Exhibit 10.3 for 10Q dated June 30, 2008



Exhibit 10.3




FOURTH AMENDMENT 

TO
AMENDED AND RESTATED CREDIT AGREEMENT




THIS FOURTH AMENDMENT TO AMENDED AND RESTATED CREDIT
AGREEMENT, dated as of August 4, 2008 (this “Amendment”), is by and
among ALLIANCE ONE INTERNATIONAL, INC., a Virginia corporation (the
“Company”), INTABEX NETHERLANDS B.V., a company formed under the
laws of The Netherlands and a Subsidiary of the Company (the “Dutch
Borrower”; together with the Company, collectively the “Borrowers,”
and individually, a “Borrower”), each of the Domestic Subsidiaries of the
Borrower from time to time party hereto (the “Domestic Guarantors”),
ALLIANCE ONE INTERNATIONAL AG, a Swiss corporation (“Alliance AG”;
together with the Company and the Domestic Guarantors, collectively the
“Guarantors” and individually, a “Guarantor”), and WACHOVIA
BANK, NATIONAL ASSOCIATION, a national banking association, as
administrative agent for the Lenders (in such capacity, the “Administrative
Agent”). 







W I T
N E S S E T H:




WHEREAS, pursuant to the Amended and Restated Credit
Agreement dated as of March 30, 2007 (as previously amended or modified and as
further amended, restated or otherwise modified from time to time, the
“Credit Agreement”; capitalized terms used herein and not otherwise
defined shall have the meanings ascribed thereto in the Credit Agreement) among
the Borrowers, the Guarantors, the lenders and other financial institutions from
time to time party thereto (the “Lenders”), and the Administrative Agent,
the Lenders have extended commitments to make certain credit facilities
available to the Borrower;




WHEREAS, the Credit Parties have requested that the
Required Lenders amend certain provisions of the Credit Agreement; and




WHEREAS, the Required Lenders are willing to make such
amendments to the Credit Agreement subject to the terms and conditions set forth
herein




NOW, THEREFORE, IN CONSIDERATION of the premises and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:




SECTION 1

AMENDMENTS




1.1

Amendment to Section 1.1.  Section 1.1 of the
Credit Agreement is hereby amended by adding the following definition in the
appropriate alphabetical order in Section 1.1:





“Permitted Allowance” shall mean, an allowance
offsetting long-term advances to tobacco farmers guaranteed by Foreign
Subsidiaries that were brought onto the balance sheet on March 31, 2008 or from
time to time thereafter excluding any adjustments for foreign currency
changes.

1.2

Amendment to Definition of Committed Inventories.
 The definition of Committed Inventories in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:




“Committed Inventories” shall mean tobacco inventories
for which the Company or any of its Subsidiaries has received a Confirmed Order,
which such inventories have been reflected on the books and records of the
Company or any of its Subsidiaries as committed inventories in accordance with
GAAP.




1.3

Amendment to Definition of Confirmed Order.
 The definition of Confirmed Order in Section 1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:




“Confirmed Order” shall mean an order or other
indication of interest, in accordance with industry standards, by a customer not
an Affiliate of the Company or any of its Subsidiaries which has been accepted
in the ordinary course of business by representatives of the Company or any of
its Subsidiaries.




1.4

Amendment to Definition of Consolidated EBIT.
 The definition of Consolidated EBIT in Section 1.1 of the Credit Agreement
is hereby amended and restated in its entirety to read as follows:




“Consolidated EBIT” shall mean, as of the last day of
any fiscal quarter of the Company for the Calculation Period ending on such
date, the sum (without duplication) of (a) Consolidated Net Income
plus (b) to the extent included in the determination of such Consolidated
Net Income, (i) Consolidated Income Tax Expense plus
(ii) Consolidated Interest Expense minus (iii) any
extraordinary items of gain minus (iv) any items of gain
attributable to Financial Accounting Standards Board Statements No. 121,
123R, 133 (solely with respect to any interest rate swap, cap or collar
agreement), 142 and 144) plus (v) any items of loss attributable to
Financial Accounting Standards Board Statements No. 121, 123R, 133 (solely
with respect to any interest rate swap, cap or collar agreement), 142 and 144)
plus (vi) costs and expenses incurred in connection with exit and
disposal activities associated with discontinued foreign operations in an amount
not to exceed $15,000,000 in the aggregate, in each case determined for the
Company and its Subsidiaries on a consolidated basis in accordance with GAAP
plus (vii) the Permitted Allowance in an aggregate amount not to exceed
$55,000,000 in the aggregate; provided that $37,500,000 of such Permitted
Allowance shall be allocated to the fiscal quarter ended March 31, 2008
minus (viii) write-ups of the Permitted Allowance minus
(ix) write downs of the Permitted Allowance.




1.5

Amendment to Definition of Uncommitted Inventories.
 The definition of Uncommitted Inventories in Section 1.1 of the Credit
Agreement is hereby amended and restated in its entirety to read as follows:




“Uncommitted Inventories” shall mean tobacco inventories
for which the Company or any of its Subsidiaries has not received a Confirmed
Order, which such inventories are reflected on the books and records of the
Company or any of its Subsidiaries as uncommitted inventories in accordance with
GAAP.




1.6

Amendment to Section 6.1(l).  Section 6.1(l) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:




(l) additional Indebtedness that in the aggregate does not
exceed, (i) for the Company and its Domestic Subsidiaries, $30,000,000 and (ii)
for Foreign Subsidiaries, (A) the sum of $685,000,000 for the period from April
1, 2008 through and including June 30, 2008, (B) the sum of $840,000,000 for the
period from July 1, 2008 through and including December 31, 2008, (C) the sum of
$675,000,000 for the period from January 1, 2009 through and including March 30,
2009 and (D) as of March 31, 2009 and at all times thereafter, the sum of
$600,000,000; provided that, after giving effect on a Pro Forma Basis to
the incurrence or assumption of any such Indebtedness and to the concurrent
retirement of any other Indebtedness of the Credit Parties or any of their
Subsidiaries, no Default or Event of Default shall exist.




1.7

Amendment to Section 6.2(m).  Section 6.2(m) of
the Credit Agreement is hereby amended and restated in its entirety to read as
follows:




(m) any Lien on the assets of a Foreign Subsidiary securing
foreign lines of credit of the Foreign Subsidiaries in an aggregate principal
amount at any time outstanding not to exceed $275,000,000; provided that
the aggregate principal amount of foreign lines of credit of the Dutch Borrower
and Alliance AG subject to a Lien contemplated by this Section 6.2(m) shall
not exceed $20,000,000 in the aggregate and shall only consist of Liens incurred
by the Dutch Borrower and Alliance AG through the merger of a Foreign Subsidiary
with, or the sale, lease or other transfer of all or any substantial part of the
assets of a Foreign Subsidiary to, the Dutch Borrower or Alliance AG;




1.8

Amendment to Section 6.14.  Section 6.14 of the
Credit Agreement is hereby amended and restated in its entirety to read as
follows:




The Credit Parties shall not permit the Uncommitted Inventories
to exceed (a) $225,000,000 in the aggregate for the fiscal quarters ended March
31, 2008, June 30, 2008, September 30, 2008 and December 31, 2008 and (b)
$150,000,000 in the aggregate at the end of each fiscal quarter thereafter.
 







SECTION 2

CONDITIONS TO EFFECTIVENESS




2.1

Closing Conditions. This Amendment shall be deemed
effective as of March 31, 2008 (the “Amendment Effective Date”) upon
satisfaction of the following conditions (in form and substance reasonably
acceptable to the Administrative Agent):




(a)

Executed Amendment.  The Administrative Agent shall
have received a copy of this Amendment duly executed by each of the Credit
Parties and the Administrative Agent, on behalf of the Required Lenders.




(b)

Executed Consents.  The Administrative Agent shall
have received executed consents, in substantially the form of Exhibit A
attached hereto, from the Required Lenders authorizing the Administrative Agent
to enter into this Amendment on their behalf.  The delivery by the
Administrative Agent of its signature page to this Amendment shall constitute
conclusive evidence that the consents from the Required Lenders have been
obtained.




(c)

Fees and Expenses.  The Administrative Agent shall
have received from the Borrower such fees and expenses that are payable in
connection with the consummation of the transactions contemplated hereby,
including, without limitation, the reasonable fees and expenses of Moore &
Van Allen PLLC.




(d)

Miscellaneous.  All other documents and legal matters
in connection with the transactions contemplated by this Amendment shall be
reasonably satisfactory in form and substance to the Administrative Agent and
its counsel.




SECTION 3

REPRESENTATIONS AND WARRANTIES




3.1

Representations and Warranties.  Each of the
Credit Parties represents and warrants as follows:




(a)

It has taken all necessary action to authorize the execution,
delivery and performance of this Amendment.




(b)

This Amendment has been duly executed and delivered by such Person
and constitutes such Person’s legal, valid and binding obligations, enforceable
in accordance with its terms, except as such enforceability may be subject to
(i) bankruptcy, insolvency, reorganization, fraudulent conveyance or
transfer, moratorium or similar laws affecting creditors’ rights generally and
(ii) general principles of equity (regardless of whether such
enforceability is considered in a proceeding at law or in equity).




(c)

No consent, approval, authorization or order of, or filing,
registration or qualification with, any court or governmental authority or third
party is required in connection with the execution, delivery or performance by
such Person of this Amendment.




(d)

The representations and warranties set forth in Article III
of the Credit Agreement are true and correct as of the date hereof (except for
those which expressly relate to an earlier date).




(e)

After giving effect to this Amendment, no event has occurred and
is continuing which constitutes a Default or an Event of Default.




(f)

The Security Documents continue to create a valid security
interest in, and Lien upon, the Collateral, in favor of the Administrative
Agent, for the benefit of the Lenders, which security interests and Liens are
perfected in accordance with the terms of the Security Documents and prior to
all Liens other than Permitted Liens.




(g)

Except as specifically provided in this Amendment, the Credit
Party Obligations are not reduced or modified by this Amendment and are not
subject to any offsets, defenses or counterclaims.




SECTION 4

MISCELLANEOUS




4.1

Counterparts/Telecopy.  This Amendment may be
executed in any number of counterparts, each of which when so executed and
delivered shall be an original, but all of which shall constitute one and the
same instrument.  Delivery of executed counterparts of this Amendment by
telecopy shall be effective as an original and shall constitute a representation
that an original shall be delivered.




4.2

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




4.3

Reaffirmation of Credit Party Obligations.
 Each Credit Party hereby ratifies the Credit Agreement and acknowledges
and reaffirms (a) that it is bound by all terms of the Credit Agreement
applicable to it and (b) that it is responsible for the observance and full
performance of its respective Credit Party Obligations.




4.4

Amended Terms.  The term “Credit Agreement” as
used in each of the Credit Documents shall hereafter mean the Credit Agreement
as amended by this Amendment.  Except as specifically amended hereby or
otherwise agreed, the Credit Agreement and the other Credit Documents are hereby
ratified and confirmed and shall remain in full force and effect according to
their terms.

 

4.5

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




4.6

Expenses.  The Borrower agrees to pay all
reasonable costs and expenses of the Administrative Agent in connection with the
preparation, execution and delivery of this Amendment, including without
limitation the reasonable fees, expenses and retainer amounts of the
Administrative Agent’s legal counsel and financial consultants.




4.7

Further Assurances.  The Credit Parties agree
to promptly take such action, upon the request of the Administrative Agent, as
is necessary to carry out the intent of this Amendment.




4.8

Governing Law.  THIS AMENDMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF
(OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW).




4.9

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




4.10

General Release.  In consideration of the
Lenders entering into this Amendment, each Credit Party hereby releases the
Administrative Agent, the Lenders, and the Administrative Agent’s and the
Lenders’ respective officers, employees, representatives, agents, counsel and
directors from any and all actions, causes of action, claims, demands, damages
and liabilities of whatever kind or nature, in law or in equity, now known or
unknown, suspected or unsuspected to the extent that any of the foregoing arises
from any action or failure to act under the Credit Agreement on or prior to the
date hereof, except, with respect to any such person being released hereby, any
actions, causes of action, claims, demands, damages and liabilities arising out
of such person’s gross negligence or willful misconduct.




4.11

Waiver of Jurisdiction; Service of Process; Waiver of Jury
Trial; Arbitration.  The jurisdiction, service of process, waiver
of jury trial and arbitration provisions set forth in Sections 9.12, 9.13
and 9.16 of the Credit Agreement are hereby incorporated by reference,
mutatis mutandis.







[Balance of Page Intentionally Left Blank].


 




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




COMPANY:

ALLIANCE ONE INTERNATIONAL, INC.







By:

/s/  Robert A. Sheets

Name:

Robert A. Sheets

Title: 

Executive Vice President –

Chief Financial Officer







By:

/s/  Joel Thomas

Name:

Joel Thomas

Title: 

Vice President and

Treasurer







DUTCH BORROWER:

INTABEX NETHERLANDS B.V.




By:

/s/  Joel Thomas

Name:

Joel Thomas

Title: 

Attorney-in-fact




By:

/s/  B. Lynne Finney

Name:

B. Lynne Finney 

Title: 

Attorney-in-fact







DOMESTIC GUARANTORS:

[NONE]







FOREIGN GUARANTORS:

ALLIANCE ONE INTERNATIONAL AG







By:

/s/  Joel Thomas 

Name:

Joel Thomas

Title: 

Authorized Signor




By:

/s/  B. Lynne Finney

Name:

B. Lynne Finney 

Title: 

Authorized Signor

















 




ALLIANCE
ONE INTERNATIONAL, INC.

FOURTH
AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT 







ADMINISTRATIVE AGENT:

WACHOVIA
BANK, NATIONAL ASSOCIATION,

as Administrative Agent and as a Lender







By:

/s/  Beth Rue

Name:

Beth Rue 

Title: 

Vice President