Amendment No. 2 to the Credit Agreement



 Exhibit 10.3 

EXECUTION VERSION 

AMENDMENT NO. 2 

TO 

CREDIT AGREEMENT 

THIS AMENDMENT NO. 2 TO CREDIT AGREEMENT (the “Amendment”), effective as of July 30, 2008, is made by and among
GLOBAL POWER EQUIPMENT GROUP INC., a corporation formed under the laws of Delaware (the “Company” or the “Borrower”), the other Credit Parties party hereto, the Lenders party hereto, MORGAN STANLEY SENIOR FUNDING,
INC., a corporation formed under the laws of Delaware, as lead arranger and bookrunner and as administrative agent for the Lenders (in such capacity, together with its successors and assigns, if any, the “Administrative Agent”),
MORGAN STANLEY & CO. INCORPORATED, a corporation formed under the laws of Delaware, as collateral agent for the Secured Parties (in such capacity, together with its successors and assigns, if any, the “Collateral Agent”),
THE CIT GROUP/BUSINESS CREDIT, INC. a corporation formed under the laws of Delaware, as syndication agent and as revolving agent for the Revolving Lenders (in such capacity, together with its successors and assigns, if any, the “Revolving
Agent”) and GENERAL ELECTRIC CAPITAL CORPORATION, a corporation formed under the laws of Delaware, as documentation agent (in such capacity, the “Documentation Agent”, together with the Administrative Agent and the
Collateral Agent, the “Agents”). 
 WHEREAS, the Borrower, the other Credit Parties party thereto, the Lenders
party thereto and the Agents are parties to that certain Credit Agreement, dated as of January 22, 2008 and as amended on April 24, 2008 (as it may be further amended, supplemented or otherwise modified, the “Credit
Agreement”), pursuant to which the Lenders and the Agents provide the Borrower with certain financial accommodations; and 

WHEREAS, the Credit Agreement shall be amended as set forth herein on the terms and conditions hereinafter set forth. 

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows: 
 1. Definitions. All capitalized terms not otherwise defined
herein shall have the meanings ascribed thereto in the Credit Agreement. 
 2. Amendment to Credit Agreement. The Credit
Agreement is hereby amended as follows: 
 (a) Subsection 1.01(a)(i) is hereby deleted and replaced in its
entirety with the following: 
 (i) Twenty-five million Dollars ($25,000,000) or 

(b) Section 3.06(b) is hereby amended by deleting the last sentence thereof and replacing it with the following:
“The Unused Commitment Fee shall be non-refundable and paid monthly in arrears and on the date of the termination or expiration of the Revolving Commitments.” 







 (c) Section 3.06(c) is hereby deleted and replaced in its entirety with
the following: 
 (c) the Revolving Agent, for the account of the Revolving Lenders, a Letter of Credit fee in an amount equal
to the Letter of Credit Applicable Margin times the undrawn amount of all outstanding Letters of Credit, payable monthly in arrears and on the date of the termination or expiration of the Revolving Commitments; 

(d) Section 3.06(d) is hereby deleted and replaced in its entirety with the following: 

(d) to the Revolving Agent for the benefit of the L/C Issuer, (i) payable monthly upon notice from the Revolving Agent, an
additional fee equal to 0.32% per annum times the average aggregate face amount of all Letters of Credit issued and outstanding during such one-month period plus, (ii) payable monthly, applicable standard bank issuance and amendment
charges, not to exceed, for each Letter of Credit issuance or amendment, $500. 
 (e) Section 7.15(a) is
hereby deleted and replaced in its entirety with the following: 
 (a) No Credit Party shall have any Deposit Account (other
than the accounts listed on Schedule 5.01(t)(iii)), commodities account or Securities Account other than accounts subject to Control Agreements and the Credit Parties shall cause the Collateral Agent, on behalf of the Secured Parties, to have
a valid, perfected, first-priority security interest in such accounts (other than those accounts listed on Schedule 5.01(t)(iii)). The Credit Parties shall not permit the balance in the accounts listed on Schedule 5.01(t)(iii) to
exceed $500,000 at any time. 
 (f) Section 7.15(c) is hereby deleted and replaced in its entirety with the
following: 
 (c) Each Credit Party shall take all reasonable steps necessary from time to time to deposit or cause to be
deposited promptly all of its Collections (including those sent in cash or otherwise directly to any Credit Party) into an account subject to a Control Agreement (other than with respect to those accounts listed on Schedule 5.01(t)(iii)).

 (g) Section 8.01(m) is hereby deleted in its entirety. 

(h) Section 8.03 is hereby amended by (i) deleting the “and” at the end of clause (k) thereof,
(ii) deleting the period at the end of clause (l) thereof and replacing it with “; and” and (iii) inserting a new clause (m) at the end thereof which shall read as follows: 

“(m) Indebtedness of the Company and its Subsidiaries in an amount not to exceed $3,000,000.00 to be used to finance the renewal of
insurance coverage for itself and its domestic and foreign Subsidiaries under its existing insurance plans.” 
  

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 (i) Section 9.01 is hereby amended by deleting the table therein in its
entirety and replacing it with the following: 
  

			
	 Measurement Period Ending
	  	Ratio
	 March 31, 2008
	  	3.00x
	 June 30, 2008
	  	2.50x
	 September 30, 2008
	  	3.00x
	 December 31, 2008
	  	3.00x
	 March 31, 2009
	  	3.00x
	 June 30, 2009
	  	3.25x
	 September 30, 2009
	  	3.50x
	 December 31, 2009
	  	3.75x
	 March 31, 2010
	  	3.75x
	 June 30, 2010
	  	3.50x
	 September 30, 2010
	  	3.25x
	 December 31, 2010
	  	3.00x
	 March 31, 2011
	  	3.00x
	 June 30, 2011
	  	2.75x
	 September 30, 2011
	  	2.75x
	 December 31, 2011
	  	2.50x
	 March 31, 2012
	  	2.50x
	 June 30, 2012
	  	2.25x
	 September 30, 2012, and each period thereafter
	  	2.00x

 (j)
Section 9.02 is hereby amended by deleting the table therein in its entirety and replacing it with the following: 
  

			
	 Measurement Period Ending
	  	Ratio
	 June 30, 2008
	  	2.00x
	 September 30, 2008
	  	1.75x
	 December 31, 2008
	  	1.75x
	 March 31, 2009
	  	1.75x
	 June 30, 2009
	  	1.60x
	 September 30, 2009
	  	1.50x
	 December 31, 2009
	  	1.40x
	 March 31, 2010
	  	1.45x
	 June 30, 2010
	  	1.50x
	 September 30, 2010
	  	1.55x
	 December 31, 2010
	  	1.60x

  

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	 Measurement Period Ending
	  	Ratio
	 March 31, 2011
	  	1.60x
	 June 30, 2011
	  	1.70x
	 September 30, 2011
	  	1.70x
	 December 31, 2011
	  	1.80x
	 March 31, 2012
	  	1.80x
	 June 30, 2012
	  	1.90x
	 September 30, 2012
	  	1.90x
	 December 31, 2012, and each period thereafter
	  	2.00x

 (k)
Section 9.03 is hereby amended by deleting the table therein in its entirety and replacing it with the following: 
  

				
	 Fiscal Month Ending
	  	Minimum
Liquidity
	 January 31, 2008
	  	$	15,000,000
	 February 29, 2008
	  	$	15,000,000
	 March 31, 2008
	  	$	15,000,000
	 April 30, 2008
	  	$	15,000,000
	 May 31, 2008
	  	$	15,000,000
	 June 30, 2008
	  	$	15,000,000
	 July 31, 2008
	  	$	0
	 August 31, 2008
	  	$	0
	 September 30, 2008
	  	$	0
	 October 31, 2008
	  	$	0
	 November 30, 2008
	  	$	0
	 December 31, 2008
	  	$	0
	 January 31, 2009
	  	$	2,500,000
	 February 28, 2009
	  	$	2,500,000
	 March 31, 2009
	  	$	2,500,000
	 April 30, 2009
	  	$	5,000,000
	 May 31, 2009
	  	$	5,000,000
	 June 30, 2009
	  	$	5,000,000
	 July 31, 2009, and each period thereafter
	  	$	10,000,000


(l) Section 14.01 of the Credit Agreement is hereby amended by: 

(i) adding the following defined term in appropriate alphabetical order: 

“Letter of Credit Applicable Margin” means a percentage per annum equal to 2.75%. 

 

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 (ii) deleting the defined term “Applicable Margin” in its
entirety and replacing it with the following: 
 “Applicable Margin” means a percentage per annum, as set forth
below: 
  

							
	 	  	Alternate Base
Rate Loan	 	 	LIBOR Rate Loan	 
	 Revolving Loans
	  	2.50	% 	 	3.50	% 
	 Term Loans
	  	6.50	% 	 	7.50	% 

 ; and

 (iii) deleting the defined term “Excluded Account” in its entirety. 

(iv) deleting the defined term “Interest Payment Date” in its entirety and replacing it with the following:

 “Interest Payment Date” means (i) for the Revolving Loans the last Business Day of each Fiscal Month
and (ii) for the Term Loans, the last Business Day of each Fiscal Quarter, in each case commencing on the first such date to occur after the Closing Date, and the Maturity Date; provided that, with respect to the amount of any Loan prepaid, the
Interest Payment Date shall be the date of such prepayment. 
 (m) The Schedules to the Credit Agreement are
hereby amended by: 
 (i) deleting the existing Schedule 5.01(t)(i) and inserting Schedule 5.01(t)(i) in the
form attached hereto as Exhibit A. 
 (ii) inserting Schedule 5.01(t)(iii) in the form attached hereto as
Exhibit B in appropriate numerical order. 
 3. Modification of Post-Closing Obligations. 

(a) The obligations set forth in Schedule 4.03 of the Credit Agreement are hereby modified as follows: 

(i) the obligation set forth in paragraph 1(e)(iii) of such Schedule is hereby waived, provided that in lieu of such
obligation, on or before the date falling 30 days after the date of this Amendment, the Credit Parties shall deliver to the Collateral Agent a stock certificate (and related stock power) representing 65% of the Capital Stock of Global Power
Equipment Group Inc. in Global Power Equipment Group (Hong Kong) Limited, the owner of 100% of the Capital Stock of Braden Power Equipment (Shanghai) Co. Ltd; and 

 

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 (ii) the time to satisfy the obligation set forth in paragraph 1(e)(iii) of
such Schedule is hereby extended to the date falling 30 days after the date of this Amendment, 
 it being agreed
and understood that the provisions of paragraphs 2, 3 and 4 of such Schedule shall apply to the above obligations, as if such obligations were set forth in such Schedule. 

4. Conditions Precedent. The amendments set forth in Section 2 above shall become effective as of July
    , 2008, but only once each of the following conditions is satisfied: 
 (a) (i) the
Administrative Agent shall have received an amendment fee in an amount equal to $250,000, (ii) the Term Lenders shall, in aggregate have received an amendment fee in an amount equal to $437,500, (iii) the Revolving Lenders shall, in
aggregate have received an amendment fee in an amount equal to $150,000, and (iv) the Borrower shall have paid all other Participating Lender Expenses required to be paid under the Loan Documents; 

(b) the Administrative Agent shall have received this Amendment, duly executed by the Required Lenders, Administrative
Agent, Revolving Agent and Borrower, and the same shall be in full force and effect; 
 (c) The representations
and warranties in this Amendment, the Credit Agreement, as amended by this Amendment, and the other Loan Documents shall be true and correct in all material respects on and as of the date hereof, as though made on such date (except to the extent
such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); 

(d) After giving effect to this Amendment, no Default, Event of Default or event that, with the giving of notice or
passage of time, would constitute an Event of Default shall have occurred and be continuing on the date hereof, nor shall result from the consummation of the transactions contemplated herein; and 

(e) No injunction, writ, restraining order, or other order of any nature prohibiting, directly or indirectly, the
consummation of the transactions contemplated herein shall have been issued and remain in force by any Governmental Authority against Borrower, any Guarantor or any Lender. 

5. Representations and Warranties. Borrower hereby represents and warrants as follows: 

(a) This Amendment and the Credit Agreement, as amended hereby, constitute legal, valid and binding obligations of
Borrower and are enforceable against Borrower in accordance with their respective terms. 
  

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 (b) The Borrower has the legal power and authority to execute and deliver
this Amendment. 
 (c) The officers executing this Amendment have been duly authorized to execute and deliver the
same and bind the Borrower with respect to the provisions hereof. 
 (d) The execution and delivery of this
Amendment by the Borrower and the performance and observance by the Borrower of the provisions hereof do not violate or conflict with the organizational documents of the Borrower or any law applicable to the Borrower or result in a breach of any
provisions of or constitute a default under any other agreement, instrument or document binding upon or enforceable against the Borrower. 

(e) No Event of Default or Default has occurred and is continuing (save as contemplated in Section 3 above) or would
exist after giving effect to this Amendment. 
 6. Effect on the Credit Agreement. 

(a) Except as specifically amended herein, the Credit Agreement, and all other documents, instruments and agreements
executed and/or delivered in connection therewith, shall remain in full force and effect, and are hereby ratified and confirmed. 

(b) The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or
remedy of any Lender or the Agents, or constitute a waiver of any provision of the Credit Agreement, or any other documents, instruments or agreements executed and/or delivered under or in connection therewith. 

7. Governing Law. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns and shall be construed in accordance with and governed by the law of the State of New York, without regard to principles of conflicts of law (other than Section 5-1401 of the General Obligations Law of the State of New
York). 
 8. Captions. The captions herein are included for convenience of reference only and shall be ignored in the
construction or interpretation hereof 
 9. Counterparts; Effectiveness. This Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument; provided no party shall be bound unless and until the parties hereto have each signed a counterpart
hereof. Facsimile transmissions of any executed original documents and/or retransmission of any executed facsimile transmission shall be deemed to be the same as the delivery of an executed original. At the written request of any party hereto, the
other parties hereto shall confirm facsimile transmissions by executing duplicate original documents and delivering the same to the requesting party or parties. 
  


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 IN WITNESS WHEREOF, the undersigned have duly executed this Amendment as of the day
and year first above written. 
  

					
	 GLOBAL POWER EQUIPMENT GROUP

INC., a Delaware corporation, as Borrower

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	President and Chief Executive Officer
	
	 DELTAK CONSTRUCTION SERVICES, INC.,

a Wisconsin corporation, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Director
	
	 DELTAK, L.L.C., A Delaware limited liability

company, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Director
	
	 BRADEN CONSTRUCTION SERVICES, INC.,

A Delaware corporation, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Director
	
	 BRADEN MANUFACTURING L.L.C., A

Delaware limited liability company, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Director


  

 [SIGNATURE PAGE – AMENDMENT NO. 2 TO CREDIT AGREEMENT] 









					
	 GLOBAL POWER PROFESSIONAL

SERVICES, L.L.C., A Delaware limited liability company, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Manager
	
	 WILLIAMS INDUSTRIAL SERVICES

GROUP, L.L.C., a Delaware limited liability company, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Manager
	
	 WILLIAMS INDUSTRIAL SERVICES, LLC, a

Georgia limited liability company, as a Guarantor

		
	By:	 	
 




		 	Name:	 	David Willis
		 	Title:	 	Manager
	
	 WILLIAMS SPECIALTY SERVICES, LLC, a

Georgia limited liability company, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Manager
	
	 WILLIAMS PLANT SERVICES, LLC, a

Georgia limited liability company, as a Guarantor

		
	By:	 	
 




		 	Name:	 	John M. Matheson
		 	Title:	 	Manager


  

 [SIGNATURE PAGE – AMENDMENT NO. 2 TO CREDIT AGREEMENT]