AMENDMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT
Exhibit 10.27.6
AMENDMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT (this “Amendment”), dated as
of October 28, 2005, is entered into by and among PHIBRO ANIMAL HEALTH CORPORATION, a New York
corporation (“Parent”), PHIBRO ANIMAL HEALTH U.S., INC., a Delaware corporation
(“PAHUS”), PHIBRO ANIMAL HEALTH HOLDINGS, INC., a Delaware corporation
(“Holdings”), PRINCE AGRIPRODUCTS, INC., a Delaware corporation (“Prince”),
PHIBRO-TECH, INC. (“PTI”; together with Parent, PAHUS, Holdings, and Prince, the
“Borrowers”), the lenders from time to time party to the Loan and Security Agreement
referenced below (each a “Lender” and collectively, the “Lenders”), XXXXX FARGO
FOOTHILL, INC., a California corporation, as the arranger and administrative agent for the Lenders
(“Agent”; and together with the Lenders, collectively the “Lender Group”), in light
of the following:
W I T N E S S E T H
WHEREAS, Borrowers and the Lender Group are parties to that certain Loan and Security
Agreement, dated as of October 21, 2003 (as amended, restated, supplemented, or otherwise modified
from time to time, the “Loan Agreement”); and
WHEREAS, subject to the terms and conditions contained herein, Borrowers, Agent, and Lenders
have agreed to amend the Loan Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree to amend the Loan Agreement as follows:
1. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the meanings ascribed to them in the Loan Agreement, as amended hereby.
2. AMENDMENT TO LOAN AGREEMENT.
(a) Section 1.1 of the Loan Agreement is hereby amended by deleting the definitions of
“EBITDA” and “Maximum Revolver Amount” and replacing them with the following
definitions, respectively:
““EBITDA” means, with respect to any fiscal period, consolidated net
earnings (or loss), minus extraordinary gains, interest income, and intercompany
allocations plus interest expense, income taxes, depreciation and amortization for
such period, charges which are both nonrecurring and noncash charges for such
period, charges and expenses related to unsuccessful acquisitions and related
financings in an aggregate amount not to exceed $5,300,000 for the period beginning
January 1, 2004 and ending June 30, 2004, charges and expenses related to the
Proposed Belgium Disposition in an aggregate amount not to exceed $33,200,000 for
the period beginning December 31, 2004 and ending June 30,
2006 and solely for the purposes of calculating the financial covenant contained in
Section 7.18(ii), as determined in accordance with GAAP.”
““Maximum Revolver Amount” means up to $35,000,000.”
(b) Section 7.18(i) of the Loan Agreement is hereby amended by deleting it
in its entirety and replacing it with the following:
“(i) Minimum Domestic EBITDA. Fail to maintain or achieve EBITDA for Parent
and its Domestic Subsidiaries, measured on a month-end basis, of at least the
required amount set forth in the following table for the applicable period set forth
opposite thereto:
| Applicable Amount | Applicable Period | |||
| $ | 2,700,000 | For the 2 month period ending November 30, 2003 |
||
| $ | 4,100,000 | For the 3 month period ending December 31, 2003 |
||
| $ | 5,000,000 | For the 4 month period ending January 31, 2004 |
||
| $ | 6,000,000 | For the 5 month period ending February 29, 2004 |
||
| $ | 8,000,000 | For the 6 month period ending March 31, 2004 |
||
| $ | 9,000,000 | For the 7 month period ending April 30, 2004 |
||
| $ | 10,000,000 | For the 8 month period ending May 31, 2004 |
||
| $ | 12,000,000 | For the 9 month period ending June 30, 2004 |
||
| $ | 13,200,000 | For the 10 month period ending July 31, 2004 |
||
| $ | 14,520,000 | For the 11 month period ending August 31, 2004 |
||
| $ | 15,972,000 | For the 12 month period ending September 30, 2004 |
||
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s
| Applicable Amount | Applicable Period | |||
| $ | 16,000,000 | For each 12 month period ending October 31, 2004, November 30, 2004, December 31, 2004, January 31, 2005, February 28, 2005, March 31, 2005, April 30, 2005, May 31, 2005, and June 30, 2005 |
||
| $ | 17,500,000 | For each 12 month period ending July 31, 2005, August 31, 2005, September 30, 2005, October 31, 2005, November 30, 2005, December 31, 2005, January 31, 2006, February 28, 2006, March 31, 2006, April 30, 2006, May 31, 2006, and June 30, 2006” |
||
(e) Section 7.18(ii) of the Loan Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:
“(ii) Consolidated Minimum EBITDA. Fail to maintain or achieve EBITDA for
Parent and its Subsidiaries, measured on a month-end basis, of at least the required
amount set forth in the following table for the applicable period set forth opposite
thereto:
| Applicable Amount | Applicable Period | |||
| $ | 5,200,000 | For the 2 month period ending November 30, 2003 |
||
| $ | 7,500,000 | For the 3 month period ending December 31, 2003 |
||
| $ | 10,000,000 | For the 4 month period ending January 31, 2004 |
||
| $ | 12,000,000 | For the 5 month period ending February 29, 2004 |
||
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| Applicable Amount | Applicable Period | |||
| $ | 15,500,000 | For the 6 month period ending March 31, 2004 |
||
| $ | 18,000,000 | For the 7 month period ending April 30, 2004 |
||
| $ | 21,000,000 | For the 8 month period ending May 31, 2004 |
||
| $ | 24,000,000 | For the 9 month period ending June 30, 2004 |
||
| $ | 26,400,000 | For the 10 month period ending July 31, 2004 |
||
| $ | 29,040,000 | For the 11 month period ending August 31, 2004 |
||
| $ | 31,944,000 | For the 12 month period ending September 30, 2004 |
||
| $ | 32,000,000 | For each 12 month period ending October 31, 2004, November 30, 2004, December 31, 2004, January 31, 2005, February 28, 2005, March 31, 2005, April 30, 2005, May 31, 2005, June 30, 2005, July 31, 2005, August 31, 2005, September 30, 2005, October 31, 2005, November 30, 2005, December 31, 2005, January 31, 2006, February 28, 2006, March 31, 2006, April 30, 2006, May 31, 2006, and June 30, 2006” |
||
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(f) Section 7.18(c) of the Loan Agreement is hereby amended by deleting it in its
entirety and replacing it with the following:
“(c) Determination of Future Levels. Agent shall, in its Permitted Discretion,
establish the monthly minimum EBITDA and capital expenditures covenant levels for
each succeeding trailing 12 month period after June 30, 2006 based upon Borrowers’
Projections for such fiscal year delivered pursuant to Section 6.3(c) of
this Agreement, which Borrowers’ Projections shall be satisfactory to Agent in all
respects. Borrowers shall execute any amendment to this Section 7.18
requested by Agent to document the inclusion of such covenant levels. If Borrowers
fail to timely deliver the Borrowers’ Projections pursuant to Section
6.3(c), the minimum EBITDA covenant level for each succeeding trailing 12 month
period after June 30, 2006 shall be measured on a monthly basis at an amount equal
to 100.83% of the monthly minimum EBITDA covenant level for the last trailing 12
months.”
(h) Schedule C-1 to the Loan Agreement is hereby deleted in its entirety and replaced
with the attached Exhibit A.
3. CONDITIONS PRECEDENT TO THIS AMENDMENT. The satisfaction of each of
the following shall constitute conditions precedent to the effectiveness of this Amendment and each
and every provision hereof:
(a) Agent shall have received this Amendment, duly executed by the parties hereto,
and the same shall be in full force and effect;
(b) Agent shall have received the reaffirmation and consent of each Guarantor, attached hereto
as Exhibit B, duly executed and delivered by an authorized official of such Guarantor;
(c) Agent shall have received a schedule of the outstanding Indebtedness of Parent and its
Subsidiaries detailing the particular section, subsection, or clause of the New Indenture
permitting such outstanding Indebtedness, certified as of the date hereof by the chief financial
officer of Parent on behalf of Parent as being a true, correct, and complete description of the
same, which shall be in form and substance satisfactory to Agent;
(d) Borrowers has paid to Agent, for the benefit of Lender Group, a fee in the amount of
$25,000, which fee shall be fully earned when paid;
(e) The representations and warranties in the Loan Agreement and the other Loan Documents
shall be true and correct in all material respects on and as of the date hereof, as though made on
such date (except to the extent that such representations and warranties relate solely to an
earlier date), and except for changes permitted by the Loan Documents;
(f) No Default or Event of Default shall have occurred and be continuing on the date hereof or
as of the date of the effectiveness of this Amendment; and
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(g) No injunction, writ, restraining order, or other order of any nature prohibiting, directly
or indirectly, the consummation of the transactions contemplated herein shall have been issued and
remain in force by any Governmental Authority against Borrowers, Guarantors, or the Lender Group.
4. COVENANTS. Borrowers hereby covenant and agree that they will satisfy
each of the following on or before the date specified below (the failure to so satisfy any of the
following to constitute an immediate Event of Default):
(a) By November 4, 2005, deliver to Agent an opinion of Borrowers’ and Guarantors’ counsel, in
form and substance satisfactory to Agent, regarding the transactions contemplated by this
Amendment; and
(b) By December 31, 2005, use commercially reasonable efforts to deliver to Agent a Collateral
Access Agreement executed by the landlord for the premises located at 00 Xxxxxxxxxx Xxxxxxxxx,
Xxxxxxxxxx Xxxx, XX and in form and substance satisfactory to Agent in its Permitted Discretion.
5. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF NEW YORK.
6. ENTIRE AMENDMENT; EFFECT OF AMENDMENT. This Amendment, and the terms and
provisions hereof, constitute the entire agreement among the parties pertaining to the subject
matter hereof and supersedes any and all prior or contemporaneous amendments relating to the
subject matter hereof. Except for the amendments to the Loan Agreement expressly set forth in
Section 2 hereof, the Loan Agreement and other Loan Documents shall remain unchanged and in
full force and effect. To the extent any terms or provisions of this Amendment conflict with those
of the Loan Agreement or other Loan Documents, the terms and provisions of this Amendment shall
control. This Amendment is a Loan Document. Except as expressly set forth herein, the execution,
delivery, and performance of this Amendment shall not operate as a waiver of or as an amendment of,
any right, power, or remedy of the Lender Group as in effect prior to the date hereof. The
agreements set forth herein are limited to the specifics hereof, shall not apply with respect to
any facts or occurrences other than those on which the same are based, shall not excuse future
non-compliance under the Loan Agreement, and shall not operate as a consent to any further or other
matter, under the Loan Documents.
7. COUNTERPARTS; TELEFACSIMILE EXECUTION. This Amendment may be executed in any
number of counterparts, all of which taken together shall constitute one and the same instrument
and any of the parties hereto may execute this Amendment by signing any such counterpart. Delivery
of an executed counterpart of this Amendment by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Amendment. Any party delivering an executed
counterpart of this Amendment by telefacsimile also shall deliver an original executed counterpart
of this Amendment, but the failure to deliver an original executed counterpart shall not affect the
validity, enforceability, and binding effect of this Amendment.
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8. MISCELLANEOUS.
(a) Upon the effectiveness of this Amendment, each reference in the Loan Agreement
to “this Agreement”, “hereunder”, “herein”, “hereof” or words of like import referring to the Loan
Agreement shall mean and refer to the Loan Agreement as amended by this Amendment.
(b) Upon the effectiveness of this Amendment, each reference in the Loan Documents
to the “Loan Agreement”, “thereunder”, “therein”, “thereof” or words of like import referring to
the Loan Agreement shall mean and refer to the Loan Agreement as amended by this Amendment.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties have caused this Amendment to be executed and delivered as of
the date first written above.
| PHIBRO ANIMAL HEALTH CORPORATION, | ||||
| a New York corporation | ||||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |||
| Title: | Chief Financial Officer | |||
| PHIBRO ANIMAL HEALTH U.S., INC., | ||||
| a Delaware corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| PHIBRO ANIMAL HEALTH HOLDINGS, INC., | ||||
| a Delaware corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| PRINCE AGRIPRODUCTS, INC., | ||||
| a Delaware corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| PHIBRO-TECH, INC., | ||||
| a Delaware corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| XXXXX FARGO FOOTHILL, INC., | ||||
| a California corporation, as Agent and a Lender | ||||
| By: | /s/ Xxxxxxx X. Xxxx | |||
| Title: | Vice President | |||
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Schedule C-1
Commitments
| Lender | Revolver Commitment |
Total Commitment |
||||||
Xxxxx Fargo Foothill, Inc. |
$ | 35,000,000 | $ | 35,000,000 | ||||
All Lenders |
$ | 35,000,000 | $ | 35,000,000 | ||||
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Exhibit B
REAFFIRMATION AND CONSENT
All capitalized terms used herein but not otherwise defined herein shall have the meanings
ascribed to them in that certain AMENDMENT NUMBER SIX TO LOAN AND SECURITY AGREEMENT (the
“Amendment”), dated as of October 28, 2005. The undersigned each hereby (a) represents and
warrants to the Lender Group that the execution, delivery, and performance of this Reaffirmation
and Consent are within its corporate powers, have been duly authorized by all necessary corporate
action, and are not in contravention of any law, rule, or regulation, or any order, judgment,
decree, writ, injunction, or award of any arbitrator, court, or governmental authority, or of the
terms of its charter or bylaws, or of any material contract or undertaking to which it is a party
or by which any of its properties may be bound or affected; (b) consents to the execution,
delivery, and performance of the Amendment; (c) acknowledges and reaffirms its obligations owing to
the Lender Group under the Loan Documents to which it is a party; and (d) agrees that each of the
Loan Documents to which it is a party is and shall remain in full force and effect in accordance
with the terms thereof. Although the undersigned has been informed of the matters set forth herein
and has acknowledged and agreed to same, it understands that the Lender Group has no obligations to
inform it of such matters in the future or to seek its acknowledgement or agreement to future
consents or amendments, and nothing herein shall create such a duty. Delivery of an executed
counterpart of this Reaffirmation and Consent by telefacsimile shall be equally as effective as
delivery of an original executed counterpart of this Reaffirmation and Consent. Any party
delivering an executed counterpart of this Reaffirmation and Consent by telefacsimile also shall
deliver an original executed counterpart of this Reaffirmation and Consent but the failure to
deliver an original executed counterpart shall not affect the validity, enforceability, and binding
effect of this Reaffirmation and Consent. This Reaffirmation and Consent shall be governed by the
laws of the State of New York.
[Signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have caused this Reaffirmation and Consent Agreement to
be executed by their respective officers thereunto duly authorized, as of the date first above
written.
| PHIBROCHEM, INC., a New Jersey corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| WESTERN MAGNESIUM CORP., a California corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| CP CHEMICALS, INC., a New Jersey corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
| PHIBRO CHEMICALS, INC., a New York corporation | ||||
| By: | /s/ Xxxxx X. Xxxxxxxx | |||
| Name: | Xxxxx X. Xxxxxxxx | |||
| Title: | Vice President | |||
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