Attached files
file | filename |
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EX-10.4 - EX-10.4 - PROFESSIONAL VETERINARY PRODUCTS LTD /NE/ | c60018exv10w4.htm |
EX-10.1 - EX-10.1 - PROFESSIONAL VETERINARY PRODUCTS LTD /NE/ | c60018exv10w1.htm |
EX-10.3 - EX-10.3 - PROFESSIONAL VETERINARY PRODUCTS LTD /NE/ | c60018exv10w3.htm |
EX-10.2 - EX-10.2 - PROFESSIONAL VETERINARY PRODUCTS LTD /NE/ | c60018exv10w2.htm |
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
August 20, 2010
Date of report (Date of earliest event reported)
Date of report (Date of earliest event reported)
Professional Veterinary Products, Ltd.
(Exact Name of Registrant as Specified in Its Charter)
Nebraska
(State or Other Jurisdiction of Incorporation)
(State or Other Jurisdiction of Incorporation)
000-26326 (Commission File Number) |
37-1119387 (IRS Employer Identification No.) |
10077 South 134th Street Omaha, NE (Address of Principal Executive Offices) |
68138 (Zip Code) |
(402) 331-4440
(Registrants Telephone Number, Including Area Code)
(Registrants Telephone Number, Including Area Code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01. Entry into a Material Definitive Agreement.
Bankruptcy Case
As previously reported in the Companys Current Report on Form 8-K filed on August 20, 2010,
Professional Veterinary Products, Ltd., a Nebraska corporation (the Company), and its
subsidiaries, ProConn, LLC, a Nebraska limited liability company (ProConn), and Exact Logistics,
LLC, a Nebraska limited liability company (Exact, and together with the Company and ProConn, the
Debtors) filed voluntary petitions for relief under Chapter 11 of the United States Bankruptcy
Code (the Bankruptcy Code) in the United States Bankruptcy Court for the District of Nebraska
(the Bankruptcy Court) (Case Nos. 10-82436, 10-82437 and 10-82438) (collectively, the Bankruptcy
Case) on August 20, 2010. The Debtors will continue to operate their businesses as
debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the
applicable provisions of the Bankruptcy Code and orders of the Bankruptcy Court. The Debtors are
pursuing a sale of substantially all of their assets pursuant to Section 363 of the Bankruptcy Code
under a Bankruptcy Court supervised auction and sale process. During the bankruptcy process, the
Debtors intend to use the proceeds of loans under a debtor-in-possession revolving credit facility
(described below) for working capital and other general corporate purposes.
DIP Facility
In connection with the Bankruptcy Case, the Debtors entered into a Stipulation For Secured
Borrowing and Adequate Protection on August 20, 2010 (the DIP Facility) with their existing
lender, Wells Fargo Bank, National Association (the Lender). The DIP Facility contemplates that
the Lender will make revolving loans available to the Debtors under the terms of the Credit and
Security Agreement dated January 29, 2010 by and among the Debtors and the Lenders, together with
the loan documents related thereto (as amended and modified, the Existing Credit Facility). The
loans available to the Debtors under the DIP Facility are in an aggregate amount of up to $40
million, subject to borrowing base and budget limitations, for working capital and other general
corporate purposes. The loans bear interest at the rate of 3-month LIBOR plus 8.50% per annum, and
require payment of a $75,000 commitment fee. The DIP Facility is subject to the approval of the
Bankruptcy Court.
The DIP Facility terminates, and the loans under the DIP Facility mature, on the earliest to
occur of (a) September 30, 2010, (b) the failure of the Debtors to achieve certain milestones with
respect to the sale of assets pursuant to Section 363 of the Bankruptcy Code during September 2010,
(c) the occurrence of an event of default under the DIP Facility, or (d) the approval of the
Bankruptcy Court of the sale of assets pursuant to Section 363 of the Bankruptcy Code and the
payment of the proceeds thereof to the Lender in an amount sufficient to pay the obligations owing
to the Lender in full. The DIP Facility requires monthly interest payments, and principal and
accrued interest are payable on the applicable maturity date described above. The Debtors
obligations under the DIP Facility are secured by a lien on substantially all of the assets of the
Debtors, as well as a superpriority administrative claim in the Bankruptcy Case. The DIP Facility
contains various representations, warranties and covenants by the Debtors, and events of default,
that are customary for transactions of this nature.
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The foregoing description of the terms of the DIP Facility is qualified in its entirety by
reference to the DIP Facility, a copy of which is filed herewith as Exhibit 10.1 and incorporated
herein by reference.
Item 1.03. Bankruptcy or Receivership.
The information provided in Item 1.01 of this Current Report on Form 8-K regarding the
Bankruptcy Case is incorporated into this Item 1.03 by reference.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information provided in Item 1.01 of this Current Report on Form 8-K regarding the DIP
Facility is incorporated into this Item 2.03 by reference.
Item 2.04. Triggering Events that Accelerate or Increase a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement.
Under the terms of the Existing Credit Facility, pursuant to which the Debtors have
outstanding obligations in the approximate amount of $5.9 million as of August 23, 2010, an event
of default occurred on August 20, 2010 due to the filing of the Bankruptcy Case. As a result, the
Existing Credit Facility provides that the Lender may terminate its commitment to make additional
advances to, and issue letters of credit for the account of, the Debtors thereunder and that the
obligations owing to the Lender thereunder are automatically due and payable.
The ability of the Lender to seek remedies to enforce its rights under the Existing Credit
Facility described above is automatically stayed as a result of the filing of the Bankruptcy Case,
and the Lenders rights of enforcement are subject to applicable provisions of the Bankruptcy Code.
Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
(e) On August 24, 2010, the Board of Directors of the Company approved Key Executive Employee
Incentive Agreements (the Incentive Agreements) with each of the following officers: (a) Stephen
J. Price, President and Chief Executive Officer; (b) Jamie Meadows, Chief Operating Officer; and
(c) Vicky Winkler, Director of Finance (principal financial officer). The Incentive Agreements are
subject to Bankruptcy Court approval and structured to incentivize such officers to, among other
things, consummate a sale of substantially all of the Companys inventory to a buyer pursuant to
Section 363 of the Bankruptcy Code. The Incentive Agreements provide for the following payments to
each officer:
| bonuses of $72,000 to Mr. Price, $35,000 to Mr. Meadows and $22,000 to Ms. Winkler, if the officer is employed by the Company on the date the Bankruptcy Court confirms a sale of substantially all of the Companys inventory to a buyer pursuant to Section 363 of the Bankruptcy Code; and |
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| bonuses of $40,000 to Mr. Price and $14,000 to Ms. Winkler, if the officer is employed by the Company on (a) November 30, 2010 or (b) the date a distribution is made to general unsecured creditors (other than a distribution from the sale of substantially all of the Companys inventory to a buyer pursuant to Section 363 of the Bankruptcy Code). |
The foregoing description of the terms of the Incentive Agreements is qualified in its
entirety by reference to the Incentive Agreements, copies of which are filed herewith as Exhibits
10.2, 10.3 and 10.4, respectively, and incorporated herein by reference.
Item 8.01. Other Events.
On August 20, 2010, the Company and ProConn completed the sale of their inventory of certain
animal health products and miscellaneous related assets to Micro Beef Technologies, Ltd. (Micro
Beef). The assets sold to Micro Beef primarily consisted of inventory located in the delivery
vehicles operated by salespersons of the Company who accepted employment offers with Micro Beef.
The purchase price for the Micro Beef transaction was based on the cost of the inventory to the
Company and ProConn, which amount totaled approximately $1.5 million plus the assumption of certain
vehicle leases.
On August 17, 2010, the Company completed the sale of its inventory of certain swine products
and miscellaneous related assets to Lextron, Inc. (Lextron). The purchase price for the Lextron
transaction was based on the cost of the inventory to the Company, which amount totaled
approximately $2.5 million.
The proceeds of the Micro Beef and Lextron transactions were paid to the Lender and used to
reduce the obligations owing under the Existing Credit Facility.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit No. | Description | |
10.1
|
Stipulation For Secured Borrowing and Adequate Protection dated August 20, 2010 by the Debtors and Wells Fargo Bank, National Association | |
10.2
|
Key Executive Employee Incentive Agreement dated August 19, 2010 by Stephen J. Price and the Company | |
10.3
|
Key Executive Employee Incentive Agreement dated August 19, 2010 by Jamie Meadows and the Company | |
10.4
|
Key Executive Employee Incentive Agreement dated August 19, 2010 by Vicky Winkler and the Company |
This Current Report on Form 8-K and the exhibits filed herewith contain forward-looking
statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements include, without limitation, the Companys beliefs concerning future
business conditions, outlook based on currently available information and statements regarding the
Companys expectations concerning the bankruptcy process. The Companys actual results
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could differ materially from those anticipated in the forward-looking statements as a result of
these risks and uncertainties. These risks and uncertainties, include, without limitation, (1) the
ability of the Company to develop, pursue, confirm and consummate one or more plans of
reorganization or liquidation with respect to the Bankruptcy Case; (2) the ability of the Company
to obtain court approval of its motions in the Bankruptcy Case pursued by it from time to time; (3)
risks associated with third parties seeking and obtaining Bankruptcy Court approval to terminate or
shorten the exclusivity period for the Company to propose and confirm one or more plans, or the
appointment of a trustee or to convert the cases to Chapter 7 cases; (4) potential adverse
developments with respect to the Companys liquidity or results of operations; (5) the ability of
the Company to fund and execute its business plan; (6) the ability of the Company to retain and
compensate key executives and other key employees; and (7) any further deterioration in the
macroeconomic environment or consumer confidence. Discussion of additional factors that could
cause actual results to differ materially from managements projections, forecasts, estimates and
expectations is set forth under Item 1A. Risk Factors in the Companys Annual Report on Form 10-K
for the year ended July 31, 2009, and in more recent filings made by the Company with the
Securities and Exchange Commission. Each forward-looking statement, including, without limitation,
financial guidance, speaks only as of the date on which it is made, and the Company undertakes no
obligation to update any forward-looking statement to reflect events or circumstances after the
date on which it is made or to reflect the occurrence of anticipated or unanticipated events or
circumstances, except as required by law.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Professional Veterinary Products, Ltd. |
||||
Date: August 25, 2010 | By: | /s/ Stephen J. Price | ||
Name: | Stephen J. Price | |||
Title: | President and CEO | |||
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EXHIBIT INDEX
Exhibit No. | Description | |
10.1
|
Stipulation For Secured Borrowing and Adequate Protection dated August 20, 2010 by the Debtors and Wells Fargo Bank, National Association | |
10.2
|
Key Executive Employee Incentive Agreement dated August 19, 2010 by Stephen J. Price and the Company | |
10.3
|
Key Executive Employee Incentive Agreement dated August 19, 2010 by Jamie Meadows and the Company | |
10.4
|
Key Executive Employee Incentive Agreement dated August 19, 2010 by Vicky Winkler and the Company |