ADVANCED ENERGY INDUSTRIES INC - FORM 8-K - EX-10.2 - September 9, 2021

Attached files

file filename
8-K - 8-K - ADVANCED ENERGY INDUSTRIES INCaeis-20210909x8k.htm

Exhibit 10.2

AMENDMENT NO. 1 TO CREDIT AGREEMENT

AMENDMENT NO. 1 TO CREDIT AGREEMENT, dated as of September 9, 2021 (this “Amendment”), among ADVANCED ENERGY INDUSTRIES, INC., a Delaware corporation (the “Borrower”), each of the Guarantors party hereto, BANK OF AMERICA, N.A., as Administrative Agent (in such capacity and including any permitted successor or assign, the “Administrative Agent”), and the Lenders party hereto.

W I T N E S S E T H:

WHEREAS, the Borrower, the Guarantors, the Lenders and the Administrative Agent entered into a Credit Agreement, dated as of September 10, 2019 (as amended, supplemented or otherwise modified through the date hereof, the “Credit Agreement”; capitalized terms used herein but not otherwise defined herein shall have the meanings given such terms in the Credit Agreement);

WHEREAS, the Borrower have requested an amendment to the Credit Agreement pursuant to which certain provisions of the Credit Agreement will be amended as set forth herein;

WHEREAS, Section 2.19 of the Credit Agreement permits the Borrower (x) to incur Incremental Revolving Commitments and to amend the Credit Agreement to give effect to the incurrence thereof pursuant to an Increase Joinder, by and among the Borrower, the Administrative Agent and the Eligible Assignees providing such Incremental Revolving Commitments and (y) to incur Incremental Term Commitments and to amend the Credit Agreement to give effect to the incurrence thereof pursuant to an Increase Joinder, by and among the Borrower, the Administrative Agent and the Eligible Assignees providing such Incremental Term Commitments;

WHEREAS, the Borrower has requested (x) Incremental Revolving Commitments pursuant to Section 2.19 of the Credit Agreement in an aggregate principal amount of $50,000,000 in the form of an increase (the “First Incremental Revolving Commitments”) to the existing Revolving Commitments outstanding under the Credit Agreement immediately prior to the Amendment No. 1 Effective Date (as defined below) (such existing Revolving Commitments, the “Outstanding Revolving Commitments”), which First Incremental Revolving Commitments shall be a fungible increase to the Outstanding Revolving Commitments, shall form part of a single Class of Revolving Commitments with the Outstanding Revolving Commitments, and shall have identical terms as the Outstanding Revolving Commitments and (y) Incremental Term Commitments pursuant to Section 2.19 of the Credit Agreement in an aggregate principal amount of $85,000,000 in the form of new term loan commitments (the “First Incremental Term Commitments”, and the loans thereunder, the “First Incremental Term Loans”), which shall be a fungible increase to the Term Loans outstanding under the Credit Agreement immediately prior to the Amendment No. 1 Effective Date (such existing Term Loans, the “Outstanding Term Loans”), shall form part of a single Class of Term Loans with the Outstanding Term Loans, and shall have identical terms as the Outstanding Term Loans;

WHEREAS, upon the effectiveness of this Amendment on the Amendment No. 1 Effective Date, (x) each Person identified on Annex A hereto that executes and delivers a counterpart to this Amendment as an Incremental Revolving Lender (each an “Incremental Revolving Lender” and, collectively, the “Incremental Revolving Lenders”) will provide, on a several and not joint basis, a First Incremental Revolving Commitment in the form of a fungible increase to the Outstanding Revolving Commitments in the amount set forth on Annex A hereto, which First Incremental Revolving Commitments shall be in an aggregate principal amount of $50,000,000, and the aggregate amount of Revolving Commitments under the Amended Credit Agreement (as defined below) shall be $200,000,000 and (y) each

Person identified on Annex A hereto that executes and delivers a counterpart to this Amendment as an Incremental Term Lender (each an “Incremental Term Lender” and, collectively, the “Incremental Term Lenders”) will make, on a several and not joint basis, new Term Loans under the First Incremental Term Commitments to the Borrower in Dollars in the amount set forth on Annex A hereto, which First Incremental Term Commitments shall be in an aggregate principal amount of $85,000,000, and the aggregate amount of Term Loans outstanding under the Amended Credit Agreement shall be $400,000,000;

WHEREAS, upon the effectiveness of this Amendment on the Amendment No. 1 Effective Date, the proceeds of the First Incremental Revolving Commitments and the First Incremental Term Loans will be used by the Borrower for any purpose not prohibited by the Credit Agreement, including the payment of fees and expenses incurred in connection with arrangement and funding of the First Incremental Revolving Commitments and the First Incremental Term Loans, all as more fully set forth in the Amended Credit Agreement;

WHEREAS, BofA Securities, Inc. has agreed to act as sole lead arranger and sole book runner for this Amendment, the Incremental Term Commitments and the Incremental Revolving Commitments (the “Amendment No. 1 Arranger”), pursuant to that certain engagement letter, dated as of August 30, 2021 (the “Amendment No. 1 Engagement Letter”), between the Borrower and the Amendment No. 1 Arranger; and

WHEREAS, Section 11.13 of the Credit Agreement permits the Borrower to replace a Non-Consenting Lender;

NOW, THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE I​
​
Amendments

Subject to the occurrence of the Amendment No. 1 Effective Date:

(a)The Credit Agreement is, effective as of the Amendment No. 1 Effective Date, hereby amended to delete the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text) as set forth in the pages of the Credit Agreement attached as Exhibit A hereto (the “Amended Credit Agreement”).
(b)Schedule 1.01(b) to the Credit Agreement is, effective as of the Amendment No. 1 Effective Date, hereby amended by adding the tables attached as Annex A hereto (for the avoidance of doubt, all other schedules to the Credit Agreement will remain in full force and effect in the form attached to the Credit Agreement on the Closing Date).
(c)The Borrower shall replace any Non-Consenting Lender in accordance with Section 11.13 of the Credit Agreement and pursuant to an Assignment and Assumption Agreement executed by the Borrower, the Administrative Agent and the assignee.
ARTICLE II​
Section 2.1.First Incremental Revolving Commitments.

-2-

​

(a)Pursuant to Sections 2.19 and 11.01 of the Credit Agreement, with effect from and including the Amendment No. 1 Effective Date, each Incremental Revolving Lender shall become a party to this Amendment and the Amended Credit Agreement with all of the rights and obligations of a “Lender” and a “Revolving Lender” under the Amended Credit Agreement and the other Loan Documents, and shall each have a First Incremental Revolving Commitment in the amount set forth opposite its name on Annex A hereto.
(b)On the Amendment No. 1 Effective Date, each Incremental Revolving Lender severally agrees that, immediately after the establishment of the First Incremental Revolving Commitments, the First Incremental Revolving Commitment of such Incremental Revolving Lender shall become effective and the Revolving Commitments shall be deemed increased by the aggregate amount of First Incremental Revolving Commitments in the amounts set forth in Annex A hereto.
(c)With effect from the Amendment No. 1 Effective Date and pursuant to Section 2.19 of the Credit Agreement, the First Incremental Revolving Commitments established on the Amendment No. 1 Effective Date in accordance with Section 2.1(b) hereof shall constitute, for all purposes of the Amended Credit Agreement, Revolving Commitments established pursuant to the Amended Credit Agreement and this Amendment, all provisions of the Amended Credit Agreement applicable to Revolving Commitments shall be applicable to such First Incremental Revolving Commitments, including with respect to all Revolving Loans incurred thereunder, and the First Incremental Revolving Commitments shall be of the same Class as, and shall have terms identical to, the Revolving Commitments.
(d)Each of the Borrower and the Administrative Agent hereby consents to the provision by each Incremental Revolving Lender of such Lender’s First Incremental Revolving Commitments, in each case to the extent such consent is required under Section 2.19 of the Credit Agreement.  The Administrative Agent and the Incremental Revolving Lenders hereby agree that the notice requirements set forth in Section 2.19(a) of the Credit Agreement have been satisfied with respect to the First Incremental Revolving Commitments. This Amendment constitutes an Increase Joinder to the Credit Agreement as referred to in Section 2.19(b) of the Credit Agreement.
(e)In accordance with Section 2.19(c) of the Credit Agreement, each Incremental Revolving Lender agrees to make a Revolving Loan, the proceeds of which will be used to prepay the Revolving Loans of the other Revolving Lenders immediately prior to the Amendment No. 1 Effective Date, so that, after giving effect thereto, the Revolving Loans outstanding are held by the Revolving Lenders pro rata based on their Revolving Commitments after giving effect to the Amendment No. 1 Effective Date.
Section 2.2.First Incremental Term Commitments.
(a) Pursuant to Sections 2.19 and 11.01 of the Credit Agreement, with effect from and including the Amendment No. 1 Effective Date, each Incremental Term Lender shall become a party to this Amendment and the Amended Credit Agreement with all of the rights and obligations of a “Lender” and a “Term Lender” under the Amended Credit Agreement and the other Loan Documents, and shall each have a First Incremental Term Commitment in the amount set forth opposite its name on Annex A hereto.
(b)On the Amendment No. 1 Effective Date, each Incremental Term Lender severally agrees to make to the Borrower First Incremental Term Loans in Dollars in an amount equal to its First Incremental Term Commitment. The First Incremental Term Commitments provided for

-3-

​

hereunder shall terminate on the Amendment No. 1 Effective Date immediately upon the borrowing of the First Incremental Term Loans pursuant to this Section 2.2(b). Any First Incremental Term Loans repaid or prepaid may not be reborrowed.  
(c)With effect from the Amendment No. 1 Effective Date and pursuant to Section 2.19 of the Credit Agreement, each First Incremental Term Loan made on the Amendment No. 1 Effective Date in accordance with Section 2.2(b) hereof shall constitute, for all purposes of the Amended Credit Agreement, a Term Loan made pursuant to the Amended Credit Agreement and this Amendment, all provisions of the Amended Credit Agreement applicable to Term Loans and Term Commitments shall be applicable to such First Incremental Term Loans and First Incremental Term Commitments, respectively, and the First Incremental Term Loans shall be of the same Class as, and shall have identical terms to, the Term Loans.
(d)Each of the Borrower and the Administrative Agent hereby consents to the provision by each Incremental Term Lender of such Lender’s First Incremental Term Loans, in each case to the extent such consent is required under Section 2.19 of the Credit Agreement.  The Administrative Agent and the Incremental Term Lenders hereby agree that the notice requirements set forth in Section 2.19(a) of the Credit Agreement have been satisfied with respect to the First Incremental Term Commitments.  This Amendment constitutes an Increase Joinder to the Credit Agreement as referred to in Section 2.19(b) of the Credit Agreement.
Section 2.3.Fungibility.  All of the parties hereto agree that, upon effectiveness of this Amendment No. 1, (i) the First Incremental Revolving Commitments will be an increase in the Outstanding Revolving Commitments, will constitute Revolving Commitments (and the loans thereunder, Revolving Loans) for all purposes of the Credit Agreement, will have the same terms as the Revolving Commitments and will, together with the Revolving Commitments and any Revolving Loans thereunder, be treated as a single Class, and (ii) the First Incremental Term Loans will be an increase in the Outstanding Term Loans, will constitute Term Loans for all purposes of the Credit Agreement, will have the same terms as the Term Loans and will, together with the Term Loans, be treated as a single Class of Term Loans.  For U.S. federal income tax purposes, the parties hereto intend to treat (i) all Revolving Commitments and Revolving Loans as fungible, (ii) all Term Loans as fungible and (iii) unless otherwise required by applicable law, none of the Borrower, any Loan Party, the Administrative Agent or any Lender shall take any tax position inconsistent with clauses (i) or (ii) above. The First Incremental Term Loans funded on the Amendment No. 1 Effective Date shall be funded as Term Loans in the form of Eurodollar Rate Loans and shall have an initial Interest Period that ends on the same date as the Interest Period applicable to the Outstanding Term Loans.
ARTICLE III​

Conditions to Effectiveness

Section 3.1.This Amendment shall become effective on the date (the “Amendment No. 1 Effective Date”) on which:
(a)The Administrative Agent (or its counsel) shall have received from (i) the Administrative Agent, (ii) the Incremental Revolving Lenders, (iii) the Incremental Term Lenders, (iv) each Lender (which Lenders shall also constitute the Required Lenders) other than a Non-Consenting Lender and (v) each Loan Party, a counterpart of this Amendment executed by a Responsible Officer of each Loan Party and a duly authorized officer of the Administrative Agent and each Lender. For purposes of this Section 3.1(a), the Responsible Officers shall be limited to

-4-

​

the President, Chief Executive Officer, Chief Financial Officer and General Counsel of each applicable Loan Party.
(b)The Administrative Agent shall have received a customary written opinion of counsel for the Loan Parties, dated the Amendment No. 1 Effective Date and addressed to the Administrative Agent and the Lenders, in form and substance reasonably acceptable to the Administrative Agent.
(c)The Administrative Agent shall have received an Officer’s Certificate dated the Amendment No. 1 Effective Date, certifying as to the Organization Documents of each Loan Party (which, to the extent filed with a Governmental Authority, shall be certified as of a recent date by such Governmental Authority), the resolutions of the governing body of each Loan Party, the good standing, existence or its equivalent of each Loan Party and of the incumbency (including specimen signatures) of the Responsible Officers of each Loan Party.
(d)The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified, in each case after giving effect to (x) this Amendment No. 1 and (y) any replacement of a Non-Consenting Lender pursuant to Section 11.13 of the Credit Agreement in connection herewith.  The Administrative Agent, the Amendment No. 1 Arranger and the Lenders shall have received all other fees and expenses, if any, owing pursuant to the Amendment No. 1 Engagement Letter and Section 2.09 of the Credit Agreement. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.  
(e)The representations and warranties of the Borrower and each other Loan Party set forth in Section 4.1 of this Amendment, in Article V of the Credit Agreement and in any other Loan Document shall (i) with respect to representations and warranties that contain a materiality qualification, be true and correct on and as of the date of this Amendment and (ii) with respect to representations and warranties that do not contain a materiality qualification, be true and correct in all material respects on and as of the date of this Amendment, and except that for purposes of this Section 3.1(e), the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b) of the Credit Agreement, respectively.
(f)At the time of and immediately after giving effect to this Amendment, no Default shall exist or would result from this Amendment, the incurrence of the First Incremental Revolving Commitments or the First Incremental Term Commitments as contemplated hereunder or from the application of the proceeds therefrom.
(g)The Administrative Agent shall have received a certificate, dated the Amendment No. 1 Effective Date and signed by a Responsible Officer of the Borrower, confirming compliance with the conditions set forth in paragraphs (e) and (f) of this Section 3.1. For purposes of this Section 3.1(g), the Responsible Officers shall be limited to the President, Chief Executive Officer, Chief Financial Officer and General Counsel of the Borrower.
(h)The Administrative Agent shall have received a Loan Notice with respect to the Loans to be made on the Amendment No. 1 Effective Date.
(i)Upon the reasonable request of the Administrative Agent or any Lender made (x) at least seven (7) Business Days prior to the Amendment No. 1 Effective Date, the Borrower shall have provided to the Administrative Agent or such Lender (as the case may be), and the

-5-

​

Administrative Agent or such Lender (as the case may be) shall be reasonably satisfied with, the documentation and other information so requested in connection with applicable “know your customer” and anti-money-laundering rules and regulations, including the PATRIOT Act, in each case at least two (2) Business Days prior to the Closing Date and (y) at least two (2) Business Days prior to the Closing Date, any Loan Party that qualifies as a “legal entity customer” under the Beneficial Ownership Regulation shall have delivered, to the Administrative Agent and each Lender that so requests, a Beneficial Ownership Certification in relation to such Loan Party.
ARTICLE IV​

Representations and Warranties.
Section 4.1.To induce the Administrative Agent, the Incremental Revolving Lenders, the Incremental Term Lenders and the Lenders to enter into this Amendment, each Loan Party represents and warrants that:
(a)Organization; Power.  Each Loan Party and each of its Subsidiaries (a) is duly organized or formed and validly existing, (b) has all requisite power and authority and all requisite governmental licenses, authorizations, consents and approvals to (i) own or lease its assets and carry on its business and (ii) execute, deliver and perform its obligations under the Amendment, the Amended Credit Agreement and the other Loan Documents to which it is a party, and (c) is duly qualified and is licensed and, as applicable, in good standing under the Laws of (i) the jurisdiction of its incorporation or organization and (ii) each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license; except, in each case referred to in clause (b)(i) or (c), to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.  
(b)Authorization; Enforceability.  The execution, delivery and performance by each Loan Party of this Amendment (i) has been duly authorized by all necessary corporate or other organizational action, and (ii) does not and will not (a) contravene the terms of any of such Person’s Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of (or the requirement to create) any Lien under, or require any payment to be made under  (x) any Material Contracts to which such Person is a party or affecting such Person or the properties of such Person or any of its Subsidiaries or (y) any order, injunction, writ or decree of any Governmental Authority or any arbitral award to which such Person or its property is subject; or (c) violate any Applicable Law.
(c)Loan Document Representations and Warranties.  Before and immediately after giving effect to this Amendment, the representations and warranties of the Borrower and each other Loan Party contained in Article V of the Credit Agreement or any other Loan Document, are (i) with respect to representations and warranties that contain a materiality qualification, true and correct on and as of the date of this Amendment and (ii) with respect to representations and warranties that do not contain a materiality qualification, true and correct in all material respects on and as of the date of this Amendment, and except that for purposes of this Section 4.1(c), the representations and warranties contained in Sections 5.05(a) and (b) of the Credit Agreement shall be deemed to refer to the most recent statements furnished pursuant to Sections 6.01(a) and (b) of the Credit Agreement, respectively.
(d)No Default.  At the time of and immediately after giving effect to this Amendment, no Default shall exist or would result from this Amendment, the incurrence of the First Incremental

-6-

​

Revolving Commitments or the First Incremental Term Commitments as contemplated hereunder or from the application of the proceeds therefrom.
(e)Solvency. As of the Amendment No. 1 Effective Date, after giving effect to the transactions contemplated hereby (including the incurrence of the Incremental Revolving Commitments and Incremental Term Commitments), each Loan Party is, together with its Subsidiaries on a Consolidated basis, Solvent.
ARTICLE V​

Miscellaneous
Section 5.1.Effect of Amendment
.
(a)On and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof” or words of like import referring to the Credit Agreement, and each reference in the other Loan Documents to the “Credit Agreement”, “thereunder”, “thereof” or words of like import referring to the Credit Agreement, mean and are a reference to the Credit Agreement as modified by this Amendment.  This Amendment is an Increase Joinder and a Loan Document executed pursuant to the Credit Agreement and shall be construed, administered and applied in accordance with the terms and provisions thereof.
(b)The Credit Agreement, as specifically amended by this Amendment, and each of the other Loan Documents are and shall continue to be in full force and effect and are hereby in all respects ratified and confirmed.
(c)The execution, delivery and effectiveness of this Amendment does not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender or the Administrative Agent under any of the Loan Documents nor constitute a waiver of any provision of any of the Loan Documents.  This Amendment shall not constitute a novation of the Credit Agreement or any other Loan Documents.
Section 5.2.Counterparts.  This Amendment and any document, amendment, approval, consent, information, notice, certificate, request, statement, disclosure or authorization related to this Amendment (each, a “Communication”), including Communications required to be in writing, may be in the form of an Electronic Record (as defined below) and may be executed using Electronic Signatures (as defined below).  Each of the parties hereto agrees that any Electronic Signature on or associated with any Communication shall be valid and binding on each of the parties hereto to the same extent as a manual, original signature, and that any Communication entered into by Electronic Signature will constitute the legal, valid and binding obligation of each of the Loan Parties enforceable against such in accordance with the terms thereof to the same extent as if a manually executed original signature was delivered.   Any Communication may be executed in as many counterparts as necessary or convenient, including both paper and electronic counterparts, but all such counterparts are one and the same Communication.  For the avoidance of doubt, the authorization under this paragraph may include, without limitation, use or acceptance by the Administrative Agent and each of the Lenders of a manually signed paper Communication which has been converted into electronic form (such as scanned into PDF format), or an electronically signed Communication converted into another format, for transmission, delivery and/or retention. The Administrative Agent and each of the Lenders may, at its option, create one or more copies of any Communication in the form of an imaged Electronic Record (“Electronic Copy”), which shall be deemed created in the ordinary course of such Person’s business, and destroy the original paper document.  All Communications in the form of an Electronic Record, including an Electronic Copy, shall be

-7-

​

considered an original for all purposes, and shall have the same legal effect, validity and enforceability as a paper record.  Notwithstanding anything contained herein to the contrary, the Administrative Agent is under no obligation to accept an Electronic Signature in any form or in any format unless expressly agreed to by the Administrative Agent pursuant to procedures approved by it; provided, further, without limiting the foregoing, (a) to the extent the Administrative Agent has agreed to accept such Electronic Signature, the Administrative Agent and each of the Lenders shall be entitled to rely on any such Electronic Signature purportedly given by or on behalf of any Loan Party without further verification and (b) upon the request of the Administrative Agent or any Lender, any Electronic Signature shall be promptly followed by such manually executed counterpart.  For purposes hereof, “Electronic Record” and “Electronic Signature” shall have the meanings assigned to them, respectively, by 15 USC §7006, as it may be amended from time to time.
Section 5.3.GOVERNING LAW, etc.  This AMENDMENT AND ANY CLAIMS, CONTROVERSY, DISPUTE OR CAUSE OF ACTION (WHETHER IN CONTRACT OR TORT OR OTHERWISE) BASED UPON, ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENT (EXCEPT, AS TO ANY LOAN DOCUMENT, AS EXPRESSLY SET FORTH THEREIN) AND THE TRANSACTIONS CONTEMPLATED THEREBY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.  The provisions of Sections 11.14(b), 11.14(c), 11.14(d) and 11.15 of the Credit Agreement are incorporated herein and apply to this Amendment mutatis mutandis.
Section 5.4.Headings.  Article and Section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or be taken into consideration in interpreting, this Amendment.
Section 5.5.Reaffirmation.  Each Loan Party hereby expressly acknowledges the terms of this Amendment and reaffirms, as of the date hereof, (i) the covenants and agreements contained in each Loan Document to which it is a party, including, in each case, such covenants and agreements as in effect immediately after giving effect to this Amendment and the transactions contemplated hereby and (ii) the Obligations and the guarantee of the Obligations under the Guaranty, and confirms that each Loan Document continues in full force and effect after giving effect to this Amendment, including without limitation, any additional Obligations resulting from or incurred pursuant to the Amended Credit Agreement.

[signature pages follow]

​

ADVANCED ENERGY INDUSTRIES INC Reports