SECOND LIMITED WAIVER AND THIRD AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT
Exhibit 10.1
SECOND LIMITED WAIVER AND
THIRD AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT
This SECOND LIMITED WAIVER AND THIRD AMENDMENT TO SENIOR SECURED CREDIT AGREEMENT, dated as of January 9, 2018 (this “Waiver and Third Amendment”), is entered into by and among Global Power Equipment Group Inc. (“Borrower”), each financial institution from time to time party hereto as lender (each, a “Lender” and collectively, the “Lenders”), and CENTRE LANE PARTNERS MASTER CREDIT FUND II, L.P., a Delaware limited partnership, as administrative agent for the Lenders (in such capacity, and together with its successors and assigns, the “Administrative Agent”) and as collateral agent for the Lenders (in such capacity, and together with its successors and assigns, the “Collateral Agent”).
RECITALS
WHEREAS, the Borrower, the Lenders identified on signatures pages thereto, the Administrative Agent and the Collateral Agent are parties to that certain Senior Secured Credit Agreement, dated as of June 16, 2017, as amended by that certain First Amendment to Senior Secured Credit Agreement, dated as of August 17, 2017, and that certain Limited Waiver and Second Amendment to Senior Secured Credit Agreement, dated as of October 11, 2017 (the “Existing Credit Agreement”; the Existing Credit Agreement, as amended by this Waiver and Third Amendment, the “Credit Agreement”);
WHEREAS, in accordance with Section 7.05(j) of the Existing Credit Agreement, on or about October 26, 2017, Xxxxxx Manufacturing, S.A. de C.V. has Disposed of a manufacturing facility located in Mexico (collectively, the “Xxxxxx Sale”);
WHEREAS, pursuant to Section 2.02(b)(ii) of the Existing Credit Agreement, the Borrower is required to prepay an aggregate amount of the Obligations equal to 100% of the Net Cash Proceeds realized or received by the Borrower or any of its Subsidiaries in connection with the Disposition of any property plus the Prepayment Premium (collectively, the “Required Prepayment”), as promptly as reasonably practicable, but in any event, prior to the date which is five (5) Business Days after the receipt of such Net Cash Proceeds;
WHEREAS, on or about August 15, 2017, the Borrower authorized the dissolution of Xxxxxx Construction Services, Inc. and thereafter filed a Certificate of Dissolution with the Delaware Secretary of State on or about September 5, 2017 (the “Dissolution”), in violation of Section 7.04 of the Existing Credit Agreement;
WHEREAS, the Borrower has requested that the Lenders agree to (i) partially waive the Required Prepayment due in connection with the Xxxxxx Sale and accept a prepayment equal to $1,900,000 in the aggregate (such amount, the “Prepayment Amount”) and (ii) waive the Event of Default under Section 8.01(b) of the Existing Credit Agreement caused by the Dissolution (the “Dissolution Event of Default”);
WHEREAS, the Borrower has requested that the Lenders agree to amend the Existing Credit Agreement to delete the Financial Covenant set forth in Section 7.12(b) of the Existing Credit
Agreement for the Fiscal Quarters ending on September 30, 2018 and December 31, 2018 (collectively, the “Specified Financial Covenant”); and
WHEREAS, the Lenders are willing to (i) consent to the prepayment of the Loans in the amount of the Prepayment Amount, (ii) waive any Defaults and/or Events of Default that may arise as a result of the failure to pay the full Required Prepayment, (iii) waive the Dissolution Event of Default and (iv) amend the Existing Credit Agreement to delete the Specified Financial Covenant, in each case subject to the terms and conditions of this Waiver and Third Amendment.
NOW THEREFORE, in consideration of the premises and the mutual covenants and the agreements herein set forth, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows:
ARTICLE I
Definitions
Section 1.1. Certain Definitions. Capitalized terms used herein but not otherwise defined herein shall have the meanings ascribed thereto in the Credit Agreement.
ARTICLE II
Consent and Waiver
Section 2.1. Mandatory Prepayment. Subject to satisfaction of the conditions set forth in Article V hereof, and in reliance upon (i) the representations and warranties of the Loan Parties set forth herein and in the Credit Agreement and the other Loan Documents and (ii) the agreements of the Loan Parties set forth herein, effective as of the date hereof, the Lenders (1) consent to the prepayment of the Prepayment Amount in satisfaction of the requirement to prepay the Loans in connection with the consummation of the Xxxxxx Sale pursuant to Section 2.02(b)(iii), (2) waive prepayment of Loans in the amount of the remainder of the Net Cash Proceeds received from the Xxxxxx Sale, which Net Cash Proceeds shall be used by the Borrower for working capital purposes, (3) waive any Default and/or Event of Default arising from the foregoing and (4) waive the Dissolution Event of Default. The Prepayment Amount shall be applied in accordance with Section 2.02(b)(vii) of the Credit Agreement. The Lenders acknowledge that the Prepayment Amount was paid by the Borrower on or about October 31, 2017 and was applied in accordance with Section 2.02(b)(vii) of the Credit Agreement.
Section 2.2. General. Nothing in this Waiver and Third Amendment, nor any communications among any Loan Party, any Agent, or any Lender, shall be deemed a waiver with respect to any Events of Default, other than (a) the Event of Default that would otherwise result from the failure to pay the Required Prepayment in full and (b) the Dissolution Event of Default, or any future failure of the Loan Parties to comply fully with any provision of the Credit Agreement or any provision of any other Loan Document, and in no event shall this waiver be deemed to be a waiver of enforcement of any of the Agents’ or Lenders’ rights or remedies under the Credit Agreement and the other Loan Documents, at law (including under the UCC), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to Section 8.02 of the Credit Agreement, with respect to any other Defaults or Events of Default now existing or
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hereafter arising. Except as expressly provided herein, each Agent and each Lender hereby reserves and preserves all of its rights and remedies against the Borrower and each other Loan Party under the Credit Agreement and the other Loan Documents, at law (including under the UCC), in equity, or otherwise including, without limitation, the right to declare all Obligations immediately due and payable pursuant to Section 8.02 of the Credit Agreement. The waivers and consents in this Article II shall be effective only in this specific instance and for the specific purposes set forth herein and does not allow for any other or further departure from the terms and conditions of the Credit Agreement or any other Loan Document, which terms and conditions shall remain in full force and effect.
ARTICLE III
Amendment
Section 3.1. Amendments to Credit Agreement. Upon satisfaction of the conditions set forth in Article V hereof, the Existing Credit Agreement is hereby amended as follows:
(a) Section 7.12(b) of the Existing Credit Agreement shall be deleted in its entirety and replaced with the following:
“(b) Fixed Charge Coverage Ratio. Commencing on March 31, 2019, permit the Fixed Charge Coverage Ratio for the Borrower and its Subsidiaries on a consolidated basis for any Test Period ending on and as of the last day of a Fiscal quarter set forth below to be less than the ratio set forth opposite such Test Period below:
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Fiscal Quarter Ending |
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Fixed Charge Coverage Ratio |
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March 31, 2019 |
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1.75:1.00 |
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June 30, 2019 |
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2.00:1.00 |
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September 30, 2019 |
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2.25:1.00 |
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December 31, 2019 |
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2.50:1.00 |
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March 31, 2020 |
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2.75:1.00 |
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June 30, 2020 |
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3.00:1.00 |
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September 30, 2020 |
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3.00:1.00 |
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December 31, 2020 |
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3.00:1.00 |
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March 31, 2021 |
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3.00:1.00 |
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June 30, 2021 |
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3.00:1.00 |
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September 30, 2021 |
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3.00:1.00 |
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(b) Schedule 2.01(b) to the Existing Credit Agreement shall be deleted in its entirety and replaced with the following:
SCHEDULE 2.01(b)
FIRST-OUT LOAN COMMITMENTS
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Lender |
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First-Out Loan Commitment |
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Centre Lane Partners Master Credit Fund II, L.P. |
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$3,750,000 |
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Centre Lane Partners IV, L.P. |
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$6,250,000 |
ARTICLE IV
Representations and Warranties
Section 4.1. Representations and Warranties. In order to induce the Agents and the Lenders to enter into this Waiver and Third Amendment, each Loan Party hereby represents and warrants to the Agents and each Lender as follows:
(a) After giving effect to this Waiver and Third Amendment, the representations and warranties of the Borrower and each other Loan Party contained in Article V of the Existing Credit Agreement or any other Loan Document shall be true and correct in all material respects on and as of the date hereof; provided that to the extent that such representations and warranties specifically refer to an earlier date, they shall be true and correct in all material respects as of such earlier date; provided further that any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language shall be true and correct (after giving effect to any qualification therein) in all respects on such respective dates.
(b) The execution, delivery and performance of this Waiver and Third Amendment have been duly authorized by all necessary action on the part of, and duly executed and delivered by each of the Loan Parties.
(c) After giving effect to this Waiver and Third Amendment, the Loan Parties are in full compliance with each of the Loan Documents.
(d) No Material Adverse Effect has occurred since the Closing Date.
(e) No Default or Event of Default currently exists or shall be in existence immediately after giving effect to this Waiver and Third Amendment.
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ARTICLE V
Effectiveness
Section 5.1. Effectiveness. This Waiver and Third Amendment shall become effective as of the date set forth above on which each of the following conditions is satisfied:
(a) The Administrative Agent shall have received duly executed signature pages to this Waiver and Third Amendment signed by each Loan Party, the Administrative Agent and the Lenders.
(b) The Administrative Agent shall have received from the Borrower a duly executed Notice of Prepayment.
(c) Payment by the Borrower to the Administrative Agent for further distribution to each Lender (or to each Lender directly, as instructed by the Administrative Agent for administrative convenience) of the Prepayment Amount (in total if paid to the Administrative Agent or in the amount of its Pro Rata Share of the Prepayment Amount if paid directly to each Lender).
ARTICLE VI
Miscellaneous
Section 6.1. Reference to and Effect on the Loan Documents.
(a) On and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” 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 shall mean and be a reference to the Existing Credit Agreement after giving effect to this Waiver and Third Amendment.
(b) Except as specifically set forth in this Waiver and Third Amendment, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.
(c) Except as specifically set forth in this Waiver and Third Amendment, the execution, delivery and performance of this Waiver and Third Amendment shall not constitute a waiver of any provision of, or operate as a waiver of any right, power or remedy of the Administrative Agent, the Collateral Agent or any Lender under the Existing Credit Agreement or any of the other Loan Documents.
Section 6.2. Release. As a material part of the consideration for the Administrative Agent, the Collateral Agent and the Lenders entering into this Waiver and Third Amendment, the Borrower and each other Loan Party (collectively, the “Releasors”) agree as follows (the “Release Provision”):
(a) Other than with respect to the agreements of the Lenders specifically set forth herein, the Releasors, jointly and severally, hereby release and forever discharge the Administrative Agent, the Collateral Agent, each Lender and the Administrative Agent’s, the
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Collateral Agent’s and each Lender’s predecessors, successors, assigns, participants, officers, managers, directors, shareholders, partners, employees, agents, attorneys and other professionals, representatives, parent corporations, subsidiaries, and affiliates (hereinafter all of the above collectively referred to as the “Lender Group”), from any and all claims, counterclaims, demands, damages, debts, agreements, covenants, suits, contracts, obligations, liabilities, accounts, offsets, rights, actions, and causes of action of any nature whatsoever and whether arising at law or in equity, presently possessed, whether known or unknown, whether liability be direct or indirect, liquidated or unliquidated, presently accrued, whether absolute or contingent, foreseen or unforeseen, and whether or not heretofore asserted arising out of, arising under or related to the Loan Documents (collectively, the “Claims”), that Releasors may have or allege to have against any or all of the Lender Group and that arise from events occurring before the date hereof.
(b) The Releasors agree not to xxx any of the Lender Group nor in any way assist any other person or entity in suing the Lender Group with respect to any of the Claims released herein. The Release Provision may be pleaded as a full and complete defense to, and may be used as the basis for an injunction against, any action, suit, or other proceeding which may be instituted, prosecuted, or attempted in breach of the release contained herein.
(c) The Releasors acknowledge, warrant, and represent to Lender Group that:
(i) The Releasors have read and understand the effect of the Release Provision. The Releasors have had the assistance of independent counsel of their own choice, or have had the opportunity to retain such independent counsel, in reviewing, discussing, and considering all the terms of the Release Provision; and if counsel was retained, counsel for Releasors has read and considered the Release Provision and advised Releasors with respect to the same. Before execution of this Waiver and Third Amendment, the Releasors have had adequate opportunity to make whatever investigation or inquiry they may deem necessary or desirable in connection with the subject matter of the Release Provision.
(ii) The Releasors are not acting in reliance on any representation, understanding, or agreement not expressly set forth herein. The Releasors acknowledge that Lender Group has not made any representation with respect to the Release Provision except as expressly set forth herein.
(iii) The Releasors have executed this Waiver and Third Amendment and the Release Provision thereof as a free and voluntary act, without any duress, coercion, or undue influence exerted by or on behalf of any person or entity.
(iv) The Releasors are the sole owners of the Claims released by the Release Provision, and the Releasors have not heretofore conveyed or assigned any interest in any such Claims to any other person or entity.
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(d) The Releasors understand that the Release Provision was a material consideration in the agreement of the Administrative Agent, the Collateral Agent and each Lender to enter into this Waiver and Third Amendment.
(e) It is the express intent of the Releasors that the release and discharge set forth in the Release Provision be construed as broadly as possible in favor of Lender Group so as to foreclose forever the assertion by the Releasors of any Claims released hereby against Lender Group.
(f) If any term, provision, covenant, or condition of the Release Provision is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, the remainder of the provisions shall remain in full force and effect.
(g) The Releasors acknowledge that they may hereafter discover facts in addition to or different from those that they now know or believe with respect to the Claims released herein, but the Releasors expressly shall have and intend to fully, finally and forever have released and discharged any and all such Claims. The Releasors expressly waive any provision of statutory or decisional law to the effect that a general release does not extend to Claims that the releasing party does not know or suspect to exist in such party’s favor at the time of executing the release.
Section 6.3. Guarantor’s Acknowledgement and Agreement. By signing below, each Guarantor (a) acknowledges, consents and agrees to this Waiver and Third Amendment, (b) acknowledges and agrees that its obligations in respect of the Guarantee, the Security Agreement and the other Collateral Documents are not released, diminished, waived, modified or impaired in any manner by this Waiver and Third Amendment or any of the provisions contemplated herein, (c) ratifies and confirms its obligations under the Guarantee, the Security Agreement and the other Collateral Documents, and (d) acknowledges and agrees that it has no claims or offsets against, or defenses or counterclaims to, the Guarantee, the Security Agreement, any other Collateral Documents or any other Loan Documents or Obligations.
Section 6.4. Fees. The Borrower hereby affirms its obligation under the Credit Agreement to reimburse the Administrative Agent, the Collateral Agent and the Lenders for all reasonable and documented out of pocket costs and expenses incurred in connection with the preparation, negotiation, execution and delivery of this Waiver and Third Amendment, including but not limited to all Attorney Costs.
Section 6.5. Headings. The headings in this Waiver and Third Amendment are included for convenience of reference only and will not affect in any way the meaning or interpretation of this Waiver and Third Amendment.
Section 6.6. Governing Law. This Waiver and Third Amendment, and all claims, disputes and matters arising hereunder or thereunder or related hereto or thereto, will be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts executed in and to be performed entirely within that state.
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Section 6.7. Counterparts. This Waiver and Third Amendment may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original, and all of which, when taken together, shall constitute but one and the same Waiver and Third Amendment. Delivery of an executed counterpart of this Waiver and Third Amendment by facsimile or a scanned copy by electronic mail shall be equally as effective as delivery of an original executed counterpart of this Waiver and Third Amendment.
Section 6.8. Severability. If any term or other provision of this Waiver and Third Amendment is invalid, illegal or incapable of being enforced by any rule of law, or public policy, all other conditions and provisions of this Waiver and Third Amendment will nevertheless remain in full force and effect so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner adverse to any party. Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the parties hereto will negotiate in good faith to modify this Waiver and Third Amendment so as to effect the original intent of the parties as closely as possible in an acceptable manner to the end that the transactions contemplated hereby are fulfilled to the extent possible.
Section 6.9. Binding Effect. This Waiver and Third Amendment will be binding upon and inure to the benefit of and is enforceable by the respective successors and permitted assigns of the parties hereto.
[Remainder of page intentionally left blank; signatures on following pages.]
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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Third Amendment to be duly executed and delivered by their respective officers thereunto duly authorized as of the date first written above.
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GLOBAL POWER EQUIPMENT GROUP INC., |
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By: |
/s/ Xxxxx X. Xxxxxxxx |
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Xxxxx X. Xxxxxxxx |
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Acknowledged and agreed: |
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GLOBAL POWER PROFESSIONAL SERVICES INC. |
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XXXXXXXX GLOBAL SERVICES, INC. |
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XXXXXXXX INDUSTRIAL SERVICES GROUP, L.L.C. |
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XXXXXXXX INDUSTRIAL SERVICES, LLC |
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XXXXXXXX SPECIALTY SERVICES, LLC |
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XXXXXXXX PLANT SERVICES, LLC |
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CONSTRUCTION & MAINTENANCE PROFESSIONALS, LLC |
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XXXXXX HOLDINGS, LLC |
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STEAM ENTERPRISES, L.L.C. |
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GPEG, LLC |
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By: |
/s/ Xxxxx X. Xxxxxxxx |
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Xxxxx X. Xxxxxxxx |
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XXXXXX-XXXXXX CUSTOM CONTROLS HOLDINGS LLC |
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By: |
/s/ Xxxx Xxxxxxxx |
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Xxxx Xxxxxxxx |
[Signature Page to Waiver and Third Amendment]
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CENTRE LANE PARTNERS MASTER CREDIT FUND II, L.P., as Administrative Agent and Collateral Agent, and as a Lender |
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By: |
/s/ Xxxx Xxxxxxxx |
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Name: Xxxx Xxxxxxxx |
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CENTRE LANE PARTNERS IV, L.P., as Lender |
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By: |
/s/ Xxxxx Xxxxxx |
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Name: Xxxxx Xxxxxx |
