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GPX > SEC Filings for GPX > Form 8-K on 2-Sep-2014All Recent SEC Filings

Show all filings for GP STRATEGIES CORP

Form 8-K for GP STRATEGIES CORP


2-Sep-2014

Entry into a Material Definitive Agreement, Creation of a Direct Financial Obl


Item 1.01 Entry into a Material Definitive Agreement

On September 2, 2014, GP Strategies Corporation (the "Company") entered into a Fourth Amended and Restated Financing and Security Agreement (the "Credit Agreement") with Wells Fargo Bank, National Association, as lender. The Credit Agreement provides for a revolving credit facility up to a maximum principal amount $70 million and for a term loan in the maximum principal amount of $40 million maturing on October 31, 2017 (the "Maturity Date"), and is secured by substantially all of the Company's assets. The Company intends to use the proceeds of the term loan and borrowings under the revolving credit facility to fund any purchase of shares of the Company's common stock pursuant to its offer to purchase up to $80 million in value of shares of its common stock.

The maximum interest rate on the Credit Agreement is the daily one-month LIBOR market index rate plus 2.50%. Based on the Company's 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 Company's maximum leverage ratio for the preceding four quarters. Each unpaid advance on the revolving loan will bear interest until the Maturity Date. The term loan is payable in monthly installments equal to $1,111,111.11 plus applicable interest, beginning on the later of November 1, 2014 and the first day of the first month following the month the term loan is advanced, and ending on the Maturity Date. 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 Company's and it subsidiaries' (subject to certain exceptions) ability to, among other things, grant liens, make investments, incur indebtedness, merge or consolidate, dispose of assets, 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.

The Credit Agreement includes customary events of default that, include among other things, non-payment defaults, covenant defaults, inaccuracy of representations and warranties, bankruptcy, material judgment defaults, contract defaults and a change of control default. The occurrence of an event of default could result in the acceleration of the obligations under the Credit Agreement. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under the Credit Agreement at a per annum rate equal to 3.0% above the applicable interest rate for any outstanding amounts. 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 an 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 10.1 Fourth Amended and Restated Financing and Security Agreement, dated September 2, 2014, by and between GP Strategies Corporation as Borrower and Wells Fargo Bank, National Association, as Lender.

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