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Exhibit 10.16
WAIVER AND AMENDMENT NO. 1 TO THE
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of March 24, 1997
WAIVER AND AMENDMENT NO. 1 TO THE AMENDED AND RESTATED CREDIT
AGREEMENT among AMF GROUP INC., a Delaware corporation (the "Borrower"), the
banks, financial institutions and other institutional lenders parties to the
Credit Agreement referred to below (collectively, the "Lenders"), XXXXXXX,
XXXXX & CO., as syndication agent (the "Syndication Agent"), CITIBANK, N.A., as
administrative agent (the "Administrative Agent"), and CITICORP USA, INC., as
collateral agent (the "Collateral Agent").
PRELIMINARY STATEMENTS:
(1) The Borrower, the Lenders, the Syndication Agent, the
Administrative Agent and the Collateral Agent have entered into an Amended and
Restated Credit Agreement dated as of December 20, 1996 (as amended,
supplemented or otherwise modified prior to the date hereof, the "Credit
Agreement"). Capitalized terms not otherwise defined in this Waiver and
Amendment have the same meanings as specified in the Credit Agreement.
(2) The Borrower plans to acquire all of the outstanding
common stock of American Recreation Centers, a Delaware corporation ("ARC"),
cash out outstanding options to purchase common stock of ARC, repay certain
outstanding indebtedness of ARC and purchase certain joint venture interests of
ARC and pay expenses related to the foregoing (the "ARC Acquisition"). The
Borrower would like to pay the approximately $74.6 million purchase price for
the ARC Acquisition with an Acquisition Borrowing. The Borrower has requested
that the Lenders waive the requirement set forth in Section 3.02(iii)(B) of the
Credit Agreement solely to the extent necessary to effectuate the ARC
Acquisition with the proceeds of an Acquisition Borrowing.
(3) The Borrower further requests that the Lenders amend the
Credit Agreement to revise the formula set forth in Section 3.02(iii)(B) of the
Credit Agreement as set forth in Section 2 hereof.
(4) The Required Lenders are, on the terms and conditions stated
below, willing to grant the request of the Borrower and the Borrower and the
Required Lenders have agreed to further amend the Credit Agreement as
hereinafter set forth.
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SECTION 1. Waiver. Section 3.02(iii)(B) of the Credit Agreement
(which prohibits, inter alia, the Borrower from making an acquisition with the
proceeds of an Acquisition Borrowing unless the amount of such Acquisition
Borrowing does not exceed an amount equal to the product of (x) 3.5, (y)
Specified Revenues and (z) the Average EBITDA Margin) and Section 3.02(iii)(C)
(which requires a certificate demonstrating compliance with Section
3.02(iii)(B)) are, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3, hereby waived,
solely for the period commencing on the date first above written through July
31, 1997 (the "Waiver Termination Date") and solely to the extent necessary to
permit the ARC Acquisition to be made with the proceeds of an Acquisition
Borrowing. The requirements of Section 3.02(iii)(C) of the Credit Agreement
are waived only to the extent that the certificate required must demonstrate
compliance with such Section 3.02(iii)(B). If the ARC Acquisition shall not
have been consummated prior to or on the Waiver Termination Date, then, on such
date, without any further action by the Agent and the Lenders, all of the terms
and provisions set forth in the Credit Agreement that are waived hereunder
shall have the same force and effect as if this Section l of this Waiver and
Amendment had not been entered into by the parties hereto.
SECTION 2. Amendments to Credit Agreement. Section 3.02(iii) of
the Credit Agreement is, effective as of the date hereof and subject to the
satisfaction of the conditions precedent set forth in Section 3, hereby amended
by deleting the figure "3.5" contained in the fifteenth line thereof and
substituting therefore the figure "4.5".
SECTION 3. Conditions of Effectiveness. This Waiver and
Amendment shall become effective as of the date first above written when, and
only when, on or before 5:00 p.m. (New York City time) on March 24, 1997, the
Administrative Agent shall have received (a) counterparts of (i) this Waiver
and Amendment executed by the Borrower and the Required Lenders or, as to any
of the Lenders, advice satisfactory to the Administrative Agent that such
Lender has executed this Waiver and Amendment and (ii) the consent attached
hereto executed by each Loan Party (other than the Borrower) and (b) for the
account of the Lenders executing this Waiver and Amendment on or prior to March
24, 1997, an amendment fee of 5 basis points. The effectiveness of Section 1
of this Waiver and Amendment is conditioned upon the accuracy of the factual
matters described herein in respect of the ARC Acquisition. This Waiver and
Amendment is subject to the provisions of Section 8.01 of the Credit Agreement.
SECTION 4. Reference to and Effect on the Credit Agreement and
the other Loan Documents. (a) On and after the effectiveness of this Waiver
and Amendment, each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof" or words of like import referring to the Credit
Agreement, and each reference in the Notes and each of 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 Credit
Agreement, as amended by this Waiver and Amendment.
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(b) The Credit Agreement, the Notes and each of the other Loan
Documents, as specifically amended by this Waiver and Amendment, and except to
the extent of the waiver specifically provided above, are and shall continue to
be in full force and effect and are hereby in all respects ratified and
confirmed. Without limiting the generality of the foregoing, the Collateral
Documents and all of the Collateral described therein do and shall continue to
secure the payment of all Obligations of the Loan Parties under the Loan
Documents, in each case as amended by this Waiver and Amendment.
(c) The execution, delivery and effectiveness of this Waiver and
Amendment shall not, except as expressly provided herein, operate as a waiver
of any right, power or remedy of any Lender or any Agent under any of the Loan
Documents, nor constitute a waiver of any provision of any of the Loan
Documents.
SECTION 5. Costs and Expenses. The Borrower agrees to pay on
demand all costs and expenses of the Agents in connection with the preparation,
execution, delivery and administration, modification and amendment of this
Waiver and Amendment and the other instruments and documents to be delivered
hereunder (including, without limitation, the reasonable fees and expenses of
counsel for the Agents) in accordance with the terms of Section 8.04 of the
Credit Agreement.
SECTION 6. Execution in Counterparts. This Waiver and Amendment
may be executed in any number of counterparts and by different parties hereto
in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement. Delivery of an executed counterpart of a signature page to
this Waiver and Amendment by telecopier shall be effective as delivery of a
manually executed counterpart of this Waiver and Amendment.
SECTION 7. Governing Law. This Waiver and Amendment shall be
governed by, and construed in accordance with, the laws of the State of New
York.
IN WITNESS WHEREOF, the parties hereto have caused this Waiver and
Amendment to be executed by their respective officers thereunto duly
authorized, as of the date first above written.
AMF GROUP INC.
By:
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Title: Chief Financial Officer
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XXXXXXX, XXXXX & CO.,
as Syndication Agent
By:
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Title:
CITIBANK, N.A.,
as Administrative Agent
By:
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Title:
CITICORP USA, INC.,
as Collateral Agent
By:
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Title:
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LENDERS
XXXXXXX SACHS CREDIT
PARTNERS L.P.
By:
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Title:
CITICORP USA, INC.
By:
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Title:
ABN AMRO BANK N.V., NEW YORK
BRANCH
By:
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Title:
AERIES FINANCE LTD.
By:
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Title:
AMARA - 2 FINANCE LTD.
By:
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Title: \
