AMENDMENT NUMBER SEVEN TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
Exhibit 10.1
AMENDMENT NUMBER SEVEN TO
THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
This AMENDMENT NUMBER SEVEN TO THIRD AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (this “Amendment”) is dated as of August 8, 2024, and is entered into by and among AMERICAN VANGUARD CORPORATION, a Delaware corporation ("Holdco"), AMVAC CHEMICAL CORPORATION, a California corporation (the “Borrower Agent”), AMVAC NETHERLANDS B.V., a besloten vennootschap met beperkte aansprakelijkheid, organized under the law of the Netherlands (“AMVAC B.V.”, and together with the Borrower Agent, each a “Borrower” and, collectively, “Borrowers”), the financial institutions party to this Agreement from time to time as lenders (collectively, “Lenders”), BMO BANK, N.A., as successor in interest to BANK OF THE WEST (“BMO”), as administrative agent, documentation agent, syndication agent and collateral agent for the Lenders (in such capacity, together with its successors and assigns in such capacity, “Agent”), BANK OF MONTREAL, CHICAGO BRANCH and COMPEER FINANCIAL, PCA, as co-documentation agents (collectively, and in such capacities, “Co-Documentation Agents”) and BMO, as sole lead arranger and book runner (in such capacity, together with its successors and assigns in such capacity, the “Lead Arranger and Book Runner”).
RECITALS
WHEREAS, Xxxxxx, Borrowers, Lenders, and Agent are parties to that certain Third Amended and Restated Loan and Security Agreement, dated as of August 5, 2021 (the “Loan Agreement”).
WHEREAS, Agent and the Required Lenders have agreed to Borrower’s request pursuant to the terms of this Amendment.
NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, the parties agree as follows:
“Modified Current Ratio”: as of any date of determination, the ratio, determined on a consolidated basis for Holdco and its Subsidiaries, of (a)(i) Accounts owned by Holdco and its Subsidiaries, plus (ii) Inventory owned by Holdco and its Subsidiaries, to (b) Funded Debt of Holdco and its Subsidiaries.
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“Amendment No. 7 Closing Date”: August 8, 2024.
(iv) non-recurring non-cash charges and cash charges within the expense categories described below for such period subject to the reasonable and satisfactory review and consent of Agent, not to exceed (A) during the four consecutive Fiscal Quarters ended on June 30, 2024, the lesser of (x) $12,500,000 and (y) the sum of (1) up to $5,000,000 related to one-time legal expenses and costs related to the Xxxx Xxxxxxxxx Transition Agreement (“EWTA”), plus (2) up to $8,500,000 in transformation costs including consulting fees; (B) during the four consecutive Fiscal Quarters ending on September 30, 2024, the lesser of (x) $45,000,000 and (y) the sum of (1) up to $6,000,000 related to one-time legal expenses and costs related to the EWTA, plus (2) up to $13,000,000 in transformation costs including consulting fees, plus (3) up to $30,000,000 in write-down of inventory and fixed assets; (C) during the four consecutive Fiscal Quarters ending on December 31, 2024, the lesser of (x) $45,000,000 and (y) the sum of (1) up to $6,000,000 related to one-time legal expenses and costs related to the EWTA, plus (2) up to $15,000,000 in transformation costs including consulting fees, plus (3) up to $30,000,000 in write-down of inventory and fixed assets); (D) during the four consecutive Fiscal Quarters ending on March 31, 2025, the lesser of (x) $45,000,000 and (y) the sum of (1) up to $5,000,000 related to one-time legal expenses and costs related to the EWTA, plus (2) up to $16,000,000 in transformation costs including consulting fees, plus (3) up to $30,000,000 in write-down of inventory and fixed assets; (E) during the four consecutive Fiscal Quarters ending on June 30, 2025, the lesser of (x) $42,500,000 and (y) the sum of (1) up to $1,500,000 related to one-time legal expenses and costs related to the EWTA, plus (2) up to $14,000,000 in transformation costs including consulting fees, plus (3) up to $30,000,000 in write-down of inventory and fixed assets; (F) during the four consecutive Fiscal Quarters ending on September 30, 2025, the lesser of (x) $15,000,000 and (y) the sum of (1) up to $1,000,000 related to one-time legal expenses and costs related to the EWTA, plus (2) up to $9,000,000 in transformation costs including consulting fees, plus (3) up to $8,000,000 in write-down of inventory and fixed assets); (G) during the four consecutive Fiscal Quarters ending on December 31, 2025, the lesser of (x) $7,500,000 and (y) the sum of (1) up to $6,000,000 in transformation costs including consulting fees, plus (2) up
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to $2,500,000 in write-down of inventory and fixed assets; and (H) up to $5,000,000 during the four consecutive Fiscal Quarters ending on March 31, 2026 and on each Fiscal Quarter-end thereafter;
“Covenant Modification Period”: the fiscal quarters commencing with the fiscal quarter ended September 30, 2023, and continuing up to and including the fiscal quarter ending December 31, 2025.
Level |
Total Leverage Ratio |
Revolver Loans |
Unused Line Fee Rate |
Letter of Credit Fee |
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SOFR |
Adjusted Base Rate |
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I |
> 4.00 to 1.00 |
3.125% |
2.125% |
0.30% |
3.125% |
II |
< 4.00 to 1.00 but > 3.50 to 1.00 |
2.875% |
1.875% |
0.30% |
2.875% |
III |
< 3.50 to 1.00 but > 3.00 to 1.00 |
2.625% |
1.625% |
0.25% |
2.625% |
IV |
< 3.00 to 1.00 but > 2.25 to 1.00 |
2.375% |
1.375% |
0.20% |
2.375% |
V |
< 2.25 to 1.00 but > 1.75 to 1.00 |
2.125% |
1.125% |
0.20% |
2.125% |
VI |
< 1.75 to 1.00 |
1.875% |
0.875% |
0.15% |
1.875% |
Commencing on the Amendment No. 7 Closing Date and continuing until the next determination pursuant to the procedures set forth in the definition of Applicable Margin, the margins shall be determined as if Level II were applicable. For the avoidance of doubt, the 0.50% increase in the Applicable Margins for SOFR, Adjusted Base Rate and Letter of Credit Fee set forth in Section 2.2 of Amendment No. 6 shall terminate on the Amendment No. 7 Closing Date. As used in this Amendment, “Amendment No. 6” shall mean that certain Amendment Number Six to Third Amended and Restated Loan and Security Agreement dated as of November 7, 2023 by and among the parties this Amendment.
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10.3.1 Maximum Total Leverage Ratio. Commencing on the Fiscal Quarter ended June 30, 2024, maintain a Total Leverage Ratio, measured on a Fiscal Quarter-end basis, of not greater than the applicable ratio set forth in the following table for the applicable date set forth opposite thereto; provided, however, that the maximum Total Leverage Ratio may be increased by 0.50:1.00 for a period of four consecutive Fiscal Quarters (the “Adjusted Covenant Period”) in connection with any one or more Permitted Acquisitions during any period of ninety (90) consecutive days for an aggregate consideration of more than $15,000,000, if the Borrowers have provided notice in writing to the Agent requesting an Adjusted Covenant Period during the Fiscal Quarter in which such Permitted Acquisition is consummated; provided, further, that, (x) an Adjusted Covenant Period cannot commence during the Covenant Modification Period, (y) Borrowers may not request more than three (3) Adjusted Covenant Periods during the term of this Agreement, and (z) at least two (2) Fiscal Quarters have been completed following the end of the previously requested Adjusted Covenant Period:
Fiscal Quarter Ending |
Maximum Total Leverage Ratio |
June 30, 2024 |
4.25:1.00 |
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September 30, 2024 |
5.00:1.00 |
December 31, 2024 |
4.50:1.00 |
March 31, 2025 |
4.50:1.00 |
June 30, 2025 |
4.25:1.00 |
September 30, 2025 |
4.00:1.00 |
December 31, 2025 and each Fiscal Quarter thereafter |
3.25:1.00 |
10.3.3 Minimum Modified Current Ratio. Commencing on the Fiscal Quarter ended September 30, 2024, maintain a Modified Current Ratio of at least 1.50:1.00 measured at the end of each Fiscal Quarter.
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[Signatures are on the following pages]
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IN WITNESS WHEREOF, this Amendment has been executed and delivered as of the date set forth above.
HOLDCO: |
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AMERICAN VANGUARD CORPORATION, a Delaware corporation |
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BORROWERS: |
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AMVAC CHEMICAL CORPORATION, a California corporation |
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By: |
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Xxxxxxx X. Xxxxxxxx |
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Director |
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AMVAC NETHERLANDS B.V. a besloten vennootschap met beperkte aansprakelijkheid, organized under the laws of the Netherlands |
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By: |
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Xxxxx Xxxxxx |
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Managing Director |
Amendment Number Seven to Third Amended and Restated Loan and Security Agreement
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AGENT AND LENDERS: |
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BMO BANK, N.A., as successor in interest to BANK OF THE WEST, as Agent (with the consent of the Required Lenders) and as a Revolver Loan Lender and Issuing Bank |
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Xxxxxx Xxxxxx |
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Director |
Amendment Number Seven to Third Amended and Restated Loan and Security Agreement
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AGCOUNTY FARM CREDIT SERVICES, FLCA, as a Lender |
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Amendment Number Seven to Third Amended and Restated Loan and Security Agreement
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COMPEER FINANCIAL, PCA, as a Lender |
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Amendment Number Seven to Third Amended and Restated Loan and Security Agreement
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BANK OF MONTREAL, CHICAGO BRANCH, as a Lender |
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Amendment Number Seven to Third Amended and Restated Loan and Security Agreement
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COBANK, ACB, as a Lender |
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Amendment Number Seven to Third Amended and Restated Loan and Security Agreement
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UMQUA BANK, as a Lender |
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Amendment Number Seven to Third Amended and Restated Loan and Security Agreement
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GREENSTONE FARM CREDIT SERVICES, FLCA, as a Lender |
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Amendment Number Seven to Third Amended and Restated Loan and Security Agreement