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EXHIBIT 4.2
FIRST SUPPLEMENTAL INDENTURE
THIS FIRST SUPPLEMENTAL INDENTURE, dated as of December 12, 1997,
between SAFELITE GLASS CORP., a Delaware corporation (hereinafter referred to as
the "Company"), and STATE STREET BANK & TRUST COMPANY, a state chartered trust
company under the laws of The Commonwealth of Massachusetts, as trustee
(hereinafter referred to as the "Trustee"), amends and supplements the Indenture
providing for the issuance of the Company's 9 7/8% Senior Subordinated Notes due
2006, dated as of December 20, 1996, among the Company, SGC Franchising Corp. (a
former subsidiary of the Company) and Fleet National Bank (predecessor trustee
to the Trustee) (the "Original Indenture"), and, to the extent inconsistent
therewith, supersedes the Original Indenture.
RECITALS
WHEREAS, Section 9.2 of the Original Indenture provides that the
Company and the Trustee may, among other things, amend the Original Indenture
with the written consent of the Holders of at least a majority in principal
amount of the Securities; and
WHEREAS, in connection with certain transactions proposed to be entered
into by the Company, including, but not limited to, the Vistar Merger (as
defined below), the Company and the Trustee desire to amend and supplement the
Original Indenture pursuant to the terms and conditions of the Original
Indenture and with the written consent of the Holders of at least a majority in
principal amount of the Securities, subject to the limitations on effectiveness
of this First Supplemental Indenture as set forth herein.
NOW, THEREFORE, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
(a) Capitalized terms used and not defined in this First Supplemental
Indenture shall have the meaning specified in or pursuant to the Original
Indenture.
(b) The definition of "Permitted Indebtedness" contained in Article I,
Section 1.1 of the Original Indenture is hereby amended and restated in its
entirety to read as follows:
"Permitted Indebtedness" means, without duplication, (i) the
Securities and the obligations under the Guarantees, (ii) Indebtedness
incurred pursuant to the Bank Credit Agreement in an aggregate
principal amount at any time outstanding not to exceed $450 million (A)
less the aggregate amount of Indebtedness of a Receivables Entity in a
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Qualified Receivables Transaction, (B) less the amount of all mandatory
principal payments actually made by the Company in respect of term
loans thereunder (excluding (1) any such payments to the extent
refinanced at the time of payment under a replaced Bank Credit
Agreement and (2) any such payments relating to the Sale of Excluded
Assets in an aggregate amount not to exceed $30 million) and (C) in the
case of a revolving facility, reduced by any required permanent
repayments (which are accompanied by a corresponding permanent
commitment reduction) thereunder, (iii) other Indebtedness of the
Company and its Restricted Subsidiaries outstanding on the Issue Date
reduced by the amount of any scheduled amortization payments or
mandatory prepayments when actually paid or permanent reductions
thereon, (iv) Interest Swap Obligations of the Company or any of its
Restricted Subsidiaries covering Indebtedness of the Company or any of
its Restricted Subsidiaries; provided that any Indebtedness to which
any such Interest Swap Obligations correspond is otherwise permitted to
be incurred under this Indenture; provided, further, that such Interest
Swap Obligations are entered into, in the judgment of the Company, to
protect the Company and its Restricted Subsidiaries from fluctuation in
interest rates on their respective outstanding Indebtedness, (v)
Indebtedness under Currency Agreements, (vi) intercompany Indebtedness
owed by the Company to any Wholly Owned Restricted Subsidiary of the
Company or by any Restricted Subsidiary of the Company to the Company
or any Wholly Owned Restricted Subsidiary of the Company, (vii)
Acquired Indebtedness of the Company or any Restricted Subsidiary of
the Company to the extent the Company could have incurred such
Indebtedness in accordance with Section 4.3 on the date such
Indebtedness became Acquired Indebtedness; provided that, in the case
of Acquired Indebtedness of a Restricted Subsidiary of the Company,
such Acquired Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Person becoming a Restricted
Subsidiary of the Company, (viii) guarantees by the Company and its
Wholly Owned Restricted Subsidiaries of each other's Indebtedness;
provided that such Indebtedness is permitted to be incurred hereunder,
including, with respect to guarantees by Wholly Owned Restricted
Subsidiaries of the Company, Section 4.11, (ix) Indebtedness arising
from the honoring by a bank or other financial institution of a check,
draft or other similar instrument inadvertently drawn against
insufficient funds in the ordinary course of business; provided that
such Indebtedness is extinguished within five business days of its
incurrence, (x) any refinancing, modification, replacement, renewal,
restatement, refunding, deferral, extension, substitution, supplement,
reissuance or resale of existing or future Indebtedness, including any
additional Indebtedness incurred to pay interest or premiums required
by the instruments governing such existing or future Indebtedness as in
effect at the time of issuance thereof )("Required Premiums") and fees
in connection therewith; provided that any such event shall not (1)
result in an increase in the aggregate principal amount of Permitted
Indebtedness (except to the extent such increase is a result of a
simultaneous incurrence of additional Indebtedness (A) to pay Required
Premiums and related fees or (B) otherwise permitted to be incurred
under this Indenture) of the Company and its Restricted Subsidiaries
and (2) create Indebtedness with a Weighted Average Life to Maturity at
the time such Indebtedness is incurred that
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is less than the Weighted Average Life to Maturity at such time of the
Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or
resold (except that this subclause (2) will not apply in the event the
Indebtedness being refinanced, modified, replaced, renewed, restated,
refunded, deferred, extended, substituted, supplemented, reissued or
resold was originally incurred in reliance upon clause (vi) or (xvi) of
this definition); provided that no Restricted Subsidiary of the Company
that is not a Subsidiary Guarantor may refinance any Indebtedness
pursuant to this clause (x) other than its own Indebtedness, (xi)
Indebtedness (including Capitalized Lease Obligations) incurred by the
Company or any of its Restricted Subsidiaries to finance the purchase,
lease or improvement of property (real or personal) or equipment
(whether through the direct purchase of assets or the Capital Stock of
any Person owning such assets) in an aggregate principal amount
outstanding not to exceed $5 million at the time of any incurrence
thereof (which amount may, but need not, be incurred in whole or in
part under the Bank Credit Agreement), (xii) the incurrence by a
Receivables Entity of Indebtedness in a Qualified Receivables
Transaction that is not recourse to the Company or any Subsidiary of
the Company (except for Standard Securitization Undertakings), (xiii)
Indebtedness incurred by the Company or any of its Restricted
Subsidiaries constituting reimbursement obligations with respect to
letters of credit issued in the ordinary course of business, including,
without limitation, letters of credit in respect of workers'
compensation claims or self-insurance, or other Indebtedness with
respect to reimbursement type obligations regarding workers'
compensation claims, (xiv) Indebtedness arising from agreements of the
Company or a Restricted Subsidiary of the Company providing for
indemnification, adjustment of purchase price, earn out or other
similar obligations, in each case, incurred or assumed in connection
with the disposition of any business, assets or a Restricted Subsidiary
of the Company, other than guarantees of Indebtedness incurred by any
Person acquiring all or any portion of such business, assets or
Restricted Subsidiary for the purpose of financing such acquisition,
provided that the maximum assumable liability in respect of all such
Indebtedness shall at no time exceed the gross proceeds actually
received by the Company and its Restricted Subsidiaries in connection
with such disposition, (xv) obligations in respect of performance and
surety bonds and completion guarantees provided by the Company or any
Restricted Subsidiary of the Company in the ordinary course of
business, (xvi) Indebtedness of Vistar constituting Capitalized Lease
Obligations in an aggregate principal amount not to exceed $2 million
and other Indebtedness of Vistar constituting unsecured Indebtedness in
an aggregate principal amount not to exceed $8 million, in each case
which is assumed by the Company upon consummation of the Vistar Merger,
and (xvii) additional Indebtedness of the Company and its Restricted
Subsidiaries in an aggregate principal amount not to exceed $10 million
at any one time outstanding (which amount may, but need not, be
incurred in whole or in part under the Bank Credit Agreement)."
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(c) Article I, Section 1.1 is hereby amended to add the following
definitions:
"Distribution" means a dividend of up to $67.2 million on the
Company's outstanding Class A Common Stock, a dividend of
approximately $4.7 million representing accrued and unpaid
dividends on the Company's 8% Cumulative Preferred Stock and a
redemption of the Company's 8% Cumulative Preferred Stock for
an amount equal to approximately $58.2 million, in each case
to be paid no more than five business days prior to the Vistar
Merger.
"Non-Voting Preferred Stock" means the Company's 8% Non-Voting
Preferred Stock, $.01 par value per share, to be issued by the
Company as partial merger consideration in the Vistar Merger.
"Vistar Merger" means the merger contemplated by the Vistar
Merger Agreement.
"Vistar Merger Agreement" means that certain Merger Agreement,
dated as of October 10, 1997, by and between Vistar, Inc. and
the Company.
ARTICLE II
COVENANTS
SECTION 2.1 Limitation on Restricted Payments.
Section 4.4 of the Original Indenture is hereby amended and restated in
its entirety to read as follows:
"(a) The Company shall not, and shall not permit any of its
Restricted Subsidiaries to, directly or indirectly, (a) declare or pay
any dividend or make any distribution (other than dividends or
distributions payable in Qualified Capital Stock) on or in respect of
shares of Capital Stock of the Company to holders of such Capital
Stock, (b) purchase, redeem or otherwise acquire or retire for value
any Capital Stock of the Company or any warrants, rights or options to
purchase or acquire shares of any class of such Capital Stock, other
than the exchange of such Capital Stock for Qualified Capital Stock, or
(c) make any Investment (other than Permitted Investments) (each of the
foregoing actions set forth in clauses (a), (b) and (c) being referred
to as a "Restricted Payment"), if at the time of such Restricted
Payment or immediately after giving effect thereto, (i) a Default or an
Event of Default shall have occurred and be continuing, (ii) the
Company is not able to incur at least $1.00 of additional Indebtedness
(other than Permitted Indebtedness) in compliance with Section 4.3 or
(iii) the aggregate amount of Restricted Payments made subsequent to
the Issue Date shall exceed the sum of: (w) 50% of the cumulative
Consolidated Net
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Income (or if cumulative Consolidated Net Income shall be a loss, minus
100% of such loss) of the Company earned subsequent to the Issue Date
and on or prior to the date the Restricted Payment occurs (the
"Reference Date") (treating such period as a single accounting period);
plus (x) 100% of the aggregate net cash proceeds received by the
Company from any Person (other than a Subsidiary of the Company) from
the issuance and sale subsequent to the Issue Date and on or prior to
the Reference Date of Qualified Capital Stock of the Company (including
Capital Stock issued upon the conversion of convertible Indebtedness or
in exchange for outstanding Indebtedness); plus (y) without duplication
of any amounts included in clause (iii)(x) above, 100% of the aggregate
net cash proceeds of any equity contribution received by the Company
from a holder of the Company's Capital Stock (excluding any net cash
proceeds from such equity contribution to the extent used to redeem
Securities in accordance with the optional redemption provisions of the
Securities); plus (z) to the extent that any Investment (other than a
Permitted Investment) that was made after the Issue Date is sold for
cash or otherwise liquidated or repaid for cash, the lesser of (A) the
cash received with respect to such sale, liquidation or repayment of
such Investment (less the cost of such sale, liquidation or repayment,
if any) and (B) the initial amount of such Investment.
(b) Notwithstanding clause (a) above, the provisions set forth in
the immediately preceding paragraph do not prohibit: (1) the payment of
any dividend or the consummation of any irrevocable redemption within
60 days after the date of declaration of such dividend or notice of
such redemption if the dividend or payment of the redemption price, as
the case may be, would have been permitted on the date of declaration
or notice; (2) if no Event of Default shall have occurred and be
continuing as a consequence thereof, the acquisition of any shares of
Capital Stock of the Company, either (i) solely in exchange for shares
of Qualified Capital Stock of the Company, or (ii) through the
application of net proceeds of a substantially concurrent sale (other
than to a Subsidiary of the Company) of shares of Qualified Capital
Stock of the Company; (3) payments for the purpose of and in an amount
equal to the amount required to permit the Company to redeem or
repurchase shares of its Capital Stock or options in respect thereof,
in each case in connection with the repurchase provisions under
employee stock option or stock purchase agreements or other agreements
to compensate management employees; provided that such redemptions or
repurchases pursuant to this clause (3) shall not exceed $2 million
(which amount shall be increased by the amount of any cash proceeds to
the Company from (x) sales of its Capital Stock to management employees
subsequent to the Issue Date and (y) any "key-man" life insurance
policies which are used to make such redemptions or repurchases) in the
aggregate; (4) the payment of fees and compensation as permitted under
clause (i) of Section 4.7(b); (5) so long as no Default or Event of
Default shall have occurred and be continuing, payments not to exceed
$100,000 in the aggregate, to enable the Company to make payments to
holders of its Capital Stock in lieu of issuance of fractional shares
of its Capital Stock; (6) repurchases of Capital Stock deemed to occur
upon the exercise of stock options if such Capital Stock represents a
portion of the exercise price thereof; (7) payments made on the Issue
Date pursuant to
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the Recapitalization Agreement; and (8) payment of the Distribution. In
determining the aggregate amount of Restricted Payments made subsequent
to the Issue Date in accordance with clause (iii) of the immediately
preceding paragraph, (a) amounts expended (to the extent such
expenditure is in the form of cash or other property other than
Qualified Capital Stock) pursuant to clauses (1), (2)(ii) and (3) of
this Section 4.4(b) shall be included in such calculation, provided
that such expenditures pursuant to clause (3) shall not be included to
the extent of cash proceeds received by the Company from any "key-man"
life insurance policies and (b) amounts expended pursuant to clauses
(2)(i), (4), (5), (6), (7) and (8) shall be excluded from such
calculation.
(c) The Company shall not permit the payment of dividends in
respect of its NonVoting Preferred Stock unless the Company exercises
its optional right to redeem the Non-Voting-Preferred Stock (the
payment of such dividends to occur at the time of redemption); provided
that the payment of such dividends will only be permitted if such
payment is in compliance with clauses (a) and (b) of this Section 4.4."
SECTION 2.2 Limitation on Transactions with Affiliates.
Section 4.7 of the Original Indenture is hereby amended and restated in
its entirety to read as follows:
"(a) The Company will not, and will not permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or
permit to exist any transaction or series of related transactions
(including, without limitation, the purchase, sale, lease or exchange
of any property or the rendering of any service) with, or for the
benefit of, any of its Affiliates (an "Affiliate Transaction"), other
than (x) Affiliate Transactions permitted under paragraph (b) below and
(y) Affiliate Transactions on terms that are no less favorable than
those that might reasonably have been obtained in a comparable
transaction at such time on an arm's-length basis from a Person that is
not an Affiliate; provided, however, that for a transaction or series
of related transactions with an aggregate value of $2 million or more,
at the Company's option (i) such determination shall be made in good
faith by a majority of the disinterested members of the Board of the
Directors of the Company or (ii) the Board of Directors of the Company
or any such Restricted Subsidiary party to such Affiliate Transaction
shall have received a favorable opinion from a nationally recognized
investment banking firm that such Affiliate Transaction is on terms not
materially less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's-length
basis from a Person that is not an Affiliate; provided, further, that
for a transaction or series of related transactions with an aggregate
value of $5 million or more, the Board of Directors of the Company
shall have received a favorable opinion from a nationally recognized
investment banking firm that such Affiliate Transaction is on terms not
materially less favorable than those that might reasonably have been
obtained in a comparable transaction at such time on an arm's-length
basis from a Person that is not an Affiliate.
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(b) The foregoing restrictions shall not apply to (i) reasonable
fees and compensation paid to, and indemnity provided on behalf of,
officers, directors, employees or consultants of the Company or any
Subsidiary of the Company as determined in good faith by the Company's
Board of Directors or senior management; (ii) transactions exclusively
between or among the Company and any of its Wholly Owned Restricted
Subsidiaries or exclusively between or among such Wholly Owned
Restricted Subsidiaries, provided such transactions are not otherwise
prohibited by this Indenture; (iii) transactions effected as part of a
Qualified Receivables Transaction; (iv) any agreement as in effect as
of the Issue Date or any amendment thereto or any transaction
contemplated thereby (including pursuant to any amendment thereto) in
any replacement agreement thereto so long as any such amendment or
replacement agreement is not more disadvantageous to the Holders in any
material respect than the original agreement as in effect on the Issue
Date; (v) Restricted Payments permitted by this Indenture; and (vi)
payments made by the Company to, and agreements entered into by the
Company with, Affiliates in connection with the Vistar Merger."
ARTICLE III
EFFECTIVENESS
SECTION 3.1 Effectiveness of First Supplemental Indenture. Upon
(i) the execution and delivery of this First Supplemental Indenture by the
Company and the Trustee and (ii) the delivery of an Officers' Certificate and
Opinion of Counsel as contemplated by Section 7.2 of the Indenture, this First
Supplemental Indenture, including the amendments to the Indenture contained
herein, shall become effective and operative. Notwithstanding anything herein to
the contrary, in the event that the Vistar Merger is not consummated within five
business days of the Distribution and on or before June 30, 1998, this First
Supplemental Indenture shall terminate and be deemed void as of and from the
date of effectiveness of this First Supplemental Indenture.
ARTICLE IV
MISCELLANEOUS
SECTION 4.1 Ratification of Provisions of Original Indenture. All
provisions of the Original Indenture not specifically herein supplemented or
modified are hereby ratified and reaffirmed by the Company and the Trustee.
SECTION 4.2 Counterparts. This First Supplemental Indenture may
be executed in counterparts, each of which when so executed shall be deemed to
be an original, but all such counterparts shall together constitute but one and
the same instrument.
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SECTION 4.3 Governing Law. This First Supplemental Indenture
shall be governed by and construed in accordance with the laws of the State of
New York without regard to principles of conflicts of laws.
SECTION 4.4 Trustee. The Trustee accepts the amendment and
modification of the Original Indenture effected by this First Supplemental
Indenture, but only upon the terms and conditions set forth in the Original
Indenture. Without limiting the generality of the foregoing, the Trustee assumes
no responsibility for the correctness of the recitals herein contained, which
shall be taken as the statements of the Company. The Trustee makes no
representation and shall have no responsibility as to the validity and
sufficiency of this First Supplemental Indenture.
SECTION 4.5 Trust Indenture Act Controls. If any provision of
this First Supplemental Indenture limits, qualifies or conflicts with another
provision which is required to be included herein by the TIA, the provision
required by the TIA shall control.
SECTION 4.6 Successors. All agreements of the Company and the
Trustee in this First Supplemental Indenture shall bind their respective
successors.
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IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed, all as of the day and year first above written.
SAFELITE GLASS CORP.
By: /s/ ▇. ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Sr. VP & CFO
STATE STREET BANK & TRUST
COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇ ▇▇
Title: Vice President
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