Exhibit 10.31.1
AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT
THIS AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT (this
"Amendment"), dated as of November 14, 2003, 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 $15,000,000 to $25,000,000 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 adding the
following definition in alphabetical order:
""TTM EBITDA" means, as of any date of determination, the EBITDA of
Parent and its Subsidiaries for the 12 month period ended as of such date
of determination."
(b) Section 1.1 of the Loan Agreement is hereby amended by deleting the
definitions of "EBITDA", "Indenture Securities", and "Maximum Revolver Amount"
and replacing them with the following definitions:
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""EBITDA" means, with respect to any fiscal period, consolidated net
earnings (or loss), minus extraordinary gains and interest income, plus
interest expense, income taxes, depreciation and amortization, and those
charges which are both nonrecurring and noncash charges for such period,
as determined in accordance with GAAP."
""Indenture Securities" means (a) the 105,000 Units (the "Units")
issued by the Parent and the Foreign Issuer pursuant to the New Indenture,
consisting of $85,000,000 aggregate principal amount of 13.0% Senior
Secured Notes due 2007 issued by the Parent (the "New Domestic Notes") and
$20,000,000 aggregate principal amount of 13.0% Senior Secured Notes due
2007 issued by the Foreign Issuer (the "New Foreign Notes" and, together
with the Domestic Notes, the "Notes") and (b) any units or notes, as the
case may be, that may be issued by the Parent or the Foreign Issuer
pursuant to the New Indenture in exchange therefor."
""Maximum Revolver Amount" means up to $25,000,000."
(c) Section 2.2 of the Loan Agreement is hereby amended by deleting it in
its entirety and replacing it with the following:
"2.2 Increase in the Maximum Revolver Amount. At any time within 90 days
after the Closing Date, upon 5 Business Days prior written notice by
Administrative Borrower to Agent, Borrowers may request an increase in the
Maximum Revolver Amount from $25,000,000 up to $40,000,000. Subject to the
foregoing, and so long as no Default or Event of Default has occurred and
is continuing as of the proposed date of such increase, so long as Agent
has completed all of its legal, business, and collateral due diligence
with respect to Borrowers and Guarantors, so long as WFF has obtained
credit committee approval for the increase in the Maximum Revolver Amount
for amounts in excess of $25,000,000 (it being expressly understood and
agreed that, as of the date of this Amendment, WFF does not have such
credit approval and has made no commitments or assurances that such credit
approval will be forthcoming), and so long as the increase in the Maximum
Revolver Amount does not contravene the Existing Indenture or the New
Indenture, the Agent may increase the Maximum Revolver Amount by the
amount requested by Administrative Borrower on the date of the proposed
increase. Borrowers acknowledge and agree that the Applicable Prepayment
Premium and the unused line fee set forth in the Fee Letter are each
calculated by reference to the Maximum Revolver Amount and an increase in
the amount thereof pursuant hereto will have the effect of increasing such
fee. The increase in the
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Maximum Revolver Amount pursuant to this Section 2.2 shall increase the
Revolving Commitment of each Lender proportionately in accordance with its
Pro Rata Share thereof."
(d) Section 2.4 of the Loan Agreement is hereby amended by adding the
following subsections (c) and (d)
"(c) Beginning on December 31, 2003, immediately at any time that
the Revolver Usage exceeds 1.5 multiplied by TTM EBITDA, measured on a
month-end basis, Borrower shall prepay the Advances and cash collateralize
the Letters of Credit in an amount equal to such excess in accordance with
Section 2.4(d) of this Agreement.
(d) Each prepayment under Section 2.4(c) shall be remitted to Agent
and all such payments shall be applied as follows: (i) first, to
outstanding Advances until paid in full and (ii) second, to cash
collateralize the Letters of Credit in an amount equal to 105% of the then
extant Letters of Credit until paid in full."
(e) Section 3.2 of the Loan Agreement is hereby amended by deleting
subsections (i), (k), (l), and (m) and replacing them with the following:
"(i) within 45 days of the Closing Date, Agent shall have received
Collateral Access Agreements with respect to: (i) Xxx Xxxxxx Xxxxx, Xxxx
Xxx, XX 00000, (ii) 0000 Xxxx Xxxx, Xxxxx Xx Xxxxxxx, XX 00000, (iii) Xxx
Xxxxxx Xxxxx, Xxxxxx, Xxxxxxxx 00000, and (iv) 000 Xxxxx 00 Xxxx, Xxxxx
000, Xxxxxxxxx, XX 00000;
(k) within 30 days of the Closing Date, Agent shall have received an
updated Schedule 5.18 which shall include information regarding Deposit
Accounts and Securities Accounts of Borrowers' Foreign Subsidiaries."
(f) Section 3.2 of the Loan Agreement is hereby amended by adding the
following subsections (n), (o), (p), (q), (r), (s), (t), and (u):
"(n) Within 30 days of the Closing Date, Agent shall have received
confirmation that appropriate financing statements respecting each
Borrower and each Guarantor have been duly filed in such office or offices
as may be necessary or, in the opinion of Agent, desirable to perfect the
Agent's Liens in and to the Collateral;
(o) Within 30 days of the Closing Date, Agent shall have received
confirmation that appropriate UCC-3 terminations
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statements have been filed for all financing statements filed by the
Existing Lender against the Borrowers and the Guarantors;
(p) Within 30 days of the Closing Date, Agent shall have received
copies of (i) the Phibro-Tech 3-year supply agreement with Arch Chemical
and (ii) the NuFarm long-term agreement;
(q) Within 5 days after the closing of the PMC Sales Transactions,
or no later than January 5, 2004, Agent shall have received copies of the
Prince Agriproducts/PMC agreements relating to the PMC Sales Transactions;
(r) Within 60 days of the Closing Date, Agent shall have received
confirmation that Borrowers and their Domestic Subsidiaries have made the
appropriate filings with the United States Patent and Trademark Office to
register any patents and trademarks acquired by Borrowers and their
Domestic Subsidiaries from Pfizer (other than by license) in the name of
Borrowers and their Domestic Subsidiaries;
(s) Within 60 days of the Closing Date, 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;
(t) Within 60 days of the Closing Date, Agent shall have received
confirmation that PMC and Prince Agriproducts have separated all of their
bank accounts; and
(u) Within 45 days of the Closing Date, Agent shall have received
intercompany notes representing all intercompany indebtedness due to any
Borrower or any Domestic Subsidiary, and the same shall have been endorsed
to Agent."
(g) Section 5.21 of the Loan Agreement is hereby deleted and replaced in
its entirety with the following:
"5.21 Inactive Subsidiaries. Western Magnesium Corp. has no assets or
liabilities and conducts no business activities other than its 1% interest
in First Dice Road Company"
(h) The Loan Agreement is hereby amended by adding the following Section
5.23:
"5.23 Letters of Credit. Except for letters of credit and letter of credit
undertakings issued for Indenture Purposes and letters of
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credit and letter of credit undertakings for purposes other than Indenture
Purposes in the maximum aggregate stated amount of $5,000,000, there are
no outstanding letters of credit or letter of credit undertakings issued
for the account of Parent, any Borrower, or any Subsidiary of Parent, and
none of Parent, any Borrower, or any Subsidiary of Parent has any
reimbursement obligations with respect to any letters of credit or letter
of credit undertakings."
(i) Section 7.18 of the Loan Agreement is hereby amended by deleting
subsection (c) in its entirety and replacing it with the following:
"(c) Determination of Future Levels. Agent shall, in its Permitted
Discretion, establish the monthly minimum EBITDA and capital expenditures
covenants for the 10 month period ended July 31, 2004, the 11 month period
ended August 31, 2004, and the 12 month period ended September 30, 2004,
and for each trailing 12 month period thereafter based upon Borrowers'
Projections for such fiscal year delivered pursuant to Section 6.3(c) of
this Agreement, which Borrowers' Projections shall be satisfactory to
Agent in all respects. Borrowers shall execute any amendment to this
Section 7.18 requested by Agent to document the inclusion of such covenant
levels. If Borrowers fail to timely deliver the Borrowers' Projections
pursuant to Section 6.3(c), the EBITDA level for (i) the 10 month period
ended July 31, 2004, the 11 month period ended August 31, 2004, and the 12
month period ended September 30, 2004, shall be measured on a monthly
basis at an amount equal to 110% of the most recent prior period and (ii)
each succeeding trailing 12 month period after September 30, 2004 shall be
measured on a monthly basis at an amount equal to 100% of the last
trailing 12 months."
(j) The Loan Agreement is hereby amended by adding the following Section
7.19:
"7.19 Letters of Credit. Request or obtain any Letters of Credit for
purposes other than Indenture Purposes; provided however, that Borrowers
may request and obtain Letters of Credit for purposes other than Indenture
Purposes under this Agreement up to a maximum aggregate stated amount of
$5,000,000 less the aggregate of the face amount of all undrawn letters of
credit and letter of credit undertakings issued for the account of Parent
or any of its Subsidiaries and all reimbursement obligations of Parent and
its Subsidiaries in connection therewith (in each case, other than letters
of credit or letter of credit undertakings issued for Indenture
Purposes)."
(k) Schedule C-1 to the Loan Agreement is hereby deleted in its entirety
and replaced with the attached Exhibit A.
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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 opinions of Borrowers' counsel required
by Section 3.1(m) of the Loan Agreement, the form and substance of which shall
be satisfactory to Agent;
(c) Agent shall have received the reaffirmation and consent of each
Guarantor, attached hereto as Exhibit B, duly executed and delivered by an
authorized official of such Guarantor;
(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.
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 4 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.
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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: Vice President
& 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
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XXXXX FARGO FOOTHILL, INC.,
a California corporation, as Agent
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Title: VP
Exhibit A
Schedule C-1
Commitments
================================================================================
Lender Revolver Commitment Total Commitment
================================================================================
Xxxxx Fargo Foothill, Inc. $25,000,000 $25,000,000
================================================================================
================================================================================
================================================================================
================================================================================
All Lenders $25,000,000 $25,000,000
================================================================================
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Exhibit B
REAFFIRMATION AND CONSENT
All capitalized terms used herein but not otherwise defined herein shall
have the meanings ascribed to them in that certain AMENDMENT NUMBER ONE TO LOAN
AND SECURITY AGREEMENT (the "Amendment"), dated as of November 14, 2003. 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.]
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S-1
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
