EXHIBIT 10.1

 

First Amendment to Credit Agreement

 

This First Amendment to Credit Agreement (herein, the “Amendment”) is entered
into as of August 7, 2013, by and among Pioneer Power Solutions, Inc., a
Delaware corporation (the “Borrower”), the direct and indirect Domestic
Subsidiaries of the Borrower, as Guarantors, and Bank of Montreal, a Canadian
chartered bank acting through its Chicago branch (the “Bank”).

 

Preliminary Statements

 

A.           The Borrower, the Guarantors and the Bank entered into a certain
Credit Agreement, dated as of June 28, 2013 (the Credit Agreement being referred
to herein as the “Credit Agreement”). All capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the Credit
Agreement.

 

B.           The Borrower has requested that the Bank make certain amendments to
the Credit Agreement, and the Bank is willing to do so under the terms and
conditions set forth in this Amendment.

 

Now, Therefore, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:

 

Section 1.          Amendments.

 

Subject to the satisfaction of the conditions precedent set forth in Section 2
below, the Credit Agreement shall be and hereby is amended as follows:

 

1.1.          Section 8.23(d) of the Credit Agreement is hereby amended and
restated in its entirety as follows:

 

(d)          Special Provision Regarding 6/30/13 and 9/30/13. With respect to
the calculation of each of the foregoing covenants in this Section 8.23 for the
fiscal quarters ending June 30, 2013 and September 30, 2013, the Borrower shall
calculate such covenants as if the anticipated Permitted Acquisition (and any
associated Indebtedness) had closed on June 30, 2013, so long as such Permitted
Acquisition has closed by no later than October 31, 2013. For further clarity,
if the anticipated Permitted Acquisition does not close on or before October 31,
2013, the Borrower shall recalculate the covenants as of June 30, 2013 and
September 30, 2013 on the basis of the actual results and deliver an updated
compliance certificate required by Section 8.5(l).

 

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Section 2.          Conditions Precedent.

 

The effectiveness of this Amendment is subject to the satisfaction of all of the
following conditions precedent:

 

2.1.          The Borrower, the Guarantors and the Bank shall have executed and
delivered this Amendment.

 

2.2.          The Bank shall have received copies (executed or certified, as may
be appropriate) of all legal documents or proceedings taken in connection with
the execution and delivery of this Amendment to the extent the Bank or its
counsel may reasonably request.

 

2.3.          Legal matters incident to the execution and delivery of this
Amendment shall be satisfactory to the Bank and its counsel.

 

Section 3.          Representations.

 

In order to induce the Bank to execute and deliver this Amendment, the Borrower
hereby represents to the Bank that as of the date hereof (a)  the
representations and warranties set forth in Section 6 of the Credit Agreement
are and shall be and remain true and correct (except that the representations
contained in Section 6.5 shall be deemed to refer to the most recent financial
statements of the Borrower delivered to the Bank) and (b) the Borrower is in
compliance with the terms and conditions of the Credit Agreement and no Default
or Event of Default has occurred and is continuing under the Credit Agreement or
shall result after giving effect to this Amendment.

 

Section 4.          Miscellaneous.

 

4.1.          The Borrower and the Guarantors heretofore executed and delivered
to the Bank the Security Agreement and certain other Collateral Documents. The
Borrower and the Guarantors hereby acknowledge and agree that the Liens created
and provided for by the Collateral Documents continue to secure, among other
things, the Secured Obligations arising under the Credit Agreement as amended
hereby; and the Collateral Documents and the rights and remedies of the Bank
thereunder, the obligations of the Borrower and Guarantors thereunder, and the
Liens created and provided for thereunder remain in full force and effect and
shall not be affected, impaired or discharged hereby. Nothing herein contained
shall in any manner affect or impair the priority of the liens and security
interests created and provided for by the Collateral Documents as to the
indebtedness which would be secured thereby prior to giving effect to this
Amendment.

 

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4.2.          Except as specifically amended herein, the Credit Agreement shall
continue in full force and effect in accordance with its original terms.
Reference to this specific Amendment need not be made in the Credit Agreement,
the Notes, or any other instrument or document executed in connection therewith,
or in any certificate, letter or communication issued or made pursuant to or
with respect to the Credit Agreement, any reference in any of such items to the
Credit Agreement being sufficient to refer to the Credit Agreement as amended
hereby.

 

4.3.          The Borrower agrees to pay on demand all costs and expenses of or
incurred by the Bank in connection with the negotiation, preparation, execution
and delivery of this Amendment, including the fees and expenses of counsel for
the Bank.

 

4.4.          This Amendment may be executed in any number of counterparts, and
by the different parties on different counterpart signature pages, all of which
taken together shall constitute one and the same agreement. Any of the parties
hereto may execute this Amendment by signing any such counterpart and each of
such counterparts shall for all purposes be deemed to be an original. Delivery
of a counterpart hereof by facsimile transmission or by e-mail transmission of
an Adobe portable document format file (also known as a “PDF” file) shall be
effective as delivery of a manually executed counterpart hereof. This Amendment
shall be governed by, and construed in accordance with, the internal laws of the
State of Illinois.

 

[Signature Page to Follow]

 

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This First Amendment to Credit Agreement is entered into as of the date and year
first above written.

 

  “Borrower”       Pioneer Power Solutions, Inc.         By /s/ Andrew Minkow  
Name Andrew Minkow   Title Chief Financial Officer         “Guarantors”      
Jefferson Electric, Inc.         By /s/ Andrew Minkow   Name Andrew Minkow  
Title Chief Financial Officer         Pioneer Critical Power Inc.         By /s/
Andrew Minkow   Name Andrew Minkow   Title Chief Financial Officer      
Accepted and agreed to.       Bank of Montreal, acting through its Chicago
Branch         By /s/ Larry Allan Swiniarski   Name Larry Allan Swiniarski  
Title Director, Bank of Montreal     Chicago, Branch

 

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