EXHIBIT 10.7.2
FIRST AMENDMENT TO CREDIT AGREEMENT
This First Amendment to Credit Agreement, dated as of September11, 1997
(this "FIRST AMENDMENT") is made by, between and among QUAD SYSTEMS CORPORATION,
HITECH FINANCE COMPANY, TRIMARK INVESTMENT CORPORATION, QUAD LEASING CORPORATION
and QUAD FOREIGN SALES CORPORATION (collectively the "BORROWERS" and
individually, a "BORROWER") and CORESTATES BANK, N.A., a national banking
association (referred to herein as the "BANK").
W I T N E S S E T H :
WHEREAS, the Borrowers and the Bank entered into a Credit Agreement dated
as of April 11, 1997, (the "CREDIT AGREEMENT") pursuant to which the Bank agreed
to provide loans and other extensions of credit to the Borrowers on the terms
set forth therein; and
WHEREAS, Borrowers have requested that the Credit Agreement be amended to
permit Quad Europe Limited (a Subsidiary of Quad Systems Corporation but one
which is not a Borrower under the Credit Agreement) to incur certain
indebtedness and that certain other, conforming changes be made to the Credit
Agreement, and the Bank has agreed to the foregoing subject to the terms and
conditions of this First Amendment.
NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration the receipt and adequacy of which are hereby
acknowledged, the Borrowers and the Bank intending to be legally bound, hereby
agree as follows:
All capitalized terms used herein, unless defined herein, shall have the
meanings set forth in the Credit Agreement.
PART A. AMENDMENTS TO LOAN DOCUMENTS
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT. Effective as of the date
hereof and subject to the satisfaction of the conditions precedent set forth in
Part B of this First Amendment, the Credit Agreement is hereby amended as
follows:
(a) AMENDED DEFINITIONS. Section 1.1 ("Definitions") of Article I of
the Credit Agreement is amended as follows:
(i) The defined term "Obligations" is amended by adding thereto
the following phrase:
"; and shall also include the Borrowers'
obligations under the Surety Agreement"
(ii) The defined term "Revolving Loan Commitment" is amended by
adding thereto the following phrase:
"MINUS the Foreign Currency Equivalent of all
amounts outstanding from time to time under the
Foreign Currency Loan"
(iii) A new defined term "Foreign Currency Loan" is added to the
Credit Agreement (in alphabetical order) as follows:
"FOREIGN CURRENCY LOAN" shall mean that certain
uncommitted, revolving credit facility made in favor of
Quad Europe Limited by the London Branch of CoreStates
Bank, N.A. in the maximum principal amount of (POUND)
1,000,000(U.K.) and evidenced by that certain Uncommitted
Facility Note dated August __, 1997. The Foreign Currency
Loan shall bear interest on the principal amount thereof,
at the rate per annum set forth in said note.
(iv) A new defined term "Foreign Currency Equivalent" is added to
the Credit Agreement (in alphabetical order) as follows:
"'FOREIGN CURRENCY EQUIVALENT' means, as of any date of
determination, the equivalent amount in Dollars of the
amounts outstanding under the Foreign Currency Loan, using
the currency exchange rate for such date in the London
wholesale foreign currency exchange market in trading
among banks as reasonably determined by the Bank."
(v) A new defined term "Surety Agreement" is added to the Credit
Agreement (in alphabetical order) as follows:
"SURETY AGREEMENT" shall mean that certain guaranty and
surety agreement executed by Quad Systems Corporation in
favor of CoreStates Bank, N.A. with respect to the Foreign
Currency Loan.
(b) PREPAYMENTS. Section 2.8 of the Credit Agreement is amended by
adding a new subsection (d) as follows:
"(d) MANDATORY PREPAYMENTS. If at any time the amount
outstanding of all Revolving Credit Loans exceeds the Revolving
Loan Commitment solely as a result of a change in the Foreign
Currency Equivalent as determined by the Bank in its reasonable
discretion (and the amount of such excess over the Revolving
Loan Commitment is greater than five percent (5%) of the amount
of the Foreign Currency Loan) then the entire excess shall be
immediately repaid by the Borrowers to the Bank, and so long as
no Event of Default has occurred, such mandatory prepayment
shall be applied to the loans as requested by the Borrower.
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(c) INDEBTEDNESS FOR BORROWED MONEY. The negative covenant set forth
in Section 7.2 of the Credit Agreement is amended by revising subsection
(c) thereof to read in its entirety as follows:
"Debt under the Foreign Currency Loan and Indebtedness for
Borrowed Money (other than to the Bank) of Quad Systems
Corporation and its Subsidiaries of up to Two Million Dollars
($2,000,000) in the aggregate including (i) Debt in respect of
letters of credit or bankers acceptances issued for the account
of Quad Systems Corporation or any Subsidiary, and (ii) Debt
secured by purchase-money Liens permitted under Section 7.3;"
(d) GUARANTEES. The negative covenant set forth in Section 7.4 of the
Credit Agreement is amended by adding thereto the following phrase:
"and (d) the Surety Agreement"
(e) EVENTS OF DEFAULT. Section 9.1 of the Credit Agreement is amended
by adding thereto a new subsection (k) as follows:
"(k) FOREIGN CURRENCY LOAN. If the Borrower or any
subsidiary shall be in default under the Foreign
Currency Loan."
SECTION 2. GUARANTY OF FOREIGN CURRENCY LOAN
(a) SURETY AGREEMENT. As security for the due and punctual payment of
the Foreign Currency Loan, Quad Systems Corporation agrees to execute and
deliver to the Bank the Surety Agreement.
(b) FURTHER ASSURANCES. Borrowers agree to execute and deliver to the
Bank, at any time and from time to time, at their sole cost and expense,
all assignments and other documents requested by the Bank, at its sole
discretion, and to take all actions reasonably requested of Borrowers from
time to time by the Bank to create, perfect, protect and enforce the Credit
Agreement, the Collateral Documents and the lien and security interest in
all Collateral now or hereafter granted to secure payment of all of the
Liabilities.
PART B. PROVISIONS OF THIS FIRST AMENDMENT
SECTION 1. ACKNOWLEDGMENTS AND AGREEMENTS OF THE BORROWERS. By executing
this First Amendment, the Borrowers acknowledge and agree that the Credit
Agreement, the Notes and the Collateral Documents, all as amended hereby, are
and remain valid, binding, enforceable and in full force and effect as of the
date hereof, and neither the Borrowers nor any other party to the Loan Documents
has any defense, set-off, counterclaim, or challenge against the payment of any
of the sums owing under the terms of the Loan Documents, the performance of any
obligations thereunder, or the enforcement or validity of any of the terms
thereof.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Each of the Borrowers, jointly
and severally, hereby represents and warrants to the Bank that:
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(a) All representations and warranties made by Borrowers in the Loan
Documents are and remain true and correct on and as of the date hereof, as
if newly made on and as of this date, and no Event of Default, or event
which, with the lapse of time or giving of notice, or both, would be an
Event of Default, has occurred and is continuing under any of the Loan
Documents.
(b) Each of the Borrowers has the power and authority to execute,
deliver and perform under the terms and provisions of this First Amendment
and the other documents and instruments executed and delivered in
connection herewith (collectively, the "AMENDMENT DOCUMENTS"). The
execution, delivery and performance by each of Borrowers of the Amendment
Documents, and the consummation of the transactions herein and therein
contemplated, have been duly authorized by all necessary corporate action
and do not, and will not: (i) violate or result in the breach of, or
constitute a default under, any of the terms, conditions or provisions of
(A) any Borrower's Certificate of Incorporation or By-Laws, (B) any law,
rule or regulation applicable to any Borrower, (C) any order, writ,
injunction or decree of any court or Governmental Authority applicable to
any Borrower, or (D) any agreement, instrument or undertaking to which any
of the Borrowers, their properties or assets, are subject; or (ii) result
in the creation or imposition of any Lien (other than those Liens granted
to the Bank by the Collateral Documents) upon any of the properties or
assets of any Borrower.
(c) The Amendment Documents have been duly executed and delivered by
the Borrowers and are the legal, valid and binding obligations of the
Borrowers enforceable against the Borrowers in accordance with their
respective terms.
(d) No consent, approval or authorization of or declaration,
registration or filing with any Governmental Authority or any
nongovernmental person or entity, including, without limitation any
creditor, lessor or stockholder of any of the Borrowers, is required on the
part of any of the Borrowers in connection with the execution, delivery and
performance of the Amendment Documents or the transactions contemplated
hereby or thereby as a condition to the legality, validity or
enforceability of the Amendment Documents.
SECTION 3. CONDITIONS OF EFFECTIVENESS. This First Amendment shall become
effective when, and only when, the Bank shall have received a counterpart of
this First Amendment executed by each of the Borrowers and, in addition, shall
have received, in form and substance satisfactory to the Bank:
(a) THE AMENDMENT DOCUMENTS. Executed originals of this First
Amendment, the Surety Agreement and related documents contemplated by this
First Amendment duly executed by Borrowers and all other documents or
certificates required to be delivered pursuant to this Section 3.
(b) OFFICER'S CERTIFICATE. A certificate of a Responsible Officer of
each of the Borrowers stating that:
(i) the representations and warranties contained in Article IV of
the Credit Agreement are true and correct on and as of the date of
such certificate as though made on and as of such date;
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(ii) no Event of Default or event which, with the passage of time
or the giving of notice, or both, would constitute an Event of Default
has occurred and is continuing or would result from the signing of the
Amendment Documents or the transactions contemplated hereby or
thereby; and
(iii) there has been no material adverse change in the financial
condition, operations, properties or business of the Borrowers since
March 31, 1997.
(c) SECRETARY'S CERTIFICATE. A certificate of the Secretary or
Assistant Secretary of each of the Borrowers as to the following:
(i) specimen signatures and incumbency of officers signing the
Amendment Documents; and
(ii) that attached thereto is a true, complete and correct copy
of the resolutions of the Board of Directors of each Borrower
authorizing the transactions contemplated by the Amendment Documents,
certified by the Secretary of such Borrower (which certificate shall
state that such resolutions are in full force and effect on the date
of the certificate).
(iii) that attached thereto is a true, complete and current copy
of all documents executed by Quad Europe Limited in connection with
the Foreign Currency Loan.
(d) APPROVALS. Certified copies (or duplicates thereof) of all
approvals, authorizations, or consents of, or notices to or registrations
with, any governmental body or agency or any existing creditor or other
Person required for any of the Borrowers to enter into the Amendment
Documents.
(e) SUPPORTING DOCUMENTS. (1) A copy of all amendments to the
Certificate of Incorporation of each Borrower filed after April 11, 1997;
(2) a copy of all amendments to the By-laws of each Borrower adopted after
April 11, 1997; or, in place of (1) or (2) a certificate of the Secretary
or Assistant Secretary of each Borrower dated the Effective Date and
certifying with respect to such Borrower that either or both of the
Certificate of Incorporation and/or Bylaws of such Borrower, as applicable,
have not been amended since the date of the last amendment indicated on the
certificate of the Secretary of each such Borrower respectively furnished
to the Bank in connection with the Closing of the Credit Agreement on April
11, 1997.
(f) OPINION. Opinion of Xxxxxxx Xxxxx Xxxxxxx & Xxxxxxxxx addressed to
the Bank dated as of the effective date and in form and substance
satisfactory to the Bank.
(g) OTHER. All information and documents relating to the Borrowers, as
the Bank may reasonably request, all in form and substance satisfactory to
the Bank and its counsel.
SECTION 4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT.
(a) Upon the effectiveness of this First Amendment, on and after the
date
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hereof, each reference in the Credit Agreement (and in the Loan Documents)
to "this Credit Agreement", "hereunder", "hereof", "herein" or words of
like import shall mean and be a reference to the Credit Agreement as
amended hereby.
(b) Except as expressly provided in this First Amendment, the Loan
Documents shall remain in full force and effect in accordance with their
respective terms and are hereby ratified and confirmed. Without limiting
the generality of the foregoing, nothing in this First Amendment shall be
construed to:
(i) impair the validity, perfection or priority of any lien or
security interest securing the Liabilities;
(ii) waive, release or impair any rights, powers or remedies of
the Bank under the Loan Documents;
(iii) require the Bank to grant any forbearance, to modify any
provision of the Loan Documents or to extend the time for payment of
any of the Obligations; or
(iv) require the Bank to make any loans or other extensions of
credit to the Borrowers.
(c) In the event of any inconsistency between the terms of this First
Amendment and the Loan Documents, this First Amendment shall govern.
(d) The execution, delivery and effectiveness of this First Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power or remedy of the Bank under the Credit Agreement, nor
constitute a waiver of any provision of the Credit Agreement.
(e) Without limiting the generality of the foregoing, the revisions to
the Credit Agreement, shall not apply to any period prior to the "effective
date" of the First Amendment.
SECTION 5. SECURITY. Each of the Borrowers hereby agrees and confirms that
all obligations of the Borrowers under the Loan Documents remain in full force
and effect and, together with this First Amendment, are and continue to be
secured by and entitled to the benefits of the Security Agreement and all of the
other Loan Documents.
SECTION 6. FURTHER ASSURANCES. Each of the Borrowers agrees to execute and
deliver to the Bank, from time to time on and after the date hereof, such
further certificates, instruments, records or other documents, assurances or
things as may be reasonably necessary to give full effect to this Third
Amendment.
SECTION 7. NO NOVATION. Neither this First Amendment nor any documents
executed in connection herewith is in any way intended to constitute a novation
of any of the Loan Documents.
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SECTION 8. NO AMENDMENT. The provisions of this First Amendment shall not
be modified or amended save in writing, executed by all the parties hereto.
SECTION 9. GOVERNING LAW. This First Amendment and all documents executed
and delivered in connection herewith shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
SECTION 10. SUCCESSORS AND ASSIGNS. This First Amendment shall bind and
inure to the benefit of each signatory, its successors and assigns, except that
none of the Borrowers shall make any assignment of any of their respective
rights hereunder without the prior written consent of the Bank.
SECTION 11. COUNTERPARTS. This First Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
IN WITNESS WHEREOF, the parties have duly executed this First Amendment as
of the day and year specified above.
CORESTATES BANK, N.A.,
By:___________________________
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
QUAD SYSTEMS CORPORATION
By:___________________________
HITECH FINANCE COMPANY
By:___________________________
TRIMARK INVESTMENT CORP.
By:___________________________
QUAD LEASING CORPORATION
By:___________________________
QUAD FOREIGN SALES CORPORATION
By:___________________________
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