Exhibit 4.2.2
SECOND SUPPLEMENTAL INDENTURE ("Second Supplemental
Indenture"), dated as of December 8, 2004, among Phibro Animal Health
Corporation (the "U.S. Issuer"), ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Netherlands III B.V. (the
"Dutch Issuer" and with the U.S. Issuer, the "Issuers"), each of the Guarantors
named herein (including each Guarantor whose guarantee is confirmed by, or
becomes effective pursuant to, this Second Supplemental Indenture), as
guarantors, and HSBC Bank USA, National Association, as Trustee (the "Trustee").
All capitalized terms not otherwise defined herein shall have the meaning
assigned to them in the Indenture (as defined herein).
WHEREAS the Issuers and the Guarantors named therein have
heretofore executed and delivered to the Trustee an Indenture, dated as of
October 21, 2003, as amended by that certain First Supplemental Indenture dated
as of June 25, 2004 (as such may be amended and supplemented from time to time,
the "Indenture"), providing for the issuance of 105,000 Units due 2007 (the
"Units"), each Unit consisting of $809.5238095 principal amount of 13% Senior
Secured Notes due 2007 issued by Phibro Animal Health Corporation (the "U.S.
Notes") and $190.4761905 principal amount of 13% Senior Secured Notes due 2007
issued by Philipp Brothers Netherlands III B.V. (the "Dutch Notes" together, the
"Notes");
WHEREAS the Issuers propose to issue and sell to Jefferies &
Company, Inc. 22,491 Additional Units, each such Additional Unit consisting of
$809.5238095 principal amount of U.S. Notes and $190.4761905 principal amount of
Dutch Notes;
WHEREAS, in connection with the issuance and sale of such
Additional Units, in accordance with the Indenture, the Issuers have obtained
the written consent of the Holders of at least a majority in aggregate principal
amount of the outstanding Notes to certain amendments (the "Amendments") to the
Indenture as set forth in this Second Supplemental Indenture;
WHEREAS, the Holders of at least a majority in aggregate
principal amount of the outstanding Notes have waived in writing the provision
in Section 9.04 of the Indenture requiring that the Record Date be at least 30
days prior to the first solicitation of Consents.
WHEREAS, pursuant to Sections 9.02 and 12.16 of the Indenture,
the Issuers and the Guarantors, when authorized by resolution of their
respective Boards of Directors, and the Trustee, together, with the written
consent of the Holders of at least a majority in aggregate principal amount of
the Notes then outstanding, are authorized to amend or supplement the Indenture
as set forth in this Second Supplemental Indenture;
WHEREAS, the Issuers, each of the Guarantors and the Trustee
desire and have agreed to execute and deliver this Second Supplemental Indenture
as herein provided and all conditions and requirements necessary to make this
Second Supplemental Indenture a valid, binding and legal instrument in
accordance with its terms have been performed and fulfilled and the execution
and delivery hereof have been in all respects duly authorized by all necessary
parties.
NOW, THEREFORE, for and in consideration of the premises
contained herein, it is mutually covenanted and agreed for the benefit of all
Holders of the Notes as follows:
Section 1. Subject to the consummation of the purchase by
Jefferies & Company, Inc., as initial purchaser of the Additional Notes
contemplated by proposed clause (xx) to Section 4.12 of the Indenture (which
clause (xx) is set forth in clause (c)(ii) below) in an aggregate principal
amount of $22,491,000, on or prior to December 31, 2004, the Indenture is hereby
amended as set forth below in this Section 1:
(a) Section 1.01. Section 1.01 of the Indenture is amended by
adding the following definitions to the definitions contained in
Section 1.01 of the Indenture in the corresponding alphabetical order:
"Belgium Equipment" means all equipment located at the
Belgium Plant.
"Belgium Plant" means the plant owned by Phibro Belgium
in Rixensart, Belgium.
"Belgium Plant Sale and Virginiamycin Production
Transactions" means the following transactions and payments, including
payments required pursuant to the documents to evidence such
transactions, each of which is subject to entering into definitive
documentation containing customary representations, warranties,
covenants and indemnities for a transaction of that type, and changes
in the definitive economic terms which are not, individually or in the
aggregate, material to the Company: (i) the transfer of substantially
all of the land and buildings and certain equipment of Phibro Belgium
at the Belgium Plant, as well as the industrial activities and
intellectual property relating to certain solvent technology of Phibro
Belgium, for a purchase price of EUR 6.2 million, payable at closing;
(ii) the transfer to GSK of a majority of the employees of Phibro
Belgium and the corresponding responsibility for statutory severance
obligations; (iii) GSK agreeing to be responsible for costs of
cleaning-up, by demolition or otherwise, certain buildings not to be
used by it, but for Phibro Belgium to reimburse GSK up to a maximum of
EUR 0.7 million for such clean-up costs; (iv) in recognition of the
benefits to the Company from the proposed transaction, Phibro Belgium
agreeing to pay to GSK EUR 1.5 million within six months from the
closing date, EUR 1.5 million within eighteen months from the closing
date, EUR 1.5 million within thirty months from the closing date, and
EUR 0.5 million within forty-two months from the closing date; (v)
Phibro Belgium retaining certain excess land (valued at approximately
EUR 0.4 million) and being able to sell such land for its own account;
(vi) Phibro Belgium being responsible for certain plant closure costs
and legally required severance indemnities in connection with workforce
reductions, estimated in total to be EUR 7.7 million, of which an
amount estimated to be approximately EUR 4.1 million would be payable
at or around the closing and an aggregate amount so estimated to be
approximately EUR 3.6 million would be payable over periods up to
thirteen years; and (vii) Phibro Belgium retaining any or all equipment
at the Belgium Plant, and being able to sell such equipment for the
account of Phibro Belgium or transfer such equipment, together with
other assets and rights related to the production of virginiamycin, to
the Company's Restricted Subsidiary in Brazil that owns the facility in
Guarulhos or in connection with alternative production arrangements.
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"Belgium Purchase Agreement" means a Purchase
Agreement between Phibro Belgium and GSK relating to the Belgium Plant
Sale and Virginiamycin Production Transactions, and any related or
ancillary agreements or instruments entered into by Phibro Belgium,
GSK, their respective Affiliates and/or other persons in connection
with the Belgium Plant Sale and Virginiamycin Production Transactions,
in each case as such agreements may be amended, modified or
supplemented (so long as such amendments, modifications or supplements
are not, individually or in the aggregate, materially adverse to the
Company or the Holders).
"GSK" means Glaxosmithkline Biologicals SA and/or
Affiliates.
"Phibro Belgium" means Phibro Animal Health SA
(formerly Phibro Animal Health (Belgium) SPRL).
(b) Section 1.01. Section 1.01 of the Indenture is amended as
follows:
(i) The definition of the term "Permitted Investments"
is amended by inserting the following provision as the last clause of such
definition:
"and (xi) Investments in Restricted Subsidiaries
of the Company in connection with the production of virginiamycin in an
amount not to exceed the Fair Market Value of the Belgium Equipment
plus $15.0 million."
(ii) The definition of the term "Transactions" is
amended by deleting the existing text of such definition in entirety and
replacing it with the following:
"`Transactions' means, collectively, the Offering,
the PMC Sale Transactions and the solicitation of consents with respect
to the Company's Existing Notes to amendments to the indenture
governing the Existing Notes, the Belgium Plant Sale and Virginiamycin
Production Transactions and the offering of the Notes described in
clause (xx) of the second paragraph under Section 4.12 of this
Indenture to refinance a portion of the Credit Agreement and the
solicitation of consents with respect to the Notes to amendments to the
indenture to permit the foregoing."
(c) Section 4.12. Clause (i) of Section 4.12 is amended as
follows:
(i) by deleting the existing text thereof and
replacing it with the following:
"(i) Indebtedness of the Company and its
Restricted Subsidiaries arising under the Credit Agreement, in an
aggregate principal amount not to exceed at any time outstanding an
amount equal to (w) $37.5 million; less (x) during the 30 day period
preceding the date on which a scheduled payment of interest is due on
the Notes, the aggregate amount of such interest, less (y) during the
30 day period preceding the date on which a scheduled payment of
interest is due on the Existing Notes, the aggregate amount of such
interest, less (z) the aggregate principal amount of Notes issued
pursuant to clause (xx) below;"
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(ii) by inserting the following additional clauses
in Section 4.12 following clause (xviii):
"(xix) Indebtedness of the Company and its
Restricted Subsidiaries arising under the Belgium Purchase Agreement;
and"
"(xx) Indebtedness of the Issuers and the
Guarantors represented by the Additional Notes issued after the Issue
Date in an aggregate principal amount not to exceed $22.5 million, the
proceeds of which are used to refinance or replace Indebtedness
incurred pursuant to clause (i) above, Exchange Notes issued in
exchange for such Additional Notes and the related Guarantees and the
Company Guarantee."
(d) Section 4.13(6). Section 4.13(6) is amended by deleting
the existing text thereof and replacing it with the following:
"(6) an agreement for the sale or disposition of assets or
the Capital Stock of a Restricted Subsidiary; provided, however, that
such restriction or encumbrance is only applicable to such Restricted
Subsidiary or assets, as applicable, and such sale or disposition
otherwise is permitted by Section 4.16, provided further, however, that
such restriction or encumbrance shall be effective only for a period
from the execution and delivery of such agreement through a termination
date not later than 270 days after such execution and delivery (other
than any such restriction or encumbrance contained in the Belgium
Purchase Agreement);"
(e) Section 5.01(b). Section 5.01(b) is amended by adding the
following as an additional provision thereof:
"Notwithstanding the foregoing, the Dutch Issuer may
permit, and there may be effected, the Belgium Plant Sale and
Virginiamycin Production Transactions."
Section 2. The Issuers and the Guarantors agree that the
Trustee is permitted, and each of them hereby authorizes the Trustee, to place a
notation about this Second Supplemental Indenture on the Notes in accordance
with the provisions of Section 9.05 of the Indenture.
Section 3. The Trustee accepts this Second Supplemental
Indenture and agrees to execute the trust created by the Indenture as hereby
supplemented, but only upon the terms and conditions set forth in the Indenture,
including the terms and provisions defining and limiting the liabilities and
responsibilities of the Trustee, which terms and provisions shall in like manner
define and limit its liabilities and responsibilities in the performance of the
trust created by the Indenture as hereby supplemented.
Section 4. This Second Supplemental Indenture is executed and
shall be construed as an indenture supplemental to the Indenture and, as
provided in the Indenture, this Second Supplemental Indenture forms a part
thereof. Except as otherwise expressly provided for in this Second Supplemental
Indenture, all of the terms and conditions of the Indenture are hereby ratified
and shall remain unchanged and continue in full force and effect.
Section 5. The recitals contained in this Second Supplemental
Indenture shall be
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taken as the statements made solely by the Issuers and the Guarantors, and the
Trustee shall have no liability or responsibility for their correctness, and,
without limiting the generality of the foregoing, the Trustee shall not be
responsible in any manner whatsoever for or with respect to any of (i) the
validity or sufficiency of this Second Supplemental Indenture or any of the
terms or provisions hereof, (ii) the proper authorization hereof by the Issuers
and the Guarantors by corporate action or otherwise, (iii) the due execution
hereof by the Issuers and the Guarantors or (iv) the consequences (direct or
indirect and whether deliberate or inadvertent) of any amendment herein provided
for, and the Trustee makes no representation with respect to any such matters.
Section 6. This Second Supplemental Indenture shall become
effective upon the execution and delivery hereof by the Issuers, the Guarantors
and the Trustee.
Section 7. THIS SECOND SUPPLEMENTAL INDENTURE SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, AS APPLIED TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT
THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE REQUIRED
THEREBY.
Section 8. This Second Supplemental Indenture may be signed
in any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
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SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this
Second Supplemental Indenture to be duly executed, all as of the date written
above.
PHIBRO ANIMAL HEALTH CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title Chief Financial Officer
PHILIPP BROTHERS NETHERLANDS III B.V.
By: Philipp Brothers Netherlands II B.V.
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title Managing Director
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
-------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇
Title Managing Director
DOMESTIC GUARANTORS:
PRINCE AGRIPRODUCTS, INC.
PHIBROCHEM, INC.
PHIBRO ANIMAL HEALTH HOLDINGS, INC.
PHIBRO CHEMICALS, INC.
WESTERN MAGNESIUM CORP.
C P CHEMICALS, INC.
PHIBRO-TECH, INC.
PHIBRO ANIMAL HEALTH U.S., INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
FOREIGN GUARANTOR:
PHIBRO ANIMAL HEALTH SA
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Managing Director
Accepted and Agreed to:
HSBC BANK USA, NATIONAL ASSOCIATION, as Trustee and Collateral Agent
By: /s/ Herawatta Alli
--------------------------------------
Name: Herawatta Alli
Title: Assistant Vice President
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