Exhibit 10.1.2
EXECUTION COPY
SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT, CAPITAL
EXPENDITURE LINE AND SECURITY AGREEMENT
THIS SECOND AMENDMENT TO AMENDED AND RESTATED REVOLVING CREDIT, CAPITAL
EXPENDITURE LINE AND SECURITY AGREEMENT (the "Agreement") is entered into on the
__ day of October, 2002 by and among PHILIPP BROTHERS CHEMICALS, INC., a
corporation organized under the laws of the State of New York, ("Borrower"),
Phibro-Tech, Inc., a corporation organized under the laws of the State of
Delaware, C P Chemicals, Inc., a corporation organized under the laws of the
State of New Jersey, The Prince Manufacturing Company, a corporation organized
under the laws of the State of Illinois (as an individual entity and as
successor by merger to The Prince Manufacturing Company, a corporation organized
under the laws of the State of Pennsylvania), Prince Agriproducts, Inc., a
corporation organized under the laws of the State of Delaware, Mineral Resource
Technologies, Inc., a corporation organized under the laws of the State of
Delaware (successor by merger of Mineral Resource Technologies, L.L.C. which
merged into MRT Management Corp.), Phibro-Chem, Inc., a corporation organized
under the laws of the State of New Jersey, PhibroChemicals, Inc., a corporation
organized under the laws of the State of New York, Western Magnesium Corp., a
corporation organized under the laws of the State of California, Phibro Animal
Health Holdings, Inc., a corporation organized under the laws of Delaware, and
Phibro Animal Health U.S., Inc., a corporation organized under the laws of
Delaware (each a "Guarantor" and collectively "Guarantors"), the financial
institutions which are now or which hereafter become a party hereto
(collectively, the "Lenders" and individually a "Lender") and PNC BANK, NATIONAL
ASSOCIATION, a national banking association ("PNC"), as agent for Lenders (PNC,
in such capacity, the "Agent").
RECITALS
Whereas, on August 19, 1998, PNC, the Borrower and certain Guarantors
entered into a Revolving Credit, Acquisition Term Loan and Security Agreement
(as such has been amended, supplemented and/or restated until November 28, 2000,
the "Original Loan Agreement"), pursuant to which certain Lenders extended
various credit facilities in favor of the Borrower;
Whereas, on November 29, 2000, Borrower, Guarantors and Lenders amended
and restated the Original Loan Agreement and entered into an Amended and
Restated Revolving Credit, Capital Expenditure Line and Security Agreement (as
may be amended, supplemented and/or restated, the "Loan Agreement"), pursuant to
which the Lenders extended various credit facilities in the aggregate amount of
$85,000,000 in favor of the Borrower;
Whereas, on September 28, 2001, Borrower, Guarantors and Lenders agreed to
modify the terms of the Loan Agreement as set forth in the First Amendment to
Amended and Restated Revolving Credit, Capital Expenditure Line and Security
Agreement;
Whereas, Borrower, Guarantors and Lenders have agreed to further modify
the terms of the Loan Agreement as set forth in this Agreement.
Now, therefore, in consideration of Lender's continued extension of credit
and the agreements contained herein, the parties agree as follows:
AGREEMENT
1) ACKNOWLEDGMENT OF BALANCE. Borrower acknowledges that the most recent
statement of account sent to Borrower with respect to the Obligations is
correct.
2) MODIFICATIONS. The Loan Agreement be and hereby is modified as follows:
(A) The following definitions contained in Section 1.2 are hereby deleted
and new definitions are substituted therefor to read as follows:
"Capital Expenditure Line Interest Rate" shall mean an interest rate per
annum equal to the sum of the Base Rate plus one and three quarters of one
percent (1.75%).
"Revolving Interest Rate" shall mean an interest rate per annum equal to
the sum of the Base Rate plus one and one half of one percent (1.50%).
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"Maximum Loan Amount" shall mean $60,800,000.
"Maximum Revolving Advance Amount" shall mean $55,000,000.
(B) The following definition is hereby added to Section 1.2 of the Loan
Agreement to read as follows:
"Inventory Sublimit" shall mean (i) $35,000,000 in the aggregate at any
one time until and including March 31, 2003, (ii) $32,500,000 in the
aggregate at any one time from April 1, 2003 until and including June 30,
2003 and (iii) $30,000,000 in the aggregate at any one time thereafter.
(C) The following definition contained in Section 1.2 is hereby deleted:
"Applicable Margin"
(D) Subsection 2.1(a)(ii) of the Loan Agreement is hereby deleted and
replaced with a new Subsection 2.1(a)(ii) to read as follows:
(ii) the lesser of (A) 60%, subject to the provisions of Section
2.1(b) hereof, of the value of the Eligible Inventory ; or (B) the
Inventory Sublimit; or (C) 85% of the net orderly liquidation value of
Eligible Inventory as determined by the appraisals (the "Appraisals")
referred to in Section 7 of the Second Amendment to Amended and Restated
Revolving Credit, Capital Expenditure Line and Security Agreement, dated
as of October __, 2002, by and among Borrower, Guarantors, Lenders and the
Agent, and thereafter as reasonably determined by the Agent from time to
time upon request of the Borrower using substantially the same methodology
and standards as are used in the Appraisals (the lesser of (A), (B) and
(C) shall be referred to as the "Inventory Advance Rate") (the Receivables
Advance Rate and the Inventory Advance Rate shall be referred to
collectively, as the "Advance Rates"), minus
(E) Subsection 2.2(a) of the Loan Agreement is hereby deleted and replaced
with new Subsection 2.2(a) to read as follows:
2.2 (a) Capital Expenditure Advances. Subject to the terms and
conditions set forth in this Agreement, each Lender, severally and not
jointly, will make Capital Expenditure Advances to Borrower, from time to
time during the period commencing on the Closing Date and ending on
October 1, 2002, in aggregate principal amounts, at any time, equal to
such Lender's Commitment Percentage of up to the lesser of (i) $5,800,000;
or (ii) 70% of the appraised orderly liquidation value of Borrower's
domestic Equipment (For purposes of this Subsection 2.2(a), the term
"Equipment" shall include only the Equipment of the Borrower). Upon
receipt by Agent of an appraisal calculating the appraised orderly
liquidation value of Borrower's domestic Equipment, Borrower shall
reimburse each Lender their Commitment Percentage of any Capital
Expenditure Line Advances provided to Borrower in excess of the value of
70% of the appraised orderly liquidation value of Borrower's domestic
Equipment. The Capital Expenditure Advances shall be evidenced by the
secured promissory note (the "Capital Expenditure Line Note"),
substantially in the form attached as Exhibit 2.2(a).
The amount derived from the calculation of the lesser of (i) and
(ii) above shall be referred to as the "Capital Expenditure Line Formula
Amount".
(F) Subsection 2.10 of the Loan Agreement is hereby deleted and replaced
with a new Subsection 2.10 to read as follows:
2.10. Letters of Credit. Subject to the terms and conditions hereof, Agent
shall (a) issue or cause the issuance of Letters of Credit ("Letters of
Credit") on behalf of Borrower; provided, however, that Agent will not be
required to issue or cause to be issued any Letters of Credit to the
extent that the face amount of such Letters of Credit would then cause the
sum of (i) the outstanding Revolving Advances plus (ii) outstanding
Letters of Credit to exceed the lesser of (x) the Maximum Revolving
Advance Amount or (y) the Formula Amount. The maximum amount of
outstanding Letters of Credit shall not exceed $7,500,000 in the aggregate
at any time. All disbursements or payments
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Exhibit 10.1.2
EXECUTION COPY
related to Letters of Credit shall be deemed to be Revolving Advances and
shall bear interest at the applicable Contract Rate; Letters of Credit
that have not been drawn upon shall not bear interest.
(G) Subsection 6.5 of the Loan Agreement is hereby deleted.
(H) Subsection 6.6 of the Loan Agreement is hereby deleted and replaced
with a new Subsection 6.6 to read as follows:
6.6. Interest Coverage Ratio. Maintain at all times an Interest Coverage
Ratio of (i) not less than 1.29 to 1.0 as of September 30, 2002, to be
tested for the immediately preceding three (3) months; (ii) not less than
1.33 to 1.0 as of December 31, 2002, to be tested for the immediately
preceding six (6) months; (iii) not less than 1.37 to 1.0 as of March 31,
2003, to be tested for the immediately preceding nine (9) months and (iv)
not less than 1.40 to 1.0 as of June 30, 2003 and thereafter, to be tested
for the immediately preceding twelve (12) months. For purposes of this
Section 6.6, EBITDA shall be calculated to exclude one-time charges,
restructuring charges and charges from discontinued operations.
(I) Subsection 6.10 of the Loan Agreement is hereby deleted.
(J) Subsection 6.12 is hereby added to the Loan Agreement to read as
follows:
6.12. Monthly Domestic Cash Flow. Maintain at all times, except as set
forth below, a monthly domestic cash flow of at least $2,250,000, tested
monthly on a trailing three (3) month basis. However, for the months of
December, January and February of each year, monthly domestic cash flow
shall not be less than $1,750,000 tested monthly on a trailing three (3)
month basis. For purposes of this Subsection 6.12, (i) monthly domestic
cash flow shall mean, for any month, the sum of EBITDA plus dividends
and/or distributions paid to the Obligors from all foreign Subsidiaries
and (ii) EBITDA shall be calculated to exclude one-time charges,
restructuring charges and charges from discontinued operations.
(K) Subsection 6.13 is hereby added to the Loan Agreement to read as
follows:
6.13. Minimum Undrawn Availability. Maintain at all times a minimum
Undrawn Availability of not less than $5,000,000.
(L) Subsection 9.9 of the Loan Agreement is hereby deleted and replaced
with a new Subsection 9.9 to read as follows:
9.9. Monthly Financial Statements and Borrowing Base Certificates. Furnish
Agent within thirty (30) days after the end of each month, the financial
statements of the Borrower and all of its direct and indirect Subsidiaries
and of the Borrower and all of its domestic Subsidiaries including, but
not limited to, an unaudited statement of profit and loss, statements of
income and stockholders' equity and cash flow from the beginning of the
current fiscal year to the end of such month and the balance sheet as at
the end of such month, all on a consolidated and consolidating basis
reflecting results of operations from the beginning of the fiscal year to
the end of such month and for such month, prepared on a basis consistent
with prior practices and fairly present, in all material respects, such
financial condition, subject to normal year end and audit adjustments. The
reports shall be accompanied by a certificate on behalf of each Obligor by
the Chief Financial Officer of such Obligor, which shall state that, based
on an examination sufficient to permit it to make an informed statement,
no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default, its nature, when it occurred,
whether it is continuing and the steps being taken by Obligors with
respect to such event and, such certificate shall have appended thereto
calculations which set forth Obligors' compliance with the requirements or
restrictions imposed by Sections 6.6, 6.12, 6.13, 7.6 and 7.11 hereof..
Furnish Agent within twenty (20) days after the end of each month a
Borrowing Base Certificate for the Borrower and its domestic Subsidiaries,
on a consolidated basis, and for each domestic Obligor, in form and
reasonably satisfactory to the Agent.
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Exhibit 10.1.2
EXECUTION COPY
3) EURODOLLAR LOAN AVAILABILITY. Notwithstanding any other term and/or
provision of the Loan Agreement or the Other Documents, as of the date
hereof, Eurodollar Loans are no longer available to the Borrower.
4) WAIVER OF BREACH OF COVENANT. The Borrower acknowledges that it is in
breach of the following financial covenants under the Loan Agreement for
the periods ended June 30, 2002 and September 30, 2002: (i) the Domestic
Net Worth covenant contained in Section 6.5 of the Loan Agreement, (ii)
the Interest Coverage Ratio contained in Section 6.6 of the Loan Agreement
and (iii) the Fixed Charge Coverage Ratio contained in Section 6.10 of the
Loan Agreement. The Lenders hereby waive the Borrower's breaches under
such covenants solely for such periods. Except as heretofore waived by the
Lenders in writing, the Lenders reserve their rights under the Loan
Agreement and the Other Documents for breaches under such covenants for
any other periods.
5) ACKNOWLEDGMENTS. Borrower acknowledges and represents that:
(A) the Loan Agreement and Other Documents, as amended hereby, are in full
force and effect without any defense, claim, counterclaim, right or claim of
set-off;
(B) to the best of its knowledge, no default by the Agent or Lenders in
the performance of their duties under the Loan Agreement or the Other Documents
has occurred;
(C) all representations and warranties of the Borrower contained herein
and in the Other Documents are true and correct in all material respects as of
this date, except for any representation or warranty that specifically refers to
an earlier date and except to the extent that the Agent and the Lenders have
been notified by the Borrower that any representation or warranty is not correct
and the Required Lenders have explicitly waived in writing compliance with such
representation or warranty (which waiver is hereby granted) and except for
changes not prohibited by the terms of the Loan Agreement;
(D) Borrower has taken all necessary corporate or company action to
authorize the execution and delivery of this Agreement; and
(E) this Agreement is a modification of an existing obligation and is not
a novation.
6) PRECONDITIONS. The Borrower shall deliver to the Agent the following: (a)
an executed Second Amendment to Amended and Restated Revolving Credit,
Capital Expenditure Line and Security Agreement, (b) an executed Amended
and Restated Revolving Credit Note in favor of PNC in the amount of
$22,647,058.82, (c) an executed Amended and Restated Revolving Credit Note
in favor of Bank of America, N.A. in the amount of $16,176,470.59, (d) an
executed Amended and Restated Revolving Credit Note in favor of General
Electric Capital Corporation in the amount of $16,176,470.59, (e) an
executed Amended and Restated Capital Expenditure Line Note in favor of
PNC in the amount of $2,388,235.30, (f) an executed Amended and Restated
Capital Expenditure Line Note in favor of Bank of America, N.A. in the
amount of $1,705,882.35, (g) an executed Amended and Restated Capital
Expenditure Line Note in favor of General Electric Capital Corporation in
the amount of $1,705,882.35, (h) an amendment fee in the amount of
$100,000 and (i) an executed resolution of each Obligor authorizing the
transaction described herein. It is understood and agreed that Borrower
shall pay all fees and costs incurred by Lenders in entering into this
Agreement and the other documents executed in connection herewith,
including but not limited to all reasonable attorney fees and expenses of
Lenders' counsel.
7) POST CONDITIONS. The Borrower shall promptly engage an appraiser or
appraisers satisfactory to the Agent to prepare an orderly liquidation
value appraisal with respect to all of Borrower's Inventory and an orderly
liquidation value appraisal of the Borrower's domestic Equipment (For
purposes of this Section 7, the term "Equipment" shall include only the
Equipment of the Borrower). Such appraisal shall be delivered to the Agent
no later than December 20, 2002. Failure to deliver such appraisal to the
Agent by said date shall be deemed an Event of Default. Until such
appraisal is delivered to the Agent, the Minimum Undrawn Availability set
forth in Section 6.13 shall not be less than $7,500,000, notwithstanding
any term or provision to the contrary contained herein. However, upon
delivery of such appraisal to the Agent, the Minimum Undrawn Availability
shall reduce to $5,000,000. The
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Exhibit 10.1.2
EXECUTION COPY
Borrower shall cooperate and provide such appraiser with such assistance
and information as reasonably requested to allow such appraiser to prepare
such appraisals and to deliver the same to the Borrower, the Agent and the
Lenders.
8) MISCELLANEOUS. This Agreement shall be construed in accordance with and
governed by the laws of the State of New Jersey, without reference to that
state's conflicts of law principles. This Agreement and the Other
Documents constitute the sole agreement of the parties with respect to the
subject matter hereof and thereof and supersede all oral negotiations and
prior writings with respect to the subject matter hereof and thereof. No
amendment of this Agreement, and no waiver of any one or more of the
provisions hereof shall be effective unless set forth in writing and
signed by the parties hereto. The illegality, unenforceability or
inconsistency of any provision of this Agreement shall not in any way
affect or impair the legality, enforceability or consistency of the
remaining provisions of this Agreement or the Other Documents. This
Agreement and the Other Documents are intended to be consistent. However,
in the event of any inconsistencies among this Agreement and either the
Loan Agreement or any of the Other Documents, the terms of this Agreement,
then the Loan Agreement, shall control. This Agreement may be executed in
any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed an original, but all
such counterparts shall together constitute one and the same agreement.
9) DEFINITIONS. The terms used herein and not otherwise defined or modified
herein shall have the meanings ascribed to them in the Loan Agreement. The
terms used herein and not otherwise defined or modified herein or defined
in the Loan Agreement shall have the meanings ascribed to them by the
Uniform Commercial Code as enacted in New Jersey.
IN WITNESS WHEREOF, the undersigned have signed and sealed this Agreement the
day and year first above written.
BORROWER:
ATTEST: PHILIPP BROTHERS CHEMICALS, INC.
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A. Mathison, Vice President
One Parker Plaza
Fort Lee, N.J. 07024
GUARANTORS:
ATTEST: PHIBRO-TECH, INC.
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
One Parker Plaza
Fort Lee, N.J. 07024
ATTEST: C P CHEMICALS, INC.
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
One Parker Plaza
Fort Lee, N.J. 07024
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Exhibit 10.1.2
EXECUTION COPY
ATTEST: THE PRINCE MANUFACTURING COMPANY (IL)
(as an individual entity and as
successor by merger to The Prince
Manufacturing Company, a corporation
organized under the laws of the State
of Pennsylvania,)
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
One Prince Plaza
P.O. Box 1009
Quincy, Il. 62306
ATTEST: PRINCE AGRIPRODUCTS, INC.
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
One Prince Plaza
P.O. Box 1009
Quincy, Il. 62306
ATTEST: Mineral Resource Technologies, Inc.
(successor by merger of Mineral
Resource Technologies, L.L.C. which
merged into MRT Management Corp.)
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
120 Interstate North Parkway East
Suite 440
Atlanta, G.A. 30339
ATTEST: PHIBRO-CHEM, INC.
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
One Parker Plaza
Fort Lee, N.J. 07024
ATTEST: PHIBROCHEMICALS, INC.
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
One Parker Plaza
Fort Lee, N.J. 07024
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Exhibit 10.1.2
EXECUTION COPY
ATTEST: WESTERN MAGNESIUM CORP.
BY: /s/ Joseph M. Katzenstein By: /s/ William A. Mathison
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary William A Mathison, Vice President
One Parker Plaza
Fort Lee, N.J. 07024
ATTEST: PHIBRO ANIMAL HEALTH HOLDINGS, INC.
BY: /s/ Joseph M. Katzenstein By: /s/ Jack C. Bendheim
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary Jack C. Bendheim, Chief Executive
Officer
One Parker Plaza
Fort Lee, N.J. 07024
ATTEST: PHIBRO ANIMAL HEALTH U.S., INC.
BY: /s/ Joseph M. Katzenstein By: /s/ Jack C. Bendheim
------------------------------ ------------------------------
Joseph M. Katzenstein, Secretary Jack C. Bendheim, Chief Executive
Officer
One Parker Plaza
Fort Lee, N.J. 07024
SIGNATURE PAGES OF LENDERS TO FOLLOW
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Exhibit 10.1.2
EXECUTION COPY
LENDERS:
ATTEST: PNC BANK, NATIONAL ASSOCIATION, as Lender and as
Agent
By: /s/ Michelle Stanley-Nurse
---------------------------------------
Name: Michelle Stanley-Nurse
Title: Vice President
Address: 70 East 55th Street, 14th Floor
New York, New York 10022
Commitment Percentage: 41.1764705882%
BANK OF AMERICA, N. A., as Lender
By: /s/ Edmundo E. Kahn
---------------------------------------
Name: Edmundo E. Kahn
Title: Vice President
Address: 335 Madison Avenue
6th Floor
New York, New York 10017
Commitment Percentage: 29.4117647059%
GENERAL ELECTRIC CAPITAL CORPORATION, as Lender
By: /s/
---------------------------------------
Name:
Title:
Address:
Commitment Percentage: 29.4117647059%
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