FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
Exhibit 10.1A
FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT (the “First Amendment”), dated as of December 20, 2013, amends that certain Amended and Restated Credit Agreement, dated as of June 12, 2013 (the “Credit Agreement”), by and among ADVANCED DRAINAGE SYSTEMS, INC., a Delaware corporation (the “Borrower”), the GUARANTORS (as defined in the Credit Agreement), the LENDERS (as defined in the Credit Agreement) PARTY THERETO, and PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent (the “Administrative Agent”).
WITNESSETH:
WHEREAS, the Borrower desires to make a Capital Distribution to its shareholders in the amount of approximately $107,966,100, which Capital Distribution is contemplated to occur in January, 2014.
WHEREAS, approximately $22,624,300 of the contemplated Capital Distribution will be paid with respect to shares held by the ESOP which have not been allocated to employees of the Borrower and its Subsidiaries as of the date hereof.
WHEREAS, the Borrower has requested an amendment of the Credit Agreement in order to increase Consolidated EDITDAE by the amount of the Capital Distribution paid with respect to unallocated shares held by the ESOP, and the Lenders have agreed to such amendment subject to the terms and conditions herein.
NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements herein contained and intending to be legally bound hereby, covenant and agree as follows:
1. Definitions. Capitalized terms used but not defined herein shall have the meanings set forth in the Credit Agreement.
2. Recitals. The foregoing recitals are true and correct and incorporated herein by reference.
3. Amendments to Credit Agreement.
(a) The following new defined terms are hereby added to Section 1.1 [Certain Definitions] of the Credit Agreement in alphabetical order as follows:
“ESOP Dividends on Unallocated Shares shall mean the Capital Distributions made by the Borrower in January, 2014 with respect to the shares of stock of the Borrower held by the ESOP which have not been allocated to the ESOP accounts of employees of the Borrower and its Subsidiaries, which Capital Distributions shall not exceed $22,624,300 in the aggregate.”
“First Amendment shall mean the First Amendment to Amended and Restated Credit Agreement, dated as of December 20, 2013.”
“First Amendment Effective Date shall mean the date upon which the First Amendment became effective pursuant to its terms.”
(b) The following definitions in Section 1.1 [Certain Definitions] of the Credit Agreement are hereby amended and restated in its entirety as follows:
“Consolidated EBITDAE for any period of determination shall mean, without duplication, (x) net income, plus, to the extent reducing net income, the sum, of amounts for (a) consolidated interest expense, (b) charges for federal, state, local and foreign income taxes, (c) total depreciation expense, (d) total amortization expense, (e) costs and expenses incurred in connection with the Transactions in an aggregate amount not to exceed $2,100,000, (f) non-cash charges reducing net income for such period, (g) ESOP Compensation, (h) ESOP Dividends on Unallocated Shares, and (i) non-cash compensation related to stock options and restricted stock, minus (y) non-cash gains increasing net income, in each case of the Borrower and its Subsidiaries for such period determined and consolidated in accordance with GAAP.
For purposes of calculating Consolidated EBITDAE (a) with respect to a business acquired by the Loan Parties or Subsidiaries thereof pursuant to a Permitted Acquisition, Consolidated EBITDAE shall be calculated on a pro forma basis (determined on a basis consistent with Article 11 or Regulation S-X promulgated under the Securities Act and as interpreted by the staff of the United States of America Securities and Exchange Commission), using historical numbers of any business so acquired, in accordance with GAAP as if the Permitted Acquisition had been consummated at the beginning of such period, and (b) with respect to a business or assets liquidated, sold or disposed of by the Loan Parties or Subsidiaries pursuant to Section 8.2.7 [Dispositions of Assets or Subsidiaries], Consolidated EBITDAE shall be calculated on a pro forma basis (determined on the basis stated above), using historical numbers of any business or assets so liquidated, sold or disposed of, in accordance with GAAP as if such liquidation, sale or disposition had been consummated at the beginning of such period.”
“Fixed Charges shall mean for any period of determination the sum of (i) cash interest expense, plus (ii) scheduled principal payments on Indebtedness, plus (iii) such portion of Capital Distributions pursuant to the ESOP exceeding $10,000,000 during any fiscal year (excluding the Capital Distributions with respect to the ESOP Dividends on Unallocated Shares), in each case of the Borrower and its Subsidiaries for such period determined and consolidated in accordance with GAAP.”
4. Conditions Precedent. The Borrower, the Guarantors and the Lenders acknowledge that this First Amendment shall not be effective until the date each of the following conditions precedent has been satisfied (such date is referred to herein as the “First Amendment Effective Date”):
(a) The Borrower, the Guarantors, the Required Lenders, and the Administrative Agent shall have executed, and delivered to the Administrative Agent, this First Amendment;
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(b) The Senior Noteholders (2010) under the Amended and Restated Private Shelf Agreement for the Borrower’s 5.60% Senior Series A Secured Notes due September 24, 2018 and 4.05% Senior Series B Secured Notes due September 24, 2019 have executed and delivered an amendment to such Amended and Restated Private Shelf Agreement between such Senior Noteholders (2010) and the Borrower pursuant to which such Amended and Restated Private Shelf Agreement is amended to be consistent with the amendments of the Credit Agreement as set forth in this First Amendment;
(c) The Borrower and each Guarantor, by its execution and delivery of this First Amendment, shall have and be deemed to have certified to the Administrative Agent and the Lenders that the certificates dated the Closing Date and signed by the Secretary or an Assistant Secretary of the Borrower or such Guarantor, as applicable, on behalf of itself and the Guarantors, remain true, correct and complete on and as of the First Amendment Effective Date;
(d) Since March 31, 2013, no Material Adverse Change shall have occurred with respect to the Borrower or any of the Guarantors;
(e) The Borrower and the Guarantors shall have obtained all approvals and consents necessary to consummate the transactions contemplated by this First Amendment;
(f) The Borrower shall have reimbursed the Administrative Agent all fees and expenses, including without limitation, reasonable attorneys’ fees, for which the Administrative Agent is entitled to be reimbursed; and
(g) All legal details and proceedings to be consummated and/or otherwise completed as of the First Amendment Effective Date in connection with the transactions contemplated by this First Amendment and all other Loan Documents to be delivered to the Lenders shall be in form and substance reasonably satisfactory to the Administrative Agent.
5. Incorporation into Credit Agreement. This First Amendment shall be incorporated into the Credit Agreement by this reference.
6. Full Force and Effect. Except as expressly modified by this First Amendment, all of the terms, conditions, representations, warranties and covenants of the Credit Agreement and the other Loan Documents are true and correct and shall continue in full force and effect without modification, including without limitation, all liens and security interests securing the Borrower’s indebtedness to the Lenders and all Guaranty Agreements executed and delivered by the Guarantors.
7. Reimbursement of Expenses. The Borrower unconditionally agrees to pay and reimburse the Administrative Agent and save the Administrative Agent harmless against liability
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for the payment of reasonable out-of-pocket costs, expenses and disbursements, including without limitation, fees and expenses of counsel incurred by the Administrative Agent in connection with the development, preparation, execution, administration, interpretation or performance of this First Amendment and all other documents or instruments to be delivered in connection herewith.
8. Counterparts. This First Amendment may be executed by different parties hereto in any number of separate counterparts, each of which, when so executed and delivered shall be an original and all such counterparts shall together constitute one and the same instrument.
9. Entire Agreement. This First Amendment sets forth the entire agreement and understanding of the parties with respect to the transactions contemplated hereby and supersedes all prior understandings and agreements, whether written or oral, between the parties hereto relating to the subject matter hereof. No representation, promise, inducement or statement of intention has been made by any party which is not embodied in this First Amendment, and no party shall be bound by or liable for any alleged representation, promise, inducement or statement of intention not set forth herein.
10. Governing Law. This First Amendment shall be deemed to be a contract under the laws of the State of Ohio, U.S.A. and for all purposes shall be governed by and construed and enforced in accordance with the internal laws of the State of Ohio, U.S.A. without regard to its conflict of laws principles.
[SIGNATURE PAGES FOLLOW]
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[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
IN WITNESS WHEREOF, the parties hereto, by their officers thereunto duly authorized, have executed this First Amendment as of the day and year first above written.
| BORROWER: | ||
| ADVANCED DRAINAGE SYSTEMS, INC. | ||
| By: | /s/ Xxxx X. Xxxxxxxx | |
| Name: | Xxxx X. Xxxxxxxx | |
| Title: | Secretary, Executive Vice President, | |
| Treasurer and Chief Financial Officer | ||
| GUARANTOR: | ||
| STORMTECH LLC | ||
| By: | /s/ Xxxx X. Xxxxxxxx | |
| Name: | Xxxx X. Xxxxxxxx | |
| Title: | Secretary and Treasurer | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| PNC BANK, NATIONAL ASSOCIATION, individually and as Administrative Agent | ||
| By: | /s/ Xxxxxx X. Xxxxx | |
| Name: | Xxxxxx X. Xxxxx | |
| Title: | Senior Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| BANK OF AMERICA, N.A., individually and as Co-Documentation Agent | ||
| By: | /s/ Xxxxxx X. Xxxxxxx | |
| Name: | Xxxxxx X. Xxxxxxx | |
| Title: | Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| BMO XXXXXX BANK N.A. | ||
| By: | /s/ Xxxxxxx Gift | |
| Name: | Xxxxxxx Gift | |
| Title: | Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| BRANCH BANKING & TRUST COMPANY | ||
| By: | /s/ Xxxxx X. Xxxxxxx | |
| Name: | Xxxxx X. Xxxxxxx | |
| Title: | Senior Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| CITIZENS BANK OF PENNSYLVANIA | ||
| By: | /s/ Xxxx X. Xxxxxxxx, Xx. | |
| Name: | Xxxx X. Xxxxxxxx, Xx. | |
| Title: | Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| FIFTH THIRD BANK, individually and as Co-Syndication Agent | ||
| By: | /s/ Xxxxxxx X. Xxxxxxx | |
| Name: | Xxxxxxx X. Xxxxxxx | |
| Title: | Senior Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| FIRSTMERIT BANK, N.A. | ||
| By: | /s/ Xxxxxx X. Xxxxxx | |
| Name: | Xxxxxx X. Xxxxxx | |
| Title: | Senior Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| JPMORGAN CHASE BANK, N.A., individually and as Co-Documentation Agent | ||
| By: | /s/ Xxxx Xxxxxx | |
| Name: | Xxxx Xxxxxx | |
| Title: | Authorized Officer | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| THE NORTHERN TRUST COMPANY | ||
| By: | /s/ Xxxxxxx X. Xxxxxxxx | |
| Name: | Xxxxxxx X. Xxxxxxxx | |
| Title: | Vice President | |
[SIGNATURE PAGE - FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT]
| TRISTATE CAPITAL BANK | ||
| By: | /s/ Xxxxxxx X. Xxxxxx | |
| Name: | Xxxxxxx X. Xxxxxx | |
| Title: | Senior Vice President | |
