GP Strategies Corporation (NASDAQ:GPX) Files An 8-K Entry into a Material Definitive Agreement

GP Strategies Corporation (NASDAQ:GPX) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01 Entry into a Material Definitive Agreement

On December 15, 2016, GP Strategies Corporation (the Company)
entered into a Fifth Amended and Restated Financing and Security
Agreement (the Credit Agreement) with Wells Fargo Bank, National
Association, as lender. The Credit Agreement provides for a new
revolving credit facility with up to a maximum principal amount
of $100 million, expiring on December 31, 2021, and for a term
loan in the principal amount of $40 million maturing on April 30,
2020. The Credit Agreement is secured by substantially all of the
Companys assets. The new term loan was used to refinance the
$11.1 million remaining balance of the existing term loan and
$28.9 million of borrowings outstanding under the existing
revolving credit facility.
The maximum interest rate on the Credit Agreement is the daily
one-month LIBOR market index rate (for borrowings in Dollars and
Sterling) or the daily one-month EURIBOR (for borrowings in
Euros) plus 2.50%. Based on the Companys financial performance,
the interest rate can be reduced to a minimum rate of the daily
one-month LIBOR market index rate plus 1.25%, with the rate being
determined based on the Companys maximum leverage ratio for the
preceding four quarters. Each unpaid advance on the revolving
loan will bear interest until repaid. The term loan is payable in
monthly installments of principal in the amount of $1,000,000
each plus applicable interest, beginning on January 1, 2017. The
Company may prepay the term loan or the revolving loan, in whole
or in part, at any time without premium or penalty, subject to
certain conditions. Amounts repaid or prepaid on the term loan
may not be reborrowed.
The Credit Agreement contains customary affirmative and negative
covenants, including covenants that limit or restrict the
Companys and its subsidiaries (subject to certain exceptions)
ability to, among other things, grant liens, make investments,
repurchase its stock, pay dividends, incur indebtedness, merge or
consolidate, dispose of assets, and make acquisitions, in each
case subject to customary exceptions for a credit facility of
this size and type. The Company is also required to maintain
compliance with a minimum fixed charge coverage ratio and a
maximum leverage ratio.
As of December 15, 2016, after entering into the new Credit
Agreement, the Company had $40 million of borrowings outstanding
under the term loan, $22.9 million of borrowings outstanding
under the revolving credit facility, and $71.6 million of
available borrowings under the revolving credit facility.
A copy of the Credit Agreement is attached as Exhibit 10.1 to
this report and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an
Obligation under a Off-Balance Sheet Arrangement of a Registrant.
The information set forth above under Item 1.01 is hereby
incorporated by reference into this Item 2.03.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
Exhibit No.
Description
10.1
Fifth Amended and Restated Financing and Security
Agreement, dated December 15, 2016, by and between GP
Strategies Corporation, as US Borrower, and General
Physics (UK) Ltd., GP Strategies Holdings Limited, GP
Strategies Limited and GP Strategies Training Limited,
collectively as UK Borrowers, and Wells Fargo Bank,
National Association, as Lender.


About GP Strategies Corporation (NASDAQ:GPX)


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