Item 1.01
|
Entry into a Material Definitive Agreement
|
Amended and Restated Credit Agreement
On May 4, 2017, NCS Multistage Holdings, Inc. (the Company) entered into an Amended and Restated Credit Agreement (the Credit
Agreement) with Pioneer Investment, Inc., as borrower (the U.S. Borrower), NCS Multistage Inc., as borrower (the Canadian Borrower), Pioneer Intermediate, Inc., (together with the Company, the Parent
Guarantors) and the lenders party thereto, Wells Fargo Bank, National Association as administrative agent in respect of the U.S. Facility (as defined below) and Wells Fargo Bank, National Association, Canadian Branch, as administrative agent
in respect of the Canadian Facility (as defined below) (the senior secured revolving credit facilities provided thereunder, the New Senior Secured Credit Facilities).
The New Senior Secured Credit Facilities consist of a (i) senior secured revolving credit facility in an aggregate principal amount of $25.0 million
made available to the U.S. Borrower (the U.S. Facility), of which up to $5.0 million may be made available for letters of credit and up to $5.0 million may be made available for swingline loans and (ii) senior secured
revolving credit facility in an aggregate principal amount of $25.0 million made available to the Canadian Borrower (the Canadian Facility).
Borrowings under the U.S. Facility may be made in U.S. dollars, Canadian dollars or Euros and will bear interest at a rate equal to the Adjusted Base Rate or
Eurocurrency Rate (each as defined in the Credit Agreement), in each case, plus an applicable interest margin as set forth in the Credit Agreement. Borrowings under the Canadian Facility may be made in U.S. dollars or Canadian dollars and will bear
interest at the Canadian (Cdn) Base Rate, Canadian (U.S.) Base Rate, Eurocurrency Rate or Discount Rate (each as defined in the Credit Agreement), in each case, plus an applicable interest margin as set forth in the Credit Agreement.
The obligations of the U.S. Borrower under the U.S. Facility will be guaranteed by the Parent Guarantors and each of the other existing and future direct and
indirect restricted subsidiaries of the Company organized under the laws of the United States (subject to certain exceptions) and will be secured by substantially all of the assets of the Parent Guarantors, the U.S. Borrower and such other
subsidiary guarantors, in each case, subject to certain exceptions and permitted liens. The obligations of the Canadian Borrower under the Canadian Facility will be guaranteed by the Parent Guarantors, the U.S. Borrower and each of the other future
direct and indirect restricted subsidiaries of the Company (subject to certain exceptions) and will be secured by substantially all of the assets of the Parent Guarantors, the U.S. Borrower, the Canadian Borrower and such other subsidiary
guarantors, in each case, subject to certain exceptions and permitted liens.
The Credit Agreement contains financial covenants that require
(i) commencing with the fiscal quarter ending June 30, 2017, compliance with a leverage ratio test set at (A) 3.00
to 1.00 as of the last day of each fiscal quarter ending prior to March 31, 2018 and (B) 2.50 to 1:00 as of the last day of each fiscal quarter ending on or after March 31, 2018, (ii)
commencing with the fiscal quarter ending June 30, 2017, compliance with an interest coverage ratio test set at 2.75 to 1.00 as of the last day of each fiscal quarter, (iii) if the leverage ratio as of the end of any fiscal quarter is
greater than 2.00 to 1.00 and the amount outstanding under the Canadian Facility at any time during such fiscal quarter was greater than $0, compliance as of the end of such fiscal quarter with a Canadian asset coverage ratio test set at 1.00 to
1.00 and (iv) if the leverage ratio as of the end of any fiscal quarter is greater than 2.00 to 1.00 and the amount outstanding under the U.S. Facility at any time during such fiscal quarter was greater than $0, compliance as of the end of such
fiscal quarter with a U.S. asset coverage ratio test set at 1.00 to 1.00.. The Credit Agreement also contains customary affirmative and negative covenants, including, among other things, limits on the creation of liens, limits on the incurrence of
indebtedness, restrictions on investments, dispositions and transactions with affiliates and limitations on dividends and other restricted payments. The Credit Agreement also includes customary events of default for facilities of this type (with
customary grace periods, as applicable). If an event of default occurs, the lenders under the Credit Agreement, may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued
and unpaid interest and other amounts payable thereunder, to be immediately due and payable, The lenders under the Credit Agreement also have the right upon an event of default thereunder to terminate any commitments they have to provide further
borrowings. Further, following an event of default under the Credit Agreement, the lenders thereunder will have the right to proceed against the collateral granted to them to secure that debt.
The Credit Agreement is attached hereto as Exhibit 10.1 and is incorporated herein by reference. The foregoing summary of the Credit Agreement does not
purport to be a complete statement of the parties rights and obligations under the Credit Agreement, and is qualified in its entirety by reference to Exhibit 10.1