SIXTH AMENDMENT TO
CREDIT AGREEMENT
THIS SIXTH AMENDMENT TO CREDIT AGREEMENT, made and entered into as of
the 8th day of September, 2003, 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 "Existing
Borrowers"), and DELMARVA LABORATORIES, INC., a Virginia corporation
("Delmarva") (Delmarva shall be added as an additional Borrower under the terms
of this Sixth Amendment and together with the Existing Borrowers shall be
referred to hereinafter as the "Borrowers"), and FIRST BANK, a Missouri state
banking corporation ("Bank").
WITNESSETH:
WHEREAS, Existing 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 August
11, 2003 in the original principal amount of up to Fourteen Million Five Hundred
Thousand Dollars ($14,500,000.00) (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 Existing Borrowers and Bank, as
previously amended by an Amendment to Credit Agreement dated as of December 30,
1999 made by and among Existing Borrowers and Bank, by a Second Amendment to
Credit Agreement dated as of May 1, 2000 made by and among Existing Borrowers
and Bank, by a Third Amendment to Credit Agreement dated as of April 4, 2001
made by and among Existing Borrowers and Bank, by a Fourth Amendment to Credit
Agreement dated as of August 7, 2002 made by and among Existing Borrowers and
Bank, and by a Fifth Amendment to Credit Agreement dated as of August 11, 2003
made by and among Existing 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, Existing Borrowers have requested certain amendments to the
Loan Agreement, including, without limitation, to add Delmarva as a party
thereto and as a "Borrower" thereunder, to increase the maximum principal amount
available thereunder and to shorten the maturity thereof, which amendments Bank
is willing to make on the terms and conditions set forth herein; and
WHEREAS, Borrowers and Bank desire to amend and modify the Notes and
the Loan Agreement as hereinafter set forth;
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. From and after the date of this Sixth Amendment, Delmarva shall be
added as a party to the Agreement (as amended by this Sixth Amendment), and the
term "Borrowers" used in the Loan Agreement or in any of the other Transaction
Documents (and other terms of similar reference to all of the Borrowers in
general) shall henceforth include Delmarva. Delmarva, by its execution of this
Sixth Amendment, hereby (i) represents and warrants to Bank all of the
representations and warranties made by Borrowers under the Agreement, as amended
in this Sixth Amendment, and (iii) agrees to all of the covenants, terms and
provisions applicable to the Borrowers under the Loan Agreement, as amended by
this Sixth Amendment, including, without limitation, not granting any liens or
other encumbrances on any of its Property except as permitted under Section
7.2(b) of the Loan Agreement.
2. The Note made by the Existing Borrowers payable to the order of Bank
shall be amended and restated in the form of that certain Revolving Credit Note
made by the Borrowers payable to the order of Bank attached hereto as Exhibit C,
to amend the maximum principal amount thereof to Thirty Million Dollars
($30,000,000.00), and to make certain amendments as set forth therein. All
references in the Loan Agreement and the other Transaction Documents to the
"Note," the "Revolving Credit Note" and other references of similar import shall
hereafter be amended and deemed to refer to the Note in the form of the
Revolving Credit Note, as amended and restated in the form attached hereto as
Exhibit C.
3. The third paragraph beginning with the word "WHEREAS" on the first
page of the Loan Agreement shall be deleted in its entirety and in its place
shall be substituted the following:
WHEREAS, Borrowers, including Virbac AH, Francodex and
Delmarva which have been added as parties to the credit facilities,
have requested that the aggregate amount thereof be amended to an
aggregate principal amount of up to Thirty Million Dollars
($30,000,000.00) and otherwise amended on the terms and conditions set
forth herein, with such loans to mature on February 27, 2004; and
4. Section 1 of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
The "Term" of this Agreement shall commence on the date hereof
and shall end on February 27, 2004, unless earlier terminated upon the
occurrence of an Event of Default under this Agreement, or unless
subsequently extended by Bank, in its sole discretion and without
obligation to do so, pursuant to the terms of Section 3.16 herein.
5. The definition of "Consolidated EBITDA" in Section 2 of the Loan
Agreement shall be deleted in its entirety and in its place shall be substituted
the following:
Consolidated EBITDA shall mean the sum of Virbac's and its
Consolidated Subsidiaries Consolidated Net Income, plus Consolidated
Interest Expense, plus Consolidated Tax Expense, plus depreciation and
amortization of Virbac and its Consolidated Subsidiaries, all
determined in accordance with Generally Accepted Accounting Principles
consistently applied for the period in question ending as of the date
of any such calculation.
6. The definition of "Floating Rate Margin" in Section 2 of the Loan
Agreement shall be deleted in its entirety and in its place shall be substituted
the following:
Floating Rate Margin shall mean Three-Fourths of One Percent
(0.75%) per annum.
Interest accrued under the Note prior to the date of this Sixth Amendment to
Credit Agreement shall continue to be due and payable, until paid, at the rates
applicable prior to the amendment made under this paragraph 6.
7. The definition of "Letter of Credit Commitment Fee Rate" in Section
2 of the Loan Agreement shall be deleted in its entirety and in its place shall
be substituted the following:
Letter of Credit Commitment Fee Rate shall mean One
and One-Fourth Percent (1.25%) per annum for all Letters of Credit.
8. Section 3.1(a) of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(a) Revolving Credit Loans. Subject to the terms and
conditions hereof, during the Term of this Agreement, Bank hereby
agrees to make such loans (individually, a "Loan" and collectively, the
"Loans") to Borrowers, jointly and severally, as any of the Borrowers
may from time to time request pursuant to Section 3.2 and in Bank's
discretion, to issue Letters of Credit for the account of the
Borrowers, or any of them, upon any Borrower's execution of a Letter of
Credit Application therefor pursuant to Section 3.3 (subject to Bank's
approval of the form of the Letters of Credit requested to be issued).
The maximum aggregate principal amount of Loans plus the face amount of
issued and outstanding Letters of Credit which Bank, cumulatively, may
be required to have outstanding hereunder at any one time shall not
exceed the lesser of Thirty Million Dollars ($30,000,000.00) (the
"Bank's Commitment"), or (ii) the Borrowing Base (as hereinafter
defined). Subject to the terms and conditions hereof, Borrowers may
jointly and severally borrow, repay and reborrow such sums from Bank,
provided, however, that the aggregate principal amount of all Loans
outstanding hereunder plus the face amount of Letters of Credit issued
and outstanding hereunder at any one time shall not exceed the lesser
of the Bank's Commitment or the then current Borrowing Base.
9. Section 3.1(c) of the Loan Agreement shall be deleted in
its entirety and in its place shall be substituted the following:
(c) Borrowing Base. For purposes of computing the amount of
the Loans available under this Section 3.1, the "Borrowing Base" shall
mean the sum of:
(i) Seventy-Five Percent (75%) of the face amount of
Eligible Accounts of each of the Borrowers, plus
(ii) Fifty Percent (50%) of the Eligible Inventory of
each of the Borrowers; plus
(iii) an amount determined by Lender as the loan
value of Borrowers' fixed assets, which amount shall be deemed to be
$9,250,000.00 until such time as: (A) Bank shall have received the
title commitment for Virbac's Tarrant County, Texas real property, (B)
Bank shall have determined in Bank's sole discretion that such title
commitment is in form and substance acceptable to Bank and contains no
liens or other exceptions other than those which are acceptable to
Bank, and (C) Bank shall have sent notice to Borrowers that Bank shall
add such Tarrant County, Texas real property's value to the Borrowing
Base, at which time the amount under this clause (iii) shall be
increased to $13,000,000.00.
10. Section 3.1(d) of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(d) Borrowing Base Certificate. Borrowers shall deliver to
Bank on the twenty-eighth (28th) day of each month, commencing in the
month of September, 2003, a borrowing base certificate in the form of
Exhibit A attached to the Sixth Amendment to Credit Agreement dated as
of September ___, 2003 made by and among Borrowers and Banks (the
"Sixth Amendment") and incorporated herein by reference (a "Borrowing
Base Certificate") setting forth:
(i) the Borrowing Base and its components as of the
end of the immediately preceding month;
(ii) the aggregate principal amount of all
outstanding Loans and the aggregate face amount of all issued and
outstanding Letters of Credit; and
(iii) the difference, if any, between the Borrowing
Base and the aggregate principal amount of all outstanding Loans plus
the aggregate face amount of all issued and outstanding Letters of
Credit.
The Borrowing Base shown in such Borrowing Base Certificate shall be
and remain the Borrowing Base hereunder until the next Borrowing Base
Certificate is delivered to Bank, at which time the Borrowing Base
shall be the amount shown in such subsequent Borrowing Base
Certificate. Each Borrowing Base Certificate shall be certified
(subject to normal year-end adjustments) as to truth and accuracy by
the President, principal financial officer or controller of each of the
Borrowers.
All references in the Loan Agreement and the other Transaction Documents to the
"Borrowing Base Certificate" and other references of similar import shall
hereafter be amended and deemed to refer to a Borrowing Base Certificate in the
form of the Borrowing Base Certificate, as amended and restated in the form
attached hereto as Exhibit A.
11. Notwithstanding anything contained herein or in the Loan Agreement,
the Note or any of the other Transaction Documents to the contrary, the
Borrowers' right to request LIBOR Loans under the revolving credit facility and
to convert or continue outstanding Loans as LIBOR Loans is hereby terminated.
The definitions of "Interest Period," "LIBOR Base Rate," "LIBOR Loan," "LIBOR
Margin," "LIBOR Rate," and "LIBOR Reserve Percentage" in Section 2 of the Loan
Agreement shall be of no further effect. All references in the Loan Agreement
and the other Transaction Documents to a LIBOR Loan shall be deleted or shall
hereafter mean a Prime Loan, as the case may require in Bank's determination.
Section 3.2 of the Loan Agreement is hereby deleted in its entirety and in its
place shall be substituted the following:
3.2 Procedure for Borrowing. Subject to the terms and
conditions hereof, Bank shall cause the Loans to be made to Borrowers
at any time and from time to time during the Term of this Agreement
upon timely prior oral or written notice ("Borrowing Notice") from any
of the Borrowers to Bank specifying:
(i) the desired amount of the Loan requested;
(ii) the date on which the proceeds of any new Loan
are to be made available to any of the Borrowers, which shall be a
Business Day;
(iii) that on the date of, and after giving effect
to, such Loan, no Default or Event of Default under this Agreement has
occurred and is continuing; and
(iv) that on the date of, and after giving effect to,
such Loan, all of the representations and warranties of Borrowers
contained in this Agreement are true and correct in all material
respects as if made on the date of such Loan.
A Borrowing Notice shall not be required in connection with a Prime
Loan made to cover any overdraft in Virbac's operating account on a
day-to-day basis as set forth herein. A Borrowing Notice, if in
writing, shall be in the form of the notice attached as Exhibit B
hereto. Each Borrowing Notice must be received by Bank not later than
10:00 a.m. (St. Louis time) on the Business Day on which a Prime Loan
is to be established. A Borrowing Notice shall not be revocable by
Borrowers. Subject to the terms and conditions hereof, provided that
Bank has received the Borrowing Notice, Bank shall (unless Bank
determines that any applicable condition specified in Section 4 has not
been satisfied) pay to Borrowers, or any of them, the Loan proceeds of
any new Loan in immediately available funds not later than 2:00 p.m.
(St. Louis time) on the Business Day specified in said Borrowing
Notice. Each of the Borrowers hereby authorizes Bank to reasonably rely
on telephonic, telegraphic, telecopy, telex or written instructions of
any person identifying himself as a person authorized to request a Loan
or make a repayment hereunder, and on any signature which Bank believes
to be genuine, and Borrowers shall be bound thereby in the same manner
as if such person were actually authorized or such signature were
genuine. Borrowers further request and authorize Bank, in Bank's sole
and absolute discretion, to make a Prime Loan to Borrowers hereunder at
the end of each day in which Borrowers shall have an overdraft
(negative ledger balance) in Virbac's operating account (Account No.
9800801785) with Bank after crediting all deposits received in
immediately available funds and debiting all withdrawals made and
checks presented against such account and honored by Bank as of such
date and after funding any advances to or receiving any collected
balances on such day from the "zero balance" operating accounts of PM
Resources (Account No. 9800802535), St. XXX (Account No. 9800805419),
Virbac AH (Account No. 9821908926), and Francodex (Account No.
9821909433) with Bank to cover withdrawals made and checks presented on
such date and after crediting all deposits received in immediately
available funds on such date, which Prime Loan shall be in the amount
of such overdraft without any other request or authorization therefor
from Borrowers and without notice to Borrowers. Similarly, Borrowers
request that Bank apply any collected balances (after funding advances
to or receiving collections from the "zero balance" accounts of PM
Resources, St. XXX, Virbac AH, and Francodex) in excess of a mutually
predetermined amount remaining at the end of any day in Virbac's
operating account to the repayment of the principal balance of
Borrowers' Obligations outstanding as Prime Loans under the Note.
Borrowers also hereby agree jointly and severally to indemnify Bank and
hold Bank harmless from and against any and all claims, demands,
damages, liabilities, losses, costs and expenses (including, without
limitation, Attorneys' Fees) relating to or arising out of or in
connection with the acceptance of instructions for making Loans or
repayments hereunder. Contemporaneously with the execution of the Sixth
Amendment (amending this Agreement), Borrowers shall execute and
deliver to Bank a Note of Borrowers dated as of September ___, 2003 and
payable jointly and severally to the order of Bank in the original
principal amount of Thirty Million Dollars ($30,000,000.00) in the form
attached as Exhibit C to such Sixth Amendment and incorporated herein
by reference (as the same may from time to time be amended, modified,
extended or renewed, the "Note").
All references in the Loan Agreement and the other Transaction Documents to a
"Borrowing Notice" and other references of similar import shall hereafter be
amended and deemed to refer to a Borrowing Notice in the form of the Borrowing
Notice, as amended and restated in the form attached hereto as Exhibit B.
12. Section 3.3(a)(iv) of the Loan Agreement shall be deleted in
its entirety and in its place shall be substituted the following:
(iv) the aggregate undrawn face amount of all
outstanding Letters of Credit issued hereunder shall not at any one
time exceed Two Million Dollars ($2,000,000.00); and
13. Section 3.4 of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
3.4 Interest Rates.
(a) Each Loan shall bear interest prior to maturity at a rate
per annum equal to the Prime Rate plus Floating Rate Margin, each in
effect from time to time during the period when such Loan is
outstanding, with changes in the interest rate taking effect on the
date a change in the Prime Rate is made effective generally by Bank.
(b) Blank Intentionally.
(c) From and after the maturity of the Note, whether by reason
of acceleration or otherwise, the entire unpaid principal balance of
each Loan shall bear interest, payable upon demand, until paid at a
rate per annum equal to Three and Three-Fourths Percent (3.75%) over
and above the Prime Rate, fluctuating as aforesaid.
(d) Interest shall be computed with respect to all Loans on an
actual day, 360-day year.
14. Section 3.7 of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
3.7 Place and Manner of Payment. Both principal and
interest on the Loans are payable to Bank in lawful currency of the
United States in Federal or other immediately available funds at Bank's
banking office at 0000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, or at
such other place as Bank shall designate in writing to Borrowers.
Borrowers shall make each payment of principal of, and interest on, the
Loans and of fees and all other amounts payable by Borrowers under this
Agreement, not later than 2:00 p.m. (St. Louis time) on the date when
due and payable, in Federal or other funds immediately available in St.
Louis, Missouri, to the Bank at its address set forth above. All
payments received by the Bank after 2:00 p.m. (St. Louis time) shall be
deemed to have been received by the Bank on the next succeeding
Business Day. Whenever any payment of principal of, or interest on, the
Loans or of fees shall be due on a day which is not a Business Day, the
date for payment thereof shall be extended to the next succeeding
Business Day. If the date for any payment of principal is extended by
operation of law or otherwise, interest thereon, at the then applicable
rate, shall be payable for such extended time.
15. Section 3.15 of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
3.15 Commitment Fee. Borrowers shall jointly and
severally pay to Bank on the fifteenth (15th) day following the end of
each January, April, July and October during the Term of this Agreement
and on the last day of the Term hereof, a commitment fee (the
"Commitment Fee") in an amount equal to Three-Eighths of One Percent
(0.375%) per annum calculated on the basis of the unused Bank's
Commitment during the preceding fiscal quarter of Borrowers ending as
of the last day of each January, April, July and October, which unused
Bank's Commitment shall be arrived at by dividing the aggregate of the
daily unused Bank's Commitment for each day of that quarter as of the
close of each day by ninety (90) (or by the actual number of days for
any partial quarter). Payment of the Commitment Fee is a condition
precedent to Bank's obligations to make any new Loans hereunder.
16. Section 3.16 of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
3.16 Maturity. All Loans not paid prior to February 27, 2004,
together with all accrued and unpaid interest thereon, shall be due and
payable on February 27, 2004 (the "Maturity Date").
17. Subparts (ii), (iii) and (iv) of Section 7.1(a) of the Loan
Agreement shall be deleted in their entirety and in their place shall be
substituted the following:
(ii) As soon as available and in any event within
thirty (30) days after the end of each month, the consolidated balance
sheets of Virbac and its Consolidated Subsidiaries as of the end of
each such month and the related consolidated statements of income,
retained earnings and cash flows for such month and for the portion of
Virbac's fiscal year ended at the end of such month, all with
consolidating disclosures and setting forth in each case in comparative
form, the figures for the corresponding fiscal month from the previous
fiscal year and the corresponding portion of Virbac's previous fiscal
year, all certified (subject to normal year-end adjustments) as to
fairness of presentation, Generally Accepted Accounting Principles and
consistency by the principal financial officer or controller of Virbac;
(iii) As soon as available and in any event within
thirty (30) days prior to the beginning of each fiscal year of
Borrowers, the consolidated and consolidating balance sheet, income
statement and cash flow projections for Borrowers and their
Subsidiaries for such fiscal year on a month-by-month basis, all in
form and detail reasonably acceptable to Bank;
(iv) As soon as available and in any event within
thirty (30) days after the end of each month, a certificate of the
principal financial officers or controllers of Borrowers in the form
attached hereto as Exhibit E and incorporated herein by reference,
accompanied by supporting financial work sheets where appropriate;
18. Section 7.1(i)(i) of the Loan Agreement shall be deleted in
its entirety and in its place shall be substituted the following:
(i) Maintain a minimum Consolidated EBITDA for Borrowers and
their Subsidiaries of not less than: (A) $3,500,000.00 for the nine
month period ending September 30, 2003, (B) $3,417,000.00 for the ten
month period ending October 31, 2003, (C) $4,052,000.00 for the eleven
month period ending November 30, 2003, (D) $7,269,000.00 for the twelve
month period ending December 31, 2003, (E) $7,336,000.00 for the
thirteen month period ending January 31, 2004, and (F) $7,586,000.00
for the fourteen month period ending February 29, 2004, minus in each
such calculation the amount of permitted purchases by Virbac 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);
19. Section 7.1(i)(ii) of the Loan Agreement shall be deleted in
its entirety and in its place shall be substituted the following:
(ii) Maintain a minimum Consolidated Net Worth at all
times during the Term hereof of not less than the sum of: (A)
Thirty-Three Million Dollars ($33,000,000.00), plus (B) Seventy-Five
Percent (75%) of the Consolidated Net Income of Borrowers (with no
deductions for any consolidated losses for any such month) shown on
Borrowers' monthly consolidated financial statements for each month,
commencing with the fiscal month ending September 30, 2003, such
required increases to be cumulative from month to month;
20. Section 7.1(i)(iii) of the Loan Agreement shall be deleted
in its entirety and in its place shall be substituted the following:
(iii) Minimum Consolidated Fixed Charge Coverage Ratio.
Borrowers will have a ratio of Consolidated EBITDA to Consolidated
Fixed Charges of at least 2.50 to 1.0 as of the last day of each month,
each determined for each fiscal period commencing January 1, 2003 and
ending as of such month-end, commencing with the first such test
thereof for the month ending September 30, 2003. As used herein,
"Consolidated Fixed Charges" shall mean, for the period in question,
the sum of (a) the aggregate amount of all principal payments required
to be made by Borrowers and their Subsidiaries on all borrowed money
Indebtedness during such period (including the principal portion of
payments in respect of Capitalized Leases but excluding principal
payments on the Loans hereunder), plus (b) all obligations for interest
paid by Borrower and its Subsidiaries or due in cash during such period
(including, without limitation, the interest portion of any Capitalized
Lease paid or due in cash and the interest portion of any deferred
payment obligation paid or due in cash during such period), plus (c)
all obligations for Federal, state, local and/or foreign income taxes
paid by Borrowers and their Subsidiaries or due in cash during such
period, plus (d) all Distributions made by Virbac during such period,
all determined on a consolidated basis and in accordance with Generally
Accepted Accounting Principles consistently applied.
21. Section 7.3 of the Loan Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
7.3 Use of Proceeds. Borrowers agree that (i) the
proceeds of the Loans will be used solely to finance acquisitions
permitted by Section 7.2(e) and for Borrowers' working capital
requirements and general corporate purposes; (ii) none of such proceeds
will be used in violation of any applicable law or regulation; and
(iii) none of the Borrowers will engage principally, or as one of its
important activities, in the business of extending credit for the
purpose of purchasing or carrying "margin stock" within the meaning of
Regulation U of The Board of Governors of the Federal Reserve System,
as amended.
22. In consideration of Bank's agreement to amend the Loan Agreement
and Note as set forth herein, Borrowers agree to jointly and severally pay to
Bank an amendment fee in the amount of $50,000.00, which amendment fee is due
and payable on the date hereof and shall be fully earned on the date hereof.
Borrowers further jointly and severally agree to reimburse Bank and any
participant with Bank in the Loans, upon demand, for all reasonable
out-of-pocket costs and expenses (including reasonable legal fees and expenses
of the attorneys for the Bank or for any such participant) incurred by Bank or
such participant with Bank in the preparation, negotiation and execution of this
Sixth Amendment to Credit Agreement and all other documents, instruments and
agreements relating to this Sixth Amendment to Credit Agreement with the Bank.
23. The agreements of Bank contained herein, including its agreement to
add Delmarva as a Borrower under the Loan Agreement, are subject to the
following preconditions:
(a) Execution by each of the Borrowers, including Delmarva, of
this Sixth Amendment to Credit Agreement;
(b) the executed original of the amended and restated Note;
(c) the execution between Bank and Bank One, NA of a
participation agreement, in form and substance acceptable to both Bank and Bank
One, NA, pursuant to which Bank One, NA shall purchase an undivided
$10,000,000.00 participation in the Bank's Commitment, in all of the Borrower's
Obligations from time to time outstanding, in all of the Collateral and Third
Party Collateral from time to time securing any of Borrower's Obligations and in
all other rights, interests duties and obligations of Bank under the Transaction
Documents;
(d) the executed original of the Twelfth Amendment to Deed of
Trust and Security Agreement from PM Resources;
(e) Execution by Delmarva of a Security Agreement in form and
substance acceptable to Bank, together with such UCC-1 financing statements,
motor vehicle title lien applications and other documents as Bank shall require
in order to perfect the security interests granted by Delmarva under such
Security Agreement;
(f) Execution and delivery by Delmarva of a Patent, Trademark
and License Security Agreement in form and substance acceptable to Bank pledging
to Bank and granting to Bank a security interest in all of patents, trademarks
and other intellectual property rights owned by Delmarva;
(g) Execution by Virbac of a Deed of Trust and Security
Agreement in form and substance acceptable to Bank, together with such other
documents as Bank shall require in order to perfect the first lien of Bank in
the real property and improvements of Virbac located in Tarrant County, Texas;
(h) a title commitment for an ALTA Loan Policy (Form 1970) for
the real property of Virbac located in Tarrant County, Texas in an amount
acceptable to Bank, with no exceptions unless previously approved by Bank and
with such affirmative coverages as Bank shall require, including, without
limitation, a zoning endorsement, a comprehensive endorsement (CLTA Form 100), a
future advance endorsement, a tie-in endorsement, a survey endorsement and a
last dollar endorsement;
(i) copies of all recorded plats and title exceptions
affecting the real property of Virbac located in Tarrant County, Texas;
(j) Receipt by Bank of such UCC, tax and judgment lien search
results as Bank may require in order to satisfy itself that the Security
Agreement of Delmarva shall grant Bank a first perfected security interest in
all of the Collateral (as defined in the Security Agreement) now or hereafter
owned by Delmarva;
(k) Delivery to Bank of evidence acceptable to Bank that
Virbac has completed its acquisition of substantially all of the assets of Xxxxx
Pharma Incorporated, a Delaware corporation ("Xxxxx Pharma"), and of JMI-Xxxxxxx
Pharmaceuticals, Inc., a Florida corporation ("JMI"), used by Xxxxx Pharma
and/or JMI in the manufacture and distribution of animal health products under
the trademarks Solonix(R), Pancrezyme(R), Tumil-K(R), Uroeze(R) and Ammonil(R)
(the "Assets") for a collective gross acquisition price not to exceed
$15,000,000.00;
(l) Execution and delivery by Virbac and Virbac AH of a
Patent, Trademark and License Security Agreement in form and substance
acceptable to Bank pledging to Bank and granting to Bank a security interest in
all of patents, trademarks and other intellectual property rights owned by
Virbac, including, without limitation, the trademarks Solonix(R), Pancrezyme(R),
Tumil-K(R), Uroeze(R) and Ammonil(R)
(m) Execution and delivery by Virbac of a Second Amended and
Restated Agreement of Pledge in form and substance acceptable to Bank pledging
to Bank all of the issued and outstanding capital stock of Delmarva, together
with such stock powers (executed in blank), Regulation U-1 affidavits, original
stock certificates and other documents as Bank shall require in order to perfect
the pledge of such shares by Virbac thereunder;
(n) Execution and delivery by Virbac AH of an Amended and
Restated Agreement of Pledge in form and substance acceptable to;
(o) Delivery by Delmarva of a Secretary's Certificate of the
Secretary of Delmarva certifying to Bank the resolutions of Delmarva's board of
directors which authorize Delmarva to borrow money from Bank under the Loan
Agreement, as amended from time to time, to execute the Loan Agreement by
execution of this Sixth Amendment to Credit Agreement, to execute the amended
and restated Note and to execute and deliver its Security Agreement and grant
the liens and security interests as provided therein;
(p) a copy of resolutions of the Board of Directors of each of
the Existing Borrowers, duly adopted, which authorize the execution, delivery
and performance of this Sixth Amendment to Credit Agreement and the amended and
restated Note and the other Transaction Documents, certified by the Secretary of
each such Borrower;
(q) Delivery to Bank of certified Articles or Certificate of
Incorporation of Delmarva issued by the Secretary of State of Virginia;
(r) Delivery to Bank of a copy of the corporate bylaws of
Delmarva certified to Bank by the corporate Secretary of Delmarva;
(s) Delivery to Bank proof that Delmarva maintain insurance of
the types and in the amounts required by Sections 7.1(d) of the Loan Agreement
and by its Security Agreement;
(t) Delivery to Bank of an opinion of legal counsel to the
Borrowers addressed to Bank, in the form of Exhibit D attached hereto and
otherwise satisfactory to the Bank and its counsel; and
(u) such other documents as Bank may reasonably request; and
(v) payment by Borrowers of the amendment fee required under
paragraph 22 above.
24. Borrowers hereby covenant and agree that they shall cooperate fully
with Bank in obtaining the following within 40 days after the date of this Sixth
Amendment to Credit Agreement:
(a) An appraisal by an MAI appraiser reasonably acceptable to
Bank of PM Resources' real property located in St. Louis County, Missouri;
(b) An environmental Phase I report of PM Resources' real
property located in St. Louis County, Missouri from an environmental assessment
firm reasonably acceptable to Bank;
(c) A policy of title insurance covering PM Resources' real
property located in St. Louis County, Missouri from a title insurance company
reasonably acceptable to Bank and in an amount acceptable to Bank, with no
exceptions unless previously approved by Bank and with such affirmative
coverages as Bank shall require, including, without limitation, a zoning
endorsement, a comprehensive endorsement (CLTA Form 100), a future advance
endorsement, a tie-in endorsement, a survey endorsement and a last dollar
endorsement;
(d) An appraisal by an MAI appraiser reasonably acceptable to
Bank of Virbac's real property located in Tarrant County, Texas;
(e) An environmental Phase I report of Virbac's real property
located in Tarrant County, Texas from an environmental assessment firm
reasonably acceptable to Bank; and
(f) A policy of title insurance covering Virbac's real
property located in Tarrant County, Texas from a title insurance company
reasonably acceptable to Bank and in an amount acceptable to Bank, with no
exceptions unless previously approved by Bank and with such affirmative
coverages as Bank shall require, including, without limitation, a zoning
endorsement, a comprehensive endorsement (CLTA Form 100), a future advance
endorsement, a tie-in endorsement, a survey endorsement and a last dollar
endorsement; and
(g) a survey of the real property of Virbac located in Tarrant
County, Texas satisfying title insurer and ALTA minimum standard detail
requirements including improvements, utilities, easements, rights-of-way,
restrictions and building lines, adjacent streets and flood plain certification;
25. Borrowers hereby represent and warrant to Bank that:
(a) The execution, delivery and performance by Borrowers of
this Sixth Amendment to Credit Agreement and the amended and restated Note 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 Sixth Amendment to Credit
Agreement and the amended and restated Note 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 Amendment to Credit Agreement and the amended and
restated Note have been duly executed and delivered and constitute the legal,
valid and binding obligations of Borrowers enforceable in accordance with their
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.
26. 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 Sixth Amendment to Credit Agreement.
27. This Sixth Amendment to Credit Agreement and the amended and
restated Note 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.
28. This Sixth Amendment to Credit Agreement and the amended and
restated Note shall be governed by and construed in accordance with the internal
laws of the State of Missouri.
29. In the event of any inconsistency or conflict between this Sixth
Amendment to Credit Agreement and the Loan Agreement, the terms, provisions and
conditions of this Sixth Amendment to Credit Agreement shall govern and control.
30. The Loan Agreement, as hereby amended and modified, and the amended
and restated Note, as hereby amended and restated, 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 amended and restated Note
shall not be paid when due as provided in the amended and restated Note, the
holder of the amended and restated Note shall be entitled to and may exercise
all rights and remedies under the amended and restated Note and the Loan
Agreement, as amended.
31. 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 September, 2003.
VIRBAC CORPORATION
PM RESOURCES, INC.
ST. XXX LABORATORIES, INC.
VIRBAC AH, INC.
FRANCODEX LABORATORIES, INC.
the "Existing Borrowers"
By:
------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
DELMARVA LABORATORIES, INC.
as an additional "Borrower"
By:
-------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
FIRST BANK
By:
------------------------------------------------
Xxxxx X. Xxxxxx, Vice President
EXHIBIT A
BORROWING BASE CERTIFICATE
This Borrowing Base Certificate is delivered pursuant to Section 3.1(d) of
that certain Credit Agreement dated September 7, 1999, by and between Virbac
Corporation, PM Resources, Inc., St. XXX Laboratories, Inc., Virbac AH, Inc.,
Francodex Laboratories, Inc., Delmarva Laboratories, Inc. and First 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.
Borrowers hereby represent and warrant to Bank that the following
information is true and correct as of _________________, 20__:
Borrowers hereby represent and warrant to Bank that the
following information is true and correct as of _________________, 19__:
1. 75% of face amount of Eligible Accounts of PM Resources $
-------------
2. 75% of face amount of Eligible Accounts of Virbac $
-------------
3. 75% of the face amount of Eligible Accounts of St. XXX $
-------------
4. 75% of face amount of Eligible Accounts of Virbac AH $
-------------
5. 75% of the face amount of Eligible Accounts of Francodex $
-------------
6. 75% of the face amount of Eligible Accounts of Delmarva $
-------------
7. 50% of Eligible Inventory of PM Resources, valued
at the lower of cost or market $
-------------
8. 50% of Eligible Inventory of Virbac, valued
at the lower of cost or market $
-------------
9. 50% of Eligible Inventory of St. XXX, valued at the lower
of cost or market$
------------------------------------------------------------------
10. 50% of Eligible Inventory of Virbac AH, valued
at the lower of cost or market $
-------------
11. 50% of Eligible Inventory of Francodex, valued at the lower
of cost or market$
------------------------------------------------------------------
12. 50% of Eligible Inventory of Delmarva, valued at the lower
of cost or market$
------------------------------------------------------------------
13. Sum of Items 7 through 12 above $
-------------
14. Fixed Asset value pursuant to clause (iii) of Section 3.1(c) of the
Loan
Agreement $
-------------
15. Total Borrowing Base (sum of 1, 2, 3, 4, 5, 6, 13 and 14 above, not to exceed
$30,000,000.00) $
------------------------------------------------------------------
Borrowers hereby further represent and warrant to Bank that the
following information is true and correct as of ______________________, 20___:
16. Aggregate principal amount of outstanding Loans $
-------------
17. Aggregate face amount of outstanding Letters of Credit $
-------------
18. Total Outstanding (Item 16 plus Item 17) $
-------------
19. Borrowing Base Excess (Deficit) (Item 15 minus Item 18)
(Negative amount represents mandatory repayment) $
-------------
If Item 19 above is negative, this Borrowing Base Certificate is
accompanied by the mandatory repayment required by Section 3.1(e) of the Loan
Agreement.
This Borrowing Base Certificate is dated the _____ day of _____________, 20__.
VIRBAC CORPORATION
PM RESOURCES, INC.
ST. XXX LABORATORIES, INC.
VIRBAC AH, INC.
FRANCODEX LABORATORIES, INC.
DELMARVA LABORATORIES, INC.
By:
---------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
EXHIBIT B
[Borrowers' Letterhead]
[Date]
First Bank
000 Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Vice President
Re: Credit Agreement dated September 7, 1999
(as from time to time amended, the "Agreement")
Gentlemen:
Pursuant to the Agreement, the undersigned desire to borrow on
_________________, ______, an aggregate principal amount of
$------------.
Accordingly, the undersigned request that you make available to the
undersigned said amount on said date.
The undersigned hereby represent and warrant to you that as of the date
hereof all of the representations and warranties of each of the undersigned
contained in the Agreement are true and correct and no Default or Event of
Default (as defined in the Agreement) has occurred and is continuing, and that
no such Default or Event of Default will result from the loan requested hereby.
Very truly yours,
VIRBAC CORPORATION
PM RESOURCES, INC.
ST. XXX LABORATORIES, INC.
VIRBAC AH, INC.
FRANCODEX LABORATORIES, INC.
DELMARVA LABORATORIES, INC.
By:
-------------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
EXHIBIT C
Revolving Credit Note
$30,000,000.00 St. Louis, Missouri
September __, 2003
FOR VALUE RECEIVED, on February 27, 2004 (or such subsequent
anniversary thereof as determined pursuant to Section 3.16 of the Loan Agreement
(hereinafter identified)), the undersigned, VIRBAC CORPORATION, a Delaware
corporation (formerly known as Agri-Nutrition Group Limited), PM RESOURCES,
INC., a Missouri corporation, ST. XXX LABORATORIES, INC., a California
corporation, FRANCODEX LABORATORIES, INC., a Kansas corporation, VIRBAC AH,
INC., a Delaware corporation and DELMARVA LABORATORIES, INC., a Virginia
corporation (collectively, the "Borrowers"), hereby jointly and severally
promise to pay to the order of FIRST BANK, a Missouri state banking corporation
("Bank"), the principal sum of Thirty Million Dollars ($30,000,000.00), or such
lesser sum as may then be outstanding hereunder. The aggregate principal amount
which Bank shall be committed to have outstanding hereunder at any one time
shall not exceed the lesser of (i) Thirty Million Dollars ($30,000,000.00), or
(ii) the "Borrowing Base" (as defined in the Loan Agreement (as hereinafter
defined)), which amount may be borrowed, paid, reborrowed and repaid, in whole
or in part, subject to the terms and conditions hereof and of the Loan Agreement
hereinafter identified.
Borrowers further jointly and severally promise to pay to the order of
Bank interest on the principal amount from time to time outstanding hereunder
prior to maturity from the date disbursed until paid at the rate or rates per
annum required by the Loan Agreement. All accrued and unpaid interest with
respect to each principal disbursement made hereunder shall be payable on the
dates set forth in Section 3.6 of the Loan Agreement and at the maturity of this
Note, whether by reason of acceleration or otherwise. After the maturity of this
Note, whether by reason of acceleration or otherwise, interest shall accrue and
be payable on demand on the entire outstanding principal balance hereunder until
paid at a rate per annum equal to Three and One-Half Percent (3.50%) over and
above the Prime Rate, fluctuating as and when said Prime Rate shall change. All
payments hereunder (other than prepayments) shall be applied first to the
payment of all accrued and unpaid interest, with the balance, if any, to be
applied to the payment of principal. All prepayments hereunder shall be applied
solely to the payment of principal.
All payments of principal and interest hereunder shall be made in
lawful currency of the United States in Federal or other immediately available
funds at the office of Bank situated at 000 Xxxxx Xxxxxxx, Xxxxxxx, Xxxxxxxx
00000, or at such other place as the holder hereof shall designate in writing.
Interest shall be computed on an actual day, 360-day year basis.
Bank may record the date and amount of all loans and all payments of
principal and interest hereunder in the records it maintains with respect
thereto. Bank's books and records showing the account between Bank and Borrowers
shall be admissible in evidence in any action or proceeding and shall constitute
prima facie proof of the items therein set forth.
This Note is the Note referred to in that certain Credit Agreement
dated as of September 7, 1999 made by and between Borrowers and Bank (as the
same may from time to time be amended, the "Loan Agreement"), to which Loan
Agreement reference is hereby made for a statement of the terms and conditions
upon which the maturity of this Note may be accelerated, and for other terms and
conditions, including prepayment, which may affect this Note. All capitalized
terms used herein and not otherwise defined shall have the meanings assigned to
such terms in the Loan Agreement.
This Note is secured by that certain Security Agreement dated as of May
14, 1998 executed by Virbac Corporation in favor of Bank, by that certain
Security Agreement dated as of May 14, 1998 and executed by PM Resources, Inc.
in favor of Bank, by that certain Security Agreement dated as of May 14, 1998
executed by St. XXX Laboratories, Inc. in favor of Bank, by that certain
Security Agreement dated as of September 7, 1999 and executed by Virbac AH, Inc.
in favor of Bank, by that certain Security Agreement dated as of September 7,
1999 executed by Francodex Laboratories, Inc. in favor of Bank and by that
certain Security Agreement dated as of September ___, 2003 executed by Delmarva
Laboratories, Inc. in favor of Bank (as the same may from time to time be
amended, the "Security Agreements"), to which Security Agreements reference is
hereby made for a description of the security and a statement of the terms and
conditions upon which this Note is secured.
This Note is also secured by that certain Deed of Trust and Security
Agreement dated September 9, 1993 and executed by PM Resources, Inc. in favor of
Xxxxxxxxx X. Xxxxxx, as trustee for Bank and by that certain Deed of Trust and
Security Agreement dated September ___, 2003 executed by Virbac Corporation in
favor of Xxxxx X. Xxxxxx, as trustee for Bank (as the same may from time to time
be amended, the "Deeds of Trust"), to which Deeds of Trust reference is hereby
made for a description of the security and a statement of the terms and
conditions upon which this Note is secured.
This Note is also secured by that certain Agreement of Pledge dated as
of September 7, 1999 and executed by Virbac Corporation in favor of Bank and by
that certain Agreement of Pledge dated as of September 7, 1999 and executed by
Virbac AH, Inc. in favor of Bank (collectively, as the same may from time to
time be amended, the "Pledge Agreements"), to which Pledge Agreements reference
is hereby made for a description of the additional security and a statement of
the terms and conditions upon which this Note is further secured.
This Note is also secured by that certain Patent, Trademark and License
Security Agreement dated as of September ____, 2003 and executed by Virbac
Corporation in favor of Bank, by that certain Patent, Trademark and License
Security Agreement dated as of September ____, 2003 and executed by Virbac AH,
Inc. in favor of Bank and by that certain Patent, Trademark and License Security
Agreement dated as of September ____, 2003 and executed by Delmarva
Laboratories, Inc. in favor of Bank (collectively, as the same may from time to
time be amended, the "IP Security Agreements "), to which IP Security Agreements
reference is hereby made for a description of the additional security and a
statement of the terms and conditions upon which this Note is further secured.
If any of the Borrowers shall fail to make any payment of any principal
of or interest on this Note as and when the same shall become due and payable,
or if an "Event of Default" (as defined therein) shall occur under or within the
meaning of the Loan Agreement, any of the Security Agreements, the Deeds of
Trust or any of the Pledge Agreements, Bank may, at its option, terminate its
obligation to make any additional loans under this Note and Bank may further
declare the entire outstanding principal balance of this Note and all accrued
and unpaid interest thereon to be immediately due and payable.
In the event that any payment of any principal of or interest on this
Note shall not be paid when due, whether by reason of acceleration or otherwise,
and this Note shall be placed in the hands of an attorney or attorneys for
collection or for foreclosure of any of the Security Agreements, any of the
Deeds of Trust or any of the Pledge Agreements securing payment hereof or for
representation of Bank in connection with bankruptcy or insolvency proceedings
relating hereto, Borrowers jointly and severally promise to pay, in addition to
all other amounts otherwise due hereon, the reasonable costs and expenses of
such collection, foreclosure and representation, including, without limitation,
reasonable attorneys' fees and expenses (whether or not litigation shall be
commenced in aid thereof). All parties hereto severally waive presentment for
payment, demand, protest, notice of protest and notice of dishonor.
This Note shall be governed by and construed in accordance with the
internal laws of the State of Missouri.
This Revolving Credit Note is a renewal, restatement and continuation
of the obligations due Bank as evidenced by a Revolving Credit Note dated August
11, 2003 from Borrower payable to the order of Bank in the maximum principal
amount of $14,500,000.00 (the "Prior Note"), and is not a novation thereof. All
interest evidenced by the Prior Note being amended and restated by this
instrument shall continue to be due and payable until paid.
VIRBAC CORPORATION
By:
-------------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
PM RESOURCES, INC.
By:
-------------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
ST. XXX LABORATORIES, INC.
By:
-------------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
VIRBAC AH, INC.
By:
-------------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
FRANCODEX LABORATORIES, INC.
By:
-------------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
DELMARVA LABORATORIES, INC.
By:
-------------------------------------------------------
Xxxxxx Xxxxxxxx, Chief Financial Officer
