Item 1.01 |
Entry into a Material Definitive Agreement. |
ABL Credit Agreement
As previously reported, on February 11, 2022, Team, Inc. (the “Company”) entered into a credit agreement with the lender parties thereto, and Eclipse Business Capital, LLC (“Eclipse”), a Delaware limited liability company, as agent, (such agreement, as amended on May 6, 2022, and as further amended from time to time, the “ABL Credit Agreement”).
In connection with the Quest Integrity Transaction (as defined below), on November 1, 2022, the Company, the guarantors party thereto, the lender parties thereto and Eclipse, as agent, entered into Amendment No. 2 to the ABL Credit Agreement (“ABL Credit Agreement Amendment No. 2”) which, among other things, (i) modified the Maturity Reserve Trigger Date (as defined in the ABL Credit Agreement) such that the date on which a reserve must, subject to certain conditions, be put into place with respect to the outstanding principal amount of the 5.00% Convertible Senior Notes due 2023 (the “Notes”) is 45 days prior to the maturity date of the Notes rather than 75 days and (ii) made certain modifications to negative covenants and mandatory prepayment provisions.
The foregoing summary of ABL Credit Agreement Amendment No. 2 does not purport to be complete and is subject to, and qualified in its entirety by, the full text of ABL Credit Agreement Amendment No. 2, a copy of which is attached hereto as Exhibit 10.1 and is incorporated by reference herein.
Atlantic Park Term Loan
As previously reported, on December 18, 2020, we entered into that certain Term Loan Credit Agreement (as amended on October 19, 2021, October 29, 2021, November 9, 2021, December 2, 2021, December 7, 2021, February 11, 2022, and May 6, 2022, and as further amended from time to time, the “Term Loan Credit Agreement”) with Atlantic Park Strategic Capital Fund, L.P. (“APSC”), as agent and the lenders party thereto, pursuant to which we borrowed a $250.0 million term loan.
In connection with the Quest Integrity Transaction, on November 1, 2022, the Company, the guarantors party thereto, the lenders party thereto and APSC, as agent for the lenders and secured parties, entered into Amendment No. 8 to the Term Loan Credit Agreement (“Term Loan Amendment No. 8”) which, among other things, (i) modified mandatory prepayment requirements to allow the Company to retain up to $26.0 million of proceeds in connection with the Quest Integrity Transaction, subject to certain limitations and (ii) made certain modifications to negative covenants and mandatory prepayment provisions.
The Company expects to use the net proceeds from the Quest Integrity Transaction to pay down debt and for general corporate purposes, thereby reducing the Company’s future debt service obligations and leverage and improving the Company’s liquidity and capital resources. Specifically, of the remaining net cash proceeds from the Quest Integrity Transaction after paying various fees, prepayment premia and taxes, the Company intends to use (i) $238.2 million dollars to pay down amounts owed by the Company under the Term Loan Credit Agreement, resulting in an outstanding principal amount thereunder of $35.6 million dollars and (ii) $26 million for liquidity and general corporate purposes.
The foregoing summary of Term Loan Amendment No. 8 does not purport to be complete and is subject to, and qualified in its entirety by, the full text of Term Loan Amendment No. 8, a copy of which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.
Subordinated Term Loan
On November 1, 2022, the Company entered into Amendment No. 9 (the “Subordinated Term Loan Amendment No. 9”) to that certain Unsecured Term Loan Credit Agreement, dated as of November 9, 2021 (as amended on November 30, 2021, December 6, 2021, December 7, 2021, December 8, 2021, February 11, 2022, May 6, 2022, June 28, 2022, and October 4, 2022 and as further amended from time to time, the “Subordinated Term Loan Credit Agreement”) among the Company, as borrower, the lenders from time to time party thereto and Cantor Fitzgerald Securities, as agent. Subordinated Term Loan Amendment No. 9, among other things, (i) modified the mandatory prepayment requirements to allow the Company to retain up to $26.0 million of proceeds in connection with the Quest Integrity Transaction, subject to certain limitations and (ii) made certain modifications to negative covenants and mandatory prepayment provisions.