Quad/Graphics, Inc. - FORM 8-K - EX-4.1 - AMENDMENT NO 1 TO CREDIT FACILITY, DATED AS OF DECEMBER 18, 2014

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8-K - FORM 8-K - Quad/Graphics, Inc.	form8-kxamendmenttocreditf.htm

Exhibit 4.1

EXECUTION COPY

AMENDMENT NO. 1

Dated as of December 18, 2014

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of April 28, 2014

THIS AMENDMENT NO. 1 (“Amendment”) is made as of December 18, 2014 (the “Amendment Effective Date”) by and among Quad/Graphics, Inc., as the Borrower (the “Borrower”), the “Lenders” listed on the signature pages hereof and JPMorgan Chase Bank, N.A., as the Administrative Agent (the “Administrative Agent”), under that certain Second Amended and Restated Credit Agreement, dated as of April 28, 2014, by and among the Borrower, the financial institutions parties thereto as “Lenders” (the “Lenders”) and the Administrative Agent (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”). Capitalized terms used herein and not otherwise defined herein shall have the respective meanings given to them in the Credit Agreement.

WHEREAS, the Borrower has requested that the Lenders and the Administrative Agent agree to make certain modifications to the Credit Agreement; and

WHEREAS, the Borrower, the Lenders and the Administrative Agent have so agreed on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Lenders party hereto and the Administrative Agent hereby agree as follows.

1.Amendments to the Credit Agreement. Effective as of the Amendment Effective Date, but subject to the satisfaction of the conditions precedent set forth in Section 2 below, the Credit Agreement is hereby amended as follows:

(a)Section 1.01 of the Credit Agreement is hereby amended to (A) delete the definition of “Unrestricted Domestic Cash” and (B) insert alphabetically the following definition:

“Amendment No. 1” means that certain Amendment No. 1 to Second Amended and Restated Credit Agreement, dated as of December 18, 2014,

Exhibit 4.1

by and among the Borrower, the financial institutions party thereto and the Administrative Agent.

“Amendment No. 1 Effective Date” means December 18, 2014.

(b)Section 2.17 is hereby amended to insert immediately at the end thereof the following clause (i):

(i) For purposes of determining withholding Taxes imposed under FATCA, from and after the Amendment No. 1 Effective Date, the Borrower and the Administrative Agent shall treat (and the Lenders hereby authorize the Administrative Agent to treat) the Loans as not qualifying as a “grandfathered obligation” within the meaning of Treasury Regulation § 1.1471-2(b)(2)(i).

(c)Section 6.11 of the Credit Agreement is hereby amended in its entirety as follows:

SECTION 6.11 Financial Covenants.

(a) Maximum Total Leverage Ratio. The Borrower will not permit the ratio (the “Total Leverage Ratio”), determined as of the end of each of its Fiscal Quarters, of (i) Consolidated Total Indebtedness to (ii) Consolidated EBITDA for the period of the then most-recently ended four (4) consecutive Fiscal Quarters, all calculated for the Consolidated Financial Covenant Entities on a consolidated basis, to be greater than 3.75 to 1.00.

(b) Maximum Senior Secured Leverage Ratio. The Borrower will not permit the ratio (the “Senior Secured Leverage Ratio”), determined as of the end of each of its Fiscal Quarters, of (i) Consolidated Senior Secured Indebtedness to (ii) Consolidated EBITDA for the period of the then most-recently ended four (4) consecutive Fiscal Quarters, all calculated for the Consolidated Financial Covenant Entities on a consolidated basis, to be greater than 3.50 to 1.00.

(c) Minimum Interest Coverage Ratio. The Borrower will not permit the Interest Coverage Ratio, determined as of the end of each of its Fiscal Quarters for the period of the then most-recently ended four (4) consecutive Fiscal Quarters, to be less than 3.50 to 1.00.

(d) Minimum Consolidated Net Worth. The Borrower will at all times maintain Consolidated Net Worth of not less than U.S. $793,760,000 plus 40% of positive Consolidated Net Income for each Fiscal Year (with no reductions being made for any negative amount in any Fiscal Year) on a cumulative basis, beginning with the Fiscal Year ending December 31, 2014; provided, that no portion of Consolidated Net Income corresponding with a

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Consolidated Financial Covenant Entity that is not a Loan Party or a Restricted Subsidiary shall be included in a computation of Minimum Consolidated Net Worth under this Section 6.11(d), other than any amount thereof that is distributed to a Loan Party or Restricted Subsidiary as a result of its ownership of Equity Interests in such other Person, which distributed amount shall be included herein; provided, further, that this Section 6.11(d) shall cease to apply from and after the date on which the Borrower delivers financial statements pursuant to Section 5.01(a) and a compliance certificate pursuant to Section 5.01(c) evidencing compliance with this Section 6.11(d) as of December 31, 2014.

(d)Each reference in the Credit Agreement to “Total Net Leverage Ratio” is hereby amended to “Total Leverage Ratio” and each reference in the Credit Agreement to “Senior Secured Net Leverage Ratio” is hereby amended to “Senior Secured Leverage Ratio”.

(e)Exhibit F to the Credit Agreement is hereby amended in its entirety pursuant to the corresponding Exhibit set forth as Annex I hereto.

2.Conditions of Effectiveness. The effectiveness of this Amendment is subject to the following conditions precedent:

(a) the Administrative Agent shall have received counterparts of this Amendment duly executed by the Borrower, the Lenders required to execute and deliver this Amendment in order to give effect hereto, and the Administrative Agent;

(b) the Administrative Agent shall have received counterparts of the Consent and Reaffirmation in the form attached hereto as Annex II duly executed by the Loan Party Guarantors and Q/G Holland B.V.;

(c) the Administrative Agent shall have received a copy of the Fourth Amendment, dated as of November 24, 2014, to the Senior Secured Note Agreement, in form and substance satisfactory to the Administrative Agent and duly executed by the Borrower, and the holders of the Senior Secured Notes; and

(d) the Administrative Agent shall have received all amounts due and payable on or prior to the Amendment Effective Date, including, to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses required to be reimbursed or paid by the Borrower.

3.Representations and Warranties of the Borrower. The Borrower hereby represents and warrants as follows:

(a)This Amendment and the Credit Agreement, as amended hereby, constitute legal, valid and binding obligations of the Borrower and are enforceable against the Borrower in accordance with their terms, subject to applicable bankruptcy, insolvency, reorganization,

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moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.

(b)As of the date hereof and after giving effect to the terms of this Amendment, (i) no Default or Event of Default shall have occurred and be continuing and (ii) the representations and warranties of the Borrower set forth in the Credit Agreement, as amended hereby, are true and correct as of the date hereof.

4.Reference to and Effect on the Credit Agreement.

(a)Upon the effectiveness of this Amendment, on and after the date hereof, each reference in the Credit Agreement to “this 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 specifically amended above, the Credit Agreement and all other documents, instruments and agreements executed and/or delivered in connection therewith shall remain in full force and effect and are hereby ratified and confirmed.

(c)The execution, delivery and effectiveness of this Amendment shall not operate as a waiver of any right, power or remedy of the Administrative Agent or the Lenders, nor constitute a waiver of any provision of the Credit Agreement or any other documents, instruments and agreements executed and/or delivered in connection therewith.

5.Costs and Expenses. The Borrower shall pay on demand all reasonable costs and expenses of the Administrative Agent (including the reasonable fees, costs and expenses of counsel to the Administrative Agent) incurred in connection with the preparation, execution and delivery of this Amendment.

6.Governing Law. THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK.

7.Execution. This Amendment may be executed in any number of counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by facsimile or other electronic imaging shall be effective as delivery of a manually executed counterpart of this Amendment.

8.Headings. Section headings used herein are for convenience of reference only, are not part of this Amendment and shall not affect the construction of, or be taken into consideration in interpreting, this Amendment.

[Signature Pages Follow]

IN WITNESS WHEREOF, this Amendment has been duly executed as of the day and year first above written.



QUAD/GRAPHICS, INC., as the Borrower


By:	/s/ Jennifer Kent
	Name: Jennifer Kent Title: Secretary

Signature Page to