Exhibit 10.2

 

THIRD AMENDMENT TO CREDIT AGREEMENT

 

This THIRD AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of
November 3, 2005, is by and among GLOBAL POWER EQUIPMENT GROUP INC., a Delaware
corporation (the “Company”), certain borrowing subsidiaries of the Company party
hereto (each a “Designated Borrower” and, together with the Company, the
“Borrowers”), each subsidiary of the Company party to the Subsidiary Guaranty
(as defined below), each Lender (as defined below) party hereto, and BANK OF
AMERICA, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer (the
“Administrative Agent”). Capitalized terms used herein and not otherwise defined
shall have the meaning assigned such term in the Credit Agreement (as defined
below).

 

RECITALS:

 

A. The Borrowers, the lenders from time to time party thereto (the “Lenders”),
the Administrative Agent, US Bank National Association, as Syndication Agent,
and Bank of Oklahoma, N.A., as Managing Agent, are parties to that certain
Credit Agreement, dated as of October 1, 2004, as amended by and together with
this Amendment and as otherwise amended or modified to the date hereof (the
“Credit Agreement”).

 

B. The Subsidiary Guarantors and the Administrative Agent are parties to that
certain Subsidiary Guaranty Agreement, dated as of October 1, 2004 (as amended
to the date hereof, the “Subsidiary Guaranty”), and the Company and the
Administrative Agent are parties to that certain Company Guaranty Agreement,
dated as of October 1, 2004 (as amended to the date hereof, the “Company
Guaranty”).

 

C. The parties hereto have agreed to amend the Credit Agreement as set forth
below.

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto agree as follows:

 

Section 1.01 Amendments to Credit Agreement.

 

(a) Amendments to Section 1.01. Section 1.01 of the Credit Agreement is hereby
amended by (i) deleting the definition of “Consolidated Capital Expenditures”
and (ii) inserting the following in replacement thereof:

 

“Consolidated Capital Expenditures” means, for any period for any Person and its
Subsidiaries determined on a consolidated basis, without duplication all
expenditures made directly or indirectly during such period for Capital Assets
(whether paid in cash or other consideration or accrued as a liability and
including, without limitation, all expenditures for maintenance and repairs
which are required, in accordance with GAAP, to be capitalized on the books of
such Person). For purposes of this definition, there shall be excluded from
Consolidated Capital Expenditures (a) Permitted Acquisitions, (b) proceeds

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resulting from Casualty and Condemnation events and Dispositions permitted under
subsections (a) and (g) of Section 7.05 which are reinvested in Capital Assets
in accordance with the terms of this Agreement and (c) for any period of
calculation thereof that includes the fiscal year ending December 31, 2006,
capital expenditures of up to $2,000,000 made during such fiscal year in
connection with growth projects at Deltak Power Equipment (China) Co., Ltd. and
Braden Manufacturing, L.L.C.

 

(b) Amendments to Section 1.01. Section 1.01 of the Credit Agreement is hereby
amended by (i) deleting the definition of “Consolidated Asset Coverage Ratio”
and (ii) inserting the following new defined term in alphabetical position
therein:

 

“Consolidated Senior Asset Coverage Ratio” means, as of any date of
determination thereof, the ratio of (a) the sum of (i) Net Amount of Eligible
Receivables plus (ii) Net Amount of Eligible Inventory plus (iii) Net Amount of
Fixed Assets to (b) Consolidated Funded Indebtedness as of such date minus the
outstanding principal amount of Convertible Subordinated Debt as of such date.

 

(c) Amendment to Section 1.01. Section 1.01 of the Credit Agreement is hereby
amended by (i) deleting the definition of “Consolidated EBITDA” and
(ii) inserting the following new defined term in alphabetical position therein:

 

“Consolidated EBITDA” means, for any period for any Person and its Subsidiaries
determined on a consolidated basis, an amount equal to Consolidated Net Income
for such period, plus (a) the following to the extent deducted in calculating
such Consolidated Net Income: (i) Consolidated Interest Charges for such period;
(ii) the provision for federal, state, local and foreign income taxes for such
period; (iii) depreciation and amortization expense; (iv) certain restructuring
expenses and estimated transaction expenses in the amounts and as described on
Schedule 1.03, (v) other transaction expenses in an aggregate amount of up to
$1,250,000 to the extent such expenses are not capitalized due to the failure of
the Company to consummate a pending acquisition disclosed to the Administrative
Agent, (vi) other non-recurring non-cash expenses, (vii) any other non-cash
write-downs or non-cash write-offs including, but not limited to, fixed asset
impairments or write-downs, intangible asset impairments, deferred tax asset
write-offs or reserves, non-cash stock component expenses and debt issuance cost
write-offs, (viii) any non-cash losses or deductions arising from the cumulative
effect of a change in accounting principles, (ix) non-cash losses relating to
foreign currency and hedging transactions, (x) CEO retirement expenses, and
(xi) process re-engineering or consulting fees, and minus (b) the following to
the extent included in calculating such Consolidated Net Income: (i) Federal,
state, local and foreign income tax benefits recorded by the Company and its
Subsidiaries for such period and (ii) all extraordinary, non-recurring, non-cash
items increasing Consolidated Net Income for such period.

 

(d) Amendments to Section 1.01. The definition of “Net Amount of Eligible
Inventory” in Section 1.01 of the Credit Agreement is hereby amended by deleting
the reference

 

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to “the Company and its Subsidiaries” therein and inserting in replacement
thereof the words “the Domestic Loan Parties”.

 

(e) Amendment to Section 1.01. The definition of “Net Amount of Eligible
Receivables” in Section 1.01 of the Credit Agreement is hereby deleted and the
following new defined term is inserted in replacement thereof:

 

“Net Amount of Eligible Receivables” means the gross amount of (i) all accounts
of the Domestic Loan Parties arising from the sale of goods or the provision of
services by such Domestic Loan Parties to any account debtor and (ii) certain
accounts of the Foreign Obligors arising from the sale of goods or the provision
of services by such Foreign Obligors to any account debtor that is pre-approved
in writing by the Administrative Agent, in its sole discretion, in each case net
of allowances for doubtful claims, taxes, discounts, rebates, deductions and
counterclaims.

 

(f) Amendment to Section 1.01. The definition of “Net Amount of Fixed Assets” in
Section 1.01 of the Credit Agreement is hereby deleted and the following new
defined term is inserted in its place:

 

“Net Amount of Fixed Assets” means an amount equal to the book value of all
property (including real estate), plant and equipment owned by the Domestic Loan
Parties, calculated based upon on the consolidated balance sheet of the Company.

 

(g) Amendments to Section 7.01(i). Section 7.01(i) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:

 

(i) Liens incurred or deposits made to secure performance of (i) tenders,
statutory obligations, bids, trade contracts, leases or other similar
obligations (other than for borrowed money) entered into in the ordinary course
of business or (ii) obligations under performance or surety bonds provided in
the ordinary course of business; provided that any such Liens permitted under
this Section 7.01(i) shall attach only to property directly relating to, or that
is the subject of, such underlying obligations;

 

(h) Amendment to Section 7.03(k). Section 7.03(k) of the Credit Agreement is
hereby deleted in its entirety and replaced with the following:

 

(k) (i) Indebtedness of the Company and its Subsidiaries in respect of
performance, surety or appeal bonds provided in the ordinary course of business
or (ii) unsecured Indebtedness of the Company and its Subsidiaries in respect of
performance or completion guarantees provided in the ordinary course of
business, but excluding (in each case under Sections 7.03(k)(i) and
7.03(k)(ii)), Indebtedness incurred through the borrowing of money or contingent
liabilities in respect thereof;

 

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(i) Amendment to Section 7.03(n). Section 7.03(n) of the Credit Agreement is
hereby amended by replacing “$10,000,000” with “$15,000,000”.

 

(j) Amendment of Section 7.05. Section 7.05 is hereby amended by deleting “and”
from the end of Section 7.05(g), replacing the period at the end of
Section 7.05(h) with “; and” and inserting the following new clause (i):

 

(i) agreements to make any Dispositions that occur as a result of granting or
permitting to exist any Permitted Liens.

 

(k) Amendment to Section 7.08. Section 7.08 of the Credit Agreement is hereby
deleted in its entirety and the following new Section 7.08 is inserted in
replacement thereof:

 

Section 7.08 Change in Nature of Business. Engage in any business activity
except (a) the business of designing, engineering, fabricating, installing and
servicing equipment for gas turbine power plants and industrial operations and
business activities that are reasonable extensions thereof and activities
reasonably incidental thereto or (b) providing routine and specialty
maintenance, abatement and construction services to Persons engaged in power
generation, pulp and paper manufacturing and to governmental agencies.

 

(l) Amendment to Section 7.13. Section 7.13 of the Credit Agreement is hereby
amended by (i) deleting the word “non-possessory” in the last line thereof and
(ii) inserting “to the extent the same have not become possessory” at the end
thereof.

 

(m) Amendment to Section 7.16. Section 7.16 of the Credit Agreement is hereby
amended by replacing “$3,000,000” with “$7,000,000”.

 

(n) Amendment to Section 7.17. Section 7.17 of the Credit Agreement is hereby
deleted in its entirety and the following new Section 7.17 in inserted in
replacement thereof:

 

Section 7.17 Financial Covenants.

 

(a) Maximum Consolidated Senior Leverage Ratio. Permit the Consolidated Senior
Leverage Ratio of the Company and its Consolidated Subsidiaries at any time
during (but measured on the last day of) any Four-Quarter Period ending during
the periods set forth below to be greater than the ratios for such periods set
forth below; provided, however that for the period from the Closing Date through
December 31, 2005, the Consolidated Senior Leverage Ratio of the Company and its
Consolidated Subsidiaries may be up to 3.00 to 1.00 for no more than two
consecutive fiscal quarters during such period.

 

From the Closing Date

through March 31, 2006

   2.00 to 1.00

From April 1, 2006

through June 30, 2006

   1.75 to 1.00

From July 1, 2006 and

thereafter

   1.50 to 1.00

 

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(b) Maximum Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
of the Company and its Consolidated Subsidiaries at any time during (but
measured on the last day of) any Four-Quarter Period ending during the periods
set forth below to be greater than the ratios for such periods set forth below;
provided, however, that for the period from the Closing Date through
December 31, 2005, the Consolidated Leverage Ratio of the Company and its
Consolidated Subsidiaries may be up to 5.75 to 1.00 for no more than two
consecutive fiscal quarters during such period.

 

From the Closing Date

through March 31, 2006

   5.50 to 1.00 From April 1, 2006 through June 30, 2006    5.00 to 1.00

From July 1, 2006

through September 30, 2006

  

4.75 to 1.00

From October 1, 2006

through December 31, 2006

  

4.50 to 1.00

From January 1, 2007

through March 31, 2007

  

4.00 to 1.00

From April 1, 2007 and

thereafter

  

2.75 to 1.00

 

(c) Minimum Consolidated Fixed Charge Coverage Ratio. Permit the Consolidated
Fixed Charge Coverage Ratio of the Company and its Consolidated Subsidiaries at
any time during (but measured on the last day of) any Four-Quarter Period to be
less than 1.00 to 1.00 for the period from the Closing Date through March 31,
2005, and 1.35 to 1.00 thereafter.

 

(d) Minimum Consolidated Senior Asset Coverage Ratio. Permit the Consolidated
Senior Asset Coverage Ratio of the Company and its Consolidated Subsidiaries as
of the last day of any fiscal quarter, beginning with the fiscal quarter ended
March 31, 2006, to be less than 1.50 to 1.00; provided, that for the period from
the Closing Date through December 31, 2005, the Company and its Consolidated
Subsidiaries shall not be required to maintain a minimum Consolidated Senior
Asset Coverage Ratio.

 

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SECTION 1.02 Representations and Warranties. Each Borrower hereby represents and
warrants to each Lender and the Administrative Agent, on the Amendment Effective
Date (as hereinafter defined), as follows:

 

(a) After giving effect to this Amendment, the representations and warranties
set forth in Article V of the Credit Agreement and in each other Loan Document,
are true and correct in all material respects on and as of the date hereof and
on and as of the Amendment Effective Date with the same effect as if made on and
as of the date hereof or the Amendment Effective Date, as the case may be,
except to the extent such representations and warranties expressly relate solely
to an early date.

 

(b) No Default or Event of Default has occurred and is continuing.

 

(c) The execution, delivery and performance by the Borrowers and each other Loan
Party of this Amendment has been duly authorized by the Borrowers and each other
Loan Party, as applicable and there is no action pending or any judgment, order
or decree in effect which is likely to restrain, prevent or impose materially
adverse conditions upon the performance by each Borrower or any other Loan Party
of its obligations under the Credit Agreement or the other Loan Documents.

 

(d) This Amendment constitutes the legal, valid and binding obligation of each
Loan Party, enforceable against each such Loan Party in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting the enforcement of creditors’ rights or by the effect of general
equitable principles.

 

(e) The execution, delivery and performance by each Loan Party of this Amendment
do not and will not conflict with, or constitute a violation or breach of, or
result in the imposition of any Lien upon the property of each Loan Party or any
of its Subsidiaries, by reason of the terms of (i) any contract, mortgage,
lease, agreement, indenture, or instrument to which such Loan Party is a party
or which is binding upon it, (ii) any Requirement of Law applicable to any Loan
Party or any of its Subsidiaries, or (iii) the certificate or articles of
incorporation or by-laws or the limited liability company or limited partnership
agreement, or analogous organizational document, of any Loan Party or any of its
Subsidiaries.

 

SECTION 1.03 Effectiveness. This Amendment shall become effective only upon
satisfaction of the following conditions precedent (the first date upon which
each such condition has been satisfied being herein called the “Amendment
Effective Date”):

 

(a) The Administrative Agent shall have received duly executed counterparts of
this Amendment which, when taken together, bear the authorized signatures of the
Borrowers, the Subsidiary Guarantors, the Administrative Agent and the Required
Lenders.

 

(b) The Administrative Agent and the Required Lenders shall be satisfied that
the representations and warranties set forth in Section 1.02 of this Amendment
are true and correct on and as of the Amendment Effective Date and that no
Default or Event of Default has occurred and is continuing on and as of the
Amendment Effective Date.

 

(c) The Administrative Agent shall have received all fees and expenses to be
paid by the Borrower pursuant to Section 1.04 of this Amendment.

 

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(d) The Administrative Agent shall have received such other documents, legal
opinions, instruments and certificates relating to this Amendment as it shall
reasonably request and such other documents, legal opinions, instruments and
certificates that shall be reasonably satisfactory in form and substance to the
Administrative Agent and the Lenders. All corporate proceedings taken or to be
taken in connection with this Amendment and documents incidental thereto whether
or not referred to herein shall be reasonably satisfactory in form and substance
to the Administrative Agent and the Lenders.

 

SECTION 1.04 Fees and Expenses.

 

(a) The Company shall pay to the Administrative Agent for its own account a fee
in connection with this arrangement of this Amendment as set forth in that
certain letter agreement dated as of the date hereof among the Company, the
Administrative Agent and Banc of America Securities LLC.

 

(b) The Company shall pay to the Administrative Agent for the ratable benefit of
each Lender that executes and delivers this Amendment as of the date hereof a
fee equal to 0.275% of the sum of (x) such Lender’s Revolving Commitment and
(y) such Lender’s outstanding Term Loans, such fee to be paid within two
Business Days of the Amendment Effective Date.

 

(c) The Borrower shall pay all reasonable out-of-pocket expenses incurred by
Administrative Agent in connection with the preparation, negotiation, execution
and delivery of this Amendment, including, but not limited to, the reasonable
fees and disbursements of counsel to the Administrative Agent.

 

SECTION 1.05 Cross-References. References in this Amendment to any Section are,
unless otherwise specified, to such Section of this Amendment.

 

SECTION 1.06 Instrument Pursuant to Credit Agreement. This Amendment is a Loan
Document executed pursuant to the Credit Agreement and shall (unless otherwise
expressly indicated herein) be construed, administered and applied in accordance
with the terms and provisions of the Credit Agreement.

 

SECTION 1.07 Further Acts. Each of the parties to this Amendment agrees that at
any time and from time to time upon the written request of any other party, it
will execute and deliver such further documents and do such further acts and
things as such other party may reasonably request in order to effect the
purposes of this Amendment.

 

SECTION 1.08 Governing Law. THIS AMENDMENT SHALL BE INTERPRETED AND THE RIGHTS
AND LIABILITIES OF THE PARTIES HERETO DETERMINED IN ACCORDANCE WITH THE INTERNAL
LAWS OF THE STATE OF NEW YORK; PROVIDED THAT THE AGENT AND THE LENDERS SHALL
RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.

 

SECTION 1.09 Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so

 

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executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

 

SECTION 1.10 Severability. In case any provision in or obligation under this
Amendment or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.

 

SECTION 1.11 Benefit of Agreement. This Amendment shall be binding upon and
inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided that the Borrower may not assign or
transfer any of its interest hereunder without the prior written consent of the
Lenders.

 

SECTION 1.12 Integration. This Amendment represents the agreement of the
Borrowers, the Subsidiary Guarantors, the Administrative Agent and each of the
Lenders signatory hereto with respect to the subject matter hereof, and there
are no promises, undertakings, representations or warranties relative to the
subject matter hereof not expressly set forth or referred to herein or in the
other Loan Documents.

 

SECTION 1.13 Confirmation. Except as expressly amended by the terms hereof, all
of the terms of the Credit Agreement and the other Loan Documents shall continue
in full force and effect and are hereby ratified and confirmed in all respects.
Each Subsidiary Guarantor ratifies and confirms the Subsidiary Guaranty as in
full force and effect after giving effect to this Amendment. The Company
ratifies and confirms the Company Guaranty as in full force and effect after
giving effect to this Amendment

 

SECTION 1.14 Loan Documents. Except as expressly set forth herein, the
amendments provided herein shall not by implication or otherwise limit,
constitute a waiver of, or otherwise affect the rights and remedies of the
Lenders or the Administrative Agent under the Credit Agreement or any other Loan
Document, nor shall they constitute a waiver of any Event of Default, nor shall
they alter, modify, amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document. Each of the amendments provided herein shall apply and be
effective only with respect to the provisions of the Credit Agreement
specifically referred to by such amendments. Except as expressly amended herein,
the Credit Agreement and the other Loan Documents shall continue in full force
and effect in accordance with the provisions thereof. As used in the Credit
Agreement, the terms “Agreement”, “herein”, “hereinafter”, “hereunder”, “hereto”
and words of similar import shall mean, from and after the date hereof, the
Credit Agreement.

 

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above written.

 

BORROWERS AND GUARANTORS:

GLOBAL POWER EQUIPMENT GROUP

INC., a Delaware corporation

By:

  /s/    REYNOLDS ALAIN BROUSSEAU        

Name:

  Reynolds Alain Brousseau

Title:

  President and Chief Executive Officer

DELTAK, L.L.C., a Delaware limited liability

company

By:

  /s/    REYNOLDS ALAIN BROUSSEAU        

Name:

  Reynolds Alain Brousseau

Title:

  Chief Executive Officer

BRADEN MANUFACTURING, L.L.C., a

Delaware limited liability company

By:

  /s/    REYNOLDS ALAIN BROUSSEAU        

Name:

  Reynolds Alain Brousseau

Title:

  Chief Executive Officer

DELTAK CONSTRUCTION SERVICES, INC.,

a Wisconsin corporation

By:

  /s/    REYNOLDS ALAIN BROUSSEAU        

Name:

  Reynolds Alain Brousseau

Title:

  Chief Executive Officer

 

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Third Amendment to Credit Agreement

Signature Page

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BRADEN CONSTRUCTION SERVICES, INC.,

a Delaware corporation

By:

  /s/    REYNOLDS ALAIN BROUSSEAU        

Name:

  Reynolds Alain Brousseau

Title:

  Chief Executive Officer ADMINISTRATIVE AGENT AND LENDERS:

BANK OF AMERICA, N.A.,

as Administrative Agent and as a Lender

By:

  /s/    JASON W. TURNER        

Name:

  Jason W. Turner

Title:

  Vice President

US BANK NATIONAL ASSOCIATION, as a

Lender

By:

  /s/    PETER I. BYSTOL        

Name:

  Peter I. Bystol

Title:

  Assistant Vice President

BANK OF OKLAHOMA, N.A., as a Lender

By:

  /s/    DAVID G. LAMB        

Name:

  David G. Lamb

Title:

  SUP - Corporate Banking Dept.

 

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Third Amendment to Credit Agreement

Signature Page

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CITICORP NORTH AMERICA INC., as a

Lender

By:

   

Name:

   

Title:

   

M&I MARSHALL & ILSLEY BANK, as a

Lender

By:

  /s/    RONALD J. CAREY        

Name:

  Ronald J. Carey

Title:

  Vice President

By:

  /s/    DANIEL A. DEFNET        

Name:

  Daniel A. Defnet

Title:

  Vice President

 

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Third Amendment to Credit Agreement

Signature Page

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BORROWERS AND GUARANTORS: GLOBAL POWER PROFESSIONAL SERVICES, L.L.C., a Delaware
limited liability company By:   /S/    REYNOLDS ALAIN BROUSSEAU         Name:  
Reynolds Alain Brousseau Title:   Chief Executive Officer WILLIAMS INDUSTRIAL
SERVICES GROUP, L.L.C., a Delaware limited liability company By:   /S/    JAMES
P. WILSON         Name:   James P. Wilson Title:   Vice President and Treasurer

 

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Third Amendment to Credit Agreement

Signature Page