Fill and Sign the Term Loan Agreement Form

FIRST MODIFICATION OF AMENDED AND RESTATED TERM LOAN AGREEMENT AND ASSIGNMENT This Modification of Amended and Restated Term Loan Agreement and Assignment (this "First 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 Term Loan Agreement, dated as of July 10, 1996 (said Agreement as it may be further amended, restated or otherwise modified from time to time, being hereinafter called the "Term Loan Agreement"), by and among the Borrower, the Existing Lenders and the Agent, pursuant to which the Lenders extended financial accommodations to Borrower in the form of a $7,750,000.08 term loan facility in accordance with, and subject to, the terms and conditions of the Term Loan Agreement; and WHEREAS, the parties to the Term Loan Agreement have agreed to amend the Term Loan Agreement as provided herein; WHEREAS, the parties to the Term Loan Agreement and the New Lender have agreed that the New Lender shall become a party to the Term Loan Agreement (as amended hereby) by way of assignment by National Bank of Canada (the "Assigning Lender") of its Term Loans; NOW, THEREFORE, in consideration of the premises and the covenants and agreements hereinafter set forth, the parties hereto agree as follows: SECTION 1. DEFINED TERMS. Capitalized terms used in this First Modification and not otherwise defined herein, shall have the meanings ascribed to them in the Term Loan Agreement. SECTION 2. AMENDMENT TO DEFINITIONS. Section 1.1 of the Term Loan Agreement is hereby amended as follows: (a)The following new definition is added in the alphabetically appropriate place: "Dollars" and "$" shall mean dollars in lawful currency of the United States of America, unless otherwise specifically provided herein. (b)The definition of "Term Loan" is hereby amended by deleting the word "7,750,000.08" and inserting the word "$7,500,000" in its place. SECTION 3. AMENDMENTS TO TERM LOAN PROVISIONS. Section 2.1 (Term Loan) of the Term Loan Agreement is hereby amended by as follows: (a)Section 2.1(a) is hereby amended by deleting the word "$3,900,768.79" and inserting the word "$3,774,937.50" in its place. (b)Section 2.1(b) is hereby amended by deleting the word "$2,567,187.53 and inserting the word "$2,484,375" in its place. (c)Section 2.1(c) is hereby amended by deleting the word "$1,282,043.76 and inserting the word "$1,240,687.50" in its place. SECTION 4. AMENDMENTS TO PAYMENT PROVISIONS. Section 3 of the Term Loan Agreement is amended as follows: (a)Section 3.1 (Payments) of the Term Loan Agreement is hereby amended by (i) deleting the words "200 South Biscayne Boulevard, 11th Floor, MC: FL6090, Miami, Florida, 33131" and inserting the words "One First Union Center, 300 S. College Street, DC-4, Charlotte, NC 28288" in their place and (ii) adding the following sentence to the end thereof: All payments hereunder shall be made without setoff, deduction, counterclaim or withholding of any kind. (b)Section 3.3 (Principal Payments) of the Term Loan Agreement is hereby deleted in its entirety and replaced with the following: 3.3 Principal Payments. In addition to and concurrently with the monthly payments of Interest, Borrower shall pay to Agent monthly installments of Principal in an amount equal to $125,000 from October 1, 1999 through September 1, 2004. SECTION 5. AMENDMENTS TO TAX PROVISIONS. Section 12 (Taxes) of the Term Loan Agreement is hereby deleted in its entirety and replaced with the following: 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 6. AMENDMENTS TO MISCELLANEOUS PROVISIONS. Section 13 of the Term Loan Agreement is hereby amended as follows: a. Section 13.2 (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 13.3 is inserted following Section 13.2, and the remaining sections are renumbered accordingly: 13.3 Arbitration. (a)Notwithstanding the provisions of Section 13.2 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. SECTION 7. RATIFICATION: EFFECT ON REVOLVING CREDIT 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 "Term Loan Agreement" shall refer to the Term Loan Agreement as modified by this First Modification. To the extent that any of the amendments of the Term Loan Agreement contained in this First Modification are amendments of provisions which are incorporated by reference in the Revolving Credit Agreement, the Revolving Credit Agreement shall be deemed to be similarly amended. SECTION 8. 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 First 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 First 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 9. 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 10. CONDITIONS PRECEDENT TO EFFECTIVENESS OF MODIFICATION. It shall be a condition precedent to the effectiveness of this First Modification that the Borrower shall have complied with each of the following: (a)Executed Documents. The Agent shall have received executed originals of (i) this First Modification together with the Consent attached hereto, (ii) Term 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 First 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 First 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 First 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 First 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 First 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 9. (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 First Modification, in form and substance satisfactory to the Agent and its special counsel. (e)Modification of Revolving Credit Agreement. All conditions to the Third Modification of Amended and Restated Revolving Credit Agreement and Assignment dated as of the date hereof by and among the Borrower, the Lenders and the Agent shall have been fulfilled. SECTION 11. 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 Term Loan Agreement (including, without limitation, the Term Loans 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 Term Loans effected by the amendment to Section 2.1(a), (b) and (c) of the Term Loan Agreement pursuant to Section 3 hereof. From and after the date hereof (i) the New Lender shall be a party to and be bound by the provisions of the Term Loan 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 Term Loan 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 Term Loan 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 Term Loan 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 Term Loan 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 Term Loan 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 Term Loan Agreement or the Revolving Credit Agreement. SECTION 12. MODIFICATION TO FOREIGN EXCHANGE AGREEMENT. The Borrower and FUCC hereby agree to modify the Foreign Exchange Agreement as follows: (a) all references to the "Term Loan Agreement" contained therein shall refer to the Term Loan Agreement as modified pursuant to this First Modification and (b) the reference to "$7,750,000.08" contained in the third WHEREAS paragraph on page 1 shall be changed to "$7,500,000". SECTION 13. FEES. The Borrower agrees to pay to the Agent, for the ratable benefit of the Lenders, a fee on the date of this First Modification in an amount equal to $26,250. SECTION 14. 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 First Modification. SECTION 15. COUNTERPARTS. This First Modification may be executed in any number of counterparts which, when taken together, shall constitute one original. SECTION 16. GOVERNING LAW; SEVERABILITY. This First 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 First Modification shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this First 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 First Modification. SECTION 17. 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 First 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 First Modification. SECTION 18. TITLES. The section titles contained in this First Modification are and shall be without substantive meaning or content of any kind whatsoever and are not part of this First Modification. IN WITNESS WHEREOF, the parties hereto have caused this First Modification to be executed as of the date first above written. BORROWER: DIXON TICONDEROGA COMPANY, a Delaware corporation By: /s/ Richard A. Asta ----------------------------------------------- Title: Treasurer DIXON TICONDEROGA INC., an Ontario corporation By: /s/ Richard A. Asta ----------------------------------------------- Title: Treasurer AGENT: FIRST UNION COMMERCIAL CORPORATION, a North Carolina corporation, as Agent By: /s/ Robert L. Dean ---------------------- Title: VP EXISTING LENDERS: FIRST UNION COMMERCIAL CORPORATION, a North Carolina corporation, as a Lender By: /s/ Robert L. Dean ---------------------- Title: VP BANKBOSTON, N.A., a national banking association By: /s/ Stephen Y. McGehee -------------------------- Title: Managing Director NATIONAL BANK OF CANADA, a Canadian chartered bank By: /s/ E. Lynn Forgosh /s/ Frank Johnson -------------------------------------------------- Title: Group V.P. Group V.P. NEW LENDER: LASALLE BANK NATIONAL ASSOCIATION By: /s/ Meg Marion ------------------ Title: Senior V.P. CONSENT ------- This Consent (the "Consent"), dated September 30, 1999, is delivered in connection with the First Modification of Amended and Restated Term Loan Agreement and Assignment, dated as of the date hereof (the "First 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 First Modification, all references in each Guaranty to the "Term Loan Agreement" shall mean the Term Loan Agreement as modified by the First Modification and any reference to "$7,750,000" shall refer to "$7,500,000". 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: