THIRD AMENDMENT TO FORBEARANCE AGREEMENTDefault Notice Forbearance Agreement |
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VIRBAC CORP | PM RESOURCES, INC | ST. JON LABORATORIES, INC | VIRBAC AH, Inc. | DELMARVA LABORATORIES, INC. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here. |
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THIRD AMENDMENT TO FORBEARANCE AGREEMENT
THIS THIRD AMENDMENT TO FORBEARANCE AGREEMENT, made and entered into as of
the 7th day of February, 2005, by and between VIRBAC CORPORATION, a Delaware
corporation ("Virbac"), PM RESOURCES, INC., a Missouri corporation ("PM
Resources"), ST. JON LABORATORIES, INC., a California corporation ("St. JON"),
FRANCODEX LABORATORIES, INC., a Kansas corporation ("Francodex"), VIRBAC AH,
INC., a Delaware corporation ("Virbac AH,"), and DELMARVA LABORATORIES, INC., a
Virginia corporation ("Delmarva," and collectively with Virbac, PM Resources,
St. JON, Francodex and Virbac AH referred to herein as the "Borrowers"), and
FIRST BANK, a Missouri banking corporation (the "Lender").
WITNESSETH:
WHEREAS, Borrowers and Lender have heretofore executed a Credit Agreement
dated as of September 7, 1999 made by and among Borrowers and Lender, as
previously amended from time to time (as amended, the "Credit Agreement"); and
WHEREAS, Borrowers are presently in default under such Credit Agreement
and the other Security Documents and Transaction Documents as more fully set
forth in that certain Forbearance Agreement dated as of April 9, 2004 made by
and among Borrowers and Lender, as previously amended by a certain Amendment to
Forbearance Agreement dated as of May 10, 2004 made by and among Borrowers and
Lender and by a certain Second Amendment to Forbearance Agreement dated as of
August 9, 2004 made by and among Borrowers and Lender (as amended, the
"Forbearance Agreement;" capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in the Forbearance Agreement);
and
WHEREAS, Lender's agreement to forebear with respect to Borrowers'
existing events of default as set forth in the Forbearance Agreement is
presently set to expire on February 7, 2005, and Borrowers have requested that
Lender extend such agreement to forebear; and
WHEREAS, Borrowers and Lender desire to amend the Forbearance Agreement on
the terms and conditions set forth herein;
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. Section 1(b)(iii)(C) of the Forbearance Agreement shall be deleted in
its entirety and in its place shall be substituted the following:
(C) on or before April 1, 2005, the consolidated balance sheet
of Borrowers and their Consolidated Subsidiaries as of December 31, 2003
and the related consolidated statements of income, retained earnings and
cash flows for the fiscal year ended as of December 31, 2003, all with
consolidating disclosures and setting forth in each case, in comparative
form, the figures for the previous fiscal year, together with any and all
restated financial statements (balance sheets and statements of income,
retained earnings and cash flows) for the fiscal years (or any periods
during the fiscal years) ending December 31, 2002, December 31, 2001 and
December 31, 2000, all such financial statements to be prepared in
accordance with Generally Accepted Accounting Principles consistently
applied and audited by and accompanied by the unqualified opinion of
PriceWaterhouse Coopers;
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2. A new Section 1(b)(iii)(E) shall be added to the Forbearance Agreement
immediately following Section 1(b)(iii)(D) therein (which was added by the
Amendment to Forbearance Agreement) as follows:
(E) on or before April 15, 2005, the consolidated and consolidating
balance sheet, income statement projections and cash flow projections for
Borrowers and their Consolidated Subsidiaries for their fiscal year ending
December 31, 2005 on a month-by-month basis, all in form and detail
reasonably acceptable to Bank.
3. Section 3(a) of the Forbearance Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(a) The Standstill Period shall commence at such time as all
conditions precedent to this Agreement have occurred or have been
satisfied, as provided in Section 2 hereof, and shall terminate on May 6,
2005.
4. Section 4(b) of the Forbearance Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(b) Amendment to Consolidated Net Worth Covenant. 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 Net Worth at all times
during the Term hereof of not less than $26,300,000.00;
5. Section 4(d) of the Forbearance Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(d) The third paragraph beginning with the word "WHEREAS" on the
first page of the Credit 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 Twenty Million Dollars
($20,000,000.00) and otherwise amended on the terms and conditions
set forth herein, with such loans to mature on May 6, 2005; and
6. Section 4(e) of the Forbearance Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(e) Section 1 of the Credit 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 May 6, 2005, unless earlier terminated upon the
occurrence of an Event of Default under this Agreement or upon an
event of termination as defined in Section 3(b) of that certain
Forbearance Agreement dated as of April 9, 2004 made by and among
Borrowers and Lender, as amended.
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7. Section 4(j) of the Forbearance Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(j) Section 3.16 of the Credit 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 May 6, 2005,
together with all accrued and unpaid interest thereon, shall be due
and payable on May 6, 2005 (the "Maturity Date").
8. Section 4(k) of the Forbearance Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(k) Addition of a new Monthly Consolidated EBITDA Covenant. Section
7.1(i) of the Credit Agreement shall be amended to add a new subsection
7.1(i)(ii) to such Section immediately following subsection 7.1(i)(i)
therein as follows:
(ii) Maintain a minimum Consolidated EBITDA for Borrowers and
their Subsidiaries of not less than: (A) ($440,000.00) for the month
ending January 31, 2005, (B) ($440,000.00) for the month ending
February 28, 2005, (C) ($55,000.00) for the month ending March 31,
2005, and (D) ($55,000.00) for the month ending April 30, 2005;
9. Section 5(b) of the Forbearance Agreement shall be deleted in its
entirety and in its place shall be substituted the following:
(b) Borrowers covenant and agree that they will promptly
furnish to Lender any additional financial or other information as Lender
may reasonably request from time to time in order to assess the progress
of Borrowers' ability to repay or refinance all of the Obligations on or
before May 6, 2005, to verify Borrowers' compliance with this Agreement,
or to ascertain whether any event of termination of the Standstill Period
has occurred;
10. Contemporaneously with the execution of this Third Amendment to
Forbearance Agreement, the Revolving Credit Note made by the Borrowers payable
to the order of Lender shall be amended and restated in the form of that certain
Revolving Credit Note made by the Borrowers payable to the order of Lender
attached hereto as Exhibit B, to extend the maturity thereof and to make certain
amendments as set forth therein (as the same may from time to time be amended,
modified, extended or renewed, the "Note"). All references in the Credit
Agreement, the Forbearance Agreement, the Security Documents 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 B.
11. Contemporaneously with the execution of this Third Amendment to
Forbearance Agreement, the compliance certificate in the form of Exhibit E to
the Credit Agreement shall be amended and restated in the form of the compliance
certificate attached hereto as Exhibit E. All references in the Credit
Agreement, the Forbearance Agreement, the Security Documents and the other
Transaction Documents to "Exhibit E," to the "compliance certificate," to a
"certificate of the principal financial officers or controllers of Borrowers in
the form attached hereto as Exhibit E" and other references of similar import
shall hereafter be amended and deemed to refer to the form of compliance
certificate as amended and restated in the form attached hereto as Exhibit E.
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12. Borrowers hereby agrees to reimburse Lender, upon demand, for all
out-of-pocket costs and expenses, including reasonable legal fees and expenses
of the attorneys for the Lender incurred by Lender in the preparation,
negotiation and execution of this Third Amendment to Forbearance Agreement and
all other documents, instruments and agreements relating to this Third Amendment
to Forbearance Agreement with Lender.
13. In consideration of the amendments made by Lender hereunder, Borrowers
shall jointly and severally pay to Lender on the date hereof an amendment fee in
the amount of $37,500.00, which fee shall be fully earned by Lender on the date
hereof.
14. The amendments set forth herein are expressly conditioned upon the
following:
(a) Execution and delivery by Borrowers of this Third Amendment to
Forbearance Agreement and of the amended and restated Revolving Credit Note in
the form attached hereto as Exhibit B;
(b) Payment by the Borrowers of the amendment fee described in
Paragraph 13 above;
(c) Execution and delivery by Bank One, NA of a Consent of
Participant, in form and substance acceptable to Lender, consenting to the terms
of this Third Amendment; and
(d) Execution and delivery of such other agreements and other
documents reasonably requested by Lender to complete the transactions
contemplated herein.
15. Borrowers hereby represents and warrants to Lender that:
(a) The execution, delivery and performance by Borrowers of this
Third Amendment to Forbearance Agreement are within the corporate powers of the
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 Third Amendment to Forbearance Agreement 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 Borrowers are not now in
default under or in violation of, the terms of the Articles of Incorporation or
Bylaws of any of the Borrowers, any applicable law, any rule, regulation, order,
writ, judgment or decree of any court or governmental or regulatory agenc






