1
EXHIBIT 10.16
WAIVER AND FIRST AMENDMENT, dated as of December 16, 1998 (this "FIRST
AMENDMENT"), to the CREDIT AGREEMENT, dated as of December 20, 1996, as amended
and restated through December 17, 1997 (the "CREDIT AGREEMENT"), among SAFELITE
GLASS CORP., a Delaware corporation (the "BORROWER"), the lenders from time to
time party thereto (the "BANKS"), THE CHASE MANHATTAN BANK, as Administrative
Agent, BANKERS TRUST COMPANY, as Syndication Agent, and XXXXXXX XXXXX CREDIT
PARTNERS L.P., as Documentation Agent.
WITNESSETH:
WHEREAS, the Borrower is considering issuing new senior subordinated notes
in the aggregate stated principal amount of at least $50,000,000 (the "1998
SENIOR SUBORDINATED NOTES"); and
WHEREAS, the Borrower is considering raising at least $50,000,000 in gross
cash proceeds from an offering of its common stock or preferred stock (the "NEW
EQUITY OFFERING");
WHEREAS, the parties hereto wish to waive and amend certain provisions of
the Credit Agreement on the terms set forth herein:
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
1. DEFINITIONS. Unless otherwise defined herein, terms defined in the
Credit Agreement shall be used as so defined.
2. WAIVER OF SECTION 4.02. (a) Up to $35,000,000 of the net cash proceeds
of the New Equity Offering will be used to repay Revolving Loans (with no
reduction of the Revolving Credit Commitments). The balance of such net cash
proceeds of the New Equity Offering, together with the net cash proceeds of the
1998 Senior Subordinated Notes, will be used to prepay principal of the A Term
Loans, the B Term Loans and the C Term Loans ratably, based on the respective
outstanding principal amounts thereof.
(b) The prepayment of the A Term Loans described in the preceding paragraph
(a) will be applied to reduce the then remaining Scheduled Repayments thereof in
the direct order of maturity.
(c) Sections 4.02(A)(d) and 4.02(B)(b) of the Credit Agreement are hereby
waived to the extent necessary to give effect to the preceding paragraphs (a)
and (b).
3. AMENDMENTS TO CREDIT AGREEMENT.
(a) Section 6.10(c) of the Credit Agreement is amended by deleting all
references to the September 30, 1997 financial statements described therein.
2
2
(b) Section 6.25 of the Credit Agreement is amended by deleting such
Section 6.25 and substituting therefor the following:
6.25 SUBORDINATED NOTES. The subordination provisions contained in the
Subordinated Note Documents are enforceable against the Borrower, the
respective Guarantors and the holders thereof, and all Obligations and
Guaranteed Obligations (as defined herein and in the Subsidiary Guaranty)
are within the definition of "Senior Indebtedness" or "Guarantor Senior
Indebtedness," as the case may be, included in such subordination
provisions. This Agreement is the Bank Credit Agreement under the
Subordinated Note Indentures.
(c) Section 8.03 of the Credit Agreement is amended by (i) deleting the
word "and" which appears at the end of clause (n) thereof, (ii) deleting the
period at the end of paragraph (o) thereof and substituting therefor the phrase
"; and" and (iii) adding the following new paragraph (p) at the end thereof:
(p) Liens in favor of the holders of the 1998 Subordinated Notes and
the trustee and collateral agent therefor resulting from the deposit of the
proceeds of the 1998 Subordinated Notes in an escrow or similar account.
(d) Section 8.04 of the Credit Agreement is hereby amended by (i) deleting
the word "and" which appears at the end of clause (n), (ii) deleting the period
at the end of clause (o) and substituting therefor the phrase "; and" and (iii)
adding the following new clause (p):
(p) Indebtedness of the Borrower and the Subsidiary Guarantors
incurred under one or more 1998 Subordinated Note Indentures and 1998
Subordinated Notes and the other Subordinated Note Documents delivered in
connection therewith so long as (A) all of the terms and conditions (and
the documentation) in connection therewith (including, without limitation,
the issuer, amortization, maturities, interest rates, limitations on cash
interest payable, covenants, defaults, remedies, sinking fund provisions,
subordination provisions and other terms), taken as a whole, are not
materially less favorable to the Borrower, and the subordination provisions
thereof are not less favorable to the Banks, than those set forth in the
1998 Subordinated Note Indenture as originally entered into and (B) the
aggregate principal amount of outstanding 1998 Senior Subordinated Notes
under the 1998 Senior Subordinated Note Indenture shall not exceed
$150,000,000 at any time plus the amount of additional 1998 Senior
Subordinated Notes issued to pay interest in lieu of payment of interest in
cash.
(e) Section 8.05 of the Credit Agreement is amended by deleting such
Section 8.05 and substituting therefor the following:
8.05 DESIGNATED SENIOR DEBT. The Borrower will not, and will not
permit any of its Subsidiaries to, designate any Indebtedness (other than
the Obligations) as
3
3
"Designated Senior Indebtedness" for purposes of, and as defined in, the
Subordinated Note Documents.
(f) Section 8.08 of the Credit Agreement is amended by deleting from the
last sentence thereof the phrase "Senior Subordinated Note Indenture" and
substituting therefor the phrase "Subordinated Note Indentures".
(g) Section 8.11 of the Credit Agreement is amended by deleting the columns
captioned "DATE" and "RATIO" and substituting therefor the following:
Last Day of Fiscal Quarter Ending on or about Ratio
--------------------------------------------- -----
March 31, 1999 1.15:1.00
June 30, 1999 1.15:1.00
September 30, 1999 1.15:1.00
December 31, 1999 1.25:1.00
March 31, 2000 1.25:1.00
June 30, 2000 1.50:1.00
September 30, 2000 1.50:1.00
December 31, 2000 1.75:1.00
March 31, 2001 1.75:1.00
June 30, 2001 1.75:1.00
September 30, 2001 2.00:1.00
December 31, 2001 2.00:1.00
March 31, 2002 2.00:1.00
June 20, 2002 2.00:1.00
September 30, 2002 2.25:1.00
December 31, 2002 2.25:1.00
March 31, 2003 2.25:1.00
June 30, 2003 2.25:1.00
September 30, 2003 2.50:1.00
December 31, 2003 2.50:1.00
March 31, 2004 2.50:1.00
June 30, 2004 2.50:1.00
September 30, 2004 and 2.75:1.00
each Fiscal Quarter Thereafter
4
4
(h) Section 8.12 of the Credit Agreement is amended by deleting the columns
captioned "PERIOD" and "RATIO" and substituting therefor the following:
Last Day of Fiscal Quarter Ending on or about Ratio
--------------------------------------------- -----
March 31, 1999 9.75:1.00
June 30, 1999 9.75:1.00
September 30, 1999 9.00:1.00
December 31, 1999 8.25:1.00
March 31, 2000 7.75:1.00
June 30, 2000 7.00:1.00
September 30, 2000 6.25:1.00
December 31, 2000 6.00:1.00
March 31, 2001 6.00:1.00
June 30, 2001 5.75:1.00
September 30, 2001 5.25:1.00
December 31, 2001 5.00:1.00
March 31, 2002 5.00:1.00
June 20, 2002 4.75:1.00
September 30, 2002 4.50:1.00
December 31, 2002 4.50:1.00
March 31, 2003 4.50:1.00
June 30, 2003 4.50:1.00
September 30, 2003 4.25:1.00
December 31, 2003 4.25:1.00
March 31, 2004 4.25:1.00
June 30, 2004 4.00:1.00
September 30, 2004 3.75:1.00
December 31, 2004 3.75:1.00
March 31, 2005 3.75:1.00
June 30, 2005 3.50:1.00
September 30, 2005 and 3.25:1.00
each Fiscal Quarter Thereafter
(i) Section 8.13 of the Credit Agreement is amended by (i) deleting from
clauses (i) - (iv) thereof the word "Senior" each time it appears therein (other
than in the phrase
5
5
"Senior Subordinated Notes Consent Solicitation" which appears in clause (iv)
thereof) and (ii) deleting the paragraph beginning "Notwithstanding" and
substituting therefor the following:
Notwithstanding the foregoing (a) the Senior Subordinated Notes may
be refinanced in accordance with the provisions of Section 8.04(c)
and the 1998 Senior Subordinated Notes may be refinanced in
accordance with the provisions of Section 8.04(p) without limitation
by this Section 8.13, (b) so long as no Default or Event of Default
exists or would result after giving effect thereto, (i) the
Subordinated Notes and accrued interest thereon may be repaid with
the proceeds of the issuance of common stock by the Borrower and (ii)
the Subordinated Notes issued under a Subordinated Note Indenture and
accrued interest thereon may be repaid with the proceeds of the sale
of common stock by the Borrower to the extent permitted by the
"equity clawback" provisions of such Subordinated Note Indenture;
PROVIDED that in the case of any repayment with proceeds of common
stock under the foregoing clauses (i) or (ii), after giving pro forma
effect to the sale of such common stock and such repayment as if such
events had occurred on the last day of the most recently ended Test
Period, the Leverage Ratio would have been less than or equal to 4.5
to 1.0 and (c) the 1998 Senior Subordinated Notes may be redeemed on
or prior to February 3, 1999 if the proceeds thereof are not released
to the Borrower on or prior to such date.
(j) Section 8.14 of the Credit Agreement is amended by deleting from clause
(v) thereof the word "Senior".
(k) Section 10 of the Credit Agreement is hereby amended by adding the
following definitions in proper alphabetical order:
"1998 Senior Subordinated Note Documents" shall mean and include each
of the 1998 Senior Subordinated Note Indenture and the 1998 Senior
Subordinated Notes, as the same may be entered into, modified, supplemented
or amended from time to time pursuant to the terms hereof and thereof.
"1998 Senior Subordinated Note Indenture" shall mean the Indenture to
be entered into among the Borrower and the trustee for the holders of the
1998 Senior Subordinated Notes, which Indenture shall be substantially
similar to the Senior Subordinated Note Indenture, and any other Indentures
that may be entered into by and between the Borrower, the Subsidiary
Guarantors and the trustee for the holders of the 1998 Senior Subordinated
Notes or the purchaser of the 1998 Senior Subordinated Notes, as
applicable, in the form referred to in, or having the terms permitted by,
Section 8.04(p), as the same may be entered into, modified, amended or
supplemented from time to time in accordance with the terms hereof and
thereof.
"1998 Senior Subordinated Notes" shall mean the subordinated notes of
the Borrower that may be issued pursuant to a 1998 Senior Subordinated Note
Indenture and as the same may be modified, supplemented or amended from
time to time pursuant to the terms hereof and thereof.
6
6
"Subordinated Note Documents" shall mean the collective reference to
the 1998 Senior Subordinated Note Documents and the Senior Subordinated
Note Documents.
"Subordinated Note Indentures" shall mean the collective reference to
the 1998 Senior Subordinated Note Indenture and the Senior Subordinated
Note Indenture.
"Subordinated Notes" shall mean the collective reference to the 1998
Senior Subordinated Notes and the Senior Subordinated Notes.
(l) Section 10 of the Credit Agreement is amended by deleting from the
definitions of "FQE1", "FQE2" and "FQE3" the phrase "calendar year" and
substituting therefor the phrase "fiscal year".
(m) Section 10 of the Credit Agreement is amended by deleting the phrase
"(or, for the Test Period ending FQE3 1998, Consolidated EBITDA for such Test
Period multiplied by 4/3)" from the definition of "Leverage Ratio".
(n) Section 10 of the Credit Agreement is amended by deleting the phrase ";
provided that the Test Period for FQE3 1998 shall mean the period beginning on
January 1, 1998 and ending on the last day of FQE3 1998" from the definition of
"Test Period".
(o) Section 10 of the Credit Agreement is amended by deleting from the
definition of "Documents" the word "Senior".
4. AMENDMENT TO ANNEX III. Annex III to the Credit Agreement (the Pricing
Grid) is hereby deleted and replaced with Annex III hereto.
5. EFFECTIVE DATE. (a) This First Amendment will become effective on the
date (the "AMENDMENT EFFECTIVE DATE") on which both (i) this First Amendment
shall have been executed by the Borrower and the Banks in accordance with the
terms of the Credit Agreement and (ii) the 1998 Subordinated Notes have been
issued and the net proceeds thereof have been deposited into an escrow account
for the benefit of the holders thereof.
(b) The amendments and waivers set forth herein shall cease to be effective
on February 3, 1999 unless on or prior to February 3, 1999 (i) the proceeds of
the 1998 Senior Subordinated Notes shall have been released from escrow to the
Borrower and (ii) the Borrower shall have received at least $50,000,000 of gross
cash proceeds from the New Equity Offering.
6. AMENDMENT FEE. The Borrower shall pay to the Administrative Agent, for
the account of each Bank which executes this First Amendment, (i) on the
Amendment Effective Date, an amendment fee equal to .10% and (ii) on the date of
the consummation of the New Equity Offering, an amendment fee equal to .275%, in
each case of the sum of such Bank's Revolving Credit Commitment and Term Loans
after giving effect to the application of the net
7
7
cash proceeds of the 1998 Senior Subordinated Notes and the New Equity Offering
described in Section 2 of this First Amendment.
7. REPRESENTATIONS AND WARRANTIES. The Borrower represents and warrants to
each Bank that as of the effective date of this First Amendment (a) this First
Amendment constitutes the legal, valid and binding obligation of the Borrower,
enforceable against it in accordance with its terms, except as such enforcement
may be limited by bankruptcy, insolvency, fraudulent conveyances,
reorganization, moratorium or similar laws affecting creditors' rights
generally, by general equitable principles (whether enforcement is sought by
proceedings in equity or at law) and by an implied covenant of good faith and
fair dealing, (b) the representations and warranties made by the Borrower in the
Credit Documents are true and correct in all material respects on and as of the
date hereof (except to the extent that such representations and warranties are
expressly stated to relate to an earlier date, in which case such
representations and warranties shall have been true and correct in all material
respects on and as of such earlier date) and (c) no Default or Event of Default
shall have occurred and be continuing as of the date hereof.
8. CONTINUING EFFECT. Except as expressly waived or amended hereby, the
Credit Agreement shall continue to be and shall remain in full force and effect
in accordance with its terms.
9. GOVERNING LAW. THIS FIRST AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
10. COUNTERPARTS. This First Amendment may be executed by the parties
hereto in any number of separate counterparts and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.
11. PAYMENT OF EXPENSES. The Borrower agrees to pay and reimburse the
Administrative Agent for all of its out-of-pocket costs and reasonable expenses
incurred in connection with this First Amendment, including, without limitation,
the reasonable fees and disbursements of counsel to the Administrative Agent.
8
8
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
be duly executed and delivered by their properly and duly authorized officers as
of the day and year first above written.
SAFELITE GLASS CORP.
By:__________________________________________
Title:
THE CHASE MANHATTAN BANK, as
Administrative Agent and as a Bank
By:__________________________________________
Title:
BANKERS TRUST COMPANY, as Syndication
Agent and as a Bank
By:__________________________________________
Title:
XXXXXXX XXXXX CREDIT PARTNERS L.P.,
as Documentation Agent and as a Bank
By:_________________________________________
Title:
THE BANK OF NOVA SCOTIA
By:_________________________________________
Title:
9
9
BANK ONE, NA
By:_________________________________________
Title:
BANK OF TOKYO-MITSUBISHI TRUST COMPANY
By:_________________________________________
Title:
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By:_________________________________________
Title:
By:_________________________________________
Title:
CREDIT LYONNAIS
By:_________________________________________
Title:
FLEET NATIONAL BANK
By:_________________________________________
Title:
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED, NEW YORK BRANCH
By:_________________________________________
Title:
10
10
ABN AMRO BANK, N.V.
By:_________________________________________
Title:
By:_________________________________________
Title:
ALLSTATE INSURANCE COMPANY
By:_________________________________________
Title:
By:_________________________________________
Title:
THE BANK OF NEW YORK
By:_________________________________________
Title:
BANQUE NATIONALE DE PARIS
By:_________________________________________
Title:
PARIBAS
By:_________________________________________
Title:
By:_________________________________________
Title:
11
11
THE FUJI BANK, LIMITED
By:_________________________________________
Title:
ING HIGH INCOME PRINCIPAL PRESERVATION
FUND HOLDINGS, LDC
By: ING Capital Advisors, Inc., as Investment
Advisor
By:_________________________________________
Title:
METROPOLITAN LIFE INSURANCE COMPANY
By:_________________________________________
Title:
NEW YORK LIFE INSURANCE COMPANY
By:_________________________________________
Title:
NEW YORK LIFE INSURANCE AND ANNUITY CORPORATION
By: NEW YORK LIFE INSURANCE COMPANY
By:_________________________________________
Title:
PILGRIM PRIME RATE TRUST
BY PILGRIM INVESTMENTS, INC. AS ITS
INVESTMENT MANAGER
By:_________________________________________
Title:
12
12
PNC BANK, N.A.
By:_________________________________________
Title:
THE TRAVELERS INSURANCE COMPANY
By:_________________________________________
Title:
KZH SOLEIL LLC
By:_________________________________________
Title:
THE SUMITOMO BANK, LIMITED, CHICAGO BRANCH
By:_________________________________________
Title:
XXX XXXXXX PRIME RATE INCOME TRUST
By:_________________________________________
Title:
XXXXXXX XXXXX SENIOR FLOATING RATE FUND, INC.
By:_________________________________________
Title:
13
13
XXXXXXX XXXXX GLOBAL INVESTMENT
SERIES: INCOME STRATEGIES PORTFOLIO
By: XXXXXXX XXXXX ASSET MANAGEMENT,
L.P., as Investment Adviser
By:_________________________________________
Title:
XXXXXXX XXXXX DEBT STRATEGIES, FUND II, INC.
By:_________________________________________
Title:
XXXXXXX XXXXX DEBT STRATEGIES PORTFOLIO
By: Xxxxxxx Xxxxx Asset Management, L.P. as
Investment Advisor
By:_________________________________________
Title:
KZH CYPRESSTREE 1 LLC
By:_________________________________________
Title:
IMPERIAL BANK
By:_________________________________________
Title:
IBJ XXXXXXXX BANK & TRUST COMPANY
By:_________________________________________
Title:
14
14
CREDIT AGRICOLE INDOSUEZ
By:_________________________________________
Title:
XXXXXX XXXXXXX XXXX XXXXXX PRIME INCOME TRUST
By:_________________________________________
Title:
PACIFICA PARTNERS I. LP
By:_________________________________________
Title:
DEEPROCK & CO.
By: Xxxxx Xxxxx Management as Investment Advisor
By:_________________________________________
Title:
GENERAL MOTORS CASH MANAGEMENT MASTER TRUST
By:_________________________________________
Title:
SENIOR DEBT PORTFOLIO
By: Xxxxx Xxxxx Management as Investment Advisor
By:_________________________________________
Title:
