Exhibit 10.31.3
AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER THREE TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of September 24, 2004, 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, and Holdings, 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, 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 "Additional Indebtedness", "EBITDA", and "Maximum Revolver
Amount" and replacing them with the following definitions, respectively:
""Additional Indebtedness" means Indebtedness of Parent and its
Subsidiaries (other than Advances) that is "Permitted Indebtedness" under
the New Indenture because it fits only within Section 4.12(xvii) thereof."
""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, and 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, as determined in
accordance with GAAP."
""Maximum Revolver Amount" means up to $32,500,000."
(b) Section 1.1 of the Loan Agreement is hereby amended by deleting "and
(j) Investments comprising the PMC Sale Transactions." from the definition of
"Permitted Investments" and replacing it with the following:
"(j) Investments comprising the PMC Sale Transactions, and (k) other
Investments made during the period from January 1, 2004 through June 30,
2004 in an aggregate amount not to exceed $336,000."
(c) Section 7.13 of the Loan Agreement is hereby amended by deleting "(e)
Permitted Investments pursuant to clauses (e), (f) and (i) of the definition of
Permitted Investments" and replacing it with the following:
"(e) Permitted Investments pursuant to clauses (e), (f), (i) and (k) of
the definition of Permitted Investments".
(d) 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
----------------------- -------------------------------------------
$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"
----------------------- -------------------------------------------
(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
----------------------- -------------------------------------------
----------------------- -------------------------------------------
$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, and
June 30, 2005"
----------------------- -------------------------------------------
(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, 2005 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,
2005 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."
(g) 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 $50,000, 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
(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 December 20, 2004, 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; and
(b) By December 20, 2004, deliver to Agent an updated Schedule 5.5 to the
Loan Agreement and an updated Schedule 5.7 to the Loan Agreement, in form and
substance satisfactory to Agent.
5. EFFECTIVE DATE. The effective date of Section 2(a) of this Amendment shall be
June 30, 2004, the effective date of Section 2(b) of this Amendment shall be
January 1, 2004, and the effective date of each other provision in this
Amendment shall be the date hereof.
6. 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.
7. 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.
8. 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.
9. 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.]
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 Xxxx
---------------------------------
Title: Vice President
Schedule C-1
Commitments
==========================================================================
Lender Revolver Commitment Total Commitment
==========================================================================
Xxxxx Fargo Foothill, Inc. $32,500,000 $32,500,000
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
All Lenders $32,500,000 $32,500,000
==========================================================================
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 THREE TO
LOAN AND SECURITY AGREEMENT (the "Amendment"), dated as of September 24, 2004.
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.]
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
S-1
