Item 1.01. Entry into a Material Definitive Agreement.
Amended and Restated Credit Agreement
On July 27, 2020 (the
“Closing Date”), AgroFresh Solutions, Inc. (the “Company”) entered into an Amended and Restated Credit
Agreement (the “Credit Agreement”) with the other Loan Parties party thereto, Bank of Montreal, as administrative agent
(“Administrative Agent”) and the lenders party thereto. The Credit Agreement amends and restates in its entirety the
Credit Agreement, dated as of July 31, 2015, among certain subsidiaries of the Company, the Administrative Agent and the lenders
and other parties thereto (the “Original Credit Agreement”). Capitalized terms used in this Item 1.01 and not otherwise
defined have the meanings given to them in the Credit Agreement, a copy of which is attached hereto as Exhibit 10.1.
The Credit Agreement
provides for a $25 million revolving credit facility (the “Revolving Credit Facility”) which matures on June 30, 2024,
and a $275 million term credit facility (the “Term Credit Facility” and, together with the Revolving Credit Facility,
the “Credit Facility”), which matures on December 31, 2024. The Credit Facility includes a $5 million swingline commitment
and a $10 million letter of credit sublimit.
Loans under the Term
Credit Facility bear interest at a rate equal to, at the Company’s option, either the Adjusted Eurodollar Rate for the interest
period in effect for such borrowing plus an Applicable Rate of 6.25% per annum, or the Alternate Base Rate plus an Applicable Rate
of 5.25% per annum. Loans under the Revolving Credit Facility bear interest at a rate equal to, at the Company’s option,
the Adjusted Eurodollar Rate for the interest period in effect for such borrowing plus the Applicable Rate ranging from 6.25% to
6.00% per annum, based upon the Total Net Leverage Ratio, or the Alternate Base Rate plus an Applicable Rate ranging from 5.25%
to 5.00% per annum, based upon the Total Net Leverage Ratio. The Company is required to pay a commitment fee on the unused portion
of the Revolving Credit Facility at a rate ranging from 0.5% to 0.375%, based upon the Total Net Leverage Ratio.
The obligations of
AgroFresh Inc., a wholly-owned subsidiary of the Company and the borrower under the Credit Facility, are initially guaranteed by
the Company and the Company’s wholly-owned subsidiary, AF Solutions Holdings LLC (together with AgroFresh Inc. and the Company,
the “Loan Parties”) and may in the future be guaranteed by certain other domestic subsidiaries of the Company. The
obligations of the Loan Parties under the Credit Agreement and other loan documents are secured, subject to customary permitted
liens and other agreed upon exceptions, by a perfected security interest in all tangible and intangible assets of the Loan Parties,
except for certain excluded assets, and equity interests of certain foreign subsidiaries of the Loan Parties held by the Loan Parties
(subject to certain exclusions and limitations).
The Company is required
to make mandatory prepayments of outstanding indebtedness under the Credit Agreement under certain circumstances, including specified
percentages (which are subject to step-downs based on the Senior Secured Net Leverage Ratio) of excess cash flow and a portion
of certain specified litigation proceeds received.
The Credit Agreement
contains customary events of default, representations and warranties and affirmative and negative covenants applicable to the Loan
Parties and their consolidated subsidiaries, including, among other things, restrictions on indebtedness, liens, investments, mergers,
dispositions, prepayment of other indebtedness and dividends and other distributions. Under the terms of the Credit Agreement,
the Company is required to comply with a springing Senior Secured Net Leverage Ratio and a maximum capital expenditures test.
The foregoing description
of the Credit Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the
Credit Agreement, which is incorporated herein by reference.
Registration Rights Agreement
On the Closing Date,
the Company consummated the issuance and sale of 150,000 shares of the Company’s newly-designated Series B-1 Convertible
Preferred Stock, par value $0.0001 per share (the “Series B-1 Preferred Stock”), pursuant to the terms of the previously-announced
Investment Agreement, dated as of June 13, 2020 (the “Investment Agreement”), between the Company and PSP AGFS Holdings,
L.P. (the “Investor”), an affiliate of Paine Schwartz Partners, LLC (“Paine Schwartz Partners”). The Company
previously filed the Investment Agreement as Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission on
June 15, 2020.
In connection with
the Closing, the Company and the Investor entered into a Registration Rights Agreement (the “Registration Rights Agreement”),
dated as of July 27, 2020. The Registration Rights Agreement provides that the Company will use its commercially reasonable efforts
to prepare and file a shelf registration statement with the SEC no later than the first business day after the expiration of the
Restricted Period (as defined in the Investment Agreement) and to use its commercially reasonable efforts to cause such shelf registration
statement to be declared effective as promptly as is reasonably practicable after its filing to permit the public resale of registrable
securities covered by the Registration Rights Agreement. The registrable securities generally include any shares of the Company’s
common stock, par value $0.0001 per share (“Common Stock”), into which the Series B-1 Preferred Stock (or any other
shares of the Company’s preferred stock issuable in addition to, or in exchange for, the Series B-1 Preferred Stock pursuant
to the terms of the Investment Agreement) is convertible, and any other securities issued or issuable with respect to any such
shares of Common Stock by way of share split, share dividend, distribution, recapitalization, merger, exchange, replacement or
similar event or otherwise.
The Company generally
will be required to effect registrations for up to three underwritten offerings of the registrable securities within any twelve-month
period during the term of the Registration Rights Agreement, subject to certain limitations, including that the anticipated gross
proceeds of any offering be at least $25 million. The Investor is also entitled to customary “piggy-back” registration
and shelf take-down rights.
The foregoing description
of the Registration Rights Agreement does not purport to be complete and is subject to, and qualified in its entirety by, the full
text of the Registration Rights Agreement, which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.