SECOND AMENDMENT TO
CREDIT AGREEMENT
THIS SECOND AMENDMENT TO CREDIT AGREEMENT, made and entered
into as of the _____ day of May, 2000, by and between VIRBAC CORPORATION, a
Delaware corporation ("Virbac"), PM RESOURCES, INC., a Missouri corporation ("PM
Resources"), ST. XXX LABORATORIES, INC., a California corporation ("St. XXX"),
FRANCODEX LABORATORIES, INC., a Kansas corporation ("Francodex"), and VIRBAC AH,
INC., a Delaware corporation ("Virbac AH," and collectively with Virbac, PM
Resources, St. XXX and Francodex referred to herein as the "Borrowers"), and
FIRST BANK, a Missouri state banking corporation ("Bank").
WITNESSETH:
WHEREAS, Borrowers heretofore jointly and severally executed
and delivered to Bank a Revolving Credit Note dated September 7, 1999, in the
principal amount of up to Ten Million Dollars ($10,000,000.00), payable to the
order of Bank as therein set forth, which Revolving Credit Note has been most
recently amended and restated by that certain Revolving Credit Note dated
December ___, 1999 in the principal amount of up to Twelve Million Three Hundred
Fifty Thousand Dollars ($12,350,000.00) (as amended and restated, the "Note");
and
WHEREAS, the Note is described in a certain Credit Agreement
dated as of September 7, 1999 made by and among Borrowers and Bank, as
previously amended by an Amendment to Credit Agreement dated as of December ___,
1999 made by and among Borrowers and Bank (as amended, the "Loan Agreement," all
capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed to them in the Loan Agreement); and
WHEREAS, Borrowers and Bank desire to amend the financial
covenants in the Loan Agreement and to make certain other amendments thereto on
the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
mutual provisions and agreements hereinafter set forth, the parties hereto do
hereby mutually promise and agree as follows:
1. The definition of "Consolidated Debt Service" in Section 2
of the Loan Agreement shall be deleted in its entirety and in its place shall be
substituted the following:
Consolidated Debt Service shall mean the sum of all
of Virbac's and its Consolidated Subsidiaries' payments of principal
scheduled on all long term borrowed money Indebtedness within the
twelve month period preceding the date of any such calculation
(provided that no principal repayments of Facility A Loans shall be
included in Consolidated Debt Service and the only principal repayments
on the Facility B Loans to be included in Consolidated Debt Service
during the period from December 31, 1999 through June 30, 2000 shall be
$150,000.00 on the last day of each February, May, August and
November), plus Consolidated Interest Expense during the twelve month
period preceding the date of any such calculation, all determined on a
consolidated basis and in accordance with Generally Accepted Accounting
Principles consistently applied.
2. The definition of "Consolidated Tangible Net Worth" in
Section 2 of the Loan Agreement shall be deleted in its entirety and in its
place shall be substituted the following definition of Consolidated Net Worth:
Consolidated Net Worth shall mean, at any date, the
sum of the consolidated stockholders' equities of Virbac and its
Consolidated Subsidiaries plus all Subordinated Debt then outstanding,
determined in accordance with Generally Accepted Accounting Principles
consistently applied.
3. A new definition of "Consolidated Senior Debt " shall be
added to Section 2 of the Loan Agreement in proper alphabetical order as
follows:
Consolidated Senior Funded Debt of any Person shall
mean, as of the date of any determination thereof, the sum of, without
duplication, (a) all Indebtedness of such Person for borrowed money
(excluding any Subordinated Debt), plus (b) all Indebtedness of such
Person which has been incurred in connection with the purchase or other
acquisition of Property (other than unsecured trade accounts payable
incurred in the ordinary course of business), plus (c) all obligations
of such Person under any Capitalized Leases, plus (d) the aggregate
undrawn face amount of all letters of credit issued for the account
and/or upon the application of such Person together with all
unreimbursed drawings with respect thereto plus (e) all Guarantees by
such Person of Indebtedness of others, all determined on a consolidated
basis and in accordance with Generally Accepted Accounting Principles
consistently applied.
4. Section 7.1(i) of the Loan Agreement shall be deleted in
its entirety and in its place shall be substituted the following:
(i) Financial Covenants, Borrower will:
(i) Maintain a ratio of Consolidated EBITDA minus permitted
purchases by Borrowers of any of the outstanding capital stock of
Virbac during any such period (determined on a consolidated basis for
Borrowers and their Consolidated Subsidiaries and in accordance with
Generally Accepted Accounting Principles consistently applied, for the
applicable period ending on the date of any such calculation), to
Consolidated Debt Service (which for any such calculations prior to
January 1, 2000 shall be determined using Virbac's and its Consolidated
Subsidiaries' actual principal reductions made or required on all long
term borrowed money Indebtedness during the period included in any such
calculation instead of scheduled principal payments during the period
of equal length following the date of any such calculation) of at least
(A) 1.50 to 1.0 for the four quarter period ending December 31, 1999,
(B) 1.50 to 1.0 for the four quarter period ending January 31, 2000,
(C) 1.50 to 1.0 for the four quarter period ending February 29, 2000,
(D) 1.75 to 1.0 for the four quarter period ending March 31, 2000, (E)
1.75 to 1.0 for the four quarter period ending Xxxxx 00, 0000, (X) 1.75
to 1.0 for the four quarter period ending May 31, 2000, (G) 1.75 to 1.0
for the four quarter period ending June 30, 2000, and (H) 2.00 to 1.0
for the four quarter period ending at each month-end and fiscal year
end thereafter during the Term hereof;
(ii) Maintain a minimum Consolidated Net Worth at all times
during the Term hereof of not less than the sum of: (A) Twenty-Five
Million Dollars ($25,000,000.00) , plus (B) Seventy-Five Percent (75%)
of the Consolidated Net Income of Borrowers (with no deductions for any
consolidated losses for any such fiscal year) shown on Borrowers'
audited consolidated financial statements for each fiscal year,
commencing with the fiscal year ending December 31, 1999, such required
increases to be cumulative for each such fiscal year;
(iii) Maintain a ratio of Consolidated Senior Funded Debt
(determined as of any such date), to Consolidated Tangible Net Worth
(determined as of any such date) of not more than 1.0 to 1.0 as of each
fiscal quarter-end during the Term hereof; and
(iv) Deliver a certificate of the principal financial officers
of each of the Borrowers containing the financial ratio calculations
required in clauses (i), (ii) and (iii) above simultaneously with the
financial statements referred to in Sections 7.1(a)(i), (ii) and (iii).
5. The agreements of Bank contained herein are expressly
conditioned upon deliver by Borrowers of the following:
(a) the executed original of this Second Amendment to Credit
Agreement;
(b) the written consent to these amendments signed by Xxxxx
Xxxxxxxxxx as holder of the subordinated debt, which consent shall be in form
and substance acceptable to Bank; and
(c) such other documents as Bank may reasonably request.
6. Borrowers hereby represent and warrant to Bank that:
(a) The execution, delivery and performance by Borrowers of
this Second Amendment to Credit Agreement are within the corporate powers of
Borrowers, have been duly authorized by all necessary corporate action and
require no action by or in respect of, or filing with, any governmental or
regulatory body, agency or official. The execution, delivery and performance by
Borrowers of this Second Amendment to Credit Agreement do not conflict with, or
result in a breach of the terms, conditions or provisions of, or constitute a
default under or result in any violation of, and none of the Borrowers is now in
default under or in violation of, the terms of the Articles of Incorporation or
Bylaws of such Borrower, any applicable law, any rule, regulation, order, writ,
judgment or decree of any court or governmental or regulatory agency or
instrumentality, or any agreement or instrument to which any of the Borrowers is
a party or by which any of them is bound or to which any of them is subject;
(b) This Second Amendment to Credit Agreement has been duly
executed and delivered and constitutes the legal, valid and binding obligation
of Borrowers enforceable in accordance with its terms; and
(c) As of the date hereof, all of the covenants,
representations and warranties of Borrowers set forth in the Loan Agreement are
true and correct and no "Event of Default" (as defined therein) under or within
the meaning of the Loan Agreement has occurred and is continuing.
7. All references in the Loan Agreement to "this Agreement"
and any other references of similar import shall henceforth mean the Loan
Agreement as amended by this Second Amendment to Credit Agreement.
8. This Second Amendment to Credit Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that Borrowers may not assign, transfer or
delegate any of their rights or obligations hereunder.
9. This Second Amendment to Credit Agreement shall be governed
by and construed in accordance with the internal laws of the State of Missouri.
10. In the event of any inconsistency or conflict between this
Second Amendment to Credit Agreement and the Loan Agreement, the terms,
provisions and conditions of this Second Amendment to Credit Agreement shall
govern and control.
11. The Loan Agreement, as hereby amended and modified, and
the Note, are and shall remain the binding obligations of Borrowers and all of
the provisions, terms, stipulations, conditions, covenants and powers contained
therein shall stand and remain in full force and effect, except only as the same
are herein and hereby specifically varied or amended, and the same are hereby
ratified and confirmed. If any installment of principal or interest on the Note
shall not be paid when due as provided in the Note, the holder of the Note shall
be entitled to and may exercise all rights and remedies under the Note and the
Loan Agreement, as amended.
12. ORAL AGREEMENTS OR COMMITMENTS TO LOAN MONEY, EXTEND
CREDIT OR TO FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT, INCLUDING PROMISES TO
EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE. TO PROTECT BORROWERS AND BANK
FROM ANY MISUNDERSTANDING OR DISAPPOINTMENT, ANY AGREEMENTS REACHED BY BORROWERS
AND BANK COVERING SUCH MATTERS ARE CONTAINED IN THE LOAN AGREEMENT, AS AMENDED
BY THIS AGREEMENT, WHICH CONSTITUTES A COMPLETE AND EXCLUSIVE STATEMENT OF THE
AGREEMENTS BETWEEN BORROWERS AND BANK EXCEPT AS BORROWERS AND BANK MAY LATER
AGREE IN WRITING TO MODIFY. THE LOAN AGREEMENT, AS AMENDED BY THIS AGREEMENT,
EMBODIES THE ENTIRE AGREEMENT AND UNDERSTANDING BETWEEN THE PARTIES HERETO AND
SUPERSEDES ALL PRIOR AGREEMENTS AND UNDERSTANDINGS (ORAL OR WRITTEN) RELATING TO
THE SUBJECT MATTER HEREOF.
IN WITNESS WHEREOF, the parties hereto have executed this
instrument as of the date first written above on this _____ day of May, 2000.
VIRBAC CORPORATION
By:
Xxxxx X. Xxxxx, Executive Vice President
PM RESOURCES, INC.
By:
Xxxxx X. Xxxxx, Executive Vice President
ST. XXX LABORATORIES, INC.
By:
Xxxxx X. Xxxxx, Executive Vice President
VIRBAC AH, INC.
By:
Xxxxx X. Xxxxx, Executive Vice President
FRANCODEX LABORATORIES, INC.
By:
Xxxxx X. Xxxxx, Executive Vice President
FIRST BANK
By:
Xxxxx X. Xxxxxx, Vice President
CONSENT TO SECOND AMENDMENT TO
CREDIT AGREEMENT
The undersigned hereby consents to the terms of that certain
Second Amendment to Credit Agreement (the "Amendment"), a copy of which has been
provided to the undersigned, and the undersigned acknowledges that the execution
and delivery by Virbac Corporation (formerly known as Agri-Nutrition Group
Limited), PM Resources, Inc., Virbac AH, Inc., St. XXX Laboratories, Inc. and
Francodex Laboratories, Inc. of said Amendment will not affect or impair the
undersigned's obligations to and agreements with Bank under that certain
Subordination and Standby Agreement executed as of May 8, 1998 by the
undersigned (and as of May 14, 1998 by the Borrowers) in favor of Bank (the
"Subordination Agreement"), which obligations and agreements are hereby ratified
and confirmed. The undersigned further acknowledges and agrees that (i) all
references in the Subordination Agreement to the "Loan Agreement" and other
references of similar import shall henceforth mean the amended and restated
Credit Agreement dated as of September 7, 1999, as amended by the Amendment, and
as the same has been or may from time to time be further amended; and (ii) all
references in the Subordination Agreement to the "Senior Indebtedness" and other
references of similar import shall henceforth mean and include as Senior
Indebtedness, the $12,350,000.00 amended and restated Revolving Credit Note, as
the same may from time to time be further amended, and the Subordinated
Indebtedness of the undersigned is and shall remain subordinated to such Senior
Indebtedness.
Dated: as of May ___, 2000.
Xxxxx X. Xxxxxxxxxx
