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EXHIBIT 4.4
FIRST
AMENDMENT
TO
SECURITIES PURCHASE
AGREEMENT
This First Amendment (the
“Amendment”) to the Securities Purchase Agreement dated
March 26, 2007 (the “Securities Purchase
Agreement”) by and among Delphax Technologies Inc.
(“Delphax”), Delphax Technologies Canada Limited
(“Delphax Canada”), and Whitebox Delphax, Ltd.
(“Whitebox”) is made as of this 10th day of September
2007 by and among Delphax, Delphax Canada, and Whitebox.
Capitalized terms used but not defined in this Amendment shall have
the meaning set forth in the Securities Purchase
Agreement.
B
ACKGROUND
A. Pursuant to the Securities
Purchase Agreement Delphax and Delphax Canada agreed to issue, and
Whitebox agreed to purchase, 12% Secured Subordinated Notes of
Delphax Canada and Warrants of Delphax.
B. In connection with the
Second Closing, Delphax and Delphax Canada will pay off the Senior
Debt owing to LaSalle and will be incurring new Senior Debt from
Wells Fargo Bank, N.A. and Wells Fargo Financial Corporation Canada
(together “Wells Fargo”).
C. Pursuant to
Section 7.2(b) of the Securities Purchase Agreement, the
parties have agreed to add a Total Debt Covenant to the Securities
Purchase Agreement.
In consideration of the
foregoing, the parties agree as follows:
A
GREEMENT
1. Section 3.5 of the
Securities Purchase Agreement is hereby amended and restated in its
entirety as follows:
“3.5 Outstanding
Debt . Immediately prior to the Second Closing Date, Delphax
and its Subsidiaries have no Indebtedness for Borrowed Money (as
hereinafter defined), other than indebtedness to LaSalle, the
indebtedness evidenced by the Existing 2004 Notes, and the
indebtedness evidenced by the Notes issued on the First Closing
Date. After giving effect to the transactions on the Second Closing
Date, Delphax and its Subsidiaries will have no Indebtedness for
Borrowed Money, other than Indebtedness to Wells Fargo and
indebtedness evidenced by the Notes. Neither Delphax nor any of its
Subsidiaries is in default in the payment of the principal of or
interest or premium on any such Indebtedness for Borrowed Money,
and no event has occurred or is continuing under the provisions of
any instrument, document or agreement evidencing or relating to any
such Indebtedness for Borrowed Money which with the lapse of time
or the giving of notice, or both, would constitute an event of
default thereunder.”
2. Section 4.19 of the
Securities Purchase Agreement is hereby amended by changing
“$14,000,000” in clause (i) thereof to
“$14,500,000.”
3. Article IV is hereby
amended to include new sections 4.25 and 4.26 reading as
follows:
“4.25 Total Debt
Covenant. The Companies shall not, and shall not permit any
Subsidiary to create, incur, assume, become obligated for (directly
or indirectly) or permit to exist, Indebtedness for Borrowed Money
(including, without limitation, Senior Debt and the Notes) in an
aggregate principal amount at any time outstanding greater than the
sum of (a) 90% of eligible accounts receivable of Delphax and
its Subsidiaries (defined to include all receivables excluding
(i) intercompany receivables and receivables from affiliates,
(ii) receivables over 90 days (120 days for customers outside
North America) after the due date, (iii) receivables owed by a
bankrupt or insolvent obligor, and (iv) or receivables owed by
an obligor if more than 25% of the receivables from such obligor
are over 90 days (120 days for customers outside North America)
after the due date), plus (b) the lesser of
(i) 85% of balance sheet inventory of Delphax and its
Subsidiaries and (ii) $12,000,000. The receivables and
inventory of any Subsidiary shall be excluded from the foregoing
calculation if Delphax is not in compliance with Section 4.23
or 4.26, as applicable, of this Agreement with respect to such
Subsidiary. Within 45 days following each fiscal quarter of the
Companies, the Companies shall deliver to Investor a compliance
certificate in form acceptable to the Investor containing
calculations showing the Companies’ compliance with this
Section 4.25.”
“4.26 Additional Liens.
Within 90 days after the Second Closing Date (a) to the extent
permitted by local law, Delphax shall pledge all of its ownership
interests in Delphax Technologies Limited and Delphax Technologies
SAS to secure the Notes and other obligations to Investor pursuant
to one or more pledge agreements in form and substance reasonably
satisfactory to Investor, subject only to liens securing Senior
Debt, and (b) Delphax shall cause Delphax Technologies Limited
and Delphax Technologies SAS to guaranty the Notes and grant liens
on all their personal property to secure the Notes and their
guaranties pursuant to security documents in form and substance
reasonably satisfactory to Investor, subject only to liens securing
Senior Debt. Delphax agrees to take, and to cause such Subsidiaries
to take, all actions as Investor may reasonably request to perfect
the lien of such pledge agreements and security
documents.
3. Section 6.2(b) of the
Securities Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
“(b) The Companies, the
Investors and Wells Fargo shall have entered into a Subordination
Agreement containing terms reasonably acceptable to the Companies,
the Investors and Wells Fargo.”
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4. Section 7.2(b) of the
Securities Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
“(b) Delphax
Technologies Limited shall have guaranteed the Notes and executed
such documents as the Investor may reasonably require to grant to
Investor a first lien on its assets with no standstill or
subordination on Investors’ right to realize on such
collateral, and Wells Fargo shall have consented to such guaranty
and first lien and agreed to amend the Subordination Agreement to
give effect thereto. If Wells Fargo does not consent to this
guaranty and first lien, Companies and Investors shall have amended
this Agreement to add a total debt covenant limiting total debt
(including, without limitation, Senior Debt and the Notes) to be
less than the sum of (i) 90% of eligible accounts receivable
of Delphax and its Subsidiaries (defined to include all receivables
excluding (A) intercompany receivables and receivables from
affiliates, (B) receivables over 90 days (120 days for
customers outside North America) after the due date,
(C) receivables owed by a bankrupt or insolvent obligor, and
(D) receivables owed by an obligor if more than 25% of the
receivables from such obligor are over 90 days (120 days for
customers outside North America) after the due date), plus
(ii) the lesser of (A) 85% of balance sheet inventory of
Delphax and its Subsidiaries and
(B) $12,000,000.”
5. Section 7.2(d) of the
Securities Purchase Agreement is hereby amended and restated in its
entirety to read as follows:
“(d) The maturity of
the Senior Debt of the Companies shall have been extended to a date
at least 3 years after the Second Closing Date, and the Companies,
the Investors and Wells Fargo shall have entered into a
Subordination Agreement reasonably acceptable to the Companies, the
Investor and Wells Fargo.”
6. Sections 8.1 and 8.2 of
the Securities Purchase Agreement are hereby amended and restated
in their entirety to read as follows:
“8.1 Events of
Default . Each of the following events shall be an event of
default (an “ Event of Default ”) for purposes
of this Agreement:
(a) if default shall be made
in the punctual payment of interest on the Notes, and such default
shall have continued for a period of 15 days after written notice
thereof to Delphax Canada by the holder of any of the Notes;
or
(b) if default shall be made
in the punctual payment of any installment of the principal of the
Notes (whether by regular installment, at a date fixed for
prepayment, at maturity or otherwise) and such default shall have
continued for a period of 15 days after written notice thereof to
Delphax Canada by the holder of any of the Notes; or
(c) if Delphax Canada shall
default in any other manner with respect to any of its obligations
under the Notes, including without limitation obligations to offer
to prepay the Notes under certain circumstances, and such default
shall not have been cured by Delphax Canada or waived by the holder
or holders of a majority of the Notes within 15 days after notice
thereof is given to Delphax Canada by any Investor; or
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