THIRD MODIFICATION OF AMENDED AND RESTATED
REVOLVING CREDIT LOAN AND SECURITY AGREEMENT,
AMENDMENT TO LOAN DOCUMENTS
AND
ASSIGNMENT
This Third Modification of Amended and Restated Revolving Credit Loan and
Security Agreement, Amendment to Loan Documents and Assignment (this "Third
Modification") dated as of September 30, 1999 (the "Effective Date"), is by and
among DIXON TICONDEROGA COMPANY, a Delaware corporation ("DTC"), and DIXON
TICONDEROGA INC., an Ontario corporation ("DTI"; DTC and DTI, are collectively
referred to hereinafter as the "Borrower"), the lenders identified on the
signature pages hereto as Existing Lenders (the "Existing Lenders"), the Persons
identified on the signature pages hereto as New Lenders (the "New Lenders", and
together with the Existing Lenders, the "Lenders") and FIRST UNION COMMERCIAL
CORPORATION, a North Carolina corporation ("FUCC"), as Agent for the Lenders (in
its capacity as Agent, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has entered into an Amended and Restated Revolving
Credit Loan and Security Agreement, dated as of July 10, 1996, as amended
September 26, 1996 and May 19, 1998 (said Agreement as it may be further
amended, restated or otherwise modified from time to time, being hereinafter
called the "Revolving Credit Agreement") by and among the Borrower, the Existing
Lenders and the Agent, pursuant to which the Existing Lenders extended financial
accommodations to Borrower in the form of a U.S. $45,000,000 revolving line of
credit and letter of credit facility in accordance with, and subject to, the
terms and conditions of the Revolving Credit Agreement; and
WHEREAS, the parties to the Revolving Credit Agreement have agreed to
amend the Revolving Credit Agreement as provided herein;
WHEREAS, the parties to the Revolving Credit Agreement and the New Lender
have agreed that the New Lender shall become a party to the Revolving Credit
Agreement (as amended hereby) by way of assignment by National Bank of Canada
(the "Assigning Lender") of its Revolving Credit Commitment;
NOW, THEREFORE, in consideration of the premises and the covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
SECTION 1. DEFINED TERMS. Capitalized terms used in this Third Modification and
not otherwise defined herein, shall have the meanings ascribed to them in the
Revolving Credit Agreement.
SECTION 2. AMENDMENT TO DEFINITIONS. Section 1.1 (Definitions) of the Revolving
Credit Agreement is hereby amended as follows:
a. The definition of "Adjusted LIBOR Rate" is hereby deleted in its
entirety and replaced with the following:
"Adjusted LIBOR Rate" shall mean the LIBOR Rate plus the
Applicable Percentage for Loans which are LIBOR Loans.
b. The definition of "Adjusted Prime Rate" is hereby deleted in its
entirety and replaced with the following:
"Adjusted Prime Rate" shall mean the Prime Rate plus the
Applicable Percentage for Loans which are Prime Rate Loans.
c. The definition of "Fixed Charges" is hereby deleted in its
entirety and replaced with the following:
"Fixed Charges" shall mean, for any period, the aggregate of (i)
Borrower's interest expense, (ii) non-financed Capital
Expenditures, including those made with proceeds from the
Revolving Credit Loans and not subsequently refinanced within the
applicable period (including, to the extent not otherwise
included in Fixed Charges, payments under Capital Leases), (iii)
scheduled payments of principal on all Indebtedness for borrowed
money during such period; provided, however, that for each period
ending on or after June 30, 2001, such scheduled payments of
principal shall be calculated for the twelve month period
immediately succeeding such period, (iv) and payments of all
taxes on or measured by income, all determined in accordance with
GAAP less, for any period ending on or before September 30, 1997,
the amount of Capital Expenditures relating to the construction
of the Heathrow Facility, made during the twelve month period
immediately preceding the last day of such period.
d. The definition of "NBC" is hereby deleted, and the following new
definition is added in the alphabetically appropriate place:
"LaSalle" shall mean LaSalle Bank, National Association, a
national banking association, and having an office at
135 S. LaSalle Street, Chicago, Illinois 60603.
e. The definition of "Overadvance" is hereby deleted in its
entirety.
f. The definition of "Revolving Credit Commitment" is hereby deleted
in its entirety and replaced with the following:
"Revolving Credit Commitment" shall mean the commitments of each
of the Lenders pursuant to Section 2.1 hereof to make the
Revolving Credit Loans to the Borrower, to wit: FUCC, $17,616,375
or 50.3325% of the Revolving Credit Loans; BankBoston,
$11,593,750 or 33.125% of the Revolving Credit Loans; and NBC,
$5,789,875 or 16.5425% of the Revolving Credit Loans.
g. The following new definitions are added in the alphabetically
appropriate places:
"Applicable Percentage" shall mean, for any day, the rate per
annum set forth below opposite the applicable Category then in
effect, it being understood that the Applicable Percentage for
(i) Loans which are Prime Rate Loans shall be the percentage set
forth under the column "Prime Rate Loans" and (ii) Loans which
are LIBOR Loans shall be the percentage set forth under the
column "LIBOR Loans":
Fixed Charge Prime LIBOR
Category Coverage Ratio Leverage Ratio Rate Loans Loans
-------- -------------- -------------- ---------- -----
- ------------------------------------------------------------------------
1 < 1.30 To 1.0 Or > 4.0 to 1.0 1.00% 2.50%
- ------------------------------------------------------------------------
2 > 1.30 to 1.0 but < 4.0 to 1.0 but
< 1.40 to 1.0 and > 3.75 to 1.0 .75% 2.25%
- ------------------------------------------------------------------------
> 1.40 to 1.0 but < 3.75 to 1.0 but
3 < 1.50 to 1.0 and > 3.50 to 1.0 .50% 2.00%
- ------------------------------------------------------------------------
4 > 1.50 to 1.0 but < 3.50 to 1.0 but
< 1.60 to 1.0 and > 3.25 to 1.0 .25% 1.75%
- ------------------------------------------------------------------------
5 > 1.60 to 1.0 and < 3.25 to 1.0 0% 1.50%
The Applicable Percentage shall, in each case, be determined and
adjusted annually on the date five (5) Business Days after the
date on which the Agent has received from the Borrower the annual
financial information and certifications required to be delivered
to the Agent and the Lenders in accordance with the provisions of
Section 7.3 (each an "Interest Determination Date"). Such
Applicable Percentage shall be effective from such Interest
Determination Date until the next such Interest Determination
Date. The initial Applicable Percentages shall be based on
Category 4 until the first Interest Determination Date occurring
after December 31, 2000. After the Closing Date, if the Borrower
shall fail to provide the quarterly financial information and
certifications in accordance with the provisions of Section 7.3,
the Applicable Percentage from such Interest Determination Date
shall, on the date five (5) Business Days after the date by which
the Borrower was so required to provide such financial
information and certifications to the Agent and the Lenders, be
based on Category 1 until such time as such information and
certifications are provided, whereupon the Category shall be
determined by the then current Leverage Ratio and Fixed Charge
Coverage Ratio. For purposes hereof, in the event the financial
calculations on any Interest Determination Date fall within two
different Categories, the greater of the two Applicable
Percentages shall be applied.
"Dollars" and "$" shall mean dollars in lawful currency of the
United States of America, unless otherwise specifically provided
herein.
"Fixed Charge Coverage Ratio" shall mean the ratio of EBITDA to
Fixed Charges.
"Leverage Ratio" shall mean the ratio of Funded Debt to EBITDA.
"Permitted Acquisition" shall mean the acquisition of the
business or substantially all of the assets or stock of any
Person, provided that the following conditions are met:
(i)the total purchase price for such acquisition shall not
exceed $5,000,000, and the aggregate purchase price for all
acquisitions made in any fiscal year shall not exceed
$10,000,000;
(ii) the Borrower shall give the Agent written notice not less
than 15 days in advance of the making of such acquisition,
which notice shall include the date and details regarding the
form of the acquisition, a description of the stock or assets
to be acquired and the location of the assets to be acquired.
(iii) the assets or business to be acquired shall be in
substantially the same or similar line of business as that
engaged in by the Borrower;
(iv) the Agent, on behalf of the Lenders, shall be granted a
first priority perfected security interest in the assets
acquired;
(v)no Event of Default exists prior to or immediately after
giving effect to such acquisition (subject to the provisions
of Section 1.2 hereof);
(vi) the Borrower shall have delivered to the Agent a compliance
certificate demonstrating that, on a pro forma basis, such
acquisition will not create a default under any financial
covenant contained herein for the four fiscal quarters ended
immediately prior to the proposed date of such acquisition;
(vii) after giving effect to such acquisition, Availability shall
be no less than $5,000,000.
SECTION 3. AMENDMENTS TO ACCOUNTING TERMS. Section 1.2 (Accounting Terms) of the
Revolving Credit Agreement is hereby amended by adding the following new
paragraph to the end thereof:
Notwithstanding the above, the parties hereto acknowledge and agree
that, for purposes of all calculations made in determining
compliance for any applicable period with the financial covenants
set forth herein (including without limitation for purposes of the
definition of "Applicable Percentage" set forth in Section 1.1), any
Indebtedness of a company acquired pursuant to a Permitted
Acquisition (a "Newly Acquired Company") which is retired in
connection with such Permitted Acquisition shall be excluded from
such calculations and deemed to have been retired as of the first
day of such applicable period and income statement items and other
balance sheet items (whether positive or negative) attributable to
the Newly Acquired Company acquired in such transaction shall be
included in such calculations to the extent relating to such
applicable period, subject to adjustments mutually acceptable to the
Agent and the Borrower.
SECTION 4. AMENDMENTS TO GENERAL LOAN PROVISIONS.
Section 2 of the Revolving Credit Agreement is hereby amended as
follows:
a. Section 2.1 (Revolving Line of Credit) of the Revolving Credit
Agreement is amended by replacing the reference to "Forty-Five
Million U.S. Dollars ($45,000,000)" with a reference to
"Thirty-Five Million U.S. Dollars ($35,000,000)".
b. Section 2.2 (Maximum Revolving Credit Facility) of the Revolving
Credit Agreement is amended by replacing the reference to
"Forty-Five Million U.S. Dollars ($45,000,000)" with a reference
to "Thirty-Five Million U.S. Dollars ($35,000,000)".
c. Section 2.5(b) (LIBOR Option) of the Revolving Credit Agreement
is hereby amended by deleting the second sentence thereof in its
entirety and replacing it with the following:
Interest on LIBOR Loans will be calculated on the basis of a
360-day year for the actual days elapsed and shall be due and
payable on the last day of the applicable LIBOR Period.
d. Section 2.9 (Loan Purposes) of the Revolving Credit Agreement is
hereby amended by inserting the words ", seasonal requirements
and other cash flow requirements" following the words "working
capital needs".
e. Section 2.10 (Optional Prepayments) of the Revolving Credit
Agreement is hereby deleted in its entirety and replaced with the
following:
Section 2.10: Optional Prepayments. The Borrower shall have the
right at any time, on 90 days' prior written notice to Agent, to
voluntarily prepay the entire principal balance of the Loans then
outstanding, and, upon such prepayment, (a) Borrower's right to
receive advances under the Revolving Credit Loans and obtain the
issuance of Letters of Credit hereunder shall simultaneously
terminate and (b) if prepaid by refinancing the Loans by a source
other than the Lenders, the Borrower shall pay to the Lenders a
prepayment fee equal to (i) 1.5%, if such prepayment occurs on or
before September 30, 2000, (ii) 1.0%, if such prepayment occurs
after September 30, 2000 but on or before September 30, 2002, or
(iii) 0.5%, if such prepayment occurs after September 30, 2002
but on or before September 30, 2004, in each case of the average
outstanding principal balance of the Loans during the twenty-four
(24) month period preceding such prepayment.
SECTION 5. AMENDMENTS TO PAYMENT PROVISIONS. Section 3.1 (Payments) of the
Revolving Credit Agreement is hereby amended by adding the following sentence to
the end thereof:
All payments hereunder shall be made without setoff, deduction,
counterclaim or withholding of any kind.
SECTION 6. AMENDMENTS TO REPRESENTATIONS AND WARRANTIES. Section 6
(Representations and Warranties) of the Revolving Credit Agreement is hereby
amended by adding the following new subsection 6.19 thereto:
6.19 Year 2000 Issue. Any reprogramming and related testing
necessary to permit the proper functioning of each of the Borrower's
computer systems in and following the year 2000 will be completed in
all material respects prior to October 31, 1999 (that is, the
Borrower will be "Year 2000 Compliant"), and the cost to the
Borrower of becoming Year 2000 Compliant will not result in an Event
of Default or have a material adverse effect upon the business,
operations, property, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
Except for becoming Year 2000 Compliant as described above, the
computer and management information systems of the Borrower are and,
with ordinary course upgrading and maintenance, will continue for
the term of this Agreement to be, adequate for the conduct of its
business.
SECTION 7. AMENDMENTS TO AFFIRMATIVE COVENANTS. Subsection (f) of Section 7.3
(Financial and Business Information of the Borrower) of the of the Revolving
Credit Agreement is hereby deleted in its entirety and replaced with the
following:
(f)At such times as determined by reference to Availability as set
forth in the schedule below, a Borrowing Base Certificate
reflecting information as of the close of business on the
immediately preceding Business Day for the applicable monthly,
weekly or daily period, as the case may be:
Availability Reporting Frequency
------------ -------------------
> $10,000,000 Monthly
< $10,000,000 but Weekly
> $5,000,000
< $5,000,000 Daily
;provided, however, that upon and during the continuation of an
Event of Default, the Borrower shall deliver a Borrowing Base
Certificate on a daily basis.
SECTION 8. AMENDMENTS TO NEGATIVE COVENANTS.
(a)Section 8.2 (Acquisitions) of the Revolving Credit Agreement is
hereby amended by deleting the proviso thereto and adding the
words "except for Permitted Acquisitions" in its place.
(b) The following new section 8.29 is hereby added to the end of
Section 8:
8.29 Additional Indebtedness. Contract, create, incur, assume or
permit to exist any additional Indebtedness in connection with
the mortgaged property of the Borrower located in Heathrow,
Florida.
(c) The following new section 8.30 is hereby added to the end of
Section 8:
8.30 Inactive Subsidiaries. Cause or permit either of the
Borrower's Subsidiaries, Bryn Mawr Ocean Resorts Inc. or
Ticonderoga Graphite, Inc., to engage in any business or own any
assets valued in excess of $10,000 without the consent of the
Required Lenders.
SECTION 9. AMENDMENTS TO FINANCIAL COVENANTS. The following sections of the
Revolving Credit Agreement are amended in their entirety to read as follows:
8.9 Tangible Net Worth. The existing covenant is hereby deleted
and replaced with the following:
Tangible Capital Funds. Permit Net Worth less Intangible Assets
plus Subordinated Debt less foreign currency translation effects
to be less than the following:
September 30, 1999 $39,000,000
September 30, 2000 $41,000,000
September 30. 2001 $43,000,000
September 30, 2002 $45,000,000
September 30, 2003 $47,000,000
September 30, 2004 $49,000,000
8.10 Current Ratio. The existing covenant is hereby deleted
and replaced with the following:
Leverage Ratio. At any time, permit the Leverage Ratio to be
greater than 4.25 to 1.0 (to be determined on a rolling four
quarter basis).
8.11 Fixed Charge Coverage Ratio. At any time, permit the ratio
of EBITDA to Fixed Charges for the twelve (12) months immediately
preceding the date of calculation to be less than 1.20 to 1.0 (to
be determined on a rolling four quarter basis).
8.l2 Interest and Dividend Coverage. [The existing covenant is
deleted].
8.13 Ratio of EBIT to Interest on Indebtedness. [The existing
covenant is deleted].
8.16 Debt to Equity Ratio. [The existing covenant is deleted].
8.17 Pro Forma Debt Coverage Ratio. [The existing covenant is
deleted].
SECTION 10. AMENDMENT TO TERM OF AGREEMENT. Section 12.1 (Term) of the Revolving
Credit Agreement is hereby amended by deleting the words "three (3) years from
the Closing Date" and inserting the words "September 30, 2004" in their place.
SECTION 11. AMENDMENTS TO EVENTS OF DEFAULT. Section 13.1 (Event of Default) of
the Revolving Credit Agreement is hereby amended as follows:
(a) Subsection (h) is amended by deleting the words "or
DT-Mexico" and inserting the words "or any Guarantor" in
their place.
(b) Subsection (i) is amended by deleting the words "or
DT-Mexico" and inserting the words "or any Guarantor" in
their place.
(c) Subsection (j) is amended by inserting the words "or any
Guarantor" following the word "Borrower".
SECTION 12. AMENDMENTS TO PROVISIONS FOR PAYMENT OF EXPENSES. Section 15
(Payment of Expenses) is hereby amended by adding the following new Section 15.4
thereto:
15.4 Taxes. All payments made by the Borrower under this Agreement,
any Notes and any documents relating hereto shall be made free and
clear of, and without deduction or withholding for or on account of,
any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter
imposed, levied, collected, withheld or assessed by any court, or
governmental body, agency or other official, including interest,
penalties and liabilities with respect thereto, excluding income
taxes of the Lenders or the Agent ("Taxes"). If any such Taxes are
required to be withheld from any amounts payable to the Agent or any
Lender hereunder or under any Notes or other documents relating
thereto, (A) the Borrower shall withhold and remit such Taxes to the
relevant authority when and as due, (B) the amounts so payable to
the Agent or such Lender shall be increased to the extent necessary
to yield to the Agent or such Lender interest or any such other
amounts payable hereunder or under the Notes or any other document
relating hereto at the rates or in the amounts specified in this
Agreement and any Notes, and (C) as promptly as possible thereafter
the Borrower shall send to the Agent for its own account or for the
account of such Lender, as the case may be, a certified copy of an
original official receipt received by the Borrower showing prompt
payment thereof. If the Borrower fails to pay any Taxes when due to
the appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the
Borrower shall indemnify the Agent and any Lender for any
incremental Taxes, interest or penalties that may become payable by
the Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this
Agreement and the payment of the Loans and all other amounts payable
hereunder.
SECTION 13. AMENDMENTS TO MISCELLANEOUS PROVISIONS. Section 17 of the Revolving
Credit Agreement is hereby amended as follows:
a. Section 17.2 (Governing Law; Waiver of Jury Trial) of the
Revolving Credit Agreement is hereby amended by inserting the
words "OR ANY STATE OR FEDERAL COURT LOCATED WITHIN MECKLENBURG
COUNTY, STATE OF NORTH CAROLINA" following the words "STATE OF
FLORIDA".
b. A new section 17.3 (Arbitration) is inserted following Section
17.2, and the remaining sections are renumbered accordingly:
17.3 Arbitration.
(a)Notwithstanding the provisions of Section 17.2 to the
contrary, upon demand of any party hereto, whether made before or
after institution of any judicial proceeding, any dispute, claim
or controversy arising out of, connected with or relating to this
Agreement and the other documents executed in connection
therewith including all promissory notes and collateral documents
("Disputes") between or among parties to this Agreement shall be
resolved by binding arbitration as provided herein. Institution
of a judicial proceeding by a party does not waive the right of
that party to demand arbitration hereunder. Disputes may include,
without limitation, tort claims, counterclaims, disputes as to
whether a matter is subject to arbitration, claims brought as
class actions, claims arising from credit documents executed in
the future, or claims arising out of or connected with the
transaction reflected by this Agreement.
(b) Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the "Arbitration
Rules") of the American Arbitration Association (the "AAA") and
Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Charlotte, North Carolina. A hearing shall begin
within 90 days of demand for arbitration and all hearings shall
be concluded within 180 days of demand for arbitration. These
time limitations may not be extended unless a party shows cause
for extension and then no more than a total extension of 60 days.
The expedited procedures set forth in Rule 51 et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any
court having jurisdiction. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys selected
from the Commercial Financial Dispute Arbitration Panel of the
AAA. The single arbitrator selected for expedited procedure shall
be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing
will be conducted or if such person is not available to serve,
the single arbitrator may be a licensed attorney. The parties
hereto do not waive applicable Federal or state substantive law
except as provided herein. Notwithstanding the foregoing, this
arbitration provision does not apply to disputes under or related
to interest rate protection agreements entered into by any Lender
and Borrower.
(c) Notwithstanding the preceding binding arbitration provisions,
the parties hereto agree to preserve, without diminution, certain
remedies that the Agent or the Lenders may employ or exercise
freely, independently or in connection with an arbitration
proceeding or after an arbitration action is brought. The Agent
and the Lenders shall have the right to proceed in any court of
proper jurisdiction or by self-help to exercise or prosecute the
following remedies, as applicable: (i) all rights to foreclose
against any real or personal property or other security by
exercising a power of sale granted under any loan document or
under applicable law or by judicial foreclosure and sale,
including a proceeding to confirm the sale; (ii) all rights of
self-help including peaceful occupation of real property and
collection of rents, set-off, and peaceful possession of personal
property; and (iii) obtaining provisional or ancillary remedies
including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary
bankruptcy proceeding. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that
may be requested by a party in a Dispute.
(d) The parties hereto agree that they shall not have a remedy of
punitive or exemplary damages against the other in any Dispute
and hereby waive any right or claim to punitive or exemplary
damages they have now or which may arise in the future in
connection with any Dispute, whether the Dispute is resolved by
arbitration or judicially.
(e) By execution and delivery of this Agreement, each of the
parties hereto accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted
under the Arbitration Rules in Charlotte, North Carolina and
irrevocably agrees to be bound by any final judgment rendered
thereby in connection with this Agreement from which no appeal
has been taken or is available.
c. Section 17.3 (Notice) of the Revolving Credit Agreement is hereby
amended by deleting the notice information for NBC and replacing
it with the following:
If to LaSalle: LaSalle Bank, National Association
135 S. LaSalle Street
Chicago, Illinois 60603
Attention: Helen Coufoudakis
Facsimile Number: (312) 904-1338
SECTION 14. AMENDMENT TO LOAN DOCUMENTS. All references in the Loan Documents to
National Bank of Canada are hereby deleted and replaced with references to
LaSalle Bank, National Association. All references in the Loan Documents to
"NBC" are hereby deleted and replaced with references to "LaSalle".
SECTION 15. AMENDMENTS TO EXHIBITS. Exhibit A to the Revolving Credit Agreement
is hereby deleted and replaced with Exhibit A attached hereto.
SECTION 16. RATIFICATION: EFFECT ON TERM LOAN AGREEMENT. The terms and
conditions of the Loan Agreements and the other Loan Documents shall remain in
full force and effect and are hereby ratified and confirmed in all respects,
except that all references contained therein to "Revolving Credit Agreement"
shall refer to the Revolving Credit Agreement as modified by this Third
Modification and any reference to $45,000,000 contained therein shall refer to
$35,000,000. To the extent that any of the amendments of the Revolving Credit
Agreement contained in this Third Modification are amendments of provisions
which are incorporated by reference in the Term Loan Agreement, the Term Loan
Agreement shall be deemed to be similarly amended.
SECTION 17. REPRESENTATIONS AND WARRANTIES. The Borrower represents warrants to,
and agrees with, the Agent and the Lenders and for the benefit of First Union
that (i) it has no defenses, set-offs, or counterclaims of any kind or nature
whatsoever against the Agent, the Lenders or First Union with respect to the
Obligations, any of the agreements among the parties hereto, including, without
limitation, the obligations of the Borrower under the Loan Agreements, the
Notes, this Third Modification or any other Loan Document, or any action
previously taken or not taken by the Agent or any Lender with respect thereto or
with respect to any Lien or Collateral in connection therewith to secure the
Obligations, and (ii) this Third Modification has been duly authorized by all
necessary corporate action on the part of the Borrower, has been duly executed
by a duly authorized officer of each entity comprising the Borrower, and
constitutes the valid and binding obligation of the Borrower, enforceable
against each entity comprising the Borrower in accordance with the terms hereof.
SECTION 18. LOAN AGREEMENT REPRESENTATIONS AND WARRANTIES. The Borrower hereby
certifies that the representations and warranties contained in the Loan
Agreements, as amended herein, continue to be true and correct and that no Event
of Default, or event which with the passage of time or the giving of notice, or
both, would constitute an Event of Default has occurred.
SECTION 19. CONDITIONS PRECEDENT TO EFFECTIVENESS OF MODIFICATION. It shall be a
condition precedent to the effectiveness of this Third Modification that the
Borrower and each Guarantor shall have complied with each of the following:
(a)Executed Documents. The Agent shall have received executed
originals of (i) this Third Modification together with the
Consent attached hereto, (ii) Revolving Credit Notes in favor of
each of the Lenders (other than the Assigning Lender) and (iii)
recorded modifications of the Mortgages.
(b)Certificates of Secretaries of the Borrower and Guarantors.
The Agent shall have received a certificate of the Secretary or
an Assistant Secretary of each entity comprising the Borrower and
of each Guarantor, certifying (a) with respect to each such
Guarantor, that attached thereto is a true and complete copy of
resolutions adopted by the Board of Directors and sole
shareholder of such Guarantor authorizing the execution, delivery
and performance by such Guarantor of this Third Modification, (b)
that attached thereto is a true and complete copy of resolutions
adopted by the Board of Directors of each entity comprising the
Borrower authorizing the execution delivery and performance of
this Third Modification by such entity; and (c) as to the
incumbency and genuineness of the signature of each officer of
the Borrower and each Guarantor executing this Third Modification
and any other documents executed in connection therewith.
(c)Certificates of Borrower and Guarantors. The Agent shall have
received a certificate from each entity comprising the Borrower
and from each Guarantor, signed by the Chief Executive Officer
and Secretary of such entity, in form and substance satisfactory
to the Agent and its special counsel, to the effect that all
representations and warranties of the Borrower contained in this
Third Modification are true, correct and complete as of the
Effective Date; that such entity is not in violation of any of
the covenants contained in any of the Loan Documents to which it
is a party; that, giving effect to the transactions contemplated
by this Third Modification, no Event of Default or any event or
condition which with notice, lapse of time, or both would
constitute such an Event of Default, has occurred and is
continuing; and that such entity has satisfied each of the
closing conditions set forth in this Section 17.
(d)Opinion of Counsel to the Borrower and Guarantors. The Agent
shall have received the opinion of counsel for the Borrower and
the Guarantors dated the Effective Date, as to the transactions
contemplated by this Third Modification, in form and substance
satisfactory to the Agent and its special counsel.
(e) Delivery of Collateral. The Agent shall have received stock
certificate and undated stock powers executed in blank in
connection with the pledge of (i) 47% of DTC's interest in Grupo
Dixon, S.A. de C.V. and (ii) 18% of DTC's interest in DTI.
(f) Organizational Structure. The Agent shall have received an
organizational chart showing the current structure of the
Borrower and its Subsidiaries.
(g)Amendment to Pledge Agreement. The Agent shall have received a
pledge amendment, dated as of the date hereof, in the form
attached to the Amended and Restated Stock Pledge and Security
Agreement dated as of July 10, 1996 made by the Borrower to the
Agent and the Lenders, setting forth all of the Pledged
Collateral as of the date hereof.
(h)Letter to Accountants. The Borrower shall have executed and
delivered a letter addressed to its certified public accountants,
authorizing such accountants to discuss the finances and
financial affairs of the Borrower with LaSalle as set forth in
the letter from the Borrower to PricewaterhouseCoopers dated
September 30, 1999.
(i)Modification of Term Loan Agreement. All conditions to the
First Modification of Amended and Restated Term Loan Agreement
dated as of the date hereof by and among the Borrower, the
Lenders and the Agent shall have been fulfilled.
SECTION 20. ASSIGNMENT AND ASSUMPTION. The Assigning Lender hereby sells and
assigns, without recourse, to the New Lender, and the New Lender hereby
purchases and assumes, without recourse, from the Assigning Lender, effective as
of the date hereof, such interests in the Assigning Lender's rights and
obligations under the Revolving Credit Agreement (including, without limitation,
the Revolving Credit Commitment of the Assigning Lender on the date hereof and
the Revolving Credit Loans and Letter of Credit Obligations owing to the
Assigning Lender which are outstanding on the date hereof) as shall be necessary
in order to give effect to the reallocations of the Revolving Credit Commitments
effected by the amendment to the definition of "Revolving Credit Commitment"
pursuant to Section 2 hereof. From and after the date hereof (i) the New Lender
shall be a party to and be bound by the provisions of the Revolving Credit
Agreement (as amended hereby) and, to the extent of the interests assigned
hereby, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and (ii) the Assigning Lender shall, to the extent of the
interests assigned hereby, relinquish its rights and be released from its
obligations under the Revolving Credit Agreement. The Assigning Lender (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 Loan Documents or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any other instrument or document furnished pursuant thereto; and
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Borrower or Guarantor or the
performance or observance by any Borrower or Guarantor of any of its obligations
under the Loan Documents or any other instrument or document furnished pursuant
thereto. The New Lender (i) confirms that it has received a copy of the
Revolving Credit Agreement (as amended hereby) together with such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Third Modification; (ii) agrees that it
will, independently and without reliance upon the Agent, the 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 the Revolving Credit Agreement; (iii) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Revolving Credit Agreement as are delegated
to the Agent by the terms thereof, together with such powers and discretion as
are reasonably incidental thereto; (iv) agrees that it will perform in
accordance with their terms all of the obligations that by the terms of the
Revolving Credit Agreement are required to be performed by it as a Lender; and
(v) attaches any U.S. Internal Revenue Service or other forms required under the
Revolving Credit Agreement.
SECTION 21. MODIFICATION TO FOREIGN EXCHANGE AGREEMENT. The Borrower and FUCC
hereby agree to modify the Foreign Exchange Agreement as follows: (a) all
references to the "Credit Agreement" contained therein shall refer to the
Revolving Credit Agreement as modified pursuant to this Third Modification and
(b) the reference to "$45,000,000" contained in the third WHEREAS paragraph on
page 1 shall be changed to "$35,000,000".
SECTION 22. FEES. The Borrower agrees to pay to the Agent, for the ratable
benefit of the Lenders, a fee on the date of this Third Modification in an
amount equal to $122,500.
SECTION 23. PAYMENT OF EXPENSES. Borrower agrees to pay, upon receipt of an
invoice therefor, all fees and expenses of separate legal counsel for the Agent
and the Lenders in connection with the preparation, negotiation or execution of
this Third Modification.
SECTION 24. COUNTERPARTS. This Third Modification may be executed in any
number of counterparts which, when taken together, shall constitute one
original.
SECTION 25. GOVERNING LAW; SEVERABILITY. This Third Modification shall be
governed by, and construed and interpreted in accordance with, the law of the
State of Florida. Wherever possible, each provision of this Third Modification
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Third Modification shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity and without
invalidating the remaining provisions of this Third Modification.
SECTION 26. WAIVER OF TRIAL BY JURY. Each of the Borrower, the Agent and the
Lenders hereby knowingly, voluntarily, irrevocably and intentionally waives the
right it may have to a trial by jury in respect to any action, proceeding,
counterclaim or other litigation based hereon, or arising out of, under or in
connection with this Third Modification, the Loan Agreements or any other Loan
Documents or any course of conduct, course of dealing, statements (whether oral
or written) or actions of any party hereto. This provision is a material
inducement of the parties to enter into this Third Modification.
SECTION 27. TITLES. The section titles contained in this Third Modification are
and shall be without substantive meaning or content of any kind whatsoever and
are not part of this Third Modification.
IN WITNESS WHEREOF, the Borrower, the Existing Lenders, the New Lender and
the Agent have caused this Third Modification to be executed as of the date
first above written.
BORROWER:
DIXON TICONDEROGA COMPANY,
a Delaware corporation
By: /s/ Richard A. Asta
---------------------------------------------
Name: Richard A. Asta
Title: Executive Vice President of Finance
and Chief Financial Officer
DIXON TICONDEROGA INC.,
an Ontario corporation
By: /s/ Richard A. Asta
-----------------------------------------------
Name: Richard A. Asta
Title: Executive Vice President of Finance
and Chief Financial Officer
AGENT:
FIRST UNION COMMERCIAL CORPORATION,
a North Carolina corporation, as Agent
By: /s/ Robert L. Dean
----------------------
Name: Robert L. Dean
Title: VP
EXISTING LENDERS:
FIRST UNION COMMERCIAL CORPORATION,
a North Carolina corporation, as a Lender
By: /s/ Robert L. Dean
----------------------
Name: Robert L. Dean
Title: VP
BANKBOSTON, N.A.,
a national banking association
By: /s/ Stephen Y. McGehee
--------------------------
Name: Stephen Y. McGehee
Title: Managing Director
NATIONAL BANK OF CANADA,
a Canadian chartered bank
By: /s/ E. Lynn Forgosh
-----------------------
Name: E. Lynn Forgosh
Title: Group V.P.
NEW LENDER:
LASALLE BANK NATIONAL ASSOCIATION
By: /s/ Meg Marion
------------------
Name: Meg Marion
Title: Senior V.P.
CONSENT
-------
This Consent (the "Consent"), dated September 30, 1999, is delivered in
connection with the Third Modification of Amended and Restated Revolving Credit
Loan and Security Agreement and Assignment, dated as of the date hereof (the
"Third Modification"). Each of the undersigned hereby confirms and agrees that
the Guaranty previously executed by it is, and shall continue to be, in full
force and effect, and hereby ratifies and confirms in all respects its
obligations thereunder, except that upon the effectiveness of, and on and after
the date of, the Third Modification, all references in each Guaranty to the
"Revolving Credit Agreement" shall mean the Revolving Credit Agreement as
modified by the Third Modification and any reference to "$45,000,000" shall
refer to "$35,000,000".
DIXON EUROPE, LIMITED
By: /s/ Richard A. Asta
---------------------------------------------
Title: Secretary
GRUPO DIXON, S.A. de C.V.
By: /s/ Diego Cespedes Creixell
-------------------------------
Title:
VINCI de MEXICO, S.A. de C.V.
By: /s/ Diego Cespedes Creixell
-------------------------------
Title:
VINCI MANUFACTURA, S.A. de C.V.
By: /s/ Diego Cespedes Creixell
-------------------------------
Title:
COMERCIALIZADORA DIXON, S.A. de C.V.
By: /s/ Diego Cespedes Creixell
-------------------------------
Title:
SERVIDIX, S.A. de C.V.
By: /s/ Diego Cespedes Creixell
-------------------------------
Title:
DIXON INDUSTRIAL MEXICO, S.A. de C.V.
By: /s/ Diego Cespedes Creixell
-------------------------------
Title:
DIXON TICONDEROGA de MEXICO, S.A. de C.V.
By: /s/ Diego Cespedes Creixell
-------------------------------
Title:
