan
Documents to be delivered by the Borrower hereunder,
and authorizing the borrowings hereunder, certified as
of the Closing Date by the Secretary or an Assistant
Secretary of the Borrower;
(B) copies of the resolutions of the board
of directors of each of the Guarantors approving and
authorizing the execution, delivery and performance of
such Guarantor of the Subsidiary Guaranty, certified
as of the Closing Date by the Secretary or an
Assistant Secretary of such Guarantor; and
(C) a certificate of the Secretary or
Assistant Secretary of the Borrower and of each
Guarantor certifying the names and true signatures of
the officers of the Borrower and such Guarantor
authorized to execute, deliver and perform, as
applicable, this Agreement, the Subsidiary Guaranty
and all other Loan Documents to be delivered
hereunder;
(iv) Articles of Incorporation; By-laws and Good
Standing. Each of the following documents:
(A) the articles or certificate of
incorporation of the Borrower and of each Guarantor as
in effect on the Closing Date, certified by the
Secretary of State (or similar, applicable
Governmental Authority) of the state of incorporation
of the Borrower and of each Guarantor as of a recent
date and by the Secretary or Assistant Secretary of
the Borrower and of such Guarantor as of the Closing
Date, and the bylaws of the Borrower and of each
Guarantor as in effect on the Closing Date, certified
by the Secretary or Assistant Secretary of the
Borrower and of such Guarantor as of the Closing Date;
and
(B) a good standing certificate as of a
recent date for the Borrower and each Guarantor from
the Secretary of State (or similar, applicable
Governmental Authority) of its state of incorporation
and each state where the Borrower or such Guarantor is
qualified to do business as a foreign corporation;
(v) Legal Opinions. A favorable opinion of
Hunton & Williams, counsel to the Borrower and the Guarantors,
addressed to the Administrative Agent and the Lenders,
substantially in the form of Exhibit F hereto;
(vi) Solvency Certificate. A certificate of the
chief financial officer, chief accounting officer or treasurer
of the Borrower to the effect that each of the Guarantors will
be Solvent after giving effect to the Subsidiary Guaranty;
(vii) Certificate. A certificate signed by the
chief executive officer, chief financial officer or treasurer
of the Borrower stating that:
(A) the representations and warranties
contained in Article V are true and correct on and as
of such date, as though made on and as of such date;
(B) no Default or Event of Default exists;
and
(C) there has occurred since June 30, 1996,
no event or circumstance that has resulted or could
reasonably be expected to result in a material adverse
change in, or a material adverse effect, at such time
or in the future, in or upon the operations, business,
properties or condition (financial or otherwise) of
the Borrower and its Subsidiaries taken as a whole;
and
(viii) Other Documents. Such other approvals,
opinions, documents or materials as the Administrative Agent,
or the Required Lenders through the Administrative Agent, may
request.
(c) Termination of Existing Credit Agreement. Concurrently
with the execution and delivery of this Agreement, each of the lenders
(other than any Lender hereunder) which is party to that certain Credit
Agreement, dated as of March 15, 1996, by and among the Borrower, the
Lenders listed therein, the Administrative Agent and Bank of America,
National Trust and Savings Association, Crestar Bank and FUNB, as
Co-Agents thereunder, as amended by that certain letter agreement dated
as of March 14, 1997, shall have received, or waived in writing, timely
notice of the termination of such credit agreement as of the effective
date of this Agreement provided for in Section 11.9 and all obligations
(if any) thereunder shall have been paid in full.
(d) Payment of Fees. The Borrower shall have paid to (i) the
Administrative Agent, for disbursement to the Lenders, such amounts as
are due and payable by the Borrower to the Lenders on the Closing Date
as agreed upon among the Borrower and the Lenders, and (ii) the
Administrative Agent, for itself and for disbursement to NCMI, such
amounts as are payable to the Administrative Agent and NCMI on the
Closing Date pursuant to the Fee Letter.
Section 4.2 Conditions to All Borrowings.
The obligation of each Lender to make any Advance to be made by it
hereunder (including its initial Advance) is subject to the satisfaction of the
following conditions precedent on the relevant borrowing date:
(a) Notice of Borrowing. The Administrative Agent shall have
received a Notice of Borrowing (with, in the case of the initial
Borrowing only, a copy for each Lender);
(b) Continuation of Representations and Warranties. The
representations and warranties made by the Borrower contained in
Article V shall be true and correct on and as of the date of such
Borrowing, with the same effect as if made on and as of the date of
such Borrowing (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they shall
be true and correct as of such earlier date);
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing; and
(d) Senior Indenture. At any time that the aggregate principal
amount of all outstanding Borrowings shall exceed $240,000,000, the Borrower
shall have provided detailed calculations (in form and substance reasonably
satisfactory to the Administrative Agent) evidencing compliance with Section
4.11 of the Senior Indenture.
Each Notice of Borrowing submitted by the Borrower hereunder shall constitute a
representation and warranty by the Borrower hereunder, as of the date of each
such notice and as of the date of each Borrowing, that the conditions in Section
4.2 are satisfied.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Administrative Agent, the
Documentation Agent, Co-Agents and each of the Lenders that:
Section 5.1 Corporate Existence and Power.
Each of the Borrower and its Subsidiaries is a corporation duly
incorporated, validly existing and in good standing under the laws of the
jurisdiction of its organization, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted. Each of the Borrower and its Subsidiaries is
duly qualified as a foreign corporation, licensed and in good standing in each
jurisdiction where qualification or licensing is required by the nature of its
respective business or the character and location of its respective property,
business or customers and in which the failure so to qualify or be licensed, as
the case may be, in the aggregate, could have a Material Adverse Effect.
Section 5.2 Corporate and Governmental Authorization; Contravention.
The execution, delivery and performance by each of the Borrower and the
Guarantors of the Loan Documents to which it is a party are within its corporate
power, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any Governmental Authority and do
not and will not contravene, or constitute (with or without the giving of notice
or lapse of time or both) a default under, any provision of applicable law as
now in effect or of the articles of incorporation or by-laws of the Borrower or
any Guarantor as now in effect or of any material agreement, judgment,
injunction, order, decree or other instrument now binding upon or affecting the
Borrower or such Guarantor or result in the creation or imposition of any Lien
on any of their respective assets.
Section 5.3 Binding Effect.
This Agreement and the Notes each constitutes a valid and binding
agreement of the Borrower and the Subsidiary Guaranty constitutes a valid and
binding obligation of each of the Guarantors, in each case enforceable against
such Person in accordance with its respective terms, except as (i) the
enforceability hereof and thereof may be limited by bankruptcy, insolvency or
similar laws affecting creditors' rights generally and (ii) rights of
acceleration and the availability of equitable remedies may be limited by
equitable principles of general applicability.
Section 5.4 Financial Information.
(a) The consolidated balance sheet of the Borrower and its Subsidiaries
as of June 30, 1996 and the related consolidated statements of income, cash
flows and stockholders' equity for the fiscal year then ended, reported on by
Price Waterhouse LLP and set forth in the Borrower's 1996 Form 10-K, a copy of
which has been delivered to each of the Lenders, fairly present, in conformity
with GAAP, the consolidated financial position of the Borrower and its
Subsidiaries as of such date and the consolidated results of operations and cash
flows for such fiscal year. The Borrower and its Subsidiaries did not, as of
June 30, 1996, have any material contingent obligation, contingent liability or
liability for taxes, long-term lease or unusual forward or long-term commitment,
which is not reflected in any of such financial statements or notes thereto.
(b) The unaudited consolidated balance sheet of the Borrower and its
Subsidiaries as of March 31, 1997 and the related unaudited consolidated
statements of income, cash flows and stockholders' equity for the nine months
then ended, set forth in the Borrower's Quarterly Report for the fiscal quarter
ended March 31, 1997 as filed with the Securities and Exchange Commission on
Form 10-Q, a copy of which has been delivered to each of the Lenders, fairly
present, in conformity with GAAP applied on a basis consistent with the
financial statements referred to in paragraph (a), the consolidated financial
position of the Borrower and its Subsidiaries as of such date and the
consolidated results of operations and cash flows for such nine-month period
(subject to normal year-end adjustments).
(c) Except as previously disclosed to the Administrative Agent and the
Lenders, the consolidated balance sheet of Intabex and its Subsidiaries as of
March 31, 1996 and the related consolidated statements of income, cash flows and
stockholders' equity for the fiscal year then ended, reported on by an Approved
Accounting Firm, a copy of which has been delivered to each of the Lenders,
fairly present, in conformity with GAAP, the consolidated financial position of
Intabex and its Subsidiaries as of such date and the consolidated results of
operations and cash flows for such fiscal year. Intabex and its Subsidiaries did
not, as of March 31, 1996, have any material contingent obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment, which is not reflected in any of such financial statements
or notes thereto.
(d) Except as previously disclosed to the Administrative Agent and the
Lenders, the unaudited consolidated balance sheet of Intabex and its
Subsidiaries as of March 31, 1997 and the related unaudited consolidated
statements of income, cash flows and stockholders' equity for the fiscal year
then ended, a copy of which has been delivered to each of the Lenders, fairly
present, in conformity with GAAP applied on a basis consistent with the
financial statements referred to in paragraph (c), the consolidated financial
position of Intabex and its Subsidiaries as of such date and the consolidated
results of operations and cash flows for such fiscal year.
(e) As of the Closing Date, there has occurred since June 30, 1996, no
event or circumstance that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
Section 5.5 Litigation.
Except as set forth on Schedule 5.5, (i) no summons, complaint or other
similar pleading has been served on the Borrower or any of its Subsidiaries in
connection with any action, suit or proceeding, and (ii) to the knowledge of the
Borrower, there is no action, suit or proceeding pending or threatened against,
or affecting, the Borrower or any of its Subsidiaries, before any Governmental
Authority, in the case of clause (i) or (ii) in which there is a reasonable
possibility of an adverse decision which could have a Material Adverse Effect or
which in any manner questions the validity of this Agreement, the Notes or any
Subsidiary Guaranty and there is no basis known to the Borrower for any such
action, suit or proceeding.
Section 5.6 Marketable Title.
The Borrower and each of its Material Subsidiaries has good and
marketable title to all its material properties and assets subject to no Lien,
except Permitted Liens.
Section 5.7 Filings.
All actions by or in respect of, and all filings with, any Governmental
Authority required in connection with the execution, delivery and performance of
this Agreement, the Notes and the Subsidiary Guaranty, or necessary for the
validity or enforceability thereof or for the protection of the rights and
interests of the Administrative Agent and each of the Lenders thereunder, will,
prior to the date of delivery thereof, have been duly taken or made, as the case
may be, and will at all times thereafter remain in full force and effect.
Section 5.8 Regulation U.
The proceeds of the Advances will be used by the Borrower only for the
purposes set forth in Section 2.14 hereof. None of the proceeds of any Advance
will be used, directly or indirectly, for the purpose of purchasing or carrying
any Margin Stock or for the purpose of reducing or retiring any indebtedness
which was originally incurred to purchase or carry Margin Stock or for any other
purpose which might constitute the Advances a "purpose credit" within the
meaning of Regulations G, T, U and X issued by the Federal Reserve Board.
Section 5.9 Subsidiaries and Affiliates.
Schedule 5.9 sets forth a correct list of each Subsidiary and
Affiliate of the Borrower and the percentage of ownership of the Borrower with
respect to each such entity. Such Schedule correctly identifies all Material
Subsidiaries.
Section 5.10 Solvency.
The Borrower and each of the Guarantors is Solvent.
Section 5.11 ERISA Compliance.
(a) No Reportable Event has occurred and is continuing with respect to
any Plan; (b) the PBGC has not instituted proceedings to terminate any Plan; (c)
neither the Borrower, any Subsidiary of the Borrower, any ERISA Affiliate, nor
any duly-appointed administrator of a Plan (i) has incurred any liability to the
PBGC with respect to any Plan other than for premiums not yet due or payable, or
(ii) has instituted or intends to institute proceedings to terminate any Plan
under Sections 4041 or 4041A of ERISA or withdraw from any Multiemployer Plan;
(d) no "accumulated funding deficiency" (as defined in ERISA Section 302 or Code
Section 412) exists with respect to any Plan, whether or not waived; (e) each
"employee benefit plan" (as defined in Section 3(3) of ERISA) maintained or
contributed to by or on behalf of the Borrower and its Subsidiaries has been
administered substantially and funded in accordance with its terms and with all
provisions of the Code and ERISA applicable thereto; and (f) the Borrower and
its Subsidiaries have not incurred any liability with respect to any welfare
plan (as defined in ERISA Section 3(1)) or for "welfare benefits" (as defined in
Code Section 419) that is not reflected on the financial statements of the
Borrower and its Subsidiaries which would have a Material Adverse Effect.
Section 5.12 Taxes.
The Borrower and each of its Subsidiaries have filed all federal and
other material tax returns and reports required to be filed, and have paid all
federal and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their respective properties, income or
assets otherwise due and payable, except those which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
provided in accordance with GAAP and, with the exception of the Brazilian Tax
Assessment, no notice of lien has been filed or recorded with respect to the
Borrower, any of its Subsidiaries or any of their respective properties. With
the exception of the Brazilian Tax Assessment, there is no proposed tax
assessment against the Borrower or any of its Subsidiaries which would, if the
assessment were made, have a Material Adverse Effect.
Section 5.13 Environmental Matters.
(a) The on-going operations of the Borrower and each of its
Subsidiaries comply in all respects with all Environmental Laws, except such
non-compliance which would not (if enforced in accordance with applicable law)
result in liability in excess of $2,000,000 in the aggregate.
(b) Except as specifically disclosed in Schedule 5.13, the Borrower and
each of its Subsidiaries have obtained all licenses, permits, authorizations and
registrations required under any Environmental Law ("Environmental Permits") and
necessary for their respective ordinary course operations, no Governmental
Authority responsible for such Environmental Permits has threatened to revoke,
refuse to reissue or materially limit such Environmental Permits, and the
Borrower and each of its Subsidiaries are in compliance with all material terms
and conditions of such Environmental Permits.
(c) Except as specifically disclosed in Schedule 5.13, none of the
Borrower, any of its Subsidiaries or any of their respective present assets or
operations, is subject to, any outstanding written order from, or agreement
with, any Governmental Authority, nor subject to any judicial or docketed
administrative proceeding, respecting any Environmental Law, Environmental Claim
or Hazardous Material.
(d) Except as specifically disclosed in Schedule 5.13, there are no
Hazardous Materials or other conditions or circumstances existing with respect
to any assets, or arising from operations prior to the Closing Date, of the
Borrower, any of its Subsidiaries or any of their respective predecessors that
would reasonably be expected to give rise to Environmental Claims with a
potential liability to the Borrower and its Subsidiaries in excess of $1,000,000
in the aggregate for any such condition, circumstance or assets. In addition,
(i) to the knowledge of the Borrower, neither the Borrower nor any of its
Subsidiaries has any underground storage tanks (x) that are not properly
registered or permitted under applicable Environmental Laws, or (y) that are
leaking or disposing of Hazardous Materials, and (ii) to the extent required by
applicable Environmental Law, the Borrower and its Subsidiaries have notified
all of their employees of the existence, if any, of any health hazard arising
from the conditions of their employment and have met all material notification
requirements under all Environmental Laws.
Section 5.14 Regulated Entities.
None of the Borrower, any Person controlling the Borrower, or any
Subsidiary of the Borrower, is (a) an "Investment Company" within the meaning of
the Investment Company Act of 1940; or (b) subject to regulation under the
Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code, or any other federal
or state statute or regulation limiting its ability to incur Debt.
Section 5.15 No Burdensome Restrictions.
Neither the Borrower nor any of its Subsidiaries is a party to or bound
by any contract or agreement, or subject to any charter or corporate
restriction, or any Requirement of Law, which could reasonably be expected to
have a Material Adverse Effect.
Section 5.16 Labor Relations.
There are no strikes, lockouts or other labor disputes against the
Borrower or any of its Subsidiaries, or, to the best of the Borrower's
knowledge, threatened against or affecting the Borrower or any of its
Subsidiaries that reasonably could be expected to have a Material Adverse
Effect, and no significant unfair labor practice complaint is pending against
the Borrower or any of its Subsidiaries or, to the knowledge of the Borrower,
threatened against any of them before any Governmental Authority, if determined
adversely to the Borrower or any of its Subsidiaries, that reasonably could be
expected to have a Material Adverse Effect.
Section 5.17 Copyrights, Patents, Trademarks and Licenses, etc.
The Borrower or its Subsidiaries own or are licensed or otherwise have
the right to use all of the patents, trademarks, service marks, trade names,
copyrights, contractual franchises, authorizations and other rights that are
reasonably necessary for the operation of their respective businesses, without
conflict with the rights of any other Person. To the knowledge of the Borrower,
no slogan or other advertising device, product, process, method, substance, part
or other material now employed, or now contemplated to be employed, by the
Borrower or any of its Subsidiaries infringes upon any rights held by any other
Person; except as specifically disclosed in Schedule 5.17, no claim or
litigation regarding any of the foregoing is pending or, to the knowledge of the
Borrower, threatened, and no patent, invention, device, application, principle
or any statute, law, rule, regulation, standard or code is pending or, to the
knowledge of the Borrower, proposed, which, in either case, could reasonably be
expected to have a Material Adverse Effect.
Section 5.18 Compliance With Laws.
The Borrower and each of its Subsidiaries are in compliance with all
applicable Requirements of Law except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect.
Section 5.19 Broker's Fees; Transaction Fees.
Neither the Borrower nor any of the its Subsidiaries has any obligation
to any Person in respect of any finder's, broker's or investment banker's fee in
connection with the transactions contemplated hereby, except as provided in the
Fee Letter.
Section 5.20 Full Disclosure.
All information heretofore furnished by any Responsible Officer of the
Borrower to the Administrative Agent or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby was, when
furnished, and all such information hereafter furnished by the Borrower to the
Administrative Agent or any Lender will be, true, accurate and complete in every
material respect or based on reasonable estimates on the date as of which such
information is stated or certified. None of such information omits any material
fact known by the Borrower that is required to be stated therein or necessary to
make the statements made therein, in light of the circumstances under which they
are made, not misleading as of the time when made or delivered. The Borrower has
disclosed to the Lenders in writing any and all facts known by the Borrower that
could have or cause a Material Adverse Effect.
ARTICLE VI
FINANCIAL COVENANTS
The Borrower agrees that so long as any Advance or any other Obligation
shall remain unpaid or any Lender shall have a Commitment hereunder, the
Borrower shall, unless the Required Lenders otherwise consent in writing:
Section 6.1 Consolidated Working Capital.
Maintain Consolidated Working Capital, calculated on the last day of
each fiscal quarter ending during the periods set forth below, of not less than
the amount set forth opposite such period:
Fiscal Quarter End Amount
------------------ ------
June 30, 1997, September 30, 1997,
December 31, 1997 and March 31, 1998 $400,000,000
June 30, 1998 and each fiscal
quarter end occurring thereafter $500,000,000
Section 6.2 Minimum Consolidated Tangible Net Worth.
Maintain Consolidated Tangible Net Worth, calculated on the last day of
each fiscal quarter of not less than the "Minimum Compliance Level." As of the
Closing Date, the "Minimum Compliance Level" shall be $165,000,000. Beginning on
the date on which the Administrative Agent first receives the officer's
certificate to be furnished by the Borrower pursuant to Section 7.1(c) of this
Agreement, the "Minimum Compliance Level" shall be the greater of (a)
$165,000,000 or (b) Consolidated Tangible Net Worth as of June 30, 1997 less
$15,000,000. The Minimum Compliance Level shall be adjusted upward (a) upon the
conversion of any Subordinated Debt Securities into stock of the Borrower, by an
amount equal to the aggregate principal amount of Subordinated Debt Securities
so converted and (b) as of the last day of each fiscal year, from and including
the fiscal year ending June 30, 1998, by an amount equal to 55% of Consolidated
Net Income (inclusive of extraordinary gains and without reduction for
extraordinary losses) for such fiscal year. The foregoing increases in the
Minimum Compliance Level shall be cumulative, and no reduction shall be made on
account of any Consolidated Net Income of less than zero for any fiscal year.
Section 6.3 Consolidated Fixed Charge Coverage Ratio.
Maintain a Consolidated Fixed Charge Coverage Ratio, calculated on the
last day of each fiscal quarter ending on the dates set forth below, of not less
than the ratio set forth opposite such date:
Fiscal Quarter End Ratio
------------------ -----
September 30, 1997 0.80:1.0
December 31, 1997 1.10:1.0
March 31, 1998 and each fiscal
quarter end occurring thereafter 1.25:1.0
Section 6.4 Consolidated Leverage Ratio.
Maintain a Consolidated Leverage Ratio, calculated on the last day of
each fiscal quarter ending on the dates set forth below, of not more than the
ratio set forth opposite such date:
Fiscal Quarter End Ratio
------------------ -----
June 30, 1997 and September 30,
1997 0.775:1.0
December 31, 1997 0.750:1.0
March 31, 1998 and June 30, 1998 0.700:1.0
September 30, 1998 0.725:1.0
December 31, 1998 0.700:1.0
March 31, 1999 and June 30, 1999 0.650:1.0
September 30, 1999 0.675:1.0
December 31, 1999 and each fiscal
quarter end occurring thereafter 0.650:1.0
ARTICLE VII
AFFIRMATIVE COVENANTS
The Borrower agrees that so long as any Advance or any other Obligation
shall remain unpaid or any Lender shall have a Commitment hereunder, unless the
Required Lenders otherwise consent in writing:
Section 7.1 Information.
The Borrower shall deliver or cause to be delivered to each of the
Lenders:
(a) Annual Reports. (i) As soon as available and in any event
within 90 days after the end of each fiscal year of the Borrower, a
consolidated balance sheet of the Borrower and its Subsidiaries as of
the end of such fiscal year and the related consolidated statement of
cash flows and the consolidated statements of income and stockholders'
equity for such fiscal year, setting forth in each case in comparative
form the figures for the previous fiscal year, all in reasonable detail
and accompanied by an opinion on such consolidated statements by an
Approved Accounting Firm which opinion shall state that such
consolidated financial statements present fairly the consolidated
financial position of the Borrower and its Subsidiaries as of the date
of such financial statements and their consolidated results of their
operations and cash flows for the period covered by such financial
statements in conformity with GAAP applied on a consistent basis
(except for changes in the application of which such accountants
concur) and shall not contain any "going concern" or like qualification
or exception or qualifications arising out of the scope of the
consolidated audit;
(ii) As soon as available and in any event within 90 days
after the end of each fiscal year, a consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries and the related
consolidated and consolidating statements of income, cash flows and
stockholders' equity for such fiscal year, setting forth (in the case
of consolidating statements) separate figures for U.S. and non-US
tobacco and flower operations and fully consolidated operations and (in
the case of consolidated statements) the consolidated figures in
comparative form for the Borrower's previous fiscal year, all certified
(subject to normal year-end audit adjustments) as complete and correct
in all material respects by the Borrower's chief financial officer,
treasurer or chief accounting officer;
(b) Quarterly Reports. As soon as available and in any event
within 45 days after the end of each of the first three fiscal
quarters, a consolidated and consolidating balance sheet of the
Borrower and its Subsidiaries and the related consolidated and
consolidating statements of income, cash flows and stockholders' equity
for the portion of the Borrower's fiscal year ended at the end of such
quarter, setting forth (in the case of consolidating statements)
separate figures for U.S. and non-US tobacco and flower operations and
fully consolidated operations and (in the case of consolidated
statements) the consolidated figures in comparative form for the
corresponding portion of the Borrower's previous fiscal year, all
certified (subject to normal year-end audit adjustments) as complete
and correct in all material respects by the Borrower's chief financial
officer, treasurer or chief accounting officer;
(c) Officer's Certificates. Simultaneously with the delivery
of the financial statements referred to in paragraphs (a) and (b)
above, (i) a certificate of the Borrower's chief financial officer,
treasurer or chief accounting officer (A) setting forth in reasonable
detail the calculations required to establish whether the Borrower was
in compliance with the requirements of Article VI and (B) stating that
the Borrower was in compliance with Sections 8.1, 8.2, 8.3 and 8.5,
each on the date of such financial statements; and (ii) a certificate
of the Borrower's chief financial officer, treasurer or chief
accounting officer (A) stating whether there exists on the date of such
certificate any Default or Event of Default and, if any Default or
Event of Default then exists, setting forth the details thereof and the
action which the Borrower is taking or proposes to take with respect
thereto and (B) stating whether, since the date of the most recent
previous delivery of financial statements pursuant to paragraphs (a) or
(b) of this Section, any event has occurred that would have a Material
Adverse Effect and, if so, the nature of such Material Adverse Effect;
(d) Accountant's Certificates. Simultaneously with the
delivery of each set of financial statements referred to in paragraph
(a) above, a statement of the Approved Accounting Firm that reported on
such statements (i) stating that their audit examination has included
the reading of this Agreement and the Notes as they relate to financial
or accounting matters, (ii) whether anything has come to their
attention to cause them to believe that there existed on the date of
such statements any Default or Event of Default and (iii) confirming
the calculations set forth in the officer's certificate delivered
simultaneously therewith pursuant to paragraph (c) above;
(e) Notice of Default. Forthwith upon the occurrence of any
Default or Event of Default, notice of such Default or Event of Default
in the form of a certificate of the Borrower's chief financial officer,
treasurer or chief accounting officer setting forth the details thereof
and the action which the Borrower is taking or proposes to take with
respect thereto;
(f) Notice of Litigation. Promptly upon, but in no event later
than fifteen (15) days after a Responsible Officer becoming aware
thereof, written notice of the commencement of, or of a material threat
of the commencement of, an action, suit or proceeding against the
Borrower or any of its Subsidiaries, whether or not the claim shall be
covered by insurance, which could have a Material Adverse Effect or
which in any manner questions the validity of this Agreement, the
Notes, the Subsidiary Guaranty or any of the other transactions
contemplated hereby or thereby, a notice setting forth the nature of
such pending or threatened action, suit or proceeding and such
additional information as the Administrative Agent, at the request of
any Lender, may reasonably request;
(g) Press Releases. Promptly upon issuance thereof, copies of
all press releases and other statements made available generally by the
Borrower or its Material Subsidiaries to the public concerning material
developments in the results of operations, financial condition,
business or prospects of the Borrower or its Material Subsidiaries;
(h) Accountant's Reports. Promptly upon receipt thereof, (x)
each report submitted to the Borrower by its Approved Accounting Firm
concerning its accounting practices and systems and any final comment
letter submitted by such accountants to management in connection with
the annual audit of the Borrower by its Approved Accounting Firm and
(y) copies of each report material to the financial condition or
operations of the Borrower submitted to a Responsible Officer of the
Borrower or any of its Material Subsidiaries by independent public
accountants in connection with any annual, interim or special audit
made by them of the books of the Borrower or any of its Material
Subsidiaries;
(i) Shareholder Communications. Promptly upon the mailing
thereof to the Borrower's shareholders, copies of all financial
statements, reports and proxy statements so mailed;
(j) SEC Filings. Promptly upon the filing thereof, copies of
all registration statements (other than the exhibits thereto and any
registration statements on Form S-8 or its equivalent) and annual,
quarterly or periodic reports which the Borrower shall have filed with
the Securities and Exchange Commission;
(k) Schedule Update. From time to time such information as is
necessary so that each of Schedule 5.9, Schedule 5.13 and Schedule 5.17
is accurate and complete;
(l) Additional Information. From time to time such additional
information regarding the financial position, results of operations or
business of the Borrower or any Material Subsidiary as the
Administrative Agent, at the request of any Lender, may reasonably
request;
(m) Notices to Holders of Senior Debt Securities.
Simultaneously with delivery thereof, copies of all written notices as
the Borrower shall send to the holders of the Senior Debt Securities;
(n) Environmental Matters. Promptly upon, but in no event
later than fifteen (15) days after a Responsible Officer becoming aware
thereof, written notice of (i) any and all enforcement, cleanup,
removal or other governmental or regulatory actions instituted,
completed or threatened against the Borrower or any of its Subsidiaries
or any of their respective properties pursuant to any applicable
Environmental Laws, (ii) all other Environmental Claims, and (iii) any
environmental or similar condition on any real property adjoining or in
the vicinity of the property of the Borrower or any Subsidiary that
could reasonably be anticipated to cause such property or any part
thereof to be subject to any restrictions on the ownership, occupancy,
transferability or use of such property under any Environmental Laws;
(o) ERISA. Promptly and in any event within fifteen (15) days
after
(i) a Responsible Officer or any ERISA Affiliate
knows or has reason to know that any ERISA Event has occurred,
a statement of the chief executive officer, chief financial
officer or treasurer of the Borrower describing such ERISA
Event and the action, if any, which the Borrower or such ERISA
Affiliate proposes to take with respect thereto;
(ii) receipt thereof by the Borrower or any ERISA
Affiliate, copies of each notice from the PBGC stating its
intention to terminate any Plan or to have a trustee appointed
to administer any Plan;
(iii) receipt thereof by the Borrower or any ERISA
Affiliate from the sponsor of a Multiemployer Plan, a copy of
each notice received by the Borrower or any ERISA Affiliate
concerning (x) the imposition of withdrawal liability by a
Multiemployer Plan, or (y) the reorganization or termination,
within the meaning of Title IV of ERISA, of any Multiemployer
Plan and such notice shall include the estimated amount of
withdrawal liability incurred or which may be incurred by the
Borrower or any ERISA Affiliate in connection with such event
described in clause (x) or (y) above; and
(p) Rating Change. Promptly upon receipt of notice thereof by
a Responsible Officer, a written notice of the issuance of any rating
of, or any change in the rating of, the Borrower's senior unsecured
debt affecting the calculation of the Applicable Margin or of the
commitment fees due pursuant to Section 2.10 hereof or any other
issuance or change in the public rating of any other obligations of the
Borrower or any of its Material Subsidiaries.
Section 7.2 Payment of Obligations.
The Borrower and each of its Material Subsidiaries shall pay and
discharge, as the same shall become due and payable, (i) all of their respective
obligations and liabilities in an amount exceeding $500,000, including all
claims or demands of materialmen, mechanics, carriers, warehousemen, landlords
and other like Persons which, in any such case, if unpaid, might by law give
rise to a Lien upon any of their properties or assets, and (ii) all lawful
taxes, assessments and charges or levies made upon their properties or assets by
any Government, except where any of the items in clause (i) or (ii) of this
Section 7.2 may be diligently contested in good faith by appropriate
proceedings, and the Borrower or such Subsidiary shall have set aside on its
books, if required under GAAP, appropriate reserves for the accrual of any such
items.
Section 7.3 Maintenance of Property; Insurance.
The Borrower and each of its Material Subsidiaries shall keep all
property useful and necessary in their respective businesses in good working
order and condition, subject to ordinary wear and tear, shall maintain (either
in the Borrower's name or in such Material Subsidiary's own name) with
financially sound and reputable insurance companies, insurance on all their
respective properties in at least such amounts and against at least such risks
(and with such risk retentions) as are usually insured against by companies
engaged in the same or a similar business in similar locations and shall furnish
to the Administrative Agent upon request by the Administrative Agent or the
Required Lenders full information as to the insurance carried.
Section 7.4 Conduct of Business and Maintenance of Existence.
The Borrower and, subject to the provisions of Section 8.4, each of its
Material Subsidiaries shall continue to engage in business of the same general
type as now conducted by the Borrower or such Material Subsidiary. The Borrower
shall, and, subject to Section 8.4, shall cause each Material Subsidiary to,
take all reasonable action to preserve, renew and keep in full force and effect
its respective corporate existence and its respective rights, privileges and
franchises to the extent such rights, privileges and franchises remain material
to the normal conduct of its business.
Section 7.5 Compliance with Laws.
The Borrower and each Subsidiary shall comply in all material respects
with all Requirements of Law (including, without limitation, ERISA and the rules
and regulations thereunder and Environmental Laws), except where the necessity
of compliance therewith is contested in good faith by appropriate proceedings or
non-compliance could not be reasonably expected to have a Material Adverse
Effect.
Section 7.6 Accounting; Inspection of Property, Books and Records.
The Borrower and each Subsidiary shall keep proper books of records and
accounts in which full, true and correct entries in conformity with GAAP shall
be made of all dealings and transactions in relation to their respective
businesses and activities; the Borrower shall maintain its fiscal reporting
period on a June 30 fiscal year, and each Subsidiary (other than a Foreign
Subsidiary) shall maintain its respective fiscal reporting period on the present
basis; and the Borrower shall permit, and shall cause each Subsidiary to permit,
upon three (3) days, prior written notice to the Borrower, representatives of
any Lender to visit and inspect any of their respective properties, to examine
and make abstracts from any of their respective books and records and to discuss
their respective affairs, finances and accounts with their officers, employees
and independent public accountants, all at such reasonable times and as often as
may reasonably be desired; provided that no such notice shall be required if a
Default or Event of Default has occurred and is continuing.
Section 7.7 Additional Guarantors.
In the event that any Subsidiary of the Borrower or any other Person
becomes a Material Domestic Subsidiary after the Closing Date, whether pursuant
to an acquisition, merger or transfer of assets permitted or consented to by the
Required Lenders under Section 8.4 hereof, through internal growth or otherwise,
the Borrower shall, at the request of the Administrative Agent, cause each such
Material Domestic Subsidiary to become a party to the Subsidiary Guaranty, and
to deliver all relevant documentation with respect thereto as would have been
delivered pursuant to Section 4.1(b) hereof as if such Subsidiary had been a
Material Domestic Subsidiary on the Closing Date.
Section 7.8 ERISA.
The Borrower shall make, and cause each of its Subsidiaries and ERISA
Affiliates to make, prompt payments of contributions required by the terms of
each plan and to meet the minimum funding standards applicable thereto.
ARTICLE VIII
NEGATIVE COVENANTS
The Borrower agrees that so long as any Advance or any other Obligation
shall remain unpaid or any Lender shall have a Commitment hereunder, unless the
Required Lenders otherwise consent in writing:
Section 8.1 Restriction on Liens.
The Borrower shall not, and shall not permit any Material Subsidiary
to, create, assume or suffer to exist any Lien on any property or asset now
owned or hereafter acquired by the Borrower or such Material Subsidiary or
assign or otherwise subordinate any present right, or subordinate any future
right subsequent to the acquisition thereof, to receive assets, except:
(a) Liens existing on the Closing Date and set forth on
Schedule 8.1, which Liens secure Debt outstanding on the Closing Date
in an aggregate principal amount not exceeding $220,000,000;
(b) purchase money Liens on any capital asset of the Borrower
or a Material Subsidiary if such purchase money Lien attaches to such
capital asset concurrently with the acquisition thereof and if the Debt
secured thereby does not exceed the lesser of the cost or fair market
value as of the time of acquisition of the asset covered thereby by the
Borrower or such Material Subsidiary; provided, that the aggregate
amount of debt (excluding any Debt permitted under clause (a) above),
secured by all such Liens does not exceed $15,000,000 in the aggregate
at any one time outstanding; and provided further, that no such Lien
shall extend to or cover any property or asset of the Borrower or such
Material Subsidiary other than the related property or asset (including
accessions thereto and proceeds thereof, to the extent provided in the
security agreement creating such Lien);
(c) Liens not securing Debt which are incurred in the ordinary
course of business in connection with workers' compensation,
unemployment insurance, old-age pensions, social security and public
liability laws and similar legislation;
(d) Liens securing the performance of bids, tenders, leases,
contracts (other than for the repayment of Debt), statutory
obligations, and other obligations of like nature, incurred as an
incident to and in the ordinary course of business;
(e) Liens securing taxes, assessments or charges or levies of
any Governmental Authority or the claims of growers, materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons;
provided, that (i) with respect to Liens securing taxes, such taxes are
not yet due and payable, (ii) with respect to Liens securing claims or
demands of growers, materialmen, mechanics, carriers, warehousemen,
landlords and the like, such Liens are inchoate and unfiled and no
other action has been taken to enforce the same and (iii) with respect
to taxes, assessments or charges or levies of any Governmental
Authority secured by such Liens, payment thereof is not at the time
required by Section 7.2;
(f) zoning restrictions, easements, licenses, reservations,
covenants, conditions, waivers, restrictions on the use of property or
other minor encumbrances or irregularities of title which do not
materially impair the use of any material property in the operation of
the business of the Borrower or any Material Subsidiary or the value of
such property for the purpose of such businesses or which are being
contested in good faith by appropriate proceedings;
(g) attachment, judgment or similar Liens arising in
connection with court proceedings and the Brazilian Tax Assessment;
provided, that the execution or other enforcement of such Liens is
effectively stayed, the claims secured thereby are being actively
contested in good faith by appropriate proceedings and the Borrower or
such Material Subsidiary shall have set aside on its books, if required
by GAAP, appropriate reserves for such Liens;
(h) any Lien existing on any asset of any Person at the time
such Person becomes a Material Subsidiary and not created in
contemplation of such event;
(i) any Lien on any asset of any Person existing at the time
such Person is merged or consolidated with or into the Borrower or a
Material Subsidiary and not created in contemplation of such event;
(j) any Lien existing on any asset prior to the acquisition
thereof by the Borrower or a Material Subsidiary and not created in
contemplation of such event;
(k) Liens given to secure Debt owing to life insurance
companies (or affiliates thereof) issuing life insurance policies in
connection with Split-Dollar Programs, incurred to finance
non-scheduled premiums paid by the Borrower or its Subsidiaries under
such policies pursuant to Split-Dollar Agreements executed in
connection with the Split-Dollar Program which Debt does not exceed
$10,000,000 in the aggregate, provided that in connection with any
Split-Dollar Program such Liens shall be limited to the Borrower's
right, title and interest in and to (i) the Split-Dollar Agreement and
the Split-Dollar Assignment executed in connection with such
Split-Dollar Program and (ii) the policy of life insurance assigned to
the Borrower as collateral pursuant to such Split-Dollar Assignment;
(l) any Lien arising out of the refinancing, extension,
renewal or refunding of any Debt secured by any Lien permitted by any
of the foregoing paragraphs of this Section 8.1; provided, that the
principal amount of such Debt is not increased and such Debt is not
secured by any additional assets; and
(m) Liens not otherwise permitted by the foregoing paragraphs
of this Section 8.1 securing Debt in an aggregate principal amount at
any time outstanding not to exceed $500,000.
Section 8.2 Debt.
(a) The Borrower shall not create, assume or suffer to exist any Debt
(i) that is secured by any Lien that is not permitted by Section 8.1 or (ii) in
the case of any Debt for borrowed money incurred or assumed after the Closing
Date, if on the date of incurrence or assumption of such Debt after giving
effect on a Pro Forma Basis to the incurrence or assumption of such Debt and to
the concurrent retirement of any other Debt of the Borrower or any of its
Subsidiaries, a Default or Event of Default would exist hereunder; provided,
however, that the Borrower may renew, refinance or extend any Debt originally
permitted to be incurred pursuant to this paragraph (a) so long as such renewed,
refinanced or extended Debt is on terms and conditions no less favorable to the
Borrower than the Debt originally issued (including, without limitation, any
shortening of the final maturity or average life to maturity or requiring any
payment to be made sooner than originally scheduled or any increase in the
interest rate applicable thereto or any change to any subordination provision
thereof).
(b) The Borrower shall not permit any Subsidiary to create, assume or
suffer to exist any Debt other than (i) purchase money Debt to the extent
secured by Liens permitted by Section 8.1 and (ii) additional Debt, including
Debt arising under any Guarantee permitted by Section 8.3, which in the
aggregate does not exceed (x) $60,000,000 for Domestic Subsidiaries, and (y)
$900,000,000 for Foreign Subsidiaries; provided, however, that this Section
8.2(b) shall not permit the incurrence or assumption of any Debt if on the date
of incurrence or assumption of such Debt after giving effect on a Pro Forma
Basis to the incurrence or assumption of such Debt and to the concurrent
retirement of any other Debt of the Borrower or any of its Subsidiaries, a
Default or Event of Default would exist hereunder.
Section 8.3 Guarantees.
The Borrower shall not, and shall not permit any Subsidiary to, create,
assume or suffer to exist any Guarantee, other than (i) Guarantees which are
incurred in the ordinary course of business for the purpose of carrying unsold
tobacco inventories held against Confirmed Orders, (ii) other Guarantees
incurred in the ordinary course of business so long as the aggregate outstanding
amount of all obligations Guaranteed under this clause (ii) does not at any time
exceed $250,000,000, (iii) Guarantees of the Guarantors pursuant to the
Subsidiary Guaranty and (iv) Guarantees of the Guarantors of the Borrower's
obligations under the Senior Indenture and the Senior Debt Securities.
Section 8.4 Consolidations, Mergers and Sale of Assets.
The Borrower shall not, and shall not permit any Material Subsidiary
to, consolidate or merge with or into any other Person or sell, lease or
otherwise transfer all or any substantial part of its assets to any other
Person, except that:
(a) the Borrower may merge with another Person if (i) the
Borrower is the corporation surviving such merger and (ii) immediately
after giving effect to such merger on a Pro Forma Basis, no Default or
Event of Default shall have occurred and be continuing;
(b) any Material Subsidiary may merge with or into, or sell,
lease or otherwise transfer all or any substantial part of its assets
to the Borrower or to a Material Domestic Subsidiary (determined
immediately thereafter) if, in connection with any such merger (i)
either the Borrower or such Material Domestic Subsidiary is the
surviving corporation and (ii) immediately after giving effect to such
merger, sale, lease or other transfer on a Pro Forma Basis, no Default
or Event of Default shall have occurred and be continuing;
(c) any Material Foreign Subsidiary may merge into or sell,
lease or otherwise transfer all or substantially all of its assets to
any other Foreign Subsidiary in which the Borrower, directly or
indirectly, shall retain a proportionate equity interest equal to or
greater than the equity interest of the Borrower in the merging
Subsidiary if immediately after giving effect to such merger, sale,
lease or other transfer on a Pro Forma Basis, no Default or Event of
Default shall have occurred and be continuing;
(d) any Material Subsidiary may merge with another Person in
connection with an Acquisition permitted by Section 8.5 if (i) such
Material Subsidiary is the surviving corporation and (ii) following
such Acquisition, the Borrower shall retain, directly or indirectly, a
proportionate equity interest in such Material Subsidiary equal to or
greater than the Borrower's equity interest immediately prior to such
Acquisition;
(e) the Borrower may complete the orderly liquidation of its
interests in Korean American Tobacco Company; and
(f) the Borrower or any Material Subsidiary may transfer its
interests in any Foreign Subsidiary to one or more Wholly Owned
Subsidiaries of the Borrower or such Material Subsidiary.
Section 8.5 Acquisitions and Investments.
The Borrower shall not, and shall not permit any Subsidiary to,
directly or indirectly, make any Acquisition or Investment, or enter into any
agreement to make any Acquisition or Investment, except for:
(a) In addition to any Investments otherwise permitted by this
Section 8.5, any Acquisition (other than a Hostile Acquisition) or
Investment for consideration consisting of cash or cash equivalents,
common stock of the Borrower (valued at the market value thereof as of
the date of the issuance thereof), other securities or properties of
the Borrower or any Subsidiary (valued in good faith by the Board of
Directors of the Borrower), the assumption of any Debt (valued at the
principal amount thereof), any other consideration (valued in good
faith by the board of directors of the Borrower) or any combination of
the foregoing; provided that the aggregate value of all such
consideration for all Acquisitions and Investments of the Borrower and
its Subsidiaries made during any fiscal year shall not exceed 10% of
Consolidated Tangible Net Worth as of the most recent fiscal year end
with respect to which the Administrative Agent and the Lenders shall
have received the financial statements referred to in Section
7.1(a)(i).
(b) Investments in direct obligations of, or obligations
Guaranteed as to principal and interest by, the United States
government or any agency or instrumentality thereof maturing in one
year or less from the date of acquisition thereof;
(c) 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 Borrower 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 Foreign Subsidiaries 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;
(d) Investments in commercial paper maturing within 270 days
and having one of the two highest ratings of either Standard & Poor's
Corporation, Moody's Investors Service, Inc. or Fitch Investors'
Service, Inc.;
(e) Investments in money market funds (other than those
referred to in paragraph (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 paragraphs
(b) (c)(i) and (ii) and (d) above;
(f) Investments in Persons evidencing the deferred purchase
price receivable of assets sold, leased or otherwise transferred in
accordance with Section 8.4;
(g) Investments in the Borrower and any Material Domestic
Subsidiary (determined immediately after such Investment);
(h) loans and advances in the ordinary course of its business
to officers and employees of the Borrower or any Subsidiary of the
Borrower in an amount consistent with past practice of the Borrower;
(i) loans and advances to growers and other suppliers of
tobacco (including Affiliates) in the ordinary course of its business
in an aggregate outstanding principal amount consistent with past
practice of the Borrower;
(j) Guarantees permitted by Sections 8.2 and 8.3;
(k) Investments in (i) direct noncallable obligations of, or
obligations Guaranteed as to principal and interest by the United
States government or any agency or instrumentality thereof, without
regard to the maturity of such obligations, and (ii) depository
receipts issued by a bank (as defined in Section 3(a)(2) of the
Securities Act of 1933) as custodian with respect to any obligation of
the United States government referred to in clause (i) above and held
by such bank for the account of the holder of such depository receipt,
or with respect to any specific payment of principal or interest on any
obligation of the United States government which is so specified and
held, provided that (except as required by law) such custodian is not
authorized to make any deduction from the amount payable to the holder
of such depository receipts from any amount received by the custodian
in respect of the United States government obligations or the specific
payment of principal or interest of the United States government
obligations evidenced by such depository receipts, where the sole
purpose of such Investments is either the Legal Defeasance or the
Covenant Defeasance of the outstanding Senior Debt Securities, as
provided in the Senior Indenture;
(l) Investments made by any Foreign Subsidiary in the ordinary
course of such Person's business, in connection with the financing of
international trading transactions, in export notes, trade credit
assignments, bankers' acceptances guarantees and instruments of a
similar nature issued by (i) any commercial bank or trust company (or
any Affiliate thereof) organized under the laws of the United States or
any state having capital and surplus in excess of $100,000,000 or (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;
(m) Investments by the Borrower in the Senior Debt Securities
in connection with any purchase of the Senior Debt Securities by the
Borrower, as required or permitted by the Senior Indenture, and
otherwise permitted under this Agreement;
(n) Investments by the Borrower in the Subordinated Debt
Securities in connection with any conversion or purchase of the
Subordinated Debt Securities by the Borrower, as required or permitted
by the Subordinated Indenture, and otherwise permitted under this
Agreement; provided that the Borrower shall make no such Investment
(other than a conversion of the Subordinated Debt Securities into stock
of the Borrower) unless immediately after giving effect thereto on a
Pro Forma Basis, no Default or Event of Default shall have occurred and
be continuing;
(o) Transfers of interests in Foreign Subsidiaries to the
extent permitted under Section 8.4(f); and
(p) Investments by a Foreign Subsidiary in any other Foreign
Subsidiary.
Section 8.6 Transactions with Other Persons.
The Borrower shall not enter into any agreement with any Person whereby
the Borrower shall agree to any restriction on the Borrower's right to amend or
waive any of the provisions of this Agreement.
Section 8.7 Transactions with Affiliates.
The Borrower shall not, and shall not permit any Material Subsidiary
to, enter into any transaction with any Affiliate of the Borrower or any such
Material Subsidiary, except (a) as expressly permitted by this Agreement, or (b)
in the ordinary course of business and pursuant to the reasonable requirements
of the business of the Borrower or such Material Subsidiary, provided that such
transaction is upon fair and reasonable terms no less favorable to the Borrower
or such Material Subsidiary than would obtain in a comparable arm's-length
transaction with a Person not an Affiliate of the Borrower or such Material
Subsidiary.
Section 8.8 Compliance with ERISA.
The Borrower shall not, and shall not permit any Subsidiary or any
ERISA Affiliate to, (a) terminate any Plan or withdraw from any Multiemployer
Plan so as to result in any liability to the Borrower or any of its Subsidiaries
in excess of $2,500,000, either singly or in the aggregate, (b) enter into any
"prohibited transaction" (as defined in Section 4975 of the Code and in Section
406 of ERISA) which results in any liability to the Borrower or any of its
Subsidiaries in excess of $2,500,000, either singly or in the aggregate, (c)
cause any occurrence of any Reportable Event which results in any, liability to
the Borrower or any of its Subsidiaries in excess of $2,500,000, either singly
or in the aggregate, or (d) allow or suffer to exist any other event or
condition known to the Borrower or any of its Subsidiaries which results in any
liability to the Borrower or any of its Subsidiaries in excess of $2,500,000,
either singly or in the aggregate, with respect to an "employee benefit plan"
(as defined in Section 3(3) of ERISA), including a Plan.
Section 8.9 Change in Structure.
Except as expressly permitted by this Agreement, the Borrower shall
not, and shall not permit any Material Subsidiary to, make any changes in its
equity capital structure (including in the terms of its outstanding stock) that
would reduce or impair the consolidated equity capital of the Borrower and its
Material Subsidiaries immediately thereafter, or amend its certificate of
incorporation or by-laws in any respect which is adverse to the interests of the
Lenders, provided that, nothing herein shall limit or impair the right or
ability of the Borrower or any of its Subsidiaries to issue stock.
Section 8.10 Restrictions on Negative Pledges.
The Borrower shall not, and shall not permit any Material Subsidiary
to, enter into any indenture, agreement, instrument or other arrangement (other
than the Senior Indenture) that (or modify any indenture, agreement, instrument
or other arrangement such that it), directly or indirectly, prohibits or
restrains, or has the effect of prohibiting or restraining, or imposes
materially adverse conditions upon, the granting of Liens by the Borrower or any
Material Subsidiary of the Borrower to the Administrative Agent for the benefit
of the Lenders.
Section 8.11 Limitation on Dividend Restrictions.
The Borrower shall not, and shall not permit any Subsidiary to, enter
into any agreement or otherwise become subject to any arrangement (except as may
be required or imposed by any Requirement of Law in the case of a Foreign
Subsidiary) which restricts or prohibits, in any manner whatsoever, the payment
of dividends or any similar distribution from any Subsidiary to the Borrower or
between or among the Subsidiaries.
Section 8.12 Payments of Subordinated Debt Securities.
If any Default or Event of Default has occurred and is continuing or
would be directly or indirectly caused as a result thereof, the Borrower shall
not, and shall not permit any Subsidiary to, make (or give any notice with
respect thereto) any payment or prepayment or redemption or acquisition for
value of (including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying when
due), refund, refinance or exchange of any Indebtedness (including interest and
fees) arising under the Subordinated Indenture and the Subordinated Debt
Securities; provided that the Borrower shall at all times be permitted to
convert the Subordinated Debt Securities into stock of the Borrower as required
or permitted by the Subordinated Indenture, and otherwise permitted under this
Agreement.
ARTICLE IX
EVENTS OF DEFAULT
Section 9.1 Events of Default.
Any one or more of the following events shall constitute an event of
default hereunder ("Events of Default"):
(a) Non-Payment. The Borrower shall fail to pay (i) when due,
any amount of principal of any Advance, (ii) within three (3) days
after the same shall become due, any interest or fee payable hereunder
or pursuant to any other Loan Document or (iii) within three (3) days
after written demand therefor from the Administrative Agent or any
Lender, any other amount payable hereunder or pursuant to any other
Loan Document; or
(b) Specific Covenants. The Borrower shall fail to observe or
perform any covenant contained in Articles VI, VII or VIII; provided,
that, with respect to a failure to observe or perform the covenants set
forth in Sections 7.1(g), 7.1(k), 7.1(l), 7.3, or 7.6, such failure
shall continue for fifteen (15) days or more after written notice
thereof to the Borrower from the Administrative Agent or any Lender; or
(c) Other Covenants. The Borrower shall fail to observe or
perform any covenant or agreement contained in this Agreement or any
other Loan Document (other than those covered by Section 9.1(a) or (b))
for thirty (30) days or more after written notice thereof has been
given to the Borrower by the Administrative Agent or the Required
Lenders; or
(d) Representation or Warranty. Any representation, warranty,
certification or statement made by the Borrower or any Material
Subsidiary in this Agreement, any other Loan Document or in any
certificate, financial statement or other document delivered pursuant
hereto or thereto shall prove to have been incorrect in any material
respect when made or deemed to have been made; or
(e) Cross-Default. Without limiting the terms of Section
9.1(n) or Section 9.1(o), the Borrower or any of its Subsidiaries (i)
shall fail to make any payment in respect of any Debt when due (beyond
the period of grace, if any, and whether by scheduled maturity,
required prepayment, acceleration, demand, or otherwise) which Debt is
in an aggregate principal amount of $10,000,000 or more; or (ii) shall
fail to perform or observe any other condition or covenant, or any
other event shall occur or condition exist, under any agreement or
instrument relating to any such Debt, and such failure shall continue
after the applicable grace or notice period, if any, specified in the
document relating thereto if the effect of such failure, event or
condition is to cause, or to permit the holder or holders of such Debt
or beneficiary or beneficiaries of such Debt (or a trustee or agent on
behalf of such holder or holders or beneficiary or beneficiaries) to
cause, such Debt to be declared to be due and payable prior to its
stated maturity or cash collateral in respect thereof to be demanded;
or
(f) Insolvency; Voluntary Proceeding. The Borrower or any of
its Material Subsidiaries shall (i) generally fail to pay, or admit in
writing its inability to pay, its debts as they become due, subject to
applicable grace periods, if any, whether at stated maturity or
otherwise; (ii) commence any Insolvency Proceeding with respect to
itself; or (iii) take any action to effectuate or authorize any of the
foregoing or the Borrower or any of its Material Subsidiaries shall
voluntarily cease to conduct its business in the ordinary course
except, in the case of Material Subsidiaries, as expressly permitted by
the terms of Section 8.4 of this Agreement; or
(g) Involuntary Proceeding. (i) Any involuntary Insolvency
Proceeding shall be commenced or filed against the Borrower or any of
its Material Subsidiaries, or any writ, judgment, warrant of
attachment, execution or similar process, shall be issued or levied
against all or a substantial part of the Borrower or any of its
Subsidiaries' assets, and any such proceeding or petition shall not be
dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded within
sixty (60) days after commencement, filing or levy; (ii) the Borrower
or any of its Material Subsidiaries shall admit the material
allegations of a petition against it in any Insolvency Proceeding, or
an order for relief (or similar order under non-U.S. law) shall be
ordered in any Insolvency Proceeding; or (iii) the Borrower or any of
its Material Subsidiaries shall acquiesce in the appointment of a
receiver, trustee, custodian, conservator, liquidator, mortgagee in
possession (or agent therefor), or other similar Person for itself or a
substantial portion of its assets or business; or
(h) ERISA Event. Any ERISA Event shall have occurred with
respect to a Plan and, thirty (30) days after notice thereof shall have
been given to the Borrower by the Administrative Agent or any Lender,
(i) such ERISA Event shall still exist and (ii) the sum (determined as
of the date of occurrence of such ERISA Event) of the Insufficiency of
such Plan and the Insufficiency of any and all other Plans with respect
to which an ERISA Event shall have occurred and then exist (or, in the
case of a Plan with respect to which an ERISA Event described in
clauses (iii) through (vi) of the definition of ERISA Event shall have
occurred and then exist, the liability related thereto) exceeds
$2,500,000; or
(i) Withdrawal Liability. The Borrower, any of its
Subsidiaries or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal
Liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower, any of its Subsidiaries or any ERISA Affiliate
as Withdrawal Liability (determined as of the date of such
notification), exceeds $2,500,000; or
(j) Monetary Judgments. One or more non-interlocutory
judgments, non-interlocutory orders, decrees or arbitration awards
shall be entered against the Borrower or any of its Subsidiaries
involving in the aggregate, a liability (not fully covered by
independent third-party insurance) as to any single transaction or
series of related transactions, incidents or conditions, of $10,000,000
or more, and the same shall remain unsatisfied, unvacated and unstayed
pending appeal for a period of forty-five (45) days after the entry
thereof; or
(k) Non-Monetary Judgments. Any non-monetary judgment, order
or decree shall be rendered against the Borrower or any of its
Subsidiaries which does or would reasonably be expected to have a
Material Adverse Effect, and the same shall remain unsatisfied,
unvacated and unstayed pending appeal for a period of forty-five (45)
days after the entry thereof; or
(l) Change of Control. There shall occur any Change of
Control; or
(m) Guarantor Defaults. Any of the Guarantors shall fail in
any material respect to perform or observe any term, covenant or
agreement in the Subsidiary Guaranty and such failure shall not be
remedied within any applicable cure period set forth therein; or the
Subsidiary Guaranty shall for any reason be partially (including with
respect to future advances) or wholly revoked or invalidated, or
otherwise cease to be in full force and effect, or any of the
Guarantors shall contest in any manner the validity or enforceability
thereof or deny that it has any further liability or obligation
thereunder; or
(n) Senior Debt Securities. The occurrence and continuation of
any Event of Default under and as defined in the Senior Indenture; or
(o) Subordinated Debt Securities. The occurrence and
continuation of any Event of Default under and as defined in the
Subordinated Indenture; or
(p) Ownership of Guarantors. Except as otherwise permitted in
Section 8.4, the Borrower shall cease to own and control, both
beneficially and of record, (i) one hundred percent (100%) of the
outstanding voting securities of any of the Guarantors other than
Florimex or (ii) at least seventy percent (70%) of the outstanding
voting securities of Florimex; or
(q) Material Adverse Effect. There shall occur a Material
Adverse Effect as determined by the Required Lenders and such condition
shall continue fifteen (15) days or more after written notice thereof
to the Borrower from the Administrative Agent or the Required Lenders.
Section 9.2 Remedies.
If any Event of Default occurs and is continuing, the Administrative
Agent shall, at the request of, or may, with the consent of, the Required
Lenders:
(a) declare the Commitment of each Lender to make Advances to
be terminated, whereupon such Commitments shall forthwith be
terminated;
(b) declare the unpaid principal amount of all the Notes, all
interest accrued and unpaid thereon, and all other Obligations payable
hereunder or under any other Loan Document to be immediately due and
payable, without presentment, demand, protest or other notice of any
kind, all of which are hereby expressly waived by the Borrower; and
(c) exercise on behalf of itself and the Lenders all rights
and remedies available to it and the Lenders under the Loan Documents
or applicable law;
provided, however, that upon the occurrence of any event specified in paragraph
(f) or (g) of Section 9.1 above, the obligation of each Lender to make Advances
shall automatically terminate and the unpaid principal amount of the Notes and
all interest and other Obligations as aforesaid shall automatically become due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower, or any further act of
the Administrative Agent or any Lender.
ARTICLE X
ADMINISTRATIVE AGENT, DOCUMENTATION AGENT AND CO-AGENTS
Section 10.1 Authorization and Action.
Each Lender hereby appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under this
Agreement and each other Loan Document as are delegated to the Administrative
Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly provided for by
this Agreement and the other Loan Documents (including, without limitation,
enforcement or collection of the Notes and the Subsidiary Guaranty), the
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
the Required Lenders, and such instructions shall be binding upon all Lenders
and all holders of Notes; provided, that the Administrative Agent shall not be
required to take any action which exposes the Administrative Agent to personal
liability or which is contrary to this Agreement, any other Loan Document or
applicable law. The Administrative Agent agrees to give to each Lender prompt
notice of each notice given to it by the Borrower pursuant to the terms of this
Agreement. The Documentation Agent and the Co-Agents, in their respective
capacities as such, shall not have any duties or obligations whatsoever under
this Agreement, the Notes, the Subsidiary Guaranty or any of the other Loan
Documents.
Section 10.2 Administrative Agent's Reliance, etc.
Neither the Administrative Agent nor any of its directors, officers,
agents or employees shall be liable for any action taken or omitted to be taken
by it or them under or in connection with this Agreement, except for its or
their own gross negligence or willful misconduct as determined in a final,
nonappealable judgment by a court of competent jurisdiction. Without limitation
of the generality of the foregoing, the Administrative Agent: (i) may treat the
payee of any Note as the holder thereof until the Administrative Agent receives
and accepts an Assignment and Acceptance entered into by the Lender who is the
payee of the Note and an Eligible Assignees as assignee as provided herein; (ii)
may consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken, in good faith by it in accordance with
the advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations (whether written or oral) made in or
in connection with this Agreement or any other Loan Document; (iv) shall not
have any duty to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions of this Agreement or any other Loan
Document on the part of the Borrower or any Guarantor or to inspect the property
(including the books and records) of the Borrower or any Guarantor; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement, any other
Loan Document or any other instrument or document furnished pursuant hereto; and
(vi) shall incur no liability under or in respect of this Agreement or any other
Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.
Section 10.3 NationsBank, FUNB, Rabobank, SocGen and Affiliates.
With respect to its Commitment, the Advances made by it and the Note
issued to it, each of NationsBank, FUNB, Rabobank and SocGen shall have the same
rights and powers under this Agreement as any other Lender and may exercise the
same as though it were not the Administrative Agent, Documentation Agent or a
Co-Agent, as appropriate; and the term "Lender" or "Lenders" shall, unless
otherwise expressly indicated, include NationsBank, FUNB, Rabobank and SocGen in
their individual capacities. NationsBank, FUNB, Rabobank and SocGen and their
respective Affiliates may accept deposits from, lend money to, act as trustee
under indentures for, and generally engage in any kind of business with, the
Borrower, the Guarantors, any of their Subsidiaries or Affiliates and any Person
who may do business with or own securities of the Borrower, the Guarantors, or
any such Subsidiaries or Affiliates, all as if NationsBank were not the
Administrative Agent, FUNB were not the Documentation Agent and Rabobank and
SocGen were not the Co-Agents and without any duty to account therefor to the
Lenders.
Section 10.4 Lender Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on the
financial statements referred to in Section 5.4 and such other documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Agreement.
Section 10.5 Indemnification.
The Lenders agree to indemnify the Administrative Agent (to the extent
not reimbursed by the Borrower), ratably according to the respective Commitment
Percentages of each Lender from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or any of the other Loan Documents
or any action taken or omitted by the Administrative Agent under this Agreement
or any of the other Loan Documents; provided that no Lender shall be liable to
the Administrative Agent for any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements to the extent that any of the foregoing is found in a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from the Administrative Agent's gross negligence or willful misconduct. Without
limitation of the foregoing, each Lender agrees to reimburse the Administrative
Agent promptly upon demand for its Commitment Percentage of any out-of-pocket
expenses (including counsel fees) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement or any of the other Loan Documents, to
the extent that the Administrative Agent is not reimbursed for such expenses by
the Borrower.
Section 10.6 Successor Administrative Agent.
The Administrative Agent may resign at any time by giving written
notice thereof to the Lenders and the Borrower and may be removed at any time
with cause by the Required Lenders. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Administrative Agent gives notice of resignation or the Required
Lenders, removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be a Lender or a commercial bank organized or
licensed under the laws of the United States of America or of any state thereof
and having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder and under each of the other Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this Article X shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent hereunder.
Section 10.7 Notice of Default.
` The Administrative Agent shall not be deemed to have knowledge or notice of
the occurrence of any Event of Default or Default unless the Administrative
Agent has received notice from a Lender or the Borrower or any Guarantor
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to the Lenders. The Administrative Agent shall take such
action with respect to any such Default or Event of Default as shall be
reasonably directed by the Required Lenders, provided that, unless and until the
Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Default or Event of Default as it shall
deem advisable in the best interests of the Lenders subject to the requirements
of this Agreement that certain actions be taken only with the consent of a
specified percentage of the Lenders.
Section 10.8 Administrative Agent's Fee.
The Borrower shall pay the Administrative Agent a fee in such amounts
and at such times as previously agreed upon by the Administrative Agent and the
Borrower pursuant to the Fee Letter.
ARTICLE XI
MISCELLANEOUS
Section 11.1 Notices.
All notices and other communications provided for hereunder shall be in
writing (including telecopier, provided, however that any telecopied notices or
communications shall be confirmed by delivery of the manually-signed original of
any such notice or communication by first-class mail, postage prepaid,
postmarked no later than five (5) Business Days after the date of any such
telecopied notice or communication) and mailed, or delivered, if to the
Borrower, at its address at 512 Bridge Street, Danville, Virginia 24543,
Attention: James A. Cooley, Vice President and Treasurer, Telecopier No. (804)
791-0349; if to any Lender, at its address for notices specified on its
signature page hereto or its notice address specified in the Assignment and
Acceptance pursuant to which it became a Lender; if to the Administrative Agent,
at its address at NationsBank, N.A., 1111 E. Main Street, 4th Floor Pavilion,
Richmond, Virginia 23277-0001, Attention: Hugh S. Miles, III, Telecopier No.
(804) 788-3669; or, as to each party, at such other address as shall be
designated by such party in a written notice to the other parties. All such
notices and communications shall, when mailed, telecopied, telegraphed, telexed
or cabled, be effective when deposited in the mails postage prepaid, confirmed
by electronic confirmation, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively, except that
notices and communications to the Administrative Agent pursuant to Articles II,
III or X shall not be effective until received by the Administrative Agent.
Section 11.2 No Waivers.
No failure or delay by the Administrative Agent or any Lender in
exercising any right, power or privilege hereunder or under any Note shall
operate as a waiver thereof nor shall any single or partial exercise thereof
preclude any other or further exercise thereof or the exercise or any other
right, power or privilege. The rights and remedies herein provided shall be
cumulative and not exclusive of any rights or remedies provided by law.
Section 11.3 Expenses; Indemnity.
(a) The Borrower agrees to pay on demand (i) all reasonable
out-of-pocket costs and expenses of the Administrative Agent, including fees and
disbursements of special counsel for the Administrative Agent, in connection
with the preparation and administration of this Agreement and the Notes, any
waiver or consent hereunder and thereunder or any amendment hereof or thereof or
any Default or alleged Default hereunder and thereunder and (ii) if an Event of
Default occurs, all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including reasonable fees and disbursements
of counsel (including staff counsel), in connection with such Event of Default
and collection and other enforcement proceedings resulting therefrom.
(b) In addition to any other indemnity provided for herein or in any
other Loan Document, the Borrower hereby indemnifies the Administrative Agent,
the Documentation Agent, the Co-Agents and each Lender and their respective
shareholders, directors, agents, officers, subsidiaries and affiliates (each, an
"Indemnified Party") from and against any and all liabilities, obligations,
claims, losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever (including, without
limitation, reasonable fees and expenses of counsel) which may be imposed on,
incurred by, or asserted against any Indemnified Party in, or in connection with
the preparation for a defense of, any litigation, proceeding or investigation or
claim instituted or conducted by any Governmental Authority or any other Person
(other than the Borrower) with respect to any aspect of, or any transaction
contemplated by, or referred to in, or any matter related to, this Agreement or
any of the other Loan Documents contemplated hereby, whether or not any
Indemnified Party is a party thereto, except to the extent that any of the
foregoing is found in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnified Party or the violation by such Indemnified Party of any latter
regulation in the conduct of its business. Additionally, the Borrower hereby
indemnifies the Indemnified Parties and agrees to defend and hold the
Indemnified Parties harmless from and against any and all losses, damages
(including, without limitation, consequential damages), costs, claims,
liabilities, actions, judgments, actions, suits, disbursements, obligations,
claims, penalties, fees, injuries or expenses of whatever kind or nature
(including, without limitation, reasonable counsel fees and costs), which any
Indemnified Party may sustain or incur in connection with any Environmental
Claim asserted against any Indemnified Party in connection with or relating to
(i) the Borrower's or any of its Subsidiaries, premises, including, without
limitation, any real or other property now or formerly owned, operated, leased
or used by the Borrower, any of its Subsidiaries or any of their respective
predecessors; or (ii) the Borrower's, any of its Subsidiaries, or any of their
respective predecessors, operations, whether such operations took place before
or after the date of this Agreement, except to the extent that any of the
foregoing is found in a final, nonappealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
such Indemnified Party. The indemnification in this Section 11.3 shall survive
termination of this Agreement and the other documents executed in connection
herewith as well as the payment of all Notes.
Section 11.4 Amendments, etc.
Any provision of this Agreement, the Notes or any other Loan Document
(other than the Fee Letter, which may be amended only in accordance with the
terms thereof) may be amended or waived if, but only if, such amendment or
waiver is in writing and is signed by the Borrower and the Required Lenders (or
the Administrative Agent with the consent of the Required Lenders) and, if the
rights or duties of the Administrative Agent are affected thereby, by the
Administrative Agent; provided, that no such amendment or waiver shall, unless
signed by all the Lenders, (a) increase or extend the Commitment of any Lender
or subject any Lender to any additional obligation, (b) reduce the principal of
or rate of interest on any Advance or any fees payable hereunder, (c) postpone
the date fixed for any payment of principal of or interest on any Advance or any
fees payable hereunder, (d) change the provisions of this Section 11.4, the
definition of "Required Lenders", or otherwise change the percentage of Lenders
required to take any action hereunder or under the Loan Documents, (e) release
the Borrower from its Obligations, or (f) except in connection with a
disposition of the stock or assets of a Guarantor permitted pursuant to the
terms of this Agreement (or otherwise consented to by the Required Lenders),
release all or substantially all of the Guarantors from their obligations under
the Subsidiary Guaranty.
Section 11.5 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its rights
or delegate any of its duties under this Agreement and that no Lender may assign
or otherwise transfer any of its rights hereunder, except as specifically
provided herein.
(b) Each Lender may (and, so long as no Event of Default has occurred
and is continuing, at the election of the Borrower given pursuant to Section 3.8
any Lender shall) assign to one or more Eligible Assignees all or a portion of
its rights and obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and the Advances owing to it), with the
consent of the Administrative Agent and the Borrower, which consent shall not
unreasonably be withheld or delayed; provided, that (i) each such assignment
shall be of a constant, and not a varying, percentage of all rights and
obligations of such Lender under the Advances made by such Lender and the
Commitment held by such Lender, (ii) unless waived in writing by the
Administrative Agent and the Borrower, the amount of the Commitment of an
assigning Lender being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event be less than $5,000,000 and shall be an integral multiple of
$1,000,000, except that in the case of an assignment to an existing Lender the
amount of the Commitment being assigned may be less than $5,000,000 if the
assigning Lender is assigning its entire Commitment or is retaining a Commitment
of not less than $5,000,000, and (iii) each such assignment shall be to an
Eligible Assignee. Prior to effecting any such assignment, the assigning Lender
shall give the Administrative Agent reasonable notice of its intent to do so,
requesting that the Administrative Agent seek the consent of the Borrower
required by this Section 11.5(b) and demonstrating that, if such consent is
obtained, the proposed assignment will otherwise conform to the requirements of
this Section 11.5(b). The Administrative Agent shall, as promptly as is
reasonably practicable after receipt of such notice, notify such Lender whether
such consent has been obtained. If such consent has been obtained, the parties
to such assignment shall execute and deliver to the Administrative Agent an
Assignment and Acceptance, together with any Note subject to such assignment and
an administrative fee of $3,500, no later than five (5) Business Days prior to
the effective date of any such assignment. Upon such execution, delivery and
acceptance, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder and (y) the assignor thereunder shall, to the extent that rights and
obligations hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its obligations under
this Agreement (and, in the case of an Assignment and Acceptance covering all or
the remaining portion of an assigning Lender's rights and obligations under this
Agreement, such Lender shall cease to be a party hereto).
(c) The Administrative Agent shall maintain at its address referred to
in Section 11.1 a copy of each Assignment and Acceptance delivered to and
accepted by it and a register for the recordation of the names and addresses of
the Lenders and the Commitment of, and principal amount of the Advances owing
to, each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive and binding for all purposes, absent manifest error, and the
Borrower, the Administrative Agent, the Documentation Agent, the Co-Agents and
the Lenders may treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or any Lender at any reasonable time
and from time to time upon reasonable prior notice.
(d) By executing and delivering an Assignment and Acceptance, the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Acceptance, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any of the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any of
the other Loan Documents; (ii) such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to the financial condition
of the Borrower or any of the Guarantors or the performance or observance by the
Borrower or any of the Guarantors of any of its Obligations; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Section 5.4 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon the Administrative Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under, this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes the
Administrative Agent to take such action as agent on its behalf and to exercise
such powers, under this Agreement as are delegated to the Administrative Agent
by the terms hereof, together with such powers as are reasonably incidental
thereto; and (vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this Agreement are
required to be performed by it as a Lender.
(e) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender and an assignee representing that it is an Eligible Assignee,
together with any Note subject to such assignment, the Administrative Agent
shall, if such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit A hereto (or such other form as shall be
acceptable to the Administrative Agent), (i) accept such Assignment and
Acceptance, (ii) record the information contained therein in the Register and
(iii) give prompt notice thereof to the Borrower. Within five Business Days
after its receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Administrative Agent in exchange for the surrendered
Note a new Note payable to such Eligible Assignee in an amount equal to the
outstanding principal balance of the ratable Commitment assigned to it pursuant
to such Assignment and Acceptance, and, if the assigning Lender has retained a
portion of the Commitment hereunder, a new Note payable to the assigning Lender
in an amount equal to the ratable portion of the Commitment retained by it
hereunder, as the case may be. Such new Note shall be in an aggregate principal
amount equal to the aggregate Commitment of such surrendered Note, shall be
dated the effective date of such Assignment and Acceptance and shall otherwise
be in substantially the form of Exhibit A, hereto.
(f) Each Lender may sell participations to one or more banks or (other
entities in or to all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitment,
the Advances owing to it and the Note held by it); provided, however, that (i)
such Lender's obligations under this Agreement (including, without limitation,
the Commitment to the Borrower hereunder) shall remain unchanged, (ii) such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender shall remain the holder of
any such Note for all purposes of this Agreement, (iv) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, and (v) such Lender shall notify the
Administrative Agent of any such sale promptly after the making thereof,
specifying the purchaser and the interest purchased, and the Administrative
Agent shall forward a copy of such notice to the Borrower. Notwithstanding any
other provision of this Agreement, no sale or existence of any participation
shall increase any amount payable by the Borrower pursuant to Article III
hereof.
(g) Any Lender may, in connection with any assignment or participation
or proposed assignment or participation pursuant to this Section 11.5, disclose
to the assignee or participant or proposed assignee or participant, any
information relating to the Borrower and the Subsidiaries furnished to such
Lender by or on behalf of the Borrower or the Subsidiaries; provided that, prior
to any such disclosure, the assignee or participant or proposed assignee or
participant shall agree to preserve the confidentiality of any confidential
information relating to the Borrower and its Subsidiaries received by it from
such Lender in a writing containing substantially the terms of Section 11.12.
(h) Notwithstanding any other provision set forth in this Agreement
which may be to the contrary, any Lender may at any time (i) assign all or any
portion of its rights and obligations under this Agreement (including, without
limitation, all or any portion of its Commitment, the Advances owing to it and
the Note held by it) to any Affiliate of such Lender, subject to the proviso of
the definition of "Eligible Assignee" (with written notice to the Borrower and
the Administrative Agent) and (ii) create a security interest in all or any
portion of its rights under this Agreement (including, without limitation, the
Advances owing to it and the Note held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Federal Reserve Board.
(i) The Administrative Agent and the Borrower may, for all purposes of
this Agreement, treat any Lender as the holder of any Note drawn to its order
(and owner of the Advances evidenced thereby) until written notice of
assignment, transfer or participation shall have been received by them.
(j) If any Reference Lender assigns or otherwise transfers its Note
other than pursuant to paragraph (h) above to any unaffiliated institution, the
Administrative Agent shall, in consultation with the Borrower, appoint another
Lender to act as a Reference Lender hereunder; provided that in no event shall
there be more than three (3) Reference Lenders at any given time.
Section 11.6 Right of Set-off.
Upon (i) the occurrence and during the continuance of any Event of
Default and (ii) the making of the request or the granting of the consent
specified by Section 9.2 to authorize the Administrative Agent to declare the
Notes due and payable, each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of the Borrower against any and all of the obligations
of the Borrower now or hereafter existing under this Agreement and the other
Loan Documents, whether or, not such Lender shall have made any demand under
this Agreement and although such obligations may be contingent and unmatured.
Each Lender agrees promptly to notify the Borrower after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender under this Section 11.6 are in addition to other rights and remedies
(including, without limitation, other rights; of set-off) which such Lender may
have.
Section 11.7 CONSENT TO JURISDICTION.
(a) THE BORROWER, IN RESPECT OF ITSELF AND ITS PROPERTIES, REPRESENTS
THAT IT IS SUBJECT TO (AND HEREBY IRREVOCABLY SUBMITS TO) THE NON-EXCLUSIVE
JURISDICTION OF ANY COURT IN THE STATE OF NORTH CAROLINA IN MECKLENBURG COUNTY,
OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF NORTH CAROLINA, IN RESPECT
OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE NOTES, AND THE BORROWER IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF
ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT. THE BORROWER IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY
DO SO UNDER APPLICABLE LAW, ANY OBJECTION TO THE LAYING OF THE VENUE OF ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH
SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORM.
(b) THE BORROWER IRREVOCABLY CONSENTS TO PROCESS BEING SERVED IN ANY
SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN PARAGRAPH (a) OF THIS
SECTION 11.7 BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED AIR MAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE ADDRESS OF THE BORROWER
SPECIFIED IN OR DESIGNATED PURSUANT TO SECTION 11.1. THE BORROWER IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ALL
CLAIM OF ERROR BY REASON OF ANY SUCH SERVICE AND AGREES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT SAID SERVICE (A) SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON THE BORROWER IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (B) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE BORROWER.
The foregoing provisions shall not limit the right of any Lender, the
Administrative Agent or any other party hereto to serve process in any other
manner permitted by law or limit the right of any Lender, the Administrative
Agent or other party hereto to bring any suit, action or proceeding or to obtain
execution on any judgment rendered in any suit, action or proceeding in any
other appropriate jurisdiction or in any other matter.
Section 11.8 VIRGINIA LAW.
THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
Section 11.9 Counterparts; Effectiveness.
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when the Administrative Agent shall have received (i) counterparts hereof signed
by all parties and (ii) the fees referred to in Section 4.1(d). In the case of
the Lenders only, such execution may be evidenced by the execution and delivery
of signature pages by facsimile transmission to the Administrative Agent
together with a letter addressed to the Administrative Agent confirming that the
original executed signature pages will be delivered to the Administrative Agent
by a reputable overnight courier service.
Section 11.10 WAIVER OF JURY TRIAL.
TO THE FULLEST EXTENT PERMITTED BY LAW, EACH OF THE BORROWER, THE
ADMINISTRATIVE AGENT, THE DOCUMENTATION AGENT, THE CO-AGENTS AND THE LENDERS
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
Section 11.11 Termination of Existing Credit Agreement.
By joining in the execution and delivery of this Agreement, each of the
Lenders who is a party to that certain Credit Agreement, dated as of March 15,
1996, by and among the Borrower, the Lenders listed therein, the Administrative
Agent and Bank of America, National Trust and Savings Association, Crestar Bank
and FUNB, as Co-Agents thereunder, as amended by that certain letter agreement
dated as of March 14, 1997, hereby irrevocably waives all requirements for prior
notice of the termination of its respective commitments thereunder and hereby
agrees with the Borrower that the foregoing credit agreement shall terminate on
the effective date of this Agreement provided for in Section 11.9 and shall be
of no further force or effect thereafter (except for any indemnification
provisions thereof which shall survive in accordance with the terms of such
agreement).
Section 11.12 Confidentiality.
The Administrative Agent, the Documentation Agent, the Co-Agents and the Lenders
agree to keep confidential (and to cause their respective affiliates, officers,
directors, employees, agents and representatives to keep confidential) all
information, materials and documents furnished to the Administrative Agent, the
Documentation Agent, any such Co-Agent or any such Lender by or on behalf of the
Borrower or any Subsidiary (whether before or after the Closing Date) which
relates to the Borrower or any Subsidiary (the "Information"). Notwithstanding
the foregoing, the Administrative Agent, the Documentation Agent, each Co-Agent
and each Lender shall be permitted to disclose Information (i) to its
affiliates, officers, directors, employees, agents and representatives in
connection with its participation in any of the transactions evidenced by this
Agreement or any other Loan Documents or the administration of this Agreement or
any other Loan Documents; (ii) to the extent required by applicable laws and
regulations or by any subpoena or similar legal process, or requested by any
Governmental Authority; (iii) to the extent such Information (A) becomes
publicly available other than as a result of a breach of this Agreement or any
agreement entered into pursuant to clause (iv) below, (B) becomes available to
the Administrative Agent, the Documentation Agent, such Co-Agent or such Lender
on a non-confidential basis from a source other than the Borrower or any
Subsidiary or (C) was available to the Administrative Agent, the Documentation
Agent, such Co-Agent or such Lender on a non-confidential basis prior to its
disclosure to the Administrative Agent, the Documentation Agent, the Co-Agent or
such Lender by the Borrower or any Subsidiary; (iv) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant (or prospective assignee or participant) first specifically agrees
in a writing furnished to and for the benefit of the Borrower to be bound by the
terms of this Section 11.12; or (v) to the extent that the Borrower shall have
consented in writing to such disclosure. Nothing set forth in this Section 11.12
shall obligate the Administrative Agent, the Documentation Agent, any Co-Agent
or any Lender to return any materials furnished by the Borrower or any
Subsidiary.
<PAGE>
F:\DOCS\DJQ\BANKING\254706_8.DOC
F:\DOCS\DJQ\BANKING\254706_8.DOC
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
"BORROWER"
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President and Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
ADDRESS FOR NOTICES:
512 Bridge Street
P.O. Box 681
Danville, Virginia 24543
Telecopier No.: (804) 791-0415
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
ADMINISTRATIVE AGENT: NATIONSBANK, N.A., as Administrative Agent
By________________________________
Name: Hugh S. Miles, III
Title: Executive Vice President
DOCUMENTATION AGENT: FIRST UNION NATIONAL BANK,
as Documentation Agent
By________________________________
Name:
Title:
CO-AGENTS: COOPERATIEVE CENTRALE RAIFFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND," NEW YORK BRANCH,
as Co-Agent
By________________________________
Name:
Title:
By________________________________
Name:
Title:
SOCIETE GENERALE, as Co-Agent
By________________________________
Name:
Title:
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
"LENDERS"
COMMITMENT NATIONSBANK, N.A.
$60,000,000.00
By________________________________
Name: Hugh S. Miles, III
Title: Executive Vice President
Domestic and Eurodollar Lending Offices
4th Floor Pavilion
1111 E. Main Street
Richmond, Virginia 23277-0001
Address for Notices
4th Floor Pavilion
1111 E. Main Street
Richmond, Virginia 23277-0001
Attention: Mr. Hugh S. Miles, III
Telecopier No.: (804) 788-3669
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: BANK OF AMERICA NT & SA
$25,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
1850 Gateway Boulevard
Concord, California 94520
Attention: Ms. Louise Hosey
Telecopier No.: (510) 675-7531
Address for Notices
231 South LaSalle Street, 9th Floor
Chicago, Illinois 60697
Attention: Mr. William Barnett
Telecopier No.: (312) 978-1276
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: CRESTAR BANK
$30,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
919 East Main Street
Richmond, Virginia 23219
Address for Notices
P.0. Box 26665
Richmond, Virginia 23261-6665
Attention: Ms. Shirley P. Elliott
Telecopier No.: (804) 782-5413
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: FIRST UNION NATIONAL BANK
$55,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
201 South Jefferson Street, (VA-7441)
Roanoke, Virginia 24011
Attention: Ms. Susan K. Doyle
Telecopier No.: (540) 561-5262
Address for Notices
First Union National Bank
201 South Jefferson Street (VA-7441)
Roanoke, Virginia 24011
Attention: Ms. Susan K. Doyle
Telecopier No.: (540) 561-5262
With a copy to:
First Union National Bank
201 South Jefferson Street (VA-7234)
Roanoke, Virginia 24011
Attention: Mr. Stewart H. Marley
Telecopier No.: (540) 561-5478
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: COOPERATIEVE CENTRALE RAIFFEISEN-
$45,000,000.00 BOERENLEENBANK B.A., "RABOBANK
NEDERLAND," NEW YORK BRANCH
By________________________________
Name:
Title:
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
245 Park Avenue, 39th Floor
New York, New York 10167
Attention: Ms. Brenda Lyew
Telecopier No.: (212) 916-7930
Address for Notices
245 Park Avenue
New York, New York 10167
Attention: Corporate Services Department
Telecopier No.: (212) 818-0233
With a copy to:
1201 West Peachtree Street, Suite 3450
Atlanta, Georgia 30309
Attention: Mr. Theodore Cox
Telecopier No.: (404) 877-9150
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: SIGNET BANK
$15,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
800 East Main Street
Richmond, Virginia 23219
Address for Notices
P.O. Box 25970
Richmond, Virginia 23219
Attention: Mr. J. Charles Link
Telecopier No.: (804) 771-7151
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: WACHOVIA BANK, N.A.
$25,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
227 Fayetteville Street Mall
Raleigh, North Carolina 27602
Attention: Ms. Beth Duffy
Telecopier No.: (919) 755-7826
Address for Notices
227 Fayetteville Street Mall
Raleigh, North Carolina 27602
Attention: Mr. Keith A. Sherman
Telecopier No.: (919) 755-7826
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: SOCIETE GENERALE
$45,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
2001 Ross Avenue, Suite 4800
Dallas, Texas 75201
Attention: Ms. Meredith Carlisle
Telecopier No.: (214) 754-0171
Address for Notices
303 Peachtree Street N.E., Suite 30308
Atlanta, Georgia 30308
Attention: Mr. Jerome Jacques
Telecopier No.: (404) 865-7419
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: BANK OF TOKYO-MITSUBISHI TRUST COMPANY
$25,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
1251 Avenue of the Americas
New York, New York 10020-1104
Telecopier No.: (201) 413-8225
Address for Notices
Suite 701
2000 K Street, N.W.
Washington, D.C. 20006
Attention: Mr. Michael Brick
Telecopier No.: (202) 293-3416
With a copy to:
North American Legal & Public Affairs Office
1251 Avenue of the Americas
New York, New York 10020-1104
Attention: Mr. Harry McLachlin
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: ABN AMRO BANK N.V. NEW YORK BRANCH
$15,000,000.00
By________________________________
Name:
Title:
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
500 Park Avenue
Commodities Department
New York, New York 10022
Attention: Mr. Shameem Quadree
Telecopier No.: (212) 446-4164
Address for Notices
500 Park Avenue
Commodities Department
New York, New York 10022
Attention: Mr. Richard West
Telecopier No.: (212) 688-5815
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: THE BANK OF NOVA SCOTIA
$15,000,000.00
By______________________________
Name: J.R. Trimble
Title: Senior Relationship Manager
Domestic and Eurodollar Lending Offices
One Liberty Plaza, 26th Floor
New York, New York 10006
Attention: Ms. Tilsa Cora
Telecopier No.: (212) 225-5145
Address for Notices
One Liberty Plaza, 26th Floor
New York, New York 10006
Attention: Mr. Frank Vidal
Telecopier No.: (212) 225-5090
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: THE SUMITOMO BANK, LIMITED,
$15,000,000.00 NEW YORK BRANCH
By______________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
277 Park Avenue
New York, New York 10172
Attention: Ms. Thierry Le Jouan
Telecopier No.: (212) 224-5197
Address for Notices
277 Park Avenue
New York, New York 10172
Attention: Mr. Gregory Aptman
Telecopier No.: (212) 224-5188
With a copy to:
277 Park Avenue
New York, New York 10172
Attention: Ms. Christine Bonifacic
Telecopier No.: (212) 224-5197
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: BAYERISCHE VEREINSBANK AG,
$25,000,000.00 NEW YORK BRANCH
By________________________________
Name:
Title:
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
335 Madison Avenue
New York, New York 10017
Attention: Ms. Evelyn Hole
Telecopier No.: (212) 880-9724
Address for Notices
Trade Finance
Madison Avenue
New York, New York 10017
Attention: Mr. William Schwarze
Telecopier No.: (212) 880-9724
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: BANQUE FRANCAISE DU COMMERCE EXTERIEUR
$15,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
645 Fifth Avenue, 20th Floor
New York, New York 10022
Attention: Ms. Nicole Vipperman
Telecopier: (212) 872-5045
Address for Notices
645 Fifth Avenue, 20th Floor
New York, New York 10022
Attention: Mr. Alain Loisy
Telecopier: (212) 872-5045
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: CORESTATES BANK, N.A.
$15,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
P.O. Box 7618
Philadelphia, Pennsylvania 19101
Attention: Ms. Sharon Burgess
Telecopier No.: (215) 973-2045
Address for Notices
1345 Chestnut Street
FC-1-8-3-16
Philadelphia, Pennsylvania 19102
Attention: Mr. John D. Brady
Telecopier No.: (215) 973-6745
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: ISTITUTO BANCARIO SAN PAOLO DI TORINO S.P.A.
$10,000,000.00
By________________________________
Name:
Title:
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
245 Park Avenue, 35th Floor
New York, New York 10167
Attention: Ms. Gabriele Acerbi
Telecopier No.: (212) 599-5303
Address for Notices
245 Park Avenue, 35th Floor
New York, New York 10167
Attention: Ms. Luca Sacchi
Telecopier No.: (212) 599-5303
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: STANDARD CHARTERED BANK
$15,000,000.00
By________________________________
Name:
Title:
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
7 World Trade Center
New York, New York 10048
Attention: Mr. Larry Fitzgerald
Telecopier: (212) 667-0568
Address for Notices
7 World Trade Center
New York, New York 10048
Attention: Ms. Nancy L. Obler
Telecopier: (212) 667-0780
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: BANCA MONTE DEI PASCHI DI SIENA S.P.A.
$15,000,000.00
By________________________________
Name:
Title:
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
245 Park Avenue, 26th Floor
New York, New York 10167
Attention: Ms. Mei Tam
Telecopier No.: (212) 557-8111
Address for Notices
245 Park Avenue, 26th Floor
New York, New York 10167
Attention: Mr. Robert E. Woods
Telecopier No.: (212) 557-8111
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: CREDIT LYONNAIS ATLANTA AGENCY
$25,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
303 Peachtree Street NE, Suite 4400
Atlanta, Georgia 30308
Attention: Ms. Lisa Cline
Telecopier No.: (404) 584-5249
Address for Notices
303 Peachtree Street NE, Suite 4400
Atlanta, Georgia 30308
Attention: Mr. Kevin Murphy
Telecopier No.: (404) 584-5249
<PAGE>
[Signature Page to Credit Agreement dated as of June 27, 1997 among DIMON
Incorporated, as Borrower, NationsBank, N.A., as Administrative Agent, First
Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and the lenders listed on the signature pages
thereof, as Lenders]
COMMITMENT: THE SANWA BANK, LIMITED, ATLANTA AGENCY
$10,000,000.00
By________________________________
Name:
Title:
Domestic and Eurodollar Lending Offices
Park Avenue Plaza
55 East 52nd Street
New York, New York 10055
Attention: Ms. Renko Hara
Telecopier: (212) 754-2368
Address for Notices
133 Peachtree Street NE, Suite 4950
Georgia-Pacific Center
Atlanta, Georgia 30303
Attention: Mr. William M. Plough
Telecopier: (404) 589-1629
<PAGE>
SCHEDULE 1.1
Commencing on the date on which the Administrative Agent first receives
the officer's certificate to be furnished by the Borrower pursuant to Section
7.1(c) of this Agreement, the Applicable Margin applicable to Eurodollar Rate
Advances shall be determined (subject to adjustment as set forth in the
definition of "Applicable Margin") based upon the ratings of Standard & Poor's
Corporation ("S&P") and Moody's Investors Service, Inc. ("Moody's") for the
Borrower's senior, unsecured, non-credit enhanced long term indebtedness for
money borrowed ("Index Debt"). The Applicable Margin shall be the rate per annum
set forth opposite the applicable rating or ratings category (each a "Category")
below:
Ratings Applicable to Index Debt Applicable Margin
-------------------------------- -----------------
CATEGORY 1
----------
BBB or higher by S&P
Baa2 or higher by Moody's .40%
CATEGORY 2
----------
BBB- by S&P
Baa3 by Moody's .50%
CATEGORY 3
----------
BB+ by S&P
Ba1 by Moody's .70%
CATEGORY 4
----------
BB by S&P
Ba2 by Moody's .80%
CATEGORY 5
----------
BB- or lower by S&P
Ba3 or lower by Moody's 1.00%
For purposes of the foregoing, if the ratings established by Moody's and S&P
shall fall within different Categories, then (a) if the ratings established by
Moody's and S&P differ by only one Category, the rating in the numerically
higher (or inferior) Category shall be disregarded or (b) if the ratings
established by Moody's and S&P differ by more than one Category, the Applicable
Margin will be determined by reference to the numerically highest (or most
inferior) Category falling between such different Categories. If any rating
established by Moody's or S&P shall be changed (other than as a result of a
change in the rating system of Moody's or S&P), the corresponding change in the
Applicable Margin shall be effective as of the date on which such changed rating
is first announced by the applicable rating agency. If the rating system of
either Moody's or S&P shall change during the term of this Agreement, the
Borrower and the Required Lenders, acting through the Administrative Agent,
shall negotiate in good faith to amend the references to specific ratings in
this Schedule 1.1 to reflect such changes in the rating system.
Each change in the Applicable Margin shall apply to all Eurodollar Rate Advances
that are outstanding at any time during the period commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next change.
<PAGE>
SCHEDULE 2.10
Commencing on the date on which the Administrative Agent first receives
the officer's certificate to be furnished by the Borrower pursuant to Section
7.1(c) of this Agreement, the commitment fees pursuant to Section 2.10 (the "Fee
Rate") shall be based upon the ratings of Standard & Poor's Corporation ("S&P")
and Moody's Investors Service, Inc. ("Moody's") for the Borrower's senior,
unsecured, non-credit enhanced long term indebtedness for money borrowed ("Index
Debt"). The Fee Rate shall be the rate per annum set forth opposite the
applicable rating or ratings category (each a "Category") below:
Ratings Applicable to Index Debt Fee Rate
-------------------------------- --------
CATEGORY 1
----------
BBB or higher by S&P
Baa2 or higher by Moody's .15%
CATEGORY 2
----------
BBB- by S&P
Baa3 by Moody's .1875%
CATEGORY 3
----------
BB+ by S&P
Ba1 by Moody's .25%
CATEGORY 4
----------
BB by S&P
Ba2 by Moody's .30%
CATEGORY 5
----------
BB- or lower by S&P
Ba3 or lower by Moody's 0.375%
For purposes of the foregoing, if the ratings established by Moody's and S&P
shall fall within different Categories, then (a) if the ratings established by
Moody's and S&P differ by only one Category, the rating in the numerically
higher (or inferior) Category shall be disregarded or (b) if the ratings
established by Moody's and S&P differ by more than one Category, the Fee Rate
will be determined by reference to the numerically highest (or most inferior)
Category falling between such different Categories. If any rating established by
Moody's or S&P shall be changed (other than as a result of a change in the
rating system of Moody's or S&P), the corresponding change in the Fee Rate shall
be effective as of the date on which such changed rating is first announced by
the applicable rating agency. If the rating system of either Moody's or S&P
shall change during the term of this Agreement, the Borrower and the Required
Lenders, acting through the Administrative Agent, shall negotiate in good faith
to amend the references to specific ratings in this Schedule 2.10 to reflect
such changes in the rating system.
Each change in the Fee Rate shall apply to the calculation of the commitment fee
pursuant to Section 2.10 on each day during the period commencing on the
effective date of such change and ending on the date immediately preceding the
effective date of the next change.
<PAGE>
EXHIBIT A TO
CREDIT AGREEMENT
ASSIGNMENT AND ACCEPTANCE
Dated ____________, 19__
Reference is made to the Credit Agreement dated as of June 27, 1997
(the "Credit Agreement") among DIMON INCORPORATED, a Virginia corporation (the
"Borrower"), the Lenders (as defined in the Credit Agreement), NATIONSBANK,
N.A., as administrative agent (the "Administrative Agent"), FIRST UNION NATIONAL
BANK, as Documentation Agent (the "Documentation Agent"), and COOPERATIEVE
CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND," NEW YORK BRANCH
and SOCIETE GENERALE, as Co-Agents (the "Co-Agents"). Terms defined in the
Credit Agreement are used herein with the same meaning.
______________________________ (the "Assignor") and ________________
(the "Assignee") agree as follows:
The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof with respect to the
percentage interest of the Aggregate Commitments specified in Section 1 of
Schedule 1 hereto and, to the extent of the interest conveyed herein, the Notes
held by the Assignor. After giving effect to such sale and assignment, the
amount of the Assignee's Commitment and the amount of the Advances owing to the
Assignee will be as set forth in Section 2 of Schedule 1.
The Assignor (i) represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim; (ii) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit Agreement
and the other Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its Subsidiaries or the
performance or observance by the Borrower or any of its Subsidiaries of any of
its obligations under the Credit Agreement, any other Loan Document or any other
instrument or document furnished pursuant thereto; and (iv) attaches the Notes
referred to in paragraph 1 above and requests that the Administrative Agent
exchange such Notes for a new Note payable to the order of the Assignee in an
amount equal to the Commitment assumed by the Assignee pursuant hereto, and if
the Assignor retained any Commitment under the Credit Agreement, a new Note
payable to the order of the Assignor in an amount equal to the Commitment so
retained by the Assignor, all as specified in Section 3 of Schedule 1.
The Assignee (i) confirms that it has received a copy of the Credit
Agreement and the other Loan Documents (other than the Fee Letter), together
with copies of the financial statements referred to in Section 5.4 of the Credit
Agreement and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (ii) agrees that it will, independently and without reliance upon
the Administrative Agent, the Assignor or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement and the other Loan Documents; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Administrative Agent to take such
action as administrative agent on its behalf and to exercise such powers under
the Credit Agreement and the other Loan Documents as are delegated to the
Administrative Agent by the terms thereof, together with such powers as are
reasonably incidental thereto; (v) agrees that it will perform in accordance
with their terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; (vi) agrees to be
bound by the confidentiality provisions of Section 11.12 of the Credit
Agreement; [and] (vii) specifies that its Domestic Lending Office (and address
for notices) and Eurodollar Lending Office are the offices set forth beneath its
name on the signature pages hereof [and] [(ix) attaches the IRS Form W-8, 4224
or 1001, as appropriate, or any successor form prescribed by the IRS, and
provides the certificates, if any, as required by Section 3.5(f) of the Credit
Agreement.](1)
As consideration for the sale, assignment and transfer contemplated by
Section 1 hereof, the Assignee shall pay to the Assignor on the Effective Date
(as defined below) in immediately available funds an amount equal to
$__________________________, representing the principal amount of Advances
assigned hereunder on the Effective Date (as defined below).
Following the execution of this Assignment and Acceptance by the
Assignor and the Assignee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date of this
Assignment and Acceptance (the "Effective Date") shall be the date specified in
Section 4 of Schedule 1; provided that the following conditions precedent have
been satisfied on or before the Effective Date:
this Agreement shall have been executed and delivered by the
Assignor and the Assignee;
the consent of the Borrower and the Administrative Agent
required for an effective assignment of the Assignor's interest
specified herein under Section 11.5 of the Credit Agreement shall have
been duly obtained and shall be in full force and effect as of such
date;
the Assignee shall have paid to the Assignor all amounts due
to the Assignor under this Agreement;
the Assignee shall have delivered the documents required by
Section 3 hereof, if applicable; and
the processing fee referred to in Section 8 hereof shall have
been paid to the Administrative Agent.
As of the Effective Date, (i) the Assignee shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender thereunder and (ii) the Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement.
From and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to the Assignee. The Assignor
and Assignee shall make all appropriate adjustments in payments under the Credit
Agreement and the Notes for periods prior to the Effective Date directly between
themselves.
The Assignee and the Assignor have attached a check in the amount of
$3,500 payable by the [Assignee] [Assignor] [Borrower] to the order of the
Administrative Agent, or the Administrative Agent has received $3,500 by wire
transfer of immediately available funds from the [Assignee] [Assignor]
[Borrower], as a processing and recording fee in satisfaction of Section 11.5 of
the Credit Agreement.
THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed by their respective officers thereunto duly
authorized, as of the date first above written, such execution being made on
Schedule I hereto.
- --------------------
(1) Insert if the Assignee is organized under the laws of a jurisdiction
outside the United States.
<PAGE>
SCHEDULE 1
to
Assignment and Acceptance
Dated _____________, 19__
Section 1. Percentage Interest of Aggregate
Commitments Purchased by Assignee: __________%
Section 2. Amount of:
Assignee's Commitment: $__________
Aggregate Outstanding Principal Amount of
Advances owing to the Assignee $__________
Section 3.
A Note payable to the order of the Assignee
Dated: _______________, 19__
Principal amount:
A Note payable to the order of the Assignor
Dated: ________________, 19__
Principal amount:
Section 4. Effective Date: ____________, 19__
<PAGE>
[NAME OF ASSIGNOR]
By:
Name:
Title:
[NAME OF ASSIGNEE]
By:
Name:
Title:
Assignee's Domestic Lending Office
(and address for notices):
___________________________________
___________________________________
Attention: ________________________
Assignee's Eurodollar Lending
Office:
___________________________________
___________________________________
Attention: ________________________
Consented to this _____ day of ______________, 19__
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
Accepted and consented to this _____ day of _______________, 19__
NATIONSBANK, N.A., as Administrative Agent
By: ________________________________
Name:
Title:
<PAGE>
EXHIBIT B TO
CREDIT AGREEMENT
GUARANTY
(Material Domestic Subsidiaries)
GUARANTY, dated as of June 27, 1997 (this "Guaranty"), made by certain
subsidiaries of DIMON Incorporated, a Virginia corporation (the "Borrower"), now
or hereafter becoming parties hereto (collectively, the "Guarantors"), in favor
of NationsBank, N.A., as administrative agent (the "Administrative Agent"), the
Lenders (as defined below) and all other Persons holding any of the Guaranty
Obligations (as defined below).
PRELIMINARY STATEMENTS.
Certain lenders (together with other lenders that may from time to time
become parties thereto the "Lenders"), the Administrative Agent, First Union
National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, have entered into a Credit Agreement dated as of
June 27, 1997 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"; terms defined therein and not otherwise defined herein
being used herein as therein defined) with the Borrower.
Pursuant to the Credit Agreement, the Lenders have agreed to make
Advances to the Borrower in accordance with the terms thereof.
It is a condition precedent to the making of any Advance by the Lenders
under the Credit Agreement that the Guarantors shall have executed and delivered
this Guaranty.
The Guarantors will derive substantial direct and indirect benefit from
the transactions contemplated by the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances under the Credit Agreement, each Guarantor hereby
agrees as follows:
SECTION 1. Guaranty. Each Guarantor hereby jointly and severally,
irrevocably and unconditionally, guarantees the due and punctual payment of all
present and future indebtedness and other liabilities of the Borrower owing to
the Administrative Agent, any Lender, any Person entitled to indemnification
pursuant to Section 11.3 of the Credit Agreement, and their respective
successors, transferees or assigns, of every type and description, whether or
not evidenced by any note, guaranty or other instrument, arising under or in
connection with the Credit Agreement, the Notes or any other Loan Document,
whether or not for the payment of money, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired, including, without
limitation, all principal, interest, charges, expenses, fees, attorneys, fees
and disbursements and any other sum chargeable to the Borrower under the Credit
Agreement, or any other Loan Document, whether at stated maturity, by
acceleration or otherwise, and the performance of all obligations of the
Borrower now or hereafter existing under the Credit Agreement, the Notes and the
other Loan Documents (such obligations being the "Guaranty Obligations"), and
agrees to pay any and all expenses (including counsel fees and expenses)
incurred by the Administrative Agent, the Lenders or any other Persons holding
any of the Guaranty Obligations in enforcing any rights under this Guaranty
without limiting the generality of the foregoing, to the fullest extent
permitted by law, each Guarantor's liability shall extend to all amounts which
constitute part of the Guaranty Obligations and would be owed by the Borrower
under the Credit Agreement, the Notes and the other Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrower. The
foregoing guaranty shall be a guaranty of payment and not of collection merely.
SECTION 2. Guaranty Absolute. Each Guarantor guarantees that the
Guaranty Obligations will be paid and performed strictly in accordance with the
terms of the Credit Agreement, the Notes and the other Loan Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Administrative
Agent, the Lenders or any other Persons holding any of the Guaranty Obligations
with respect thereto. The obligations of each Guarantor under this Guaranty are
independent of the Guaranty Obligations, and a separate action or actions may be
brought and prosecuted against any Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower, any other
Guarantor or any other guarantor of the Guaranty Obligations, or whether the
Borrower or any other Guarantor is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, the Notes, the other Loan Documents or any other agreement
or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, or any extension or renewal of, all or any of the
Guaranty Obligations, or any other amendment or waiver of or any
consent to departure from the Credit Agreement, the Notes or the other
Loan Documents, including, without limitation, any increase in the
Guaranty Obligations resulting from the extension of additional credit
to the Borrower under the Credit Agreement or the Other Loan Documents;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release, or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the
Guaranty Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranty Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Guaranty Obligations or any other assets of the Borrower, any other
Guarantor or any other guarantor of the Guaranty Obligations;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower, any other Guarantor or any
other guarantor of the Guaranty Obligations; or
(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower, any other
Guarantor or any other guarantor of the Guaranty Obligations.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranty Obligations is rescinded
or must otherwise be returned by any of the Administrative Agent, Lenders or
other Persons holding any of the Guaranty Obligations upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
SECTION 3. Waiver. Each Guarantor hereby waives promptness, diligence,
presentment, demand of payment, protest, notice of acceptance of this Guaranty,
notice of any liability to which it may apply and any other notice with respect
to any of the Guaranty Obligations, this Guaranty and any requirement that any
of the Administrative Agent, Lenders or other Persons holding any of the
Guaranty Obligations protect, secure, perfect or insure any security interest or
lien or any property subject thereto or exhaust any right or take any action
against the Borrower, any other Guarantor or any other person or entity or any
collateral. Without limiting the generality of the foregoing provisions of this
Section 3, each Guarantor hereby specifically waives the benefits of N.C. Gen.
Stat. ss.ss. 26-7 through 26-9, inclusive.
SECTION 4. Subrogation. Upon the making by any Guarantor of any payment
hereunder for the account of the Borrower, such Guarantor shall be subrogated to
the rights of the payee against the Borrower with respect to such payment;
provided, that such Guarantor shall not enforce any right or receive any payment
by way of subrogation until all of the Guaranty Obligations shall have been paid
in full and the Commitments have been terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights prior to the payment in full
of the Guaranty Obligations and the termination of the Commitments, such amounts
shall be held in trust for the benefit of the Administrative Agent, the Lenders
and any other holder of the Guaranty Obligations and shall forthwith be paid on
demand to the Administrative Agent to be credited and applied to the Guaranty
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement or to be held by the Administrative Agent as collateral
security for any Guaranty Obligations existing.
SECTION 5. Limitation of Guaranty Obligations. Anything herein to the
contrary notwithstanding:
(a) It is the intent of the Guarantors, the Administrative Agent, the
Lenders and any other Person holding any of the Guaranty Obligations that each
Guarantor's maximum obligations hereunder (such Guarantor's "Maximum Guaranty
Liability") shall not be in excess of (after giving effect to all rights of such
Guarantor to contribution or subrogation provided herein):
(i) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code of 1978, 11 U.S.C. ss. 101 et.
seq., as amended (the "Bankruptcy Code"), on or within one year from
the date on which any of the Guaranty Obligations are incurred, the
maximum amount which would not otherwise cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the
Administrative Agent, the Lenders and any other Person holding any of
the Guaranty Obligations) to be avoidable or unenforceable against such
Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the Bankruptcy
Code; or
(ii) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code subsequent to one year from the
date on which any of the Guaranty Obligations are incurred, the maximum
amount which would not otherwise cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the
Administrative Agent, the Lenders and any other Person holding any of
the Guaranty Obligations) to be voidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance
act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such
Guarantor under any law, statute or regulation other than the
Bankruptcy Code relating to dissolution, liquidation, conservatorship,
bankruptcy, moratorium, readjustment of debt, compromise,
rearrangement, receivership, insolvency, reorganization or similar
debtor relief from time to time in effect affecting the rights of
creditors generally (collectively, "Other Debtor Relief Law"), the
maximum amount which would not otherwise cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the
Administrative Agent, the Lenders and any other Person holding any of
the Guaranty Obligations) to be avoidable or unenforceable against such
Guarantor under such other Debtor Relief Law, including, without
limitation, any state fraudulent transfer or fraudulent conveyance act
or statute applied in any such case or proceeding. (The substantive
laws under which the possible avoidance or unenforceability of the
obligations of any Guarantor hereunder (or any other obligations of
such Guarantor to the Administrative Agent, the Lenders and any other
Person holding any of the Guaranty Obligations) shall be determined in
any such case or proceeding shall hereinafter be referred to as the
"Avoidance Provisions").
(b) To the end set forth in Section 5(a)(i), (ii) or (iii), but only to
the extent that the obligations of any Guarantor hereunder would otherwise be
subject to avoidance under any Avoidance Provisions if such Guarantor is not
deemed to have received valuable consideration, fair value or reasonably
equivalent value for such obligations, or if the obligations of any Guarantor
hereunder would render such Guarantor not Solvent as of the time any of the
obligations of such Guarantor are deemed to have been incurred under such
Avoidance Provisions, then the obligations of such Guarantor hereunder shall be
reduced to that amount which, after giving effect thereto, would not cause the
obligations of such Guarantor hereunder (or any other obligations of such
Guarantor to the Administrative Agent, the Lenders or any other Person holding
any of the Guaranty Obligations), as so reduced, to be subject to avoidance
under such Avoidance Provisions. This Section 5(b) is intended solely to
preserve the rights hereunder of the Administrative Agent, the Lenders and any
other Person holding any of the Guaranty Obligations to the maximum extent that
would not cause the obligations of the Guarantors hereunder to be subject to
avoidance under any Avoidance Provisions, and no Guarantor nor any other Person
shall have any right or claim under this Section 5(b) as against the
Administrative Agent, the Lenders or any other Person holding any of the
Guaranty Obligations that would not otherwise be available to such Person under
the Avoidance Provisions.
SECTION 6. Contribution Obligations. In the event that any Guarantor
(the "Funding Guarantor") shall make any payment or payments under this Guaranty
or shall suffer any loss as a result of any realization upon any collateral
granted by it to secure its obligations hereunder, each other Guarantor (each, a
"Contributing Guarantor") hereby agrees to contribute to the Funding Guarantor
an amount equal to such Contributing Guarantor's pro rata share of such Payment
or payments made, or losses suffered, by such Funding Guarantor determined by
reference to the ratio of (a) the amount, expressed in Dollars, of the
percentage of each such Contributing Guarantor's Net Assets (without giving
effect to any right to receive any contribution or subrogation or obligation to
make any contribution hereunder), to (b) the sum of the Net Assets of all
Guarantors (including the Funding Guarantor) hereunder (without giving effect to
any right to receive contribution or subrogation hereunder or any obligation to
make any contribution hereunder); provided, that the Contributing Guarantor
shall not be obligated to make any such payment to the Funding Guarantor if the
Contributing Guarantor is not Solvent at the time of such contribution or if the
Contributing Guarantor would be rendered not Solvent as a result thereof.
Nothing in this Section 6 shall affect each Guarantor's several liability for
the entire amount of the Guaranty Obligations, subject only to the limitations
set forth in Section 6. For the purposes of this Section 6, (x) the "Net Assets"
of any Guarantor shall mean the highest amount, as of any Determination Date, by
which (A) the aggregate present fair saleable value of the assets of such
Guarantor exceeds (B) the amount of all the debts and liabilities of such
Guarantor (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder), and (y)
"Determination Date" shall mean each of (1) the Closing Date, (2) the date of
commencement of a case under Title 11 of the Code in which a Guarantor is a
debtor, and (3) the date enforcement hereunder is sought with respect to such
Guarantor. Each Funding Guarantor covenants and agrees that its right to receive
any contribution from any Contributing Guarantor hereunder shall be subordinated
and junior in right of payment in full of all of the Guaranty Obligations.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty, and no consent to any departure by any Guarantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Required Lenders (or the Administrative Agent with the consent of the Required
Lenders) and the Guarantors, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given,
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by all the Lenders, (a) limit the liability of any Guarantor
hereunder, (b) postpone any date fixed for payment hereunder or (c) change the
number of Lenders required to take any action hereunder.
SECTION 8. Addresses for Notices. All notices and other communications
provided for hereunder shall be given in the manner specified in the Credit
Agreement, (i) if to any Guarantor, at 512 Bridge Street, Danville, Virginia
24543-0681 Attention: President and (ii) if to the Administrative Agent or any
Lender, at its address specified in the Credit Agreement, or, as to any of them,
at such other address as shall be designated by such party in a written notice
to each other party.
SECTION 9. No Waiver; Remedies. No failure on the part of the
Administrative Agent, any Lender or any other Person holding any of the Guaranty
Obligations to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. No notice to or demand on any Guarantor in any case shall
entitle such Guarantor to any other or further notice or demand in any similar
or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Lenders or any other Person holding any of the
Guaranty Obligations to any other or further action in any circumstances without
notice or demand. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 9.2 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 9.2, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of any Guarantor against any and all
of the obligations of the Guarantors now or hereafter existing under this
Guaranty, whether or, not such Lender shall have made any demand under this
Guaranty and although such obligations may be contingent and unmatured. Each
Lender agrees promptly to notify the Guarantors after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender under this Section 10 are in addition to other rights and remedies
(including, without limitation, other rights; of set-off) which such Lender may
have.
SECTION 11. Continuing Guaranty; Assignments under Credit Agreement.
This Guaranty is an irrevocable and continuing guaranty and shall (i) remain in
full force and effect until the later of (x) the payment in full of the Guaranty
Obligations (including, without limitation, all of the Advances) and all amounts
payable under this Guaranty and (y) the expiration or termination of the
Commitments, (ii) be binding upon each Guarantor, its successors and assigns and
(iii) inure to the benefit of, and be enforceable by, the Administrative Agent,
the Lenders and any other Person holding any of the Guaranty Obligations, and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), the Administrative Agent or any Lender
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it, and any Note held by
it) to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to the
Administrative Agent or such Lender herein or otherwise, subject, however, to
the provisions of Article 10 (concerning the Administrative Agent) and Section
11.5 of the Credit Agreement (concerning assignments and participations).
SECTION 13. Additional Guarantors. In the event that any Material
Domestic Subsidiary of the Borrower now existing or hereafter created or
acquired is required under Section 7.7 of the Credit Agreement to become a
Guarantor hereunder, such Material Domestic Subsidiary shall become a Guarantor
hereunder and be bound by all of the terms and conditions hereof, upon
delivering to the Administrative Agent an executed counterpart of a Supplement
to Guaranty in the form of Exhibit A hereto.
SECTION 14. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
SECTION 15. Consent to Jurisdiction; Waiver of Jury Trial.
(a) EACH GUARANTOR, IN RESPECT OF ITSELF AND ITS PROPERTIES,
REPRESENTS THAT IT IS SUBJECT TO (AND HEREBY IRREVOCABLY SUBMITS TO) THE
NON-EXCLUSIVE JURISDICTION OF ANY COURT IN THE STATE OF NORTH CAROLINA IN
MECKLENBURG COUNTY, OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF NORTH
CAROLINA, IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY, AND EACH GUARANTOR IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT. EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION TO THE LAYING OF THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORM.
(b) EACH GUARANTOR IRREVOCABLY CONSENTS TO PROCESS BEING
SERVED IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN PARAGRAPH
(a) OF THIS SECTION 15 BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED AIR
MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE ADDRESS OF THE BORROWER
SPECIFIED IN OR DESIGNATED PURSUANT TO SECTION 8. EACH GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ALL
CLAIM OF ERROR BY REASON OF ANY SUCH SERVICE AND AGREES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT SAID SERVICE (A) SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (B) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO SUCH GUARANTOR.
(c) TO THE FULLEST EXTENT PERMITTED BY LAW, EACH GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
The foregoing provisions shall not limit the right of any
Lender, the Administrative Agent or any other Person holding any of the Guaranty
Obligations to serve process in any other manner permitted by law or limit the
right of any Lender or the Administrative Agent or other Person holding any of
the Guaranty Obligations to bring any suit, action or proceeding or to obtain
execution on any judgment rendered in any suit, action or proceeding in any
other appropriate jurisdiction or in any other matter.
SECTION 16. Acknowledgment of Receipt of Loan Documents. Each Guarantor
hereby acknowledges receipt and hereby consents to the terms, of the Credit
Agreement and each of the other Loan Documents.
SECTION 17. Severability. In the case any provision in or obligation
under this Guaranty shall be determined to be invalid, illegal or unenforceable,
in whole or in part, under applicable law, the validity, legality and
enforceability of the remaining provisions or obligations of this Guaranty shall
not in any way be affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
GUARANTORS:
DIMON INTERNATIONAL, INC.
By:_______________________________
Name:
Title:
FLORIMEX WORLDWIDE, INC.
By:_______________________________
Name:
Title:
The undersigned, on behalf of the Lenders, hereby acknowledges and consents to
the terms of the foregoing Guaranty:
NATIONSBANK, N.A., as Administrative Agent
By:_______________________________
Name:
Title:
<PAGE>
EXHIBIT A
SUPPLEMENT TO GUARANTY
THIS SUPPLEMENT TO GUARANTY (this "Supplement"), dated as of
______________ __, 19__, made by _______________, a ________________ corporation
(the "Additional Guarantor"), in favor of NationsBank, N.A., as administrative
agent (the "Administrative Agent"), the Lenders (as defined below) and all other
Persons holding any of the Guaranty Obligations (as defined below).
PRELIMINARY STATEMENTS.
A. Certain lenders (together with other lenders that may from
time to time become parties thereto the "Lenders"), the Administrative Agent,
First Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, have entered into a certain Credit Agreement,
dated as of June 27, 1997 (as amended or otherwise modified from time to time,
the "Credit Agreement"; terms defined therein and not otherwise defined herein
being used herein as therein defined) with DIMON Incorporated, a Virginia
corporation (the "Borrower"). Pursuant to that certain Guaranty, dated as of
June 27, 1997 (as amended or otherwise modified from time to time, the
"Guaranty"), certain of the Borrower's Subsidiaries (the "Guarantors") have
guarantied the Obligations of the Borrower.
B. Pursuant to Section 7.7 of the Credit Agreement, the
Borrower is required to cause the Additional Guarantor to become a party to this
Supplement, and it is a condition to the obligations of the Lenders to continue
to make Advances under the Credit Agreement that the Additional Guarantor
execute and deliver to the Administrative Agent this Supplement, and the
Additional Guarantor desires to execute and deliver this Supplement to satisfy
such requirement and condition.
NOW, THEREFORE, in consideration of the premises and in order
to ensure the Borrower's compliance with and to induce the Lenders to make
Advances under the Credit Agreement, the Additional Guarantor hereby agrees as
follows:
SECTION 1. Additional Guarantor. The Additional Guarantor
hereby assumes all obligations, and agrees to be bound by all covenants,
agreements and obligations, of a Guarantor under, and shall be a Guarantor for
all purposes of, the Guaranty and shall be fully liable thereunder to the
Administrative Agent, any Lender or any Person entitled to indemnification
pursuant to Section 11.3 of the Credit Agreement, or any of their respective
successors, transferees or assigns, to the same extent and with the same effect
as though the Additional Guarantor had been one of the Guarantors originally
executing and delivering the Guaranty. Without limiting the foregoing:
(a) The Additional Guarantor hereby irrevocably and
unconditionally, jointly and severally with all other Guarantors, guarantees the
due and punctual payment of all present and future indebtedness and other
liabilities of the Borrower owing to the Administrative Agent, any Lender, any
Person entitled to indemnification pursuant to Section 11.3 of the Credit
Agreement, and their respective successors, transferees or assigns, of every
type and description, whether or not evidenced by any note, guaranty or either
instrument, arising under or in connection with the Credit Agreement, the Notes
or any other Loan Document, whether or not for the payment of money, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired, including, without limitation, all principal, interest, charges,
expenses, fees, attorneys' fees and disbursements and any other sum chargeable
to the Borrower under the Credit Agreement or any other Loan Document, whether
at stated maturity, by acceleration or otherwise, and the performance, of all
obligations of the Borrower now or hereafter existing under the Credit
Agreement, the Notes and the other Loan Documents (such obligations being the
"Guaranty Obligations"), and agrees to pay any and all expenses (including
counsel fees and expenses) incurred by the Administrative Agent, the Lenders or
any other Persons holding any of the Guaranty Obligations in enforcing any
rights under this Guaranty. Without limiting the generality of the foregoing,
the Guarantor's liability shall extend to all amounts which constitute part of
the Guaranty Obligations and would be owed by the Borrower under the Credit
Agreement, the Notes and the other Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower;
(b) The Additional Guarantor guarantees that the Guaranty
Obligations will be paid and performed strictly in accordance with the terms of
the Credit Agreement, the Notes and the other Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Administrative Agent, the
Lenders or any other Persons holding any of the Guaranty Obligations with
respect thereto. The obligations of the Additional Guarantor under this Guaranty
are independent of the Guaranty Obligations, and a separate action or actions
may be brought and prosecuted against the Additional Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower,
any other Guarantor or any other guarantor of the Guaranty Obligations or
whether the Borrower or any other Guarantor is joined in any such action or
actions;
(c) The foregoing guaranty shall be a guaranty of payment and
not of collection merely;
(d) The foregoing guarantee is subject to the limitations
expressly provided in Section 5 of the Guaranty and to the other terms and
conditions governing the guaranty of Guarantors under the Guaranty, including,
without limitation, Section 2 of the Guaranty;
(e) All references in the Guaranty to the "Guarantors" or any
"Guarantor" or to the "Funding Guarantor" or the "Contributing Guarantor" as
applicable, shall be deemed to include and to refer to the Additional Guarantor.
SECTION 2. Waiver. The Additional Guarantor hereby waives promptness,
diligence, presentment, demand of payment, protest, notice of acceptance of this
Guaranty, notice of any liability to which it may apply and any other notice
with respect to any of the Guaranty Obligations, this Guaranty and any
requirement that the Administrative Agent, Lenders or other Persons holding any
of the Guaranty Obligations protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against the Borrower, any other Guarantor or any other person or
entity or any collateral. Without limiting the generality of the foregoing
provisions of this Section 2, the Additional Guarantor hereby specifically
waives the benefits of N.C. Gen. Stat. ss.ss. 26-7 through 26-9, inclusive.
SECTION 3. Subrogation. Upon the making by the Additional Guarantor of
any payment under the Guaranty (and this Supplement) for the account of the
Borrower, the Additional Guarantor shall be subrogated to the rights of the
payee against the Borrower with respect to such payment; provided that, the
Additional Guarantor shall not enforce any right or receive any payment by way
of subrogation until all of the Guaranty Obligations shall have been paid in
full and the Commitments have been terminated. If any amount shall be paid to
the Additional Guarantor on account of such subrogation rights prior to the
payment in full of the Guaranty Obligations and the termination of the
Commitments, such amounts shall be held in trust for the benefit of the
Administrative Agent, the Lenders and any other holder of the Guaranty
Obligations and shall forthwith be paid to the Administrative Agent to be
credited and applied upon the Guaranty Obligations, whether matured or
unmatured, in accordance with the terms; of the Credit Agreement or to be held
by the Administrative Agent as collateral security for any Guaranty Obligations
existing.
SECTION 4. Successors and Assigns. The Guaranty (together with this
Supplement) constitutes an irrevocable and continuing guaranty and shall (i)
remain in full force and effect until the later of (x) the payment in full of
the Guaranty Obligations and all amounts payable under the Guaranty (and this
Supplement) and (y) the expiration or termination of the Commitments, (ii) be
binding upon the Additional Guarantor, its successors and assigns and (iii)
inure to the benefit of, and be enforceable by, the Administrative Agent, the
Lenders and any other Person holding any of the Guaranty Obligations, and their
respective successors, transferees and assigns.
SECTION 5. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA,
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
SECTION 6. Consent to Jurisdiction; Waiver of Jury Trial.
(a) THE ADDITIONAL GUARANTOR, IN RESPECT OF ITSELF AND ITS PROPERTIES,
REPRESENTS THAT IT IS SUBJECT TO (AND HEREBY IRREVOCABLY SUBMITS TO) THE
NON-EXCLUSIVE JURISDICTION OF ANY COURT IN THE STATE OF NORTH CAROLINA IN
MECKLENBURG COUNTY, OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF NORTH
CAROLINA, IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY, AND THE ADDITIONAL GUARANTOR IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT. THE ADDITIONAL GUARANTOR IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION
TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORM.
(b) THE ADDITIONAL GUARANTOR IRREVOCABLY CONSENTS TO PROCESS BEING
SERVED IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN CLAUSE (a)
OF THIS SECTION 6 BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED AIR MAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE ADDITIONAL GUARANTOR AT ITS
ADDRESS AT ___________________________. THE ADDITIONAL GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ALL
CLAIM OF ERROR BY REASON OF ANY SUCH SERVICE AND AGREES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT SAID SERVICE (A) SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (B) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE ADDITIONAL GUARANTOR.
(c) TO THE FULLEST EXTENT PERMITTED BY LAW, THE ADDITIONAL GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
The foregoing provisions shall not limit the right of any Lender, the
Administrative Agent or any other Person holding any of the Guaranty Obligations
to serve process in any other manner permitted by law or limit the right of any
Lender or the Administrative Agent or other Person holding any of the Guaranty
Obligations to bring any suit, action or proceeding or to obtain execution on
any judgment rendered in any suit, action or proceeding in any other appropriate
jurisdiction or in any other matter.
IN WITNESS WHEREOF, the Additional Guarantor has caused this
Supplement to be duly executed and delivered by its duly authorized officer as
of the date first above written:
ADDITIONAL GUARANTOR:
By:
Name:
Title:
<PAGE>
EXHIBIT C TO
CREDIT AGREEMENT
NOTE
U.S. $____________________ Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
_______________________ (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referenced below) the principal sum
of U.S. $[amount of the Lender's Commitment in figures] or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
EXHIBIT D TO
CREDIT AGREEMENT
NOTICE OF BORROWING
NationsBank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referenced below
4th Floor Pavilion
1111 E. Main Street
Richmond, Virginia 23277-0001
[Date]
Re: DIMON INCORPORATED
Ladies and Gentlemen:
The undersigned, DIMON INCORPORATED, a Virginia corporation
(the "Borrower"), refers to the Credit Agreement, dated as of June 27, 1997 (the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the undersigned, the lenders (the "Lenders") from time to time
parties thereto, NationsBank, N.A., as Administrative Agent, First Union
National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and hereby gives you irrevocable notice pursuant
to Section 2.3 of the Credit Agreement that the undersigned hereby requests a
Borrowing under the Credit Agreement (the "Proposed-Borrowing"), and in that
connection sets forth below the information relating to such Borrowing as
required by Section 2.3(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
_______________, 19__.
(ii) The Proposed Borrowing shall be comprised of [Base
Rate Advances] [Eurodollar Rate Advances].
(iii) The amount of the Proposed Borrowing is
$_____________________.
<PAGE>
[(iv) The Interest Period for the Proposed Borrowing if comprised of
Eurodollar Rate Advances is ______ month[s].]*
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) The representations and warranties made by the Borrower
contained in Article V of the Credit Agreement are true and correct on and as of
the date of such Proposed Borrowing, with the same effect as if made on and as
of the date of such Proposed Borrowing (except to the extent such
representations and warranties expressly refer to an earlier date, in which case
they shall be true and correct as of such earlier date);
(B) No Default or Event of Default exists or shall result from
such Proposed Borrowing; and
[(C) Attached hereto are calculations evidencing compliance
with Section 4.11 of the Senior Indenture.]*
Very truly yours,
DIMON INCORPORATED
By________________________________
Name:
Title:
and
By_______________________________
Name:
Title:
- ---------------
* Not applicable if the Proposed Borrowing is to be comprised of Base Rate
Advances.
* Not applicable if the aggregate principal amount of all outstanding
Borrowings does not exceed $240,000,000.
<PAGE>
EXHIBIT E TO
CREDIT AGREEMENT
NOTICE OF CONTINUATION/CONVERSION
NationsBank, N.A., as Administrative Agent
for the Lenders parties to the
Credit Agreement referenced below
4th Floor Pavilion
1111 E. Main Street
Richmond, Virginia 23277-0001
[Date]
Re: DIMON INCORPORATED
Ladies and Gentlemen:
The undersigned, DIMON INCORPORATED, a Virginia corporation
(the "Borrower"), refers to the Credit Agreement, dated as of June 27, 1997 (the
"Credit Agreement", the terms defined therein being used herein as therein
defined), among the undersigned, the lenders (the "Lenders") from time to time
parties thereto, NationsBank, N.A., as Administrative Agent, First Union
National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, and hereby gives you irrevocable notice pursuant
to Section 2.4 of the Credit Agreement that the undersigned hereby requests the
[Conversion] [Continuation] of a Borrowing under the Credit Agreement as
specified below in accordance with Section 2.4(a) of the Credit Agreement:
[The Borrower hereby requests the Conversion of a
Borrowing comprised of Base Rate Advances to a Borrowing comprised of
Eurodollar Rate Advances, as follows:
(i) the Business Day of the proposed Conversion is
__________________, 19__.
(ii) the Interest Period applicable to the Eurodollar
Rate Advances upon such Conversion shall be _____ month(s)].
[The Borrower hereby requests the Conversion of a
Borrowing comprised of Eurodollar Rate Advances to a Borrowing
comprised of Base Rate Advances, as follows:
(i) the Business Day of the proposed Conversion,
which shall be the last day of the current Interest Period
applicable to the Borrowing to be Converted, is
___________________, 19__.
(ii) the amount of the Borrowing to be Converted is
$___________________.]
[The Borrower hereby requests the Continuation of a
Borrowing comprised of Eurodollar Rate Advances for an additional
Interest Period, as follows:
(i) the Business Day of the proposed Continuation,
which shall be the last day of the current Interest Period
applicable to the Borrowing to be Continued, is
_______________, 19__.
(ii) the amount of the Borrowing to be Continued is
$_____________________.
(iii) the Interest Period applicable to the
Eurodollar Rate Advances upon such Continuation shall be _____
month(s).]
The undersigned hereby certifies that the following statement
is true on the date hereof, and will be true on the date of the proposed
Continuation or Conversion:
No Default or Event of Default exists or shall result from
such proposed Continuation or Conversion.]*
Very truly yours,
DIMON INCORPORATED
By________________________________
Name:
Title:
and
By_______________________________
Name:
Title:
- ---------------
* Applicable only upon the Conversion to or Continuation of, a Borrowing
comprised of Eurodollar Advances.
NOTE
U.S. $60,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
NATIONSBANK, N.A. (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referenced below) the principal sum
of SIXTY MILLION AND NO/100 DOLLARS (U.S. $60,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $25,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
BANK OF AMERICA NT & SA (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referenced below) the principal sum
of TWENTY-FIVE MILLION AND NO/100 DOLLARS (U.S. $25,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $30,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
CRESTAR BANK (the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referenced below) the principal sum of THIRTY
MILLION AND NO/100 DOLLARS (U.S. $30,000,000.00) or, if less, the aggregate
unpaid principal amount of Advances (as defined below) made by the Lender to the
Borrower pursuant to the Credit Agreement, on the Termination Date (as such term
is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $55,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
FIRST UNION NATIONAL BANK (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referenced below) the
principal sum of FIFTY-FIVE MILLION AND NO/100 DOLLARS (U.S. $55,000,000.00) or,
if less, the aggregate unpaid principal amount of Advances (as defined below)
made by the Lender to the Borrower pursuant to the Credit Agreement, on the
Termination Date (as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $45,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
COOPERATIEVE CENTRALE RAIFFEISEN-BOERENLEENBANK B.A., "RABOBANK NEDERLAND," NEW
YORK BRANCH (the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referenced below) the principal sum of
FORTY-FIVE MILLION AND NO/100 DOLLARS (U.S. $45,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
SIGNET BANK (the "Lender") for the account of its Applicable Lending Office (as
defined in the Credit Agreement referenced below) the principal sum of FIFTEEN
MILLION AND NO/100 DOLLARS (U.S. $15,000,000.00) or, if less, the aggregate
unpaid principal amount of Advances (as defined below) made by the Lender to the
Borrower pursuant to the Credit Agreement, on the Termination Date (as such term
is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $25,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
WACHOVIA BANK, N.A. (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referenced below) the principal sum
of TWENTY-FIVE MILLION AND NO/100 DOLLARS (U.S. $25,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $45,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
SOCIETE GENERALE (the "Lender") for the account of its Applicable Lending Office
(as defined in the Credit Agreement referenced below) the principal sum of
FORTY-FIVE MILLION AND NO/100 DOLLARS (U.S. $45,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $25,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
BANK OF TOKYO-MITSUBISHI TRUST COMPANY (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referenced below)
the principal sum of TWENTY-FIVE MILLION AND NO/100 DOLLARS (U.S.
$25,000,000.00) or, if less, the aggregate unpaid principal amount of Advances
(as defined below) made by the Lender to the Borrower pursuant to the Credit
Agreement, on the Termination Date (as such term is defined in the Credit
Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
ABN AMRO BANK N.V. NEW YORK BRANCH (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referenced below)
the principal sum of FIFTEEN MILLION AND NO/100 DOLLARS (U.S. $15,000,000.00)
or, if less, the aggregate unpaid principal amount of Advances (as defined
below) made by the Lender to the Borrower pursuant to the Credit Agreement, on
the Termination Date (as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
THE BANK OF NOVA SCOTIA (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referenced below) the principal sum
of FIFTEEN MILLION AND NO/100 DOLLARS (U.S. $15,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
THE SUMITOMO BANK, LIMITED, NEW YORK BRANCH (the "Lender") for the account of
its Applicable Lending Office (as defined in the Credit Agreement referenced
below) the principal sum of FIFTEEN MILLION AND NO/100 DOLLARS (U.S.
$15,000,000.00) or, if less, the aggregate unpaid principal amount of Advances
(as defined below) made by the Lender to the Borrower pursuant to the Credit
Agreement, on the Termination Date (as such term is defined in the Credit
Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $25,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
BAYERISCHE VEREINSBANK AG, NEW YORK BRANCH (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referenced below)
the principal sum of TWENTY-FIVE MILLION AND NO/100 DOLLARS (U.S.
$25,000,000.00) or, if less, the aggregate unpaid principal amount of Advances
(as defined below) made by the Lender to the Borrower pursuant to the Credit
Agreement, on the Termination Date (as such term is defined in the Credit
Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
BANQUE FRANCAISE DU COMMERCE EXTERIEUR (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referenced below)
the principal sum of FIFTEEN MILLION AND NO/100 DOLLARS (U.S. $15,000,000.00)
or, if less, the aggregate unpaid principal amount of Advances (as defined
below) made by the Lender to the Borrower pursuant to the Credit Agreement, on
the Termination Date (as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
CORESTATES BANK, N.A. (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referenced below) the principal sum
of FIFTEEN MILLION AND NO/100 DOLLARS (U.S. $15,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $10,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
ISTITUTO BANCARIO SAN PAOLO DI TORINO S.P.A. (the "Lender") for the account of
its Applicable Lending Office (as defined in the Credit Agreement referenced
below) the principal sum of TEN MILLION AND NO/100 DOLLARS (U.S. $10,000,000.00)
or, if less, the aggregate unpaid principal amount of Advances (as defined
below) made by the Lender to the Borrower pursuant to the Credit Agreement, on
the Termination Date (as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
STANDARD CHARTERED BANK (the "Lender") for the account of its Applicable Lending
Office (as defined in the Credit Agreement referenced below) the principal sum
of FIFTEEN MILLION AND NO/100 DOLLARS (U.S. $15,000,000.00) or, if less, the
aggregate unpaid principal amount of Advances (as defined below) made by the
Lender to the Borrower pursuant to the Credit Agreement, on the Termination Date
(as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $15,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
BANCA MONTE DEI PASCHI DI SIENA S.P.A. (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referenced below)
the principal sum of FIFTEEN MILLION AND NO/100 DOLLARS (U.S. $15,000,000.00)
or, if less, the aggregate unpaid principal amount of Advances (as defined
below) made by the Lender to the Borrower pursuant to the Credit Agreement, on
the Termination Date (as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $25,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
CREDIT LYONNAIS ATLANTA AGENCY (the "Lender") for the account of its Applicable
Lending Office (as defined in the Credit Agreement referenced below) the
principal sum of TWENTY-FIVE MILLION AND NO/100 DOLLARS (U.S. $25,000,000.00)
or, if less, the aggregate unpaid principal amount of Advances (as defined
below) made by the Lender to the Borrower pursuant to the Credit Agreement, on
the Termination Date (as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
<PAGE>
NOTE
U.S. $10,000,000.00 Dated: June 27, 1997
FOR VALUE RECEIVED, the undersigned, DIMON INCORPORATED, a
Virginia corporation (the "Borrower"), HEREBY PROMISES TO PAY to the order of
THE SANWA BANK, LIMITED, ATLANTA AGENCY (the "Lender") for the account of its
Applicable Lending Office (as defined in the Credit Agreement referenced below)
the principal sum of TEN MILLION AND NO/100 DOLLARS (U.S. $10,000,000.00) or, if
less, the aggregate unpaid principal amount of Advances (as defined below) made
by the Lender to the Borrower pursuant to the Credit Agreement, on the
Termination Date (as such term is defined in the Credit Agreement).
The Borrower promises to pay interest on the unpaid principal
amount of each Advance from the date of such Advance until such principal amount
is paid in full, at such interest rates, and payable at such times, as are
specified in the Credit Agreement.
In no contingency or event whatsoever shall the interest rate
charged pursuant to the terms of this Note exceed the highest rate permissible
under any law which a court of competent jurisdiction shall, in a final
determination, deem applicable. In the event that such a court determines that
the Lender has received interest hereunder in excess of the highest applicable
rate, the Lender shall promptly refund such excess interest to the Borrower.
Both principal and interest are payable in lawful money of the
United States of America to NationsBank, N.A., as Administrative Agent, at its
Payment Office (as such term is defined in the Credit Agreement) currently
located at 100 North Tryon Street, Charlotte, North Carolina, in same day funds.
Each Advance made by the Lender to the Borrower pursuant to the Credit
Agreement, and all payments made on account of principal thereof, shall be
recorded on the books and records of the Lender and the Administrative Agent as
provided in the Credit Agreement. Failure of the Lender, the Administrative
Agent or any holder to maintain its books and records with respect to any
Advance, or any error in such books and records, shall not affect the
obligations of the Borrower under this Note, the Credit Agreement or any other
Loan Document.
This Note is one of the Notes referenced in, and is entitled
to the benefits of, the Credit Agreement dated as of June 27, 1997 (as hereafter
amended, modified or supplemented, the "Credit Agreement") among the Borrower,
the Lender and certain other lenders parties thereto, NationsBank, N.A., as
Administrative Agent, First Union National Bank, as Documentation Agent, and
Cooperatieve Centrale Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New
York Branch and Societe Generale, as Co-Agents. The Credit Agreement, among
other things, (i) provides for the making of advances (the "Advances") by the
Lender to the Borrower from time to time in an aggregate amount not to exceed
the Dollar amount first above mentioned, the indebtedness of the Borrower
resulting from each such Advance being evidenced by this Note, and (ii) contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events. This Note is entitled to the benefits of the Subsidiary Guaranty
(as such term is defined in the Credit Agreement).
The Borrower hereby waives presentment, demand, protest and
notice of any kind. No failure to exercise, and no delay in exercising, any
rights hereunder on the part of the holder hereof shall operate as a waiver of
such rights.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA.
This Note and the Advances evidenced hereby may be transferred
in whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 11.5(c) of the
Credit Agreement.
This Note is signed and delivered to the Lender for acceptance
at its Applicable Lending Office.
DIMON INCORPORATED
By________________________________
Name: James A. Cooley
Title: Senior Vice President
Treasurer
and
By_______________________________
Name: John O. Hunnicutt, III
Title: Vice President and Secretary
GUARANTY
(Material Domestic Subsidiaries)
GUARANTY, dated as of June 27, 1997 (this "Guaranty"), made by certain
subsidiaries of DIMON Incorporated, a Virginia corporation (the "Borrower"), now
or hereafter becoming parties hereto (collectively, the "Guarantors"), in favor
of NationsBank, N.A., as administrative agent (the "Administrative Agent"), the
Lenders (as defined below) and all other Persons holding any of the Guaranty
Obligations (as defined below).
PRELIMINARY STATEMENTS.
Certain lenders (together with other lenders that may from time to time
become parties thereto the "Lenders"), the Administrative Agent, First Union
National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, have entered into a Credit Agreement dated as of
June 27, 1997 (as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"; terms defined therein and not otherwise defined herein
being used herein as therein defined) with the Borrower.
Pursuant to the Credit Agreement, the Lenders have agreed to make
Advances to the Borrower in accordance with the terms thereof.
It is a condition precedent to the making of any Advance by the Lenders
under the Credit Agreement that the Guarantors shall have executed and delivered
this Guaranty.
The Guarantors will derive substantial direct and indirect benefit from
the transactions contemplated by the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances under the Credit Agreement, each Guarantor hereby
agrees as follows:
SECTION 1. Guaranty. Each Guarantor hereby jointly and severally,
irrevocably and unconditionally, guarantees the due and punctual payment of all
present and future indebtedness and other liabilities of the Borrower owing to
the Administrative Agent, any Lender, any Person entitled to indemnification
pursuant to Section 11.3 of the Credit Agreement, and their respective
successors, transferees or assigns, of every type and description, whether or
not evidenced by any note, guaranty or other instrument, arising under or in
connection with the Credit Agreement, the Notes or any other Loan Document,
whether or not for the payment of money, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired, including, without
limitation, all principal, interest, charges, expenses, fees, attorneys, fees
and disbursements and any other sum chargeable to the Borrower under the Credit
Agreement, or any other Loan Document, whether at stated maturity, by
acceleration or otherwise, and the performance of all obligations of the
Borrower now or hereafter existing under the Credit Agreement, the Notes and the
other Loan Documents (such obligations being the "Guaranty Obligations"), and
agrees to pay any and all expenses (including counsel fees and expenses)
incurred by the Administrative Agent, the Lenders or any other Persons holding
any of the Guaranty Obligations in enforcing any rights under this Guaranty
without limiting the generality of the foregoing, to the fullest extent
permitted by law, each Guarantor's liability shall extend to all amounts which
constitute part of the Guaranty Obligations and would be owed by the Borrower
under the Credit Agreement, the Notes and the other Loan Documents but for the
fact that they are unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving the Borrower. The
foregoing guaranty shall be a guaranty of payment and not of collection merely.
SECTION 2. Guaranty Absolute. Each Guarantor guarantees that the
Guaranty Obligations will be paid and performed strictly in accordance with the
terms of the Credit Agreement, the Notes and the other Loan Documents,
regardless of any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Administrative
Agent, the Lenders or any other Persons holding any of the Guaranty Obligations
with respect thereto. The obligations of each Guarantor under this Guaranty are
independent of the Guaranty Obligations, and a separate action or actions may be
brought and prosecuted against any Guarantor to enforce this Guaranty,
irrespective of whether any action is brought against the Borrower, any other
Guarantor or any other guarantor of the Guaranty Obligations, or whether the
Borrower or any other Guarantor is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be absolute and
unconditional irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, the Notes, the other Loan Documents or any other agreement
or instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
in any other term of, or any extension or renewal of, all or any of the
Guaranty Obligations, or any other amendment or waiver of or any
consent to departure from the Credit Agreement, the Notes or the other
Loan Documents, including, without limitation, any increase in the
Guaranty Obligations resulting from the extension of additional credit
to the Borrower under the Credit Agreement or the Other Loan Documents;
(c) any taking, exchange, release or non-perfection of any
collateral, or any taking, release, or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the
Guaranty Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Guaranty Obligations, or any manner of
sale or other disposition of any collateral for all or any of the
Guaranty Obligations or any other assets of the Borrower, any other
Guarantor or any other guarantor of the Guaranty Obligations;
(e) any change, restructuring or termination of the corporate
structure or existence of the Borrower, any other Guarantor or any
other guarantor of the Guaranty Obligations; or
(f) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower, any other
Guarantor or any other guarantor of the Guaranty Obligations.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranty Obligations is rescinded
or must otherwise be returned by any of the Administrative Agent, Lenders or
other Persons holding any of the Guaranty Obligations upon the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
SECTION 3. Waiver. Each Guarantor hereby waives promptness, diligence,
presentment, demand of payment, protest, notice of acceptance of this Guaranty,
notice of any liability to which it may apply and any other notice with respect
to any of the Guaranty Obligations, this Guaranty and any requirement that any
of the Administrative Agent, Lenders or other Persons holding any of the
Guaranty Obligations protect, secure, perfect or insure any security interest or
lien or any property subject thereto or exhaust any right or take any action
against the Borrower, any other Guarantor or any other person or entity or any
collateral. Without limiting the generality of the foregoing provisions of this
Section 3, each Guarantor hereby specifically waives the benefits of N.C. Gen.
Stat. ss.ss. 26-7 through 26-9, inclusive.
SECTION 4. Subrogation. Upon the making by any Guarantor of any payment
hereunder for the account of the Borrower, such Guarantor shall be subrogated to
the rights of the payee against the Borrower with respect to such payment;
provided, that such Guarantor shall not enforce any right or receive any payment
by way of subrogation until all of the Guaranty Obligations shall have been paid
in full and the Commitments have been terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights prior to the payment in full
of the Guaranty Obligations and the termination of the Commitments, such amounts
shall be held in trust for the benefit of the Administrative Agent, the Lenders
and any other holder of the Guaranty Obligations and shall forthwith be paid on
demand to the Administrative Agent to be credited and applied to the Guaranty
Obligations, whether matured or unmatured, in accordance with the terms of the
Credit Agreement or to be held by the Administrative Agent as collateral
security for any Guaranty Obligations existing.
SECTION 5. Limitation of Guaranty Obligations. Anything herein to the
contrary notwithstanding:
(a) It is the intent of the Guarantors, the Administrative Agent, the
Lenders and any other Person holding any of the Guaranty Obligations that each
Guarantor's maximum obligations hereunder (such Guarantor's "Maximum Guaranty
Liability") shall not be in excess of (after giving effect to all rights of such
Guarantor to contribution or subrogation provided herein):
(i) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code of 1978, 11 U.S.C. ss. 101 et.
seq., as amended (the "Bankruptcy Code"), on or within one year from
the date on which any of the Guaranty Obligations are incurred, the
maximum amount which would not otherwise cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the
Administrative Agent, the Lenders and any other Person holding any of
the Guaranty Obligations) to be avoidable or unenforceable against such
Guarantor under (A) Section 548 of the Bankruptcy Code or (B) any state
fraudulent transfer or fraudulent conveyance act or statute applied in
such case or proceeding by virtue of Section 544 of the Bankruptcy
Code; or
(ii) in a case or proceeding commenced by or against such
Guarantor under the Bankruptcy Code subsequent to one year from the
date on which any of the Guaranty Obligations are incurred, the maximum
amount which would not otherwise cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the
Administrative Agent, the Lenders and any other Person holding any of
the Guaranty Obligations) to be voidable or unenforceable against such
Guarantor under any state fraudulent transfer or fraudulent conveyance
act or statute applied in any such case or proceeding by virtue of
Section 544 of the Bankruptcy Code; or
(iii) in a case or proceeding commenced by or against such
Guarantor under any law, statute or regulation other than the
Bankruptcy Code relating to dissolution, liquidation, conservatorship,
bankruptcy, moratorium, readjustment of debt, compromise,
rearrangement, receivership, insolvency, reorganization or similar
debtor relief from time to time in effect affecting the rights of
creditors generally (collectively, "Other Debtor Relief Law"), the
maximum amount which would not otherwise cause the obligations of such
Guarantor hereunder (or any other obligations of such Guarantor to the
Administrative Agent, the Lenders and any other Person holding any of
the Guaranty Obligations) to be avoidable or unenforceable against such
Guarantor under such other Debtor Relief Law, including, without
limitation, any state fraudulent transfer or fraudulent conveyance act
or statute applied in any such case or proceeding. (The substantive
laws under which the possible avoidance or unenforceability of the
obligations of any Guarantor hereunder (or any other obligations of
such Guarantor to the Administrative Agent, the Lenders and any other
Person holding any of the Guaranty Obligations) shall be determined in
any such case or proceeding shall hereinafter be referred to as the
"Avoidance Provisions").
(b) To the end set forth in Section 5(a)(i), (ii) or (iii), but only to
the extent that the obligations of any Guarantor hereunder would otherwise be
subject to avoidance under any Avoidance Provisions if such Guarantor is not
deemed to have received valuable consideration, fair value or reasonably
equivalent value for such obligations, or if the obligations of any Guarantor
hereunder would render such Guarantor not Solvent as of the time any of the
obligations of such Guarantor are deemed to have been incurred under such
Avoidance Provisions, then the obligations of such Guarantor hereunder shall be
reduced to that amount which, after giving effect thereto, would not cause the
obligations of such Guarantor hereunder (or any other obligations of such
Guarantor to the Administrative Agent, the Lenders or any other Person holding
any of the Guaranty Obligations), as so reduced, to be subject to avoidance
under such Avoidance Provisions. This Section 5(b) is intended solely to
preserve the rights hereunder of the Administrative Agent, the Lenders and any
other Person holding any of the Guaranty Obligations to the maximum extent that
would not cause the obligations of the Guarantors hereunder to be subject to
avoidance under any Avoidance Provisions, and no Guarantor nor any other Person
shall have any right or claim under this Section 5(b) as against the
Administrative Agent, the Lenders or any other Person holding any of the
Guaranty Obligations that would not otherwise be available to such Person under
the Avoidance Provisions.
SECTION 6. Contribution Obligations. In the event that any Guarantor
(the "Funding Guarantor") shall make any payment or payments under this Guaranty
or shall suffer any loss as a result of any realization upon any collateral
granted by it to secure its obligations hereunder, each other Guarantor (each, a
"Contributing Guarantor") hereby agrees to contribute to the Funding Guarantor
an amount equal to such Contributing Guarantor's pro rata share of such Payment
or payments made, or losses suffered, by such Funding Guarantor determined by
reference to the ratio of (a) the amount, expressed in Dollars, of the
percentage of each such Contributing Guarantor's Net Assets (without giving
effect to any right to receive any contribution or subrogation or obligation to
make any contribution hereunder), to (b) the sum of the Net Assets of all
Guarantors (including the Funding Guarantor) hereunder (without giving effect to
any right to receive contribution or subrogation hereunder or any obligation to
make any contribution hereunder); provided, that the Contributing Guarantor
shall not be obligated to make any such payment to the Funding Guarantor if the
Contributing Guarantor is not Solvent at the time of such contribution or if the
Contributing Guarantor would be rendered not Solvent as a result thereof.
Nothing in this Section 6 shall affect each Guarantor's several liability for
the entire amount of the Guaranty Obligations, subject only to the limitations
set forth in Section 6. For the purposes of this Section 6, (x) the "Net Assets"
of any Guarantor shall mean the highest amount, as of any Determination Date, by
which (A) the aggregate present fair saleable value of the assets of such
Guarantor exceeds (B) the amount of all the debts and liabilities of such
Guarantor (including contingent, subordinated, unmatured and unliquidated
liabilities, but excluding the obligations of such Guarantor hereunder), and (y)
"Determination Date" shall mean each of (1) the Closing Date, (2) the date of
commencement of a case under Title 11 of the Code in which a Guarantor is a
debtor, and (3) the date enforcement hereunder is sought with respect to such
Guarantor. Each Funding Guarantor covenants and agrees that its right to receive
any contribution from any Contributing Guarantor hereunder shall be subordinated
and junior in right of payment in full of all of the Guaranty Obligations.
SECTION 7. Amendments, Etc. No amendment or waiver of any provision of
this Guaranty, and no consent to any departure by any Guarantor herefrom, shall
in any event be effective unless the same shall be in writing and signed by the
Required Lenders (or the Administrative Agent with the consent of the Required
Lenders) and the Guarantors, and then such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given,
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by all the Lenders, (a) limit the liability of any Guarantor
hereunder, (b) postpone any date fixed for payment hereunder or (c) change the
number of Lenders required to take any action hereunder.
SECTION 8. Addresses for Notices. All notices and other communications
provided for hereunder shall be given in the manner specified in the Credit
Agreement, (i) if to any Guarantor, at 512 Bridge Street, Danville, Virginia
24543-0681 Attention: President and (ii) if to the Administrative Agent or any
Lender, at its address specified in the Credit Agreement, or, as to any of them,
at such other address as shall be designated by such party in a written notice
to each other party.
SECTION 9. No Waiver; Remedies. No failure on the part of the
Administrative Agent, any Lender or any other Person holding any of the Guaranty
Obligations to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. No notice to or demand on any Guarantor in any case shall
entitle such Guarantor to any other or further notice or demand in any similar
or other circumstances or constitute a waiver of the rights of the
Administrative Agent, the Lenders or any other Person holding any of the
Guaranty Obligations to any other or further action in any circumstances without
notice or demand. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.
SECTION 10. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the request or the
granting of the consent specified by Section 9.2 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 9.2, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of any Guarantor against any and all
of the obligations of the Guarantors now or hereafter existing under this
Guaranty, whether or, not such Lender shall have made any demand under this
Guaranty and although such obligations may be contingent and unmatured. Each
Lender agrees promptly to notify the Guarantors after any such set-off and
application made by such Lender, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Lender under this Section 10 are in addition to other rights and remedies
(including, without limitation, other rights; of set-off) which such Lender may
have.
SECTION 11. Continuing Guaranty; Assignments under Credit Agreement.
This Guaranty is an irrevocable and continuing guaranty and shall (i) remain in
full force and effect until the later of (x) the payment in full of the Guaranty
Obligations (including, without limitation, all of the Advances) and all amounts
payable under this Guaranty and (y) the expiration or termination of the
Commitments, (ii) be binding upon each Guarantor, its successors and assigns and
(iii) inure to the benefit of, and be enforceable by, the Administrative Agent,
the Lenders and any other Person holding any of the Guaranty Obligations, and
their respective successors, transferees and assigns. Without limiting the
generality of the foregoing clause (iii), the Administrative Agent or any Lender
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it, and any Note held by
it) to any other person or entity, and such other person or entity shall
thereupon become vested with all the benefits in respect thereof granted to the
Administrative Agent or such Lender herein or otherwise, subject, however, to
the provisions of Article 10 (concerning the Administrative Agent) and Section
11.5 of the Credit Agreement (concerning assignments and participations).
SECTION 13. Additional Guarantors. In the event that any Material
Domestic Subsidiary of the Borrower now existing or hereafter created or
acquired is required under Section 7.7 of the Credit Agreement to become a
Guarantor hereunder, such Material Domestic Subsidiary shall become a Guarantor
hereunder and be bound by all of the terms and conditions hereof, upon
delivering to the Administrative Agent an executed counterpart of a Supplement
to Guaranty in the form of Exhibit A hereto.
SECTION 14. Governing Law. THIS GUARANTY SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
SECTION 15. Consent to Jurisdiction; Waiver of Jury Trial.
(a) EACH GUARANTOR, IN RESPECT OF ITSELF AND ITS PROPERTIES,
REPRESENTS THAT IT IS SUBJECT TO (AND HEREBY IRREVOCABLY SUBMITS TO) THE
NON-EXCLUSIVE JURISDICTION OF ANY COURT IN THE STATE OF NORTH CAROLINA IN
MECKLENBURG COUNTY, OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF NORTH
CAROLINA, IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY, AND EACH GUARANTOR IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN
ANY SUCH COURT. EACH GUARANTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION TO THE LAYING OF THE VENUE
OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM
THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORM.
(b) EACH GUARANTOR IRREVOCABLY CONSENTS TO PROCESS BEING
SERVED IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN PARAGRAPH
(a) OF THIS SECTION 15 BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED AIR
MAIL, POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE ADDRESS OF THE BORROWER
SPECIFIED IN OR DESIGNATED PURSUANT TO SECTION 8. EACH GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ALL
CLAIM OF ERROR BY REASON OF ANY SUCH SERVICE AND AGREES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT SAID SERVICE (A) SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (B) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO SUCH GUARANTOR.
(c) TO THE FULLEST EXTENT PERMITTED BY LAW, EACH GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
The foregoing provisions shall not limit the right of any
Lender, the Administrative Agent or any other Person holding any of the Guaranty
Obligations to serve process in any other manner permitted by law or limit the
right of any Lender or the Administrative Agent or other Person holding any of
the Guaranty Obligations to bring any suit, action or proceeding or to obtain
execution on any judgment rendered in any suit, action or proceeding in any
other appropriate jurisdiction or in any other matter.
SECTION 16. Acknowledgment of Receipt of Loan Documents. Each Guarantor
hereby acknowledges receipt and hereby consents to the terms, of the Credit
Agreement and each of the other Loan Documents.
SECTION 17. Severability. In the case any provision in or obligation
under this Guaranty shall be determined to be invalid, illegal or unenforceable,
in whole or in part, under applicable law, the validity, legality and
enforceability of the remaining provisions or obligations of this Guaranty shall
not in any way be affected or impaired thereby.
<PAGE>
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.
GUARANTORS:
DIMON INTERNATIONAL, INC.
By:_______________________________
Name:
Title:
FLORIMEX WORLDWIDE, INC.
By:_______________________________
Name:
Title:
The undersigned, on behalf of the Lenders, hereby acknowledges and consents to
the terms of the foregoing Guaranty:
NATIONSBANK, N.A., as Administrative Agent
By:_______________________________
Name:
Title:
<PAGE>
EXHIBIT A
SUPPLEMENT TO GUARANTY
THIS SUPPLEMENT TO GUARANTY (this "Supplement"), dated as of
______________ __, 19__, made by _______________, a ________________ corporation
(the "Additional Guarantor"), in favor of NationsBank, N.A., as administrative
agent (the "Administrative Agent"), the Lenders (as defined below) and all other
Persons holding any of the Guaranty Obligations (as defined below).
PRELIMINARY STATEMENTS.
A. Certain lenders (together with other lenders that may from
time to time become parties thereto the "Lenders"), the Administrative Agent,
First Union National Bank, as Documentation Agent, and Cooperatieve Centrale
Raiffeisen-Boerenleenbank B.A., "Rabobank Nederland," New York Branch and
Societe Generale, as Co-Agents, have entered into a certain Credit Agreement,
dated as of June 27, 1997 (as amended or otherwise modified from time to time,
the "Credit Agreement"; terms defined therein and not otherwise defined herein
being used herein as therein defined) with DIMON Incorporated, a Virginia
corporation (the "Borrower"). Pursuant to that certain Guaranty, dated as of
June 27, 1997 (as amended or otherwise modified from time to time, the
"Guaranty"), certain of the Borrower's Subsidiaries (the "Guarantors") have
guarantied the Obligations of the Borrower.
B. Pursuant to Section 7.7 of the Credit Agreement, the
Borrower is required to cause the Additional Guarantor to become a party to this
Supplement, and it is a condition to the obligations of the Lenders to continue
to make Advances under the Credit Agreement that the Additional Guarantor
execute and deliver to the Administrative Agent this Supplement, and the
Additional Guarantor desires to execute and deliver this Supplement to satisfy
such requirement and condition.
NOW, THEREFORE, in consideration of the premises and in order
to ensure the Borrower's compliance with and to induce the Lenders to make
Advances under the Credit Agreement, the Additional Guarantor hereby agrees as
follows:
SECTION 1. Additional Guarantor. The Additional Guarantor
hereby assumes all obligations, and agrees to be bound by all covenants,
agreements and obligations, of a Guarantor under, and shall be a Guarantor for
all purposes of, the Guaranty and shall be fully liable thereunder to the
Administrative Agent, any Lender or any Person entitled to indemnification
pursuant to Section 11.3 of the Credit Agreement, or any of their respective
successors, transferees or assigns, to the same extent and with the same effect
as though the Additional Guarantor had been one of the Guarantors originally
executing and delivering the Guaranty. Without limiting the foregoing:
(a) The Additional Guarantor hereby irrevocably and
unconditionally, jointly and severally with all other Guarantors, guarantees the
due and punctual payment of all present and future indebtedness and other
liabilities of the Borrower owing to the Administrative Agent, any Lender, any
Person entitled to indemnification pursuant to Section 11.3 of the Credit
Agreement, and their respective successors, transferees or assigns, of every
type and description, whether or not evidenced by any note, guaranty or either
instrument, arising under or in connection with the Credit Agreement, the Notes
or any other Loan Document, whether or not for the payment of money, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired, including, without limitation, all principal, interest, charges,
expenses, fees, attorneys' fees and disbursements and any other sum chargeable
to the Borrower under the Credit Agreement or any other Loan Document, whether
at stated maturity, by acceleration or otherwise, and the performance, of all
obligations of the Borrower now or hereafter existing under the Credit
Agreement, the Notes and the other Loan Documents (such obligations being the
"Guaranty Obligations"), and agrees to pay any and all expenses (including
counsel fees and expenses) incurred by the Administrative Agent, the Lenders or
any other Persons holding any of the Guaranty Obligations in enforcing any
rights under this Guaranty. Without limiting the generality of the foregoing,
the Guarantor's liability shall extend to all amounts which constitute part of
the Guaranty Obligations and would be owed by the Borrower under the Credit
Agreement, the Notes and the other Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving the Borrower;
(b) The Additional Guarantor guarantees that the Guaranty
Obligations will be paid and performed strictly in accordance with the terms of
the Credit Agreement, the Notes and the other Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Administrative Agent, the
Lenders or any other Persons holding any of the Guaranty Obligations with
respect thereto. The obligations of the Additional Guarantor under this Guaranty
are independent of the Guaranty Obligations, and a separate action or actions
may be brought and prosecuted against the Additional Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against the Borrower,
any other Guarantor or any other guarantor of the Guaranty Obligations or
whether the Borrower or any other Guarantor is joined in any such action or
actions;
(c) The foregoing guaranty shall be a guaranty of payment and
not of collection merely;
(d) The foregoing guarantee is subject to the limitations
expressly provided in Section 5 of the Guaranty and to the other terms and
conditions governing the guaranty of Guarantors under the Guaranty, including,
without limitation, Section 2 of the Guaranty;
(e) All references in the Guaranty to the "Guarantors" or any
"Guarantor" or to the "Funding Guarantor" or the "Contributing Guarantor" as
applicable, shall be deemed to include and to refer to the Additional Guarantor.
SECTION 2. Waiver. The Additional Guarantor hereby waives promptness,
diligence, presentment, demand of payment, protest, notice of acceptance of this
Guaranty, notice of any liability to which it may apply and any other notice
with respect to any of the Guaranty Obligations, this Guaranty and any
requirement that the Administrative Agent, Lenders or other Persons holding any
of the Guaranty Obligations protect, secure, perfect or insure any security
interest or lien or any property subject thereto or exhaust any right or take
any action against the Borrower, any other Guarantor or any other person or
entity or any collateral. Without limiting the generality of the foregoing
provisions of this Section 2, the Additional Guarantor hereby specifically
waives the benefits of N.C. Gen. Stat. ss.ss. 26-7 through 26-9, inclusive.
SECTION 3. Subrogation. Upon the making by the Additional Guarantor of
any payment under the Guaranty (and this Supplement) for the account of the
Borrower, the Additional Guarantor shall be subrogated to the rights of the
payee against the Borrower with respect to such payment; provided that, the
Additional Guarantor shall not enforce any right or receive any payment by way
of subrogation until all of the Guaranty Obligations shall have been paid in
full and the Commitments have been terminated. If any amount shall be paid to
the Additional Guarantor on account of such subrogation rights prior to the
payment in full of the Guaranty Obligations and the termination of the
Commitments, such amounts shall be held in trust for the benefit of the
Administrative Agent, the Lenders and any other holder of the Guaranty
Obligations and shall forthwith be paid to the Administrative Agent to be
credited and applied upon the Guaranty Obligations, whether matured or
unmatured, in accordance with the terms; of the Credit Agreement or to be held
by the Administrative Agent as collateral security for any Guaranty Obligations
existing.
SECTION 4. Successors and Assigns. The Guaranty (together with this
Supplement) constitutes an irrevocable and continuing guaranty and shall (i)
remain in full force and effect until the later of (x) the payment in full of
the Guaranty Obligations and all amounts payable under the Guaranty (and this
Supplement) and (y) the expiration or termination of the Commitments, (ii) be
binding upon the Additional Guarantor, its successors and assigns and (iii)
inure to the benefit of, and be enforceable by, the Administrative Agent, the
Lenders and any other Person holding any of the Guaranty Obligations, and their
respective successors, transferees and assigns.
SECTION 5. GOVERNING LAW. THIS SUPPLEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE COMMONWEALTH OF VIRGINIA,
APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THAT STATE.
SECTION 6. Consent to Jurisdiction; Waiver of Jury Trial.
(a) THE ADDITIONAL GUARANTOR, IN RESPECT OF ITSELF AND ITS PROPERTIES,
REPRESENTS THAT IT IS SUBJECT TO (AND HEREBY IRREVOCABLY SUBMITS TO) THE
NON-EXCLUSIVE JURISDICTION OF ANY COURT IN THE STATE OF NORTH CAROLINA IN
MECKLENBURG COUNTY, OR OF THE UNITED STATES FOR THE WESTERN DISTRICT OF NORTH
CAROLINA, IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS GUARANTY, AND THE ADDITIONAL GUARANTOR IRREVOCABLY AGREES THAT
ALL CLAIMS IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT. THE ADDITIONAL GUARANTOR IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ANY OBJECTION
TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORM.
(b) THE ADDITIONAL GUARANTOR IRREVOCABLY CONSENTS TO PROCESS BEING
SERVED IN ANY SUIT, ACTION OR PROCEEDING OF THE NATURE REFERRED TO IN CLAUSE (a)
OF THIS SECTION 6 BY MAILING A COPY THEREOF BY REGISTERED OR CERTIFIED AIR MAIL,
POSTAGE PREPAID, RETURN RECEIPT REQUESTED, TO THE ADDITIONAL GUARANTOR AT ITS
ADDRESS AT ___________________________. THE ADDITIONAL GUARANTOR IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, ALL
CLAIM OF ERROR BY REASON OF ANY SUCH SERVICE AND AGREES, TO THE FULLEST EXTENT
IT MAY EFFECTIVELY DO SO UNDER APPLICABLE LAW, THAT SAID SERVICE (A) SHALL BE
DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON SUCH GUARANTOR IN ANY
SUCH SUIT, ACTION OR PROCEEDING AND (B) SHALL BE TAKEN AND HELD TO BE VALID
PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO THE ADDITIONAL GUARANTOR.
(c) TO THE FULLEST EXTENT PERMITTED BY LAW, THE ADDITIONAL GUARANTOR
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS GUARANTY OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
The foregoing provisions shall not limit the right of any Lender, the
Administrative Agent or any other Person holding any of the Guaranty Obligations
to serve process in any other manner permitted by law or limit the right of any
Lender or the Administrative Agent or other Person holding any of the Guaranty
Obligations to bring any suit, action or proceeding or to obtain execution on
any judgment rendered in any suit, action or proceeding in any other appropriate
jurisdiction or in any other matter.
IN WITNESS WHEREOF, the Additional Guarantor has caused this
Supplement to be duly executed and delivered by its duly authorized officer as
of the date first above written:
ADDITIONAL GUARANTOR:
__________________________________
By:_______________________________
Name:
Title:
