1
EXHIBIT 4.19
SECOND AMENDMENT TO
CREDIT AGREEMENT, CONSENT AND LIMITED WAIVER
This SECOND AMENDMENT TO CREDIT AGREEMENT, CONSENT AND LIMITED WAIVER
(this "Amendment") is entered into as of September 21, 1999, by and among
COINSTAR, INC., a Delaware corporation ("Borrower"), the financial institutions
named on the signature pages hereof (each, a "Lender" and collectively the
"Lenders"), and IMPERIAL BANK, as Agent for the Lenders ("Agent"), with
reference to the following facts:
A. Borrower, Agent, and Lenders are parties to that certain Credit
Agreement dated as of February 19, 1999, as amended (the "Credit Agreement").
B. The parties desire to amend the Credit Agreement in accordance
with the terms of this Amendment.
NOW, THEREFORE, in consideration of the promises and the agreements,
provisions and covenants herein contained, the parties hereto agree as follows:
1. DEFINED TERMS. Capitalized terms not otherwise defined herein shall
have the same meanings as set forth in the Credit Agreement.
2. AMENDMENT TO CREDIT AGREEMENT. The Credit Agreement is hereby
amended as follows:
(a) Clause (iii) of the proviso in Section 2.5(a) is amended to
read as follows:
(iii) Borrower shall not request any Letter of Credit, if
after giving effect to such issuance, the Letter of Credit Usage exceeds
Ten Million Dollars ($10,000,000) or any regulatory, legal or internal
limit on the Issuing Bank's ability to issue the requested Letter of
Credit.
(b) Section 6.2(z) is amended in its entirety to read as follows:
(z) RESTRICTIONS ON TRANSFERS TO SUBSIDIARIES:
RESTRICTIONS ON EXPENDITURES FOR ELECTRONIC COMMERCE. Notwithstanding any
other provisions of this Agreement to the contrary, allow the total
aggregate amounts of any (a) consideration given in any Acquisition from a
Domestic Subsidiary or a Foreign Person pursuant to Section
6.2(k)(ii)(iv), (b) loans to, Investments in, or guaranties of the
obligations of any Domestic or Foreign Subsidiaries pursuant to Section
6.2(1)(v), (c) Contingent Liabilities in favor of any Domestic or Foreign
Subsidiaries pursuant to Section 6.2(m)(iv), (d) sales, leases, or
transfers of assets to Domestic or Foreign Subsidiaries pursuant to
Section 6.2(n)(iii), (e) amounts transferred to any Domestic or Foreign
Subsidiaries prior to the date of this Agreement as set forth on Schedule
5.1(n), and (f) amounts expended or used by the Borrower or any Subsidiary
for the development of electronic commerce or interact-related business,
in each case individually or in the aggregate, to exceed $8,000,000 at any
time.
(c) EXHIBIT F is deleted and replaced with EXHIBIT F hereto.
-1-
2
3. CONSENT AND LIMITED WAIVER. Notwithstanding any provisions of the
Credit Agreement, subject to the terms and conditions contained herein, and in
reliance on the representations and warranties of the Borrower set forth herein,
Lenders hereby consent to the redemption from time to time by Borrower of
certain of its 13% Senior Subordinated Discount Notes due 2006 issued pursuant
to the Indenture dated as of October 1, 1996, between the Borrower and The Bank
of New York, as Trustee, provided that (i) at the time of and immediately
following any such redemption there shall exist no condition or event that
constitutes an Event of Default or Potential Event of Default; and (ii) the
total consideration paid in redemption of such Notes shall not exceed Fifty
Million Dollars ($50,000,000) in the aggregate, regardless of the actual
principal amount of such redeemed Notes. Without limiting the generality of the
provisions of Section 9.1 of the Credit Agreement, the consent and waiver set
forth herein shall be limited precisely as written, and nothing in this
Agreement shall be deemed to (i) constitute a waiver of compliance by the
Borrower with any such provision of the Credit Agreement in any other instance,
or (ii) constitute a waiver of any other Event of Default or other failure by
Borrower to perform in accordance with the Loan Documents or this Agreement, or
(iii) prejudice any right or remedy that the Lender may now have or may have in
the future under or in connection with the Credit Agreement or the Loan
Documents.
4. CONDITIONS TO EFFECTIVENESS.
This Amendment shall become effective as of September 21, 1999 (the
"Effective Date"), only upon:
(a) receipt by the Agent of the following (each of which shall be
in form and substance satisfactory to the Agent and its counsel):
(i) counterparts of this Amendment duly executed on behalf
of the Borrower and the Lenders;
(ii) copies of resolutions of the Board of Directors or other
authorizing documents of the Borrower, authorizing the execution and delivery of
this Amendment; and
(iii) an affirmation of the Guaranty, duly executed on behalf
of the Guarantor; and
(b) completion of such other matters and delivery of such offer
agreements, documents and certificates as the Agent or any Lender may reasonably
request.
5. REPRESENTATIONS AND WARRANTIES. In order to induce the Lenders to
enter into this Amendment, the Borrower represents and warrants to the Lenders
that the following statements are true, correct and complete as of the effective
date of this Amendment:
(a) CORPORATE POWER AND AUTHORITY. The Borrower has all requisite
corporate power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the Credit
Agreement as amended by this Amendment (the "Amended Agreement"). The
Certificate of Incorporation and Bylaws of the Borrower have not been amended
since the copies previously delivered to the Lenders.
-2-
3
(b) AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance by the Borrower of the Amended Agreement have
been duly authorized by all necessary corporate action on the part of the
Borrower.
(c) NO CONFLICT. The execution and delivery by the Borrower of
this Amendment do not and will not contravene (i) any law or any governmental
rule or regulation applicable to the Borrower, except to the extent not
resulting in a Material Adverse Effect, (ii) the Certificate of Incorporation or
Bylaws of the Borrower, (iii) any order, judgment or decree of any court or
other agency of government binding on the Borrower, or (iv) any material
agreement or instrument binding on the Borrower, except to the extent not
resulting in a Material Adverse Effect.
(d) GOVERNMENTAL CONSENTS. The execution and delivery by the
Borrower of this Amendment and the performance by the Borrower of the Amended
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body (except routine reports required
pursuant to the Securities and Exchange Act of 1934, as amended, which reports
will be made in the ordinary course of business).
(e) BINDING OBLIGATION. This Amendment and the Amended Agreement
have been duly executed and delivered by the Borrower and are the binding
obligations of the Borrower, enforceable against the Borrower in accordance with
their respective terms, except in each case as such enforceability may be
limited by bankruptcy, insolvency, reorganization, liquidation, moratorium or
other similar laws and equitable principles relating to or affecting creditors'
rights.
(f) INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 5.1 of the
Credit Agreement are correct on and as of the effective date of this Amendment
as though made on and as of such date.
(g) ABSENCE OF DEFAULT. No event has occurred and is continuing
or will result from the consummation of the transactions contemplated by this
Amendment that would constitute an Event of Default or a Potential Event of
Default.
6. MISCELLANEOUS
(a) REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER
LOAN DOCUMENTS.
(i) On and after the Effective Date, each reference in the
Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or words
of like import referring to the Credit Agreement, and each reference in the
other Loan Documents to the "Credit Agreement," "thereunder," "thereof" or words
of like import referring to the Credit Agreement, shall mean and be a reference
to the Amended Agreement.
-3-
4
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Loan Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy of the
Agent or Lenders under the Credit Agreement or any of the other Loan Documents.
(b) FEES AND EXPENSES. All costs and expenses of the Agent and
Lenders, including, but not limited to, reasonable attorneys fees, incurred by
the Agent and Lenders in the preparation and negotiation of this Amendment
constitute costs and expenses in connection with the amendment and restructuring
of the Loan Documents, and as such are payable by the Borrower in accordance
with Section 9.5 of the Credit Agreement.
(c) HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
(d) APPLICABLE LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF CALIFORNIA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
(e) COUNTERPARTS. This 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 an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[REMAINDER INTENTIONALLY LEFT BLANK]
-4-
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
BORROWER:
COINSTAR, INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Xxxxxx X. Xxxxxx
Title: Controller/Treasurer
AGENT:
IMPERIAL BANK
By: /s/ J. P. Michael
-----------------------------------
J. P. Michael
Title: Vice President
LENDERS:
IMPERIAL BANK
By: /s/ J. P. Michael
-----------------------------------
J. P. Michael
Title: Vice President
BANK AUSTRIA CREDITANSTALT
CORPORATE FINANCE, INC.
By: /s/ Xxxx Xxxx
-----------------------------------
Xxxx Xxxx
Title: Vice President
By: /s/ Xxxx X. Xxxxxxx
-----------------------------------
Xxxx X. Xxxxxxx
Title: Senior Vice President
-5-
6
EXHIBIT F
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
1. This Compliance Certificate ("Compliance Certificate") is executed
and delivered by Coinstar, Inc., a Delaware corporation (the "Borrower") to
Imperial Bank (the "Agent") pursuant to Section 6.1(a)(iv)(B) of the Credit
Agreement dated as of February 19, 1999 among the Borrower, the financial
institutions named therein and the Agent. Any terms used herein and not defined
herein shall have the meanings defined in the Credit Agreement. This Compliance
Certificate covers the Borrower's:
Calendar month ended ______________, 19___
Fiscal quarter ended ______________, 19___
Fiscal year ended ______________, 19___
2. The following paragraphs set forth calculations in compliance with
obligations pursuant to Section 6.2(a), (b), (c), (d), (e), (f), (g) and (z) of
the Credit Agreement, as of the end of the fiscal period set forth in paragraph
1 hereof.
A. DIRECT CONTRIBUTION MARGIN TO COINSTAR
PROCESSING REVENUE (SEC. 6.2(a)):
(a) Direct Contribution Margin $____________
(b) Coinstar Processing Revenue $____________
Ratio (a) : (b) _____________
Minimum Permitted Ratio: (i) 0.40 to 1.0 as
of the last day of any calendar month during
the period from January 1, 1999 through June
30, 1999; (ii) 0.425 to 1.0 as of the last
day of any calendar month during the period
from July 1, 1999 through September 30,
1999; or (iii) 0.45 to 1.0 as of the last
day of any calendar month during the period
from October 1, 1999 through December 31,
1999.
B. DIRECT CONTRIBUTION MARGIN LESS BASE LINE
OVERHEAD TO CONSOLIDATED PROFORMA DEBT
SERVICE (SEC. 6.2(b)):
(a) Direct Contribution Margin less
$10,000,000 $____________
(b) Consolidated Proforma Debt Service $____________
F-1
7
Ratio (a) : (b) _____________
Minimum Permitted Ratio: (i) 1.50 to 1.0 as
of the last day of any calendar month during
the period from January 1, 1999 through June
30, 1999; or (ii) 1.75 to 1.0 as of the last
day of any calendar month during the period
from July 1, 1999 through December 31, 1999.
C. CONSOLIDATED SENIOR DEBT TO COINSTAR UNITS
(SEC. 6.2(c)):
1. Consolidated Senior Debt $____________
2. Coinstar Units $____________
Ratio (a) : (b) _____________
Maximum Permitted Ratio: (i) $3,000 to 1 as
of the last day of any calendar month during
the period from January 1, 1999 through
December 31, 1999; or (ii) $4,000 to 1 as of
the last day of any fiscal quarter of the
Borrower from and after January 1, 2000.
D. CONSOLIDATED EBITDA TO CONSOLIDATED
SENIOR DEBT SERVICE (SEC. 6.2(d)):
(a) Consolidated EBITDA $____________
(b) Consolidated Senior Debt Service $____________
Ratio (a) to (b) _____________
Minimum Permitted Ratio: (i) 1.75 to 1,0 as
of the last day of any fiscal quarter of the
Borrower during the period from January 1,
2000 through December 31, 2000; or (ii) 2.0
to 1.0 as of the last day of any fiscal
quarter of the Borrower from and after
January 1, 2001.
E. CONSOLIDATED EBITDA TO CONSOLIDATED
TOTAL DEBT SERVICE (SEC. 6.2(e)):
(a) Consolidated EBITDA $____________
(b) Consolidated Total Debt Service $____________
F-2
8
Ratio (a) to (b) _____________
Minimum Permitted Ratio: (i) 1.25 to 1.0 as
of the last day of any fiscal quarter of the
Borrower during the period from January 1,
2000 through December 31, 2000; (ii) 1.50 to
1.0 as of the last day of any fiscal quarter
of the Borrower during the period from
January 1, 2001 through December 31, 2001;
or (iii) 1.75 to 1.0 as of the last day of
any fiscal quarter of the Borrower from and
after January 1, 2002.
F. CONSOLIDATED SENIOR DEBT TO CONSOLIDATED
EBITDA (SEC. 6.2(f)):
(a) Consolidated Senior Debt $_____________
(b) Consolidated EBITDA $_____________
Ratio (a) to (b) ______________
Maximum Permitted Ratio: (i) 2.0 to 1.0 as
of the last day of any fiscal quarter of the
Borrower during the period from January 1,
2000 through December 31, 2000; or (ii) 1.50
to 1.0 as of the last day of any fiscal
quarter of the Borrower from and after from
January 1, 2001.
G. CONSOLIDATED TOTAL DEBT TO CONSOLIDATED
EBITDA (SEC. 6.2(g)):
(a) Consolidated Senior Debt $_____________
(b) Consolidated EBITDA $_____________
Ratio (a) to (b) ______________
F-3
9
Maximum Permitted Ratio: (i) 6.50 to 1.0 as
of the last day of either of the fiscal
quarters ending March 31, 2000 or June 30,
2000; (ii) 5.0 to 1.0 as of the last day of
either of the fiscal quarters ending
September 30, 2000 or December 31, 2000;
(iii) 4.0 to 1.0 as of the last day of
either of the fiscal quarters ending March
31, 2001 or June 30, 2001; (iv) 3.50 to 1.0
as of the last day of either of the fiscal
quarters ending September 30, 2001 or
December 31, 2001; or (v) 2.50 to 1.0 as of
the last day of any fiscal quarter of the
Borrower from and after January 1, 2002.
H. TRANSFERS TO SUBSIDIARIES: ELECTRONIC
COMMERCE (SEC. 6.2(z))
(a) Acquisitions from Domestic $_____________
Subsidiaries or Foreign Persons
(b) Loans to, Investments in, guarantees $_____________
of obligations of Domestic or Foreign
Subsidiaries
(c) Contingent Liabilities in favor of $_____________
Domestic or Foreign Subsidiaries
(d) Sales, leases, transfers of assets to $_____________
Domestic or Foreign Subsidiaries
(e) Amounts transferred to Domestic or $_____________
Foreign Subsidiaries prior to closing
(f) Amounts used for Electronic $_____________
Commerce or Internet Related Business
Total: $_____________
Total must not exceed $8,000,000
F-4
10
3. The undersigned has reviewed the terms of the Credit Agreement and
has made, or caused to be made under his/her supervision, a review in reasonable
detail of the transactions and condition of the Borrower and its Domestic
Subsidiaries during the fiscal period covered by this Compliance Certificate.
The undersigned does not (either as a result of such review or otherwise) have
any knowledge of the existence as of the date of this Compliance Certificate of
any condition or event that constitutes an Event of Default or a Potential Event
of Default, with the exception set forth below in response to which the Borrower
is taking or proposes to take the following actions (if none, so state):
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
4. The undersigned hereby certifies that the representations and
warranties contained in the Agreement and the other Loan Documents are true and
correct in all material respects on and as of the date hereof (except to the
extent they relate specifically to any earlier date, in which case such
representations and warranties shall continue to have been correct as of such
date).
5. This Compliance Certificate is executed on _____________, _____, by
the Chief Executive Officer, Chief Financial Officer, Treasurer or Controller of
the Borrower. The undersigned hereby certifies that each and every matter
contained herein is derived from the Borrower's books and records and is, to the
best knowledge of the undersigned, true and correct.
COINSTAR, INC.,
a Delaware corporation
By:____________________________
Title:_________________________
F-5
11
AFFIRMATION OF GUARANTY
The undersigned Guarantor hereby acknowledges and agrees to the terms of
the foregoing Second Amendment to Credit Agreement, Consent and Limited Waiver
(the "Amendment"), and further acknowledges and agrees that nothing contained in
the Amendment in any way affects the validity and enforceability of that certain
Subsidiary Guaranty (the "Guaranty") dated as of February 19, 1999, executed by
the undersigned Guarantor in favor of Lenders, the validity and effectiveness
of which Guaranty is hereby reaffirmed as of the Effective Date of the
Amendment.
MY XXXXXXXXXXXX.XXX, INC.
By: /s/ XXXX X. XXXXXXXX
-----------------------------
Name: Xxxx X. Xxxxxxxx
--------------------------
Title: Vice President
--------------------------
