Exhibit 10.31.2
AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER TWO TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of April 29, 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");
WHEREAS, Borrowers have requested that the Lender Group increase the
Maximum Revolver Amount from $25,000,000 to $27,500,000 under the Loan
Agreement; and
WHEREAS, subject to the satisfaction of the conditions and upon the terms
set forth herein, the Lender Group is willing to do so.
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
definition of "NADAs".
(b) Section 1.1 of the Loan Agreement is hereby amended by adding the
following definitions in alphabetical order:
""Additional Indebtedness" means Indebtedness of Parent and its
Subsidiaries that is "Permitted Indebtedness" under the New Indenture
because it fits only within Section 4.12(xvii) thereof."
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""Additional Indebtedness Usage" means, as of any date of
determination, the aggregate amount of outstanding Additional
Indebtedness."
(c) Section 1.1 of the Loan Agreement is hereby amended by deleting the
definition of "Maximum Revolver Amount" and replacing it with the following
definition:
""Maximum Revolver Amount" means up to $27,500,000."
(d) Section 2.1 of the Loan Agreement is hereby amended by deleting
subsection (a) in its entirety and replacing it with the following subsection
(a):
"(a) Subject to the terms and conditions of this Agreement, and
during the term of this Agreement, each Lender with a Revolver Commitment
agrees (severally, not jointly or jointly and severally) to make advances
("Advances") to Borrowers in an amount at any one time outstanding not to
exceed such Lender's Pro Rata Share of an amount equal to the lesser of
(i) the Maximum Revolver Amount less the sum of (A) the Letter of Credit
Usage, (B) the Indenture Reserve, and (C) the Additional Indebtedness
Usage, (ii) the Borrowing Base less the Letter of Credit Usage, or (iii)
$17,500,000 less the Additional Indebtedness Usage."
(e) Section 2.12 of the Loan Agreement is hereby amended by deleting
subsection (a)(iii) in its entirety and replacing it with the following
subsection (a)(iii):
"(iii) the Letter of Credit Usage would exceed the Maximum Revolver
Amount less the sum of (A) the then extant amount of outstanding Advances,
(B) the Indenture Reserve, and (C) the Additional Indebtedness Usage."
(f) Section 3.2 of the Loan Agreement is hereby amended by deleting
subsection (s) in its entirety and replacing it with the following subsection
(s):
"(s) by May 30, 2004, Agent shall have received the original Stock
certificates for all Foreign Subsidiaries organized under jurisdictions
that have stock certificates or other equity instruments reflecting the
equity ownership of such Foreign Subsidiary and whose interests were
pledged to Agent pursuant to the Stock Pledge Agreement;"
(g) Section 3.2 of the Loan Agreement is hereby amended by deleting
subsection (u) in its entirety and replacing it with the following:
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"(u) Borrowers and their Subsidiaries will use their best efforts to
deliver to Agent by April 30, 2004 all intercompany notes, representing
intercompany indebtedness due to any Borrower or any Domestic Subsidiary,
and the same shall have been endorsed to Agent."
(h) Section 6.3(a)(ii) of the Loan Agreement is hereby amended by deleting
it in its entirety and replacing it with the following:
"(ii) certificate signed on behalf of Parent by the chief financial
officer of Parent certifying:
(A) that the financial statements delivered hereunder have
been prepared in accordance with GAAP (except for the lack of
footnotes and being subject to year-end audit adjustments) and
fairly present in all material respects the financial condition of
Parent and its Subsidiaries,
(B) that the representations and warranties of Borrowers
contained in this Agreement and the other Loan Documents are true
and correct in all material respects on and as of the date of such
certificate, as though made on and as of such date (except to the
extent that such representations and warranties relate solely to an
earlier date and except for changes permitted under the Loan
Documents and reflected in an updated schedule delivered by the
Borrowers),
(C) that there does not exist any condition or event that
constitutes a Default or Event of Default (or, to the extent of any
non-compliance, describing such non-compliance as to which he or she
may have knowledge and what action Borrowers have taken, are taking,
or propose to take with respect thereto), and
(D) in detail, the identity and the principal amount of all
outstanding Indebtedness of Parent and its Subsidiaries and that
such Indebtedness is permitted under the New Indenture."
(i) The Loan Agreement is hereby amended by adding the following
Section 7.20:
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"7.20 Additional Indebtedness Usage. Request, obtain or incur
Indebtedness, including Obligations hereunder, if such Indebtedness
would cause the Additional Indebtedness Usage to exceed $2,500,000."
(j) Exhibit C-1 to the Loan Agreement is hereby deleted in its entirety
and replaced with the attached Exhibit A.
(k) Schedule C-1 to the Loan Agreement is hereby deleted in its entirety
and replaced with the attached Schedule B.
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 C, 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) 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;
(e) 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
(f) 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. 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.
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5. 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.
6. 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.
7. 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
By: /s/ Xxxxxxx Xxxx
-----------------------------
Title: Vice President
EXHIBIT A
EXHIBIT C-1
FORM OF COMPLIANCE CERTIFICATE
[on Borrower's letterhead]
To: Xxxxx Fargo Foothill, Inc.
0000 Xxxxxxxxx Xxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Business Finance Manager
Re: Compliance Certificate dated
------------------------
Ladies and Gentlemen:
Reference is made to that certain LOAN AND SECURITY AGREEMENT (the "Loan
Agreement") dated as of October 21, 2003, by and among, on the one hand, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and permitted assigns, are referred to hereinafter
each individually as a "Lender" and collectively as the "Lenders"), XXXXX FARGO
FOOTHILL, INC., a California corporation, as the arranger and administrative
agent for the Lenders ("Agent"), and, on the other hand, PHIBRO ANIMAL HEALTH
CORPORATION, a New York corporation ("Parent"), and each of Parent's
Subsidiaries identified on the signature pages thereof (such Subsidiaries,
together with Parent, are referred to hereinafter each individually as a
"Borrower", and individually and collectively, jointly and severally, as the
"Borrowers"). Capitalized terms used in this Compliance Certificate have the
meanings set forth in the Loan Agreement unless specifically defined herein.
Pursuant to Section 6.3(a) of the Loan Agreement, the undersigned officer
of Parent hereby certifies that:
1. The financial information of Parent and its Subsidiaries furnished in
Schedule 1 attached hereto has been prepared in accordance with GAAP (except for
the lack of footnotes and being subject to year-end audit adjustments), and
fairly presents in all material respects the financial condition of Parent and
its Subsidiaries.
2. Such officer has reviewed the terms of the Loan Agreement and has made,
or caused to be made under his/her supervision, a review in reasonable detail of
the transactions and condition of Parent and its Subsidiaries during the
accounting period covered by the financial statements delivered pursuant to
Section 6.3(a) of the Loan Agreement.
3. Such review has not disclosed the existence on and as of the date
hereof, and the undersigned does not have knowledge of the existence as of the
date hereof, of any event or condition that constitutes a Default or Event of
Default, except for such conditions or events listed on Schedule 2 attached
hereto, specifying the nature and period of existence thereof and what action
Borrowers have taken, are taking, or propose to take with respect thereto.
4. The representations and warranties of Borrowers set forth in the Loan
Agreement and the other Loan Documents are true and correct in all material
respects on and as of the date hereof (except to the extent they relate to a
specified date and except for changes permitted under the Loan Documents and
reflected in an updated schedule delivered by the Borrowers), except as set
forth on Schedule 3 attached hereto.
5. Schedule 4 hereof is a true, correct, and complete list of the identity
and the principal amount of all outstanding Indebtedness of Parent and its
Subsidiaries. Except as otherwise set forth on Schedule 4, such Indebtedness is
permitted under the New Indenture.
6. Borrowers are in compliance with the covenants contained in Section
7.18 of the Loan Agreement as demonstrated on Schedule 5 hereof.
IN WITNESS WHEREOF, this Compliance Certificate is executed by the
undersigned this _____ day of _______________, _________.
PHIBRO ANIMAL HEALTH CORPORATION,
a New York corporation
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
SCHEDULE 1
Financial Information
SCHEDULE 2
Default or Event of Default
SCHEDULE 3
Representations and Warranties
SCHEDULE 4
Outstanding Indebtedness
SCHEDULE 5
Financial Covenants
1. Minimum Domestic EBITDA.
Parent's and Domestic Subsidiaries' EBITDA, measured on a month-end basis,
for the month period ending _________, ________ is $______________, which amount
[is/is not] greater than or equal to the amount set forth in Section 7.18(a)(i)
of the Loan Agreement for the corresponding period.
2. Minimum Consolidated EBITDA.
Parent's and Subsidiaries' EBITDA, measured on a month-end basis, for the
month period ending _________, ________ is $______________, which amount [is/is
not] greater than or equal to the amount set forth in Section 7.18(a)(i) of the
Loan Agreement for the corresponding period.
3. Maximum Capital Expenditures.
(a) The aggregate amount of capital expenditures made in the current
fiscal year is $________________.
(b) The aggregate amount set forth above [is/is not] less than or equal to
the amount set forth in Section 7.18(b)(i) of the Loan Agreement for the
corresponding period.
Exhibit B
Schedule C-1
Commitments
Lender Revolver Commitment Total Commitment
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Xxxxx Fargo Foothill, Inc. $27,500,000 $27,500,000
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All Lenders $27,500,000 $27,500,000
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EXHIBIT C
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 TWO TO LOAN
AND SECURITY AGREEMENT (the "Amendment"), dated as of April 29, 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
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