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Exhibit
10.2
Execution Copy
FIRST AMENDMENT TO CREDIT
AGREEMENT
This FIRST AMENDMENT TO
CREDIT AGREEMENT (this “ Amendment ”) made
and entered into as of September 13, 2007, is by and between
Quantum Fuel Systems Technologies Worldwide, Inc., a Delaware
corporation (the “ Borrower ”), the Lenders
party to the Credit Agreement (as defined below), and WB QT, LLC, a
Delaware limited liability company, a Lender and as agent for the
Lenders (in such capacity, the “ Agent
”).
RECITALS
1. The Lenders, the Agent and
the Borrower entered into a Credit Agreement dated as of
January 31, 2007 (the “ Credit Agreement
”); and
2. The Borrower desires to
amend certain provisions of the Credit Agreement, and the Lenders
have agreed to make such amendments, subject to the terms and
conditions set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, for
good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, the parties hereto hereby covenant and
agree to be bound as follows:
Section 1.
Capitalized Terms . Capitalized terms used herein and
not otherwise defined herein shall have the meanings assigned to
them in the Credit Agreement, unless the context shall otherwise
require.
Section 2.
Amendments . The Credit Agreement is hereby
amended as follows:
2.1 Definitions
. The definition of “ Borrowing Base ”
contained in Section 1.1 of the Credit Agreement is amended to
read its entirety as follows:
“ Borrowing Base
” shall mean, as of any date of determination thereof, an
amount equal to the sum of (i) eighty five percent
(85%) of Eligible Accounts plus (ii) the lesser of
(A) (1) forty-five percent (45%) of Eligible
Inventory until the earlier of (x) the date the Borrowers give
the Agent notice pursuant to Section 2.6 of its option to
reduce such availability rate to 30% and (y) October 1,
2008, and (2) thirty percent (30%) of Eligible Inventory
thereafter, and (B) Ten Million Six Hundred Thirty Seven
Thousand Five Hundred Dollars ($10,637,500); provided however, to
the extent the aggregate Eligible Accounts with respect to
Borrowing Base Obligors that are not Lockbox Obligors exceeds Three
Million Dollars ($3,000,000) as of any date of determination, such
excess shall not be included in the calculation of section
(i) above; provided further, that the Borrowing Base shall be
determined on the basis of the most current Borrowing
Base
Certificate required to be
submitted hereunder, provided, further, that the amount determined
as the Borrowing Base shall be subject to any reserves for
contras/offsets, potential offsets due to customer deposits, and
such other reserves as reasonably established by the Agent, at the
direction or with the concurrence of the Majority Lenders from time
to time, including, without limitation any reserves or other
adjustments established by Agent or the Majority Lenders on the
basis of any collateral audits conducted hereunder, all in
accordance with ordinary and customary asset-based lending
standards, as reasonably determined by Agent and the Majority
Lenders. In the event that Agent, at any time in its sole
discretion, determines that the dollar amount of Eligible Accounts
collectable by a Borrowing Base Obligor is reduced or diluted as a
result of discounts or rebates granted by a Borrowing Base Obligor
to the respective Account Debtor(s), returned or rejected Inventory
or services, or such other reasons or factors as Agent reasonably
deems applicable, all in accordance with ordinary and customary
asset-based lending standards, as reasonably determined by Agent
and the Majority Lenders, Agent may, in its sole discretion, upon
five (5) Business Days’ prior written notice to the
Company, reduce or otherwise modify the percentage of Eligible
Accounts included within the Borrowing Base and/or reduce the
dollar amount of Eligible Accounts by an amount determined by Agent
in its sole discretion.
2.2 Term Loan .
Section 2.3(b) of the Credit Agreement is amended by
amending the last paragraph thereof to read in its entirety as
follows:
Notwithstanding anything to
the contrary in this Agreement, amounts due under
Section 2.3(b)(i) may be made in common stock of the Company
upon 30 days prior written notice to the Agent. When making any
payment under Section 2.3(b)(i) using common stock of the
Company, the value of such stock shall determined based on the
lower of (A) 95% of the closing price for such stock on the
Business Day immediately prior to the date of such payment, or
(B) 95% of the average closing price for such stock for the
five (5) Business Days immediately prior to the date of such
payment; provided, that the Company may not make payment under
Section 2.3(b)(i) using common stock of the Company unless
(A) such common stock is registered with the Securities and
Exchange Commission under the Securities Act of 1933 and is freely
tradable and (B) the closing price for such stock on the
Business Day immediately prior to the date of such payment was
greater than $1 per share.
2.3 Interest; Interest
Payment . Section 2.6 of the Credit Agreement is
amended to read in its entirety as follows:
2.6 Interest; Interest
Payments . Interest on the unpaid balance of all Advances from
time to time outstanding shall accrue from the date of such Advance
to the date repaid, at a per annum interest rate equal to
(a) the greater of (i) ten percent (10%) and
(ii) the sum of the Prime Rate plus 3% through
September 30, 2007, (b) twelve percent
(12%) commencing on October 1, 2007 through the earlier
of (A) the date the Borrower, upon 30 days prior written
notice
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to the Agent, elects to
reduce the availability rate for Eligible Inventory to thirty
percent (30%) and (B) September 30, 2008, and
(c) thereafter, the greater of (x) ten percent (10%), and
(y) the sum of the Prime Rate plus 3%, and shall be payable in
immediately available funds on the first day of each month
commencing on March 1, 2007. Interest shall be computed on the
basis of a 360 day year and assessed for the actual number of days
elapsed, and in such computation effect shall be given to any
change in the interest rate resulting from a change in the Prime
Rate on the date of such change in the Prime Rate.
2.4 Borrowing Base
Certificate . Exhibit H to the Credit Agreement is
hereby amended to read as set forth on Exhibit A attached to
this Amendment which is made a part of the Credit Agreement as
Exhibit H thereto.
Section 3.
Effectiveness of Amendments . The amendments contained
in this Amendment shall become effective upon delivery by the
Borrower of, and compliance by the Borrower with, the
following:
3.1 This Amendment,
duly executed by the Borrower.
3.2 The Second Amended
and Restated Convertible Subordinated Promissory Notes, duly
executed by Tecstar Automotive Group, Inc.
3.3 A copy of the
resolutions of the Board of Directors of the Borrower authorizing
the execution, delivery and performance of this Amendment certified
as true and accurate by its Secretary or Assistant Secretary, along
with a certification by such Secretary or Assistant Secretary
(i) certifying that there has been no amendment to the
Certificate of Incorporation or Bylaws of the Borrower since true
and accurate copies of the same were delivered to the Agent with a
certificate of the Secretary of the Borrower dated January 31,
2007, and (ii) identifying each officer of the Borrower
authorized to execute this Amendment and any other instrument or
agreement executed by the Borrower in connection with this
Amendment (collectively, the “ Amendment Documents
”), and certifying as to specimens of such officer’s
signature and such officer’s incumbency in such offices as
such officer holds.
3.4 A Reaffirmation of
Guaranty by the Guarantors in the form of Exhibit B attached
to this Amendment, duly executed by the Guarantors.
3.5 A Reaffirmation of
Security Documents in the form of Exhibit C attached to this
Amendment, duly executed by the Guarantors.
3.6 Certified copies
of all document
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