Washington, D.C. 20549
____________
FORM 10-K
[ ] Transition report pursuant to section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to .
AUTOZONE, INC.
(Exact name of registrant as specified in its charter)
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123 South Front Street, Memphis, Tennessee 38103
(Address of principal executive offices) (Zip Code)
(901) 495-6500
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
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on which registered |
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($.01 par value) |
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Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K § 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X]
The aggregate market value of the 70,984,627 shares of voting stock
of the registrant held by non-affiliates of the registrant (excluding,
for this purpose, shares held by officers, directors, or 10% stockholders)
was $4,026,957,889 based on the last sales price of the Common Stock on
October 15, 2001, as reported on the New York Stock Exchange. The number
of shares of Common Stock outstanding as of October 15, 2001, was 107,807,339.
Documents Incorporated By Reference
Portions of the definitive Proxy Statement dated November 7, 2001, for the Annual Meeting of Stockholders to be held December 13, 2001, are incorporated by reference into Part III.
Portions of the Annual Report to Stockholders for the year ended August
25, 2001, are incorporated by reference into Parts I and II.
TABLE OF CONTENTS
PART I
Item 1. Business
Introduction
Marketing and Merchandising Strategy
Store Operations
Store Development
Purchasing and Supply Chain
Competition
Trademarks and Patents
Employees
Executive Officers of the Registrant
Risk Factors
Item 2. Properties
Item 3. Legal Proceedings
PART II
Item 5. Market for Registrant's Common Stock and Related
Stockholder Matters
Item 6. Selected Financial Data
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk
Item 8. Financial Statements and Supplementary Data
Item 9. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure
PART III
Item 10. Directors and Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners
and Management
Item 13. Certain Relationships and Related Transactions
PART IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports On Form 8-K
Forward-Looking Statements
Certain statements contained in this Annual Report on Form 10-K are forward-looking statements. These statements discuss, among other things, expected growth, domestic and international development and expansion strategy, business strategies, and future performance. These forward-looking statements are subject to risks, uncertainties, and assumptions, including without limitation, competition, product demand, domestic and international economies, the ability to hire and retain qualified employees, consumer debt levels, inflation, war and the prospect of war, including terrorist activity, and availability of commercial transportation. Actual results may materially differ from anticipated results. Please refer to the Risk Factors section of this Form 10-K for more details.
We are the nation's leading specialty retailer of automotive parts and accessories, with most of our sales to do-it-yourself ("DIY") customers. We began operations in 1979 and at August 25, 2001, operated 3,019 auto parts stores in the United States and 21 in Mexico. Each auto parts store carries an extensive product line for cars, vans, and light trucks, including new and re-manufactured automotive hard parts, maintenance items, and accessories. We also have a commercial sales program in the United States that provides commercial credit and prompt delivery of parts and other products to local repair garages, dealers, and service stations. We do not sell tires nor do we perform automotive repair or installation.
In addition, we sell automotive diagnostic and repair information software through our ALLDATA subsidiary and diagnostic and repair information through alldatadiy.com.
At August 25, 2001, our auto
parts stores were in the following states:
| Alabama
Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Illinois Indiana Iowa Kansas Kentucky Louisiana |
83
75 48 393 39 22 8 148 101 134 102 31 43 57 89 |
Maine
Maryland Massachusetts Michigan Mississippi Missouri Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina Ohio Oklahoma |
5
26 53 117 67 84 9 31 11 12 29 88 101 184 63 |
Oregon
Pennsylvania Rhode Island South Carolina Tennessee Texas Utah Vermont Virginia Washington, DC West Virginia Wisconsin Wyoming Mexico TOTAL |
14
76 14 52 112 352 24 1 55 6 16 39 5 21 3,040 |
Marketing and Merchandising Strategy
We are dedicated to providing customers with superior service, value, and quality automotive parts and products at conveniently located, well-designed stores. Key elements of this strategy are:
Customer Service
We believe that our customers value customer service; therefore, customer service is the most important element in our marketing and merchandising strategy. We emphasize that our AutoZoners (employees) should always put customers first. Our electronic parts catalogs assist in the selection of parts; we offer free testing of starters, alternators, batteries, sensors, and actuators; and we were among the first auto parts companies to offer lifetime warranties on many of the parts we sell. Our satellite system in our auto parts stores helps us to speed up credit card and check approval processes and locate parts at neighboring AutoZone stores.
Our stores generally open at 8 a.m. and close between 8 and 10 p.m. (with some open 24 hours) Monday through Saturday and typically open at 9 a.m. and close between 6 and 8 p.m. on Sunday.
AutoZone also provides specialty tools in our loan-a-tool program. Customers can borrow a specialty tool, such as a steering wheel puller, that a do-it-yourself customer or a small repair shop would have no use for other than for a single job.
Products
This table shows the types
of products we sell in our auto parts stores:
| Hard Parts | Maintenance Items | Accessories | Miscellany |
| Alternators
Batteries Brake Drums, Rotors Shoes, and Pads Carburetors Clutches Engines Mufflers Shock Absorbers Spark Plugs Starters Struts Water Pumps |
Antifreeze
Brake Fluid Oil Oil and Fuel Additives Oil, Air, and Fuel Filters Power Steering Fluid Transmission Fluid Wash and Wax Chemicals Windshield Wipers |
Floor Mats
Lights Mirrors Stereos |
Air Fresheners
Cell Phone Accessories Decorative Lighting Dent Filler Hand Cleaner Paint Repair Manuals Sunglasses Tools |
We believe that the satisfaction of DIY and professional technician customers often is impacted by our ability to provide specific automotive products as requested. Our auto parts stores generally offer between 19,000 and 22,000 stock keeping units ("SKUs") covering a broad range of vehicle types. Each auto parts store carries the same basic product line with some regional differences based on climate, demographics, and age and type of vehicle registration. Our "flexogram" program enables us to tailor our parts inventory to the makes and models of the automobiles in each store's trade area. We also offer a range of lower turnover products through overnight delivery to our auto parts stores and at hub stores that carry a larger range of products.
Pricing
We employ an everyday low price strategy and want to be perceived by our customers as the value leader in our industry by consistently providing quality merchandise at a good price, with a good warranty and backed by outstanding customer service. Our prices are generally structured to meet the lowest price offered by a competitor for a product and we believe that our prices overall compare favorably to those of our competitors.
Commercial Sales Program
Our commercial sales program provides credit and prompt delivery of parts and other products to local repair garages, dealers, and service stations. The program operated out of 1,638 stores as of August 25, 2001. In addition, we have opened 39 hub stores that offer a greater range of parts and products desired by commercial customers and that can be used as additive inventory for local stores.
Store Design and Visual Merchandising
We design and build stores
for a high visual impact. The typical AutoZone store has an industrial
"high tech" appearance by utilizing colorful exterior signage, exposed
beams and ductwork, and brightly lighted interiors. Maintenance products,
accessories, and miscellaneous items are attractively displayed for easy
browsing by customers. In-store signage and special displays promote products
in floor displays, endcaps, and on the shelf. Store managers are able to
customize areas of the store to prominently display products that are in
demand in the local community.
Store Formats
As of August 25, 2001, we
had domestic auto parts stores in the following square footage ranges:
| Square Footage |
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| Less than 4,000 |
294
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| 4,000 to 7,000 |
1,565
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| More than 7,000 |
1,160
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Substantially all AutoZone stores are based on standard store formats resulting in generally consistent appearance, merchandising, and product mix. Approximately 85% to 90% of each store's square footage is selling space, of which approximately 40% to 45% is dedicated to hard parts inventory. The hard parts inventory area is fronted by a counter that generally runs the depth or length of the store, dividing the hard parts area from the remainder of the store. The remaining selling space contains displays of accessories and maintenance items.
We have knowledgeable AutoZoners (employees) available to assist customers with their parts needs utilizing our proprietary electronic parts catalog with a video screen which is visible to both the AutoZoner and the customer. The parts catalog will suggest additional items that a customer should purchase in order to properly install the part being purchased.
We believe that our stores are "destination stores," generating their own traffic rather than relying on traffic created by the presence of other stores in the immediate vicinity. Therefore, we situate most stores on major thoroughfares with easy access and good parking. Approximately 2,300 of our auto parts stores are freestanding, with the balance principally located within strip shopping centers. Freestanding large format stores typically have parking for approximately 40 to 45 cars on a lot of approximately 3/4 to one acre. Our smaller auto parts stores typically have parking for approximately 25 to 35 cars and are usually located on a lot of approximately 1/2 to 3/4 acre.
Store Personnel and Training
Each auto parts store typically employs from six to eighteen AutoZoners, including a manager and an assistant manager. AutoZoners typically have prior automotive experience. All AutoZoners are encouraged to complete courses resulting in certification by the National Institute for Automotive Service Excellence ("ASE"), which is broadly recognized for training certification in the automotive industry. Although we rely primarily on on-the-job training, we also provide formal training programs, including regular store meetings on specific sales and product issues, standardized training manuals, and a specialist program where AutoZoners can obtain certification in several areas of technical expertise from both the company and from independent certification agencies. Training is supplemented with frequent store visits by management.
Store managers get financial incentives through performance-based bonuses and grants of stock options. In addition, our growth has provided opportunities for the promotion of qualified AutoZoners. We believe these opportunities are important to attract, motivate, and retain quality AutoZoners.
Our domestic auto parts stores are primarily supervised through district managers who oversee approximately six to ten stores each and who report to regional managers. Regional managers with approximately fifty-five to sixty-five stores each, in turn, report to five Vice Presidents-Store Operations. Purchasing, merchandising, advertising, accounting, cash management, store development, systems technology and support, and other store support functions are centralized in our store support center in Memphis, Tennessee. We believe that this centralization enhances consistent execution of our merchandising and marketing strategy at the store level, and reduces expenses and cost of goods.
Store Automation
All auto parts stores have proprietary electronic parts catalogs that provide parts information based on the make, model, and year of an automobile. The catalog display screens are placed on the hard parts counter where both AutoZoners and customers can view the screen. In addition, our satellite system enables the auto parts stores to speed up credit card and check approval processes and locate parts at neighboring AutoZone stores.
Our domestic auto parts stores utilize our computerized Store Management System, which includes bar code scanning and point-of-sale data collection terminals. The Store Management System provides administrative assistance and improved personnel scheduling at the store level, as well as enhanced merchandising information and improved inventory control. We believe the Store Management System also enhances customer service through faster processing of transactions and simplified warranty and product return procedures.
This table shows the domestic
auto parts store development during the past five fiscal years:
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1997
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1998
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1999
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2000
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2001
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| Beginning Stores |
1,423
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1,728
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2,657
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2,711
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2,915
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| New Stores1 |
308
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952
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245
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208
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107
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| Replaced Stores2 |
17
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12
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59
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30
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16
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| Closed Stores2 |
(20)
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(35)
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(250)
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(34)
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(19)
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| Ending Stores |
1,728
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2,657
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2,711
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2,915
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3,019
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1Includes
stores obtained in Chief and Auto Palace acquisitions in 1998, and store
real estate acquired from Pep Boys in fiscal year 1999.
2Closed
stores include replaced stores.
We believe that expansion opportunities exist both in markets that we do not currently serve, and in markets where we can achieve a larger presence. We attempt to obtain high visibility sites in high traffic locations and undertake substantial research prior to entering new markets. The most important criteria for opening a new store is its projected future profitability. Key factors in selecting new site and market locations include population, demographics, vehicle profile, number and strength of competitors' stores, and the cost of real estate. We generally seek to open new stores within or contiguous to existing market areas and attempt to cluster development in new urban markets in a relatively short period of time in order to achieve economies of scale in advertising and distribution costs. In addition to continuing to construct our own stores, we occasionally evaluate potential acquisition candidates in new as well as in existing markets.
Merchandise is selected and purchased for all stores at our store support center in Memphis. No one class of product accounts for as much as ten percent of our total sales. In fiscal 2001, no single supplier accounted for more than seven percent of our total purchases, and our ten largest suppliers accounted for approximately 32 percent of our purchases. We generally have few long-term contracts for the purchase of merchandise. We believe that we have excellent relationships with suppliers. We also believe that alternative sources of supply exist, at similar cost, for substantially all types of product sold.
Our vendors ship substantially all of our merchandise to our distribution centers. Stores typically place orders on a weekly basis with merchandise shipped from the warehouse in our trucks on the following day.
We want to have the right merchandise in our stores at the right time. In the past two fiscal years, we have improved our supply chain by eliminating excess inventory and increasing our purchasing terms while increasing sales. This has resulted in increases in inventory turns and substantial increases in net inventory turns.
AutoZone competes in both the DIY and professional technician auto parts markets. Primary competitors include national and regional auto parts chains, independently owned parts stores, wholesalers and jobbers, and auto dealers. Although auto parts stores are the most important retail outlets for DIY customers, some aftermarket vehicle supplies, chemicals, accessories, and tools are also available at discount and department stores, hardware stores, supermarkets, drug stores, and home stores. Auto parts retailers have remained competitive in the DIY aftermarket by offering superior product knowledge and an extensive number of products in stock. AutoZone competes on the basis of customer service, including the knowledge and expertise of our AutoZoners, merchandise selection and availability, price, product warranty, store layout, and location.
We have registered several service marks and trademarks in the United States Patent and Trademark office, including our service mark "AutoZone" and trademarks "AutoZone," "Duralast," and "ALLDATA." We believe that the "AutoZone" service mark and trademarks are important components in our merchandising and marketing strategy.
As of August 25, 2001, we employed approximately 44,600 persons, approximately 29,000 of whom were employed full-time. Approximately 90 percent of our AutoZoners were employed in stores or in direct field supervision, approximately seven percent in distribution centers, and approximately three percent in store support functions.
We have never experienced any material labor disruption, and believe that our labor relations are generally good.
Executive Officers of the Registrant
The following table lists our executive officers. The title of each executive officer includes the words "Customer Satisfaction" which reflects our commitment to customer service as part of our marketing and merchandising strategy. Officers are elected by and serve at the discretion of the Board of Directors.
Steve Odland, 43---Chairman, President, Chief Executive Officer,
and Director
Steve Odland was elected
Chairman, Chief Executive Officer, and a Director in January 2001 and was
elected President in May 2001. From June 2000, he was Chief Operating Officer
for Ahold USA. From 1998, he was President and CEO of Tops Markets, an
Ahold subsidiary. Previously, Mr. Odland was President of the Foodservice
Division of Sara Lee Bakery from 1997 to 1998. Before Sara Lee, Mr. Odland
was employed by The Quaker Oats Company for over 16 years in various executive
positions.
Robert J. Hunt, 52---Executive Vice President and Chief Financial
Officer
Robert J. Hunt has been
Executive Vice President and Chief Financial Officer since 1994, and was
a member of the Board of Directors from 1997 until May 2001. He has announced
his intention to retire as Executive Vice President and Chief Financial
Officer upon appointment of his successor. From 1984 to 1991, Mr. Hunt
was employed by Malone & Hyde, AutoZone's former parent company, where
he was Executive Vice President and Chief Financial Officer from 1988 to
1991.
Bruce G. Clark, 56---Senior Vice President and Chief Information
Officer
Bruce G. Clark has been
Senior Vice President and Chief Information Officer since January 1999.
Previously Mr. Clark was Senior Vice President--MIS/Telemarketing of Brylane
and its predecessors since 1988, and had been employed by Brylane, at that
time a division of The Limited, since 1983.
Brett D. Easley, 42---Senior Vice President--Merchandising
Brett D. Easley was named
Senior Vice President--Merchandising in 2000. He was President of ALLDATA
from 1998 to 2000 and Senior Vice President--E-Commerce from 1999 to 2000.
Prior to that, he was Vice President--Information and Training since 1997
and Vice President--Merchandising Systems since 1994. Mr. Easley has been
employed by AutoZone or Malone & Hyde since 1984.
Harry L. Goldsmith, 50---Senior Vice President, Secretary, and General
Counsel
Harry L. Goldsmith was elected
Senior Vice President, Secretary, and General Counsel in 1996. Previously
he was Vice President, General Counsel, and Secretary from 1993 to 1996.
Lisa R. Kranc, 48---Senior Vice President--Marketing
Lisa R. Kranc joined AutoZone
as Senior Vice President--Marketing in August 2001. Previously, she was
Vice President--Marketing for Hannaford Bros. Co., a Maine-based grocery
chain, since 1997 and was Senior Vice President--Marketing for Bruno's,
Inc., from 1996 to 1997.
Michael E. Longo, 40---Senior Vice President--Store Operations
Michael E. Longo has been
Senior Vice President--Store Operations since February 2001. Previously
he was Senior Vice President--Supply Chain since 1998 and Vice President--Distribution
since 1996. Mr. Longo has been employed by AutoZone since 1992.
Robert D. Olsen, 49---Senior Vice President--Mexico, ALLDATA, and
Store Development
Robert D. Olsen was elected
Senior Vice President in 2000. Currently Mr. Olsen is President of ALLDATA
and also has primary responsibility for store development and our Mexico
operations. From 1993 to 2000, Mr. Olsen was Executive Vice President and
Chief Financial Officer of Leslie's Poolmart. From 1985 to 1989, Mr. Olsen
held several positions with AutoZone, including Controller, Vice President--Finance,
and Senior Vice President and Chief Financial Officer.
William C. Rhodes, III, 36---Senior Vice President--Supply Chain
William C. Rhodes, III,
has been Senior Vice President--Supply Chain since February 2001. Prior
to that time, he has served in various capacities with AutoZone, including
Vice-President--Mid-South Stores in 2000, Senior Vice President--Finance
and Vice President--Finance in 1999, Vice President--Operations Analysis
and Support from 1997 to 1999. He has been employed by AutoZone since 1994.
Daisy L. Vanderlinde, 51---Senior Vice President--Human Resources
Daisy L. Vanderlinde joined
AutoZone as Senior Vice President--Human Resources in March 2001. Previously,
she was Vice President--Human Resources for Tractor Supply Company since
1996 and Vice President--Human Resources for Marshalls, Inc., from 1990.
Tricia K. Greenberger, 33---Vice President and Controller
Tricia K. Greenberger has
been Vice President and Controller since April 2000. Prior to that, she
was Vice President-Financial Planning and Control since 1998. Previously,
she was Director of Process Improvement since 1996.
We may not be able to increase sales by the same historic growth rates.
We have significantly increased our domestic store count in the past five fiscal years, growing from 1,143 stores at August 25, 1996, to 3,019 stores at August 25, 2001, an average store count increase per year of 16%. We do not plan to continue our store count growth rate at the historic pace. In addition, a portion of our total sales increases each year results from increases in sales at existing stores. We cannot provide any assurance that we can continue to increase same store sales as our stores mature in their markets.
We have an ever-increasing need for qualified employees.
In fiscal year 2001, our consolidated employee count increased from approximately 43,200 at the beginning of the year to about 44,600, a 3% increase in the year. We do not know if we can continue to hire and retain qualified employees at current wage rates.
If demand for our products slows, then our business may be materially affected.
Demand for products sold by our stores depends on many factors. In the short term, it may depend upon:
- the weather, as vehicle maintenance may be deferred during periods of inclement weather. However, as AutoZone stores are geographically disbursed, isolated instances of inclimate weather will generally not have a material effect upon our aggregate sales.
- the economy, as during periods of good economic conditions, more of our do-it-yourself customers may pay others to repair and maintain their cars instead of working on their own vehicles or they may purchase new vehicles. This factor is tempered by our commercial parts sales program that sells parts to installers. In periods of declining economic conditions, both do-it-yourself and do-it-for-me customers may defer vehicle maintenance or repair.
If we cannot profitably increase market share in the commercial auto parts business, our sales growth may be limited.
Although we are one of the five largest sellers of auto parts in the commercial "do-it-for-me" market, to increase commercial sales we must compete against automotive aftermarket jobbers and warehouse distributors, in addition to other auto parts retailers that have recently entered the commercial business. Some of these jobbers and warehouse distributors have been in business for substantially longer periods of time than we have, have developed long-term customer relationships, and have larger available inventories. We can make no assurance that we can profitably develop new commercial customers or make available inventories required by commercial customers.
If we cannot profitably open and operate stores in international markets, our sales growth may be limited.
We opened our first auto parts stores in Mexico during fiscal year 1999. Although we believe that great potential exists for auto parts stores in the fragmented international auto parts market, we have little experience opening or operating stores outside of the United States, and no assurances can be made that we can open additional stores in Mexico or stores in any other country in a timely or profitable manner.
In addition, products sold in Mexico must be properly labeled for sale in accordance with Mexican law. If AutoZone cannot source products in Mexico, it must obtain products elsewhere and have them appropriately labeled for sale in Mexico. We can make no assurances that we can purchase goods of appropriate quality or in sufficient quantities in Mexico to sell in our stores, nor can we make any assurances that we can profitably obtain products outside of Mexico and have them relabeled in accordance with Mexican law.
If our vendors continue to consolidate, we may pay higher prices for our merchandise.
Recently, several of our vendors have merged and others have announced plans to merge. Further vendor consolidation could limit the number of vendors from which we may purchase products and could materially affect the prices we pay for these products.
Consolidation among our competitors may negatively impact our business.
Recently, several large auto parts chains have announced plans to merge. We do not know what impact these mergers will have upon competition in the retail automotive aftermarket. If our merging competitors are able to achieve efficiencies in their mergers, then there may be greater competitive pressures in the markets in which they are strongest.
War, acts of terrorism, or the threat of either may negatively impact availability of merchandise and adversely impact our sales.
In the event of war, acts of terrorism, or either are threatened, it may have a negative impact on our ability to obtain merchandise available for sale in our stores. Some of our merchandise is imported from other countries. If imported goods become difficult or impossible to bring into the United States, and if we cannot obtain such merchandise from other sources at similar costs, our sales and profit margins may be negatively affected. In addition, a significant amount of the merchandise sold in our Mexico stores is exported from the United States. If we cannot export this merchandise in a timely manner, sales in our Mexico stores may be adversely affected.
In the event that commercial
transportation is curtailed or substantially delayed, our business may
be adversely impacted, as we may have difficulty shipping merchandise to
our distribution centers and stores.
This table shows the square
footage and number of leased and owned properties for our domestic auto
parts stores:
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| Leased |
1,238
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7,323,497
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| Owned |
1,781
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12,053,970
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| Total |
3,019
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19,377,467
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We have 2,998,834 square feet in our distribution centers servicing our auto parts stores, all of which is owned, except for 998,237 square feet, which is leased. The distribution centers are located in Arizona, California, Georgia, Illinois, Louisiana, Ohio, Tennessee, and Texas.
Our store support center, which we own, is located in Memphis, Tennessee, and consists of 260,000 square feet.
We also own and lease other
properties that are not material in the aggregate.
AutoZone, Inc., was a defendant in a class action lawsuit entitled "Melvin Quinnie on behalf of all others similarly situated v. AutoZone, Inc., and DOES 1 through 100, inclusive" filed in the Superior Court of California, County of Los Angeles, in November 1998. The plaintiff claimed that the defendants failed to pay overtime to store managers as required by California law and failed to pay terminated managers in a timely manner as required by California law. The plaintiff was seeking injunctive relief, restitution, statutory penalties, prejudgment interest, and reasonable attorneys' fees, expenses, and costs. The parties have settled the lawsuit and the settlement has received court approval. The terms of the settlement were not material to AutoZone's operations or consolidated financial position.
AutoZone, Inc., is a defendant in a lawsuit entitled "Coalition for a Level Playing Field, L.L.C., et al., v. AutoZone, Inc., et al.," filed in the U.S. District Court for the Eastern District of New York in February 2000. The case was filed by over 100 plaintiffs, principally automotive aftermarket warehouse distributors and jobbers, against eight defendants, principally automotive aftermarket parts retailers. The plaintiffs claim that the defendants have knowingly received volume discounts, rebates, slotting and other allowances, fees, free inventory, sham advertising and promotional payments, a share in the manufacturers' profits, and excessive payments for services purportedly performed for the manufacturers in violation of the Robinson-Patman Act. Plaintiffs seek approximately $1 billion in damages (including statutory trebling) and a permanent injunction prohibiting defendants from committing further violations of the Robinson-Patman Act and from opening any further stores to compete with plaintiffs as long as defendants continue to violate the Act. We and the other defendants filed a motion to dismiss this action in the fiscal fourth quarter. Subsequently, on October 23, 2001, the court overruled a substantial portion of the defendants' motion. We believe this suit is without merit and will vigorously defend against it.
We are also involved in various
other legal proceedings incidental to the conduct of our business. Although
the amount of liability that may result from these other proceedings cannot
be ascertained, we do not currently believe that, in the aggregate, they
will result in liabilities material to our financial condition or results
of operations.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Market for Registrant's Common Stock and Related Stockholder Matters
Common Stock Market Prices for our common stock as traded on the New York Stock Exchange as shown in the section labeled "Quarterly Summary" of the Annual Report to Stockholders for the fiscal year ended August 25, 2001, are incorporated herein by reference.
At October 15, 2001, we had
3,550 stockholders of record, which does not include the number of beneficial
owners whose shares were represented by security position listings.
Item 6. Selected Financial Data
Selected financial data contained
in the section entitled "Ten-Year Review" of the Annual Report to Stockholders
for the fiscal year ended August 25, 2001, are incorporated herein by reference.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The section entitled "Financial
Review" of the Annual Report to Stockholders for the fiscal year ended
August 25, 2001, is incorporated herein by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The subsection entitled "Financial
Market Risk" of the section entitled "Financial Review" of the Annual Report
to Stockholders for the fiscal year ended August 25, 2001, is incorporated
herein by reference.
Item 8. Financial Statements and Supplementary Data
The financial statements
and related notes and the section entitled "Quarterly Summary" of the Annual
Report to Stockholders for the fiscal year ended August 25, 2001, are incorporated
herein by reference.
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 10. Directors and Officers of the Registrant
The information required
by this item is incorporated by reference to Part I of this document and
to the definitive Proxy Statement dated November 7, 2001, filed pursuant
to Regulation 14A under the Securities Exchange Act of 1934 in connection
with the annual meeting of stockholders to be held December 13, 2001.
Item 11. Executive Compensation
The information required
by this item is incorporated by reference to the definitive Proxy Statement
dated November 7, 2001, filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with the annual meeting of stockholders
to be held December 13, 2001.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The information required
by this item is incorporated by reference to the definitive Proxy Statement
dated November 7, 2001, filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with the annual meeting of stockholders
to be held December 13, 2001.
Item 13. Certain Relationships and Related Transactions
The information required
by this item is incorporated by reference to the definitive Proxy Statement
dated November 7, 2001, filed pursuant to Regulation 14A under the Securities
Exchange Act of 1934 in connection with the annual meeting of stockholders
to be held December 13, 2001.
Item 14. Exhibits, Financial Statement Schedules, and Reports On Form 8-K
(a) 1. Financial Statements
The following financial statements included in the Annual Report to Stockholders for the fiscal year ended August 25, 2001, are incorporated herein by reference to Item 8:
Consolidated Statements of Income for the fiscal years ended August 25, 2001, August 26, 2000, and August 28, 1999
Consolidated Balance Sheets as of August 25, 2001, and August 26, 2000
Consolidated Statements of Stockholders' Equity for the fiscal years ended August 25, 2001, August 26, 2000, and August 28, 1999
Consolidated Statements of Cash Flows for the fiscal years ended August 25, 2001, August 26, 2000, and August 28, 1999
Notes to Consolidated Financial Statements
All other schedules are omitted because the information is not required or because the information required is included in the financial statements or notes thereto.
3. The following exhibits
are filed as a part of this report:
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3.1
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3.2
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4.1
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4.2
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4.3
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*10.1
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*10.2
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*10.3
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10.4
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*10.5
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*10.6
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*10.7
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|
*10.8
|
|
|
*10.9
|
|
|
*10.10
|
|
|
*10.11
|
|
|
*10.12
|
|
|
*10.13
|
|
|
*10.14
|
|
|
*10.15
|
|
|
*10.16
|
|
|
*10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
19.1
|
|
|
21.1
|
|
|
23.1
|
|
*Management contract or compensatory plan or arrangement.
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K dated May 23, 2001, that contained a press release announcing the Company's financial results for the quarter ended May 5, 2001.
The Company filed a Current Report on Form 8-K dated June 8, 2001, that contained a press release announcing that the Company would take a nonrecurring charge in the fourth quarter of the 2001 fiscal year.
The Company filed a Current Report on Form 8-K dated July 10, 2001, that contained a press release announcing that the Company: had retained an advisor for the sale of its TruckPro, Inc., subsidiary, had hired Lisa Kranc as senior vice president of marketing, had increased its share repurchase authorization, and had updated sales trends for the fiscal quarter.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
AUTOZONE, INC.
By: /s/ Steve Odland
Steve Odland
Chairman, President, and
Chief Executive Officer
(Principal Executive Officer)
Dated: November 16, 2001
Pursuant to the requirement
of the Securities Exchange Act of 1934, this report has been signed below
by the following persons in the capacities and on the dates indicated:
| SIGNATURE
|
TITLE | DATE |
| /s/ Steve Odland_________
Steve Odland |
Chairman, President, Chief Executive Officer,
& Director
(Principal Executive Officer) |
November 16, 2001 |
| /s/ Robert J. Hunt________
Robert J. Hunt
|
Executive Vice President & Chief Financial
Officer
(Principal Financial Officer) |
November 16, 2001 |
| /s/ Tricia K. Greenberger__
Tricia K. Greenberger |
Vice President & Controller
(Principal Accounting Officer) |
November 16, 2001 |
| /s/ Andrew M. Clarkson___
Andrew M. Clarkson |
Director | November 16, 2001 |
| /s/ Charles M. Elson______
Charles M. Elson |
Director | November 16, 2001 |
| /s/ N. Gerry House________
N. Gerry House |
Director | November 16, 2001 |
| /s/ J. R. Hyde, III_________
J.R. Hyde, III |
Director | November 16, 2001 |
| /s/ James F. Keegan___
James F. Keegan |
Director | November 16, 2001
|
| /s/ Edward S. Lampert_____
Edward S. Lampert |
Director | November 16, 2001 |
| /s/ W. Andrew McKenna___
W. Andrew McKenna |
Director | November 16, 2001 |
| /s/ Michael W. Michelson__
Michael W. Michelson |
Director | November 16, 2001 |
SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS
AUTOZONE, INC.
(In thousands)
|
|
|
|
|
|
|||||
|
|
|||||||||
|
|
Beginning of Period |
And Expenses |
|
|
End of Period |
||||
| YEAR ENDED AUGUST 28, 1999: | |||||||||
|
|
|||||||||
|
|
$20,786
|
$90,310
|
$3,473
|
|
$81,619
|
|
$32,950
|
||
|
|
14,296
|
94,640
|
|
||||||
| YEAR ENDED AUGUST 26, 2000: | |||||||||
|
|
|||||||||
|
|
32,950
|
100,381
|
83,317
|
|
50,014
|
||||
|
|
94,640
|
57,585
|
|
||||||
| YEAR ENDED AUGUST 25, 2001: | |||||||||
|
|
|||||||||
|
|
50,014
|
101,318
|
87,865
|
|
63,467
|
||||
|
|
57,585
|
98,689
|
|
||||||
|
(1)
|
Cost of product for warranty replacements, net of salvage and amounts collected from customers. | ||||||||
|
(2)
|
Purchase accounting adjustments related to acquisition of Chief Auto Parts Inc. | ||||||||
|
(3)
|
Amount includes items classified in other accrued expenses and other long-term liabilities. | ||||||||
|
3.1
|
|
|
3.2
|
|
|
4.1
|
|
|
4.2
|
|
|
4.3
|
|
|
*10.1
|
|
|
*10.2
|
|
|
*10.3
|
|
|
10.4
|
|
|
*10.5
|
|
|
*10.6
|
|
|
*10.7
|
|
|
*10.8
|
|
|
*10.9
|
|
|
*10.10
|
|
|
*10.11
|
|
|
*10.12
|
|
|
*10.13
|
|
|
*10.14
|
|
|
*10.15
|
|
|
*10.16
|
|
|
*10.17
|
|
|
10.18
|
|
|
10.19
|
|
|
10.20
|
|
|
19.1
|
|
|
21.1
|
|
|
23.1
|
|
*Management contract or compensatory plan or arrangement.
EXHIBIT 10.14
This Agreement is between AutoZone, Inc., a Nevada corporation ("AZO") and Timothy D. Vargo ("Vargo") made as of the 23rd day of May, 2001 (the "Effective Date").
WHEREAS, due to illnesses in Vargo's family, Vargo has notified AZO that he will not be able to continue acting as President and Chief Operating Officer of AZO;
WHEREAS, AZO desires Vargo to be available to it to continue to assist with its business;
THEREFORE, Vargo and AZO for and in consideration of the promises, undertakings and benefits set out in this Agreement ("Agreement"), agree as follows:
1. EFFECTIVE DATE. Vargo resigns as an officer and a director of AZO and each of AZO's subsidiaries as of the Effective Date but shall remain an employee of AZO or a subsidiary until May 25, 2004 ("Termination Date"). During the period from the Effective Date until the Termination Date, Vargo shall provide such services to AZO as are requested by the CEO of AZO.
2. TERMINATION OF EMPLOYMENT AGREEMENT. The parties agree that the Amended and Restated Employment and Non-Compete Agreement dated August 31, 1999 (the "Prior Agreement") between the parties shall be deemed to be amended and restated by this Agreement, and after the execution of this Agreement, neither party hereto shall have any rights under the Prior Agreement.
3. BENEFITS. In consideration for the services to be provided
to AZO by Vargo under this Agreement, AZO agrees to confer or have a subsidiary
confer, the following benefits in Vargo's favor:
| A.
|
For the period beginning on the Effective Date and ending on August
25, 2001, Vargo shall continue to receive his current salary ($500,000
gross on an annual fiscal basis) to be paid at the same time as AZO's executive
officers;
|
| B.
|
Beginning August 26, 2001, until the Termination Date, Vargo shall receive an annualized gross salary of $102,068.80 to be paid in installments every two weeks at the same time as AZO's executive officers are paid (except for pay for the period ended August 31, 2002, which will be for one week, and then again every two weeks thereafter); |
| C.
|
For the 2001 fiscal year, Vargo shall receive a bonus calculated in accordance with the AutoZone, Inc., Executive Incentive Compensation Plan, for the period beginning from the beginning of the 2001 fiscal year to the Effective Date, that shall be paid when AZO pays bonuses for fiscal year 2001 to its executive officers, and shall not be eligible for a bonus thereafter; and |
| D. | All other benefits received by full-time employees of AZO. |
The parties understand that applicable local, state, and federal tax deductions and withholdings will be made from all of the appropriate payments and exercises of stock options.
4. NON-COMPETE. Vargo further agrees that he will not, for the period beginning on the date of execution of this Agreement and ending on the Termination Date, be engaged in or concerned with, directly or indirectly, any business related to or involved in the wholesale or retail sale or distribution of auto parts and accessories, chemicals, or motor oil, operating in the automobile aftermarket in any state or geographical area in which AZO or a subsidiary operates now or shall operate during the term of the non- compete agreement (herein called "Competitor"), as an employee, consultant, beneficial or record owner (other than as an owner of less than 1% of an entity's issued and outstanding securities traded on a securities exchange registered as such with the U.S. Securities and Exchange Commission under the Securities Exchange Act of 1934), partner, joint venturer, officer or agent of the Competitor.
The parties acknowledge and agree that the time, scope, geographic area and other provisions of this Non-Compete section have been specifically negotiated by sophisticated commercial parties and specifically hereby agree that such time, scope, geographic area and other provisions are reasonable under the circumstances.
Further, Vargo agrees not to hire, for himself or any other entity, encourage anyone or entity to hire, or entice away from AZO any employee of AZO or a subsidiary of AZO, during the term of this non-compete agreement.
In the event of breach by Vargo of any provision of this Paragraph 6 "NON-COMPETE", Vargo acknowledges that such breach will cause irreparable damage to AZO, the exact amount of which will be difficult or impossible to ascertain, and that remedies at law for any such breach will be inadequate. Accordingly, AZO shall be entitled, in addition to any other rights or remedies existing in its favor, to obtain, without the necessity for any bond or other security, specific performance and/or injunctive relief in order to enforce, or prevent breach of any such provision and AZO shall be entitled to the remedies set forth in the section entitled "Remedies".
5. CONFIDENTIALITY. Unless otherwise required by law, Vargo shall hold in confidence any proprietary or confidential information obtained by him during his employment with AZO, which shall include, but not be limited to, information regarding AZO's present and future business plans, systems, operations and personnel matters.
6. COMPLETE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the matters covered herein and is intended to integrate and merge all prior understandings, discussions and negotiations. No other agreements, oral or written, relating to the subject matter contained herein shall be binding upon or enforceable against any of the parties. This Agreement and the documents executed pursuant to it may be amended only in a writing signed by authorized representatives of the parties. No provision of this Agreement or any document executed pursuant to it may be waived except in a writing signed by authorized representatives of the parties. The sections of this Agreement taken as a whole are intended to represent a single agreement.
This Agreement shall be governed and construed by the laws of the State of Tennessee, without regard to its choice of law rules. The parties agree that the only proper venue for any dispute under this Agreement shall be Shelby County, Tennessee.
7. TERMINATION WITH CAUSE. AZO shall have the right to terminate this Agreement and Vargo's employment with AZO for Cause at any time. Upon such termination for Cause, Vargo shall have no right to receive any compensation, salary, or bonus and shall immediately cease to receive any benefits (other than those as may be required pursuant to the AutoZone, Inc Associates' Pension Plan or by law) and any stock options shall be governed by the respective stock option agreements in effect between Vargo and AZO at that time. "Cause" shall mean the willful engagement by Vargo in conduct which is demonstrably or materially injurious to AZO, monetarily or otherwise. For this purpose, no act or failure to act by Vargo shall be considered "willful" unless done, or omitted to be done, by Vargo not in good faith and without reasonable belief that his action or omission was in the best interest of AZO.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND OBLIGATIONS. The representations, warranties, and obligations of the parties pursuant to this Agreement shall survive the execution hereof and this Agreement shall continue to be binding upon and enforceable against each of the parties, their successors, heirs, executors, and assigns. The rights and benefits of Vargo hereunder shall inure to the benefit of his heirs and estate and after Vargo's death, his estate shall have the right to receive the Benefits as are required by law, and to the extent allowed by their terms, shall have the rights set forth in the Stock Option Agreements. Notwithstanding, all payments provided for hereunder shall cease at the death of Vargo.
9. REMEDIES. Vargo acknowledges and agrees that any remedy at law for a breach of any obligation herein may be inadequate and that AZO shall be entitled to any and all equitable relief, including, but not limited to, injunctive relief. In the event Vargo breaches this Agreement in any way, any unpaid Benefits shall immediately terminate and Vargo shall forfeit any then unexercised option rights.
In addition, the parties agree to execute on or after the date of the execution of this Agreement any and all reasonable additional documents as requested by the other or its counsel to effectuate the purposes hereof.
IN WITNESS WHEREOF, the respective parties execute this Agreement.
AUTOZONE, INC.
| By: | /s/ Steve Odland | /s/ Timothy D. Vargo | |
| Title: | Chairman, President & CEO | Timothy D. Vargo
5-22-2001
|
|
| By: | /s/ Harry Goldsmith | ||
| Title: | Senior Vice President, General Counsel & Secretary | ||
This Agreement is between AutoZone, Inc., a Nevada corporation ("AZO") and Robert J. Hunt ("Hunt") made as of the 23rd day of May, 2001.
WHEREAS, Hunt has notified AZO that he does not desire to continue acting as Executive Vice President and Chief Financial Officer of AZO;
WHEREAS, AZO desires Hunt to continue to assist with its business;
THEREFORE, Hunt and AZO for and in consideration of the promises, undertakings and benefits set out in this Agreement ("Agreement"), agree as follows:
1. EFFECTIVE DATE. Hunt resigns as a director of AZO and each of its subsidiaries effective May 23, 2001, and as an officer and Chief Financial Officer of AZO and each of AZO's subsidiaries as of the date a new Chief Financial Officer is employed by AZO or such earlier date as may be decided by AZO's Board of Directors ("Effective Date"), but shall remain an employee of AZO or a subsidiary until August 31, 2004 ("Termination Date"). During the period from the Effective Date until the Termination Date, Hunt shall make himself available to perform such services for AZO as are requested by the CEO of AZO.
2. TERMINATION OF EMPLOYMENT AGREEMENT. The parties agree that the Amended and Restated Employment and Non-Compete Agreement dated August 31, 1999 (the "Prior Agreement"), between the parties shall be deemed to be amended and restated by this Agreement and, after the execution of this Agreement, neither party hereto shall have any rights under the Prior Agreement.
3. BENEFITS. In consideration for the services to be provided to AZO by Hunt under this Agreement, AZO agrees to confer the following benefits in Hunt's favor:
| A. | From May 23, 2001, through August 25, 2001, Hunt shall continue to receive his current annual base salary of $330,000 which shall be paid on a pro-rated basis at the same time as AZO's other officers are paid; |
| B. | On or before August 25, 2001, Hunt shall receive a lump sum gross payment of $650,000 (which payment shall not be considered in determining average monthly earnings for benefit purposes under the AutoZone, Inc. Associates Pension Plan or the AutoZone, Inc. Executive Deferred Compensation Plan); |
| C. | Beginning August 26, 2001, until the Termination Date, Hunt shall receive a annual gross salary of $100,000 to be paid in pro rata installments every two weeks at the same time as AZO's executive officers are paid (except for pay for the period ended August 31, 2002, which will be for one week, and then again every two weeks thereafter); |
| D. | For the 2001 fiscal year, Hunt shall receive a bonus calculated in accordance with the AutoZone, Inc., Executive Incentive Compensation Plan, that shall be paid when AZO pays bonuses for fiscal year 2001 to its executive officers and shall not be eligible to receive a bonus thereafter; and |
| E. | All other benefits received by full-time employees of AZO. |
The parties understand that applicable local, state, and federal tax deductions and withholdings will be made from all of the appropriate payments and exercises of stock options.
4. NON-COMPETE. Hunt further agrees that he will not, for the period beginning on the date of execution of this Agreement and ending on the Termination Date, be engaged in or concerned with, directly or indirectly, any business related to or involved in the wholesale or retail sale or distribution of auto parts and accessories, chemicals, or motor oil, operating in the automobile aftermarket in any state or geographical area in which AZO or a subsidiary of AZO operates now or shall operate during the term of the non- compete agreement (herein called "Competitor"), as an employee, consultant, beneficial or record owner (other than as an owner of less than 1% of an entity's issued and outstanding securities traded on a securities exchange registered as such with the U.S. Securities Exchange Commission under the Securities Exchange Act of 1934), partner, joint venturer, officer or agent of the Competitor.
The parties acknowledge and agree that the time, scope, geographic area and other provisions of this Non-Compete section have been specifically negotiated by sophisticated commercial parties and specifically hereby agree that such time, scope, geographic area and other provisions are reasonable under the circumstances.
Further, Hunt agrees not to hire, for himself or any other entity, encourage anyone or entity to hire, or entice away from AZO any employee of AZO or a subsidiary of AZO during the term of this non-compete agreement.
In the event of breach by Hunt of any provision of this Paragraph 6 "NON-COMPETE", Hunt acknowledges that such breach will cause irreparable damage to AZO, the exact amount of which will be difficult or impossible to ascertain, and that remedies at law for any such breach will be inadequate. Accordingly, AZO shall be entitled, in addition to any other rights or remedies existing in its favor, to obtain, without the necessity for any bond or other security, specific performance and/or injunctive relief in order to enforce, or prevent breach of any such provision and AZO shall be entitled to the remedies set forth in the section entitled "Remedies".
5. CONFIDENTIALITY. Unless otherwise required by law or requested by AZO in the performance of his duties, Hunt shall hold in confidence any proprietary or confidential information obtained by him during his employment with AZO, which shall include, but not be limited to, information regarding AZO's present and future business plans, systems, operations and personnel matters.
6. COMPLETE AGREEMENT. This Agreement contains the entire agreement between the parties with respect to the matters covered herein and is intended to integrate and merge all prior understandings, discussions and negotiations. No other agreements, oral or written, relating to the subject matter contained herein shall be binding upon or enforceable against any of the parties. This Agreement and the documents executed pursuant to it may be amended only in a writing signed by authorized representatives of the parties. No provision of this Agreement or any document executed pursuant to it may be waived except in a writing signed by authorized representatives of the parties. The sections of this Agreement taken as a whole are intended to represent a single agreement.
This Agreement shall be governed and construed by the laws of the State of Tennessee, without regard to its choice of law rules. The parties agree that the only proper venue for any dispute under this Agreement shall be Shelby County, Tennessee.
7. TERMINATION WITH CAUSE: AZO shall have the right to terminate this Agreement and Hunt's employment with AZO and all of its subsidiaries for Cause at any time. Upon such termination for Cause, Hunt shall have no right to receive any compensation, salary, or bonus and shall immediately cease to receive any benefits (other than those as may be required pursuant to the AutoZone, Inc. Associates Pension Plan or by law) and any stock options shall be governed by the respective stock option agreements in effect between Hunt and AZO at that time. "Cause" shall mean the willful engagement by Hunt in conduct which is demonstrably or materially injurious to AZO, monetarily or otherwise. For this purpose, no act or failure to act by Hunt shall be considered "willful" unless done, or omitted to be done, by the Employee not in good faith and without reasonable belief that his action or omission was in the best interest of AZO.
8. SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND OBLIGATIONS. The representations, warranties, and obligations of the parties pursuant to this Agreement shall survive the execution hereof and this Agreement shall continue to be binding upon and enforceable against each of the parties, their successors, heirs, executors, and assigns. The rights and benefits of Hunt hereunder shall inure to the benefit of his heirs and estate and after Hunt's death, his estate shall have the right to receive the Benefits as are required by law, and to the extent allowed by their terms, shall have the rights set forth in the Stock Option Agreements. Notwithstanding, all payments provided for hereunder shall cease at the death of Hunt.
9. REMEDIES. Hunt acknowledges and agrees that any remedy at law for a breach of any obligation herein may be inadequate and that AZO shall be entitled to any and all equitable relief, including, but not limited to, injunctive relief. In the event Hunt breaches this Agreement in any way, any unpaid Benefits shall immediately terminate and Hunt shall forfeit any then unexercised option rights.
In addition, the parties agree to execute on or after the date of the execution of this Agreement any and all reasonable additional documents as requested by the other or its counsel to effectuate the purposes hereof.
IN WITNESS WHEREOF, the respective parties execute this Agreement.
AUTOZONE, INC.
| By: | /s/ Steve Odland | /s/ Robert J. Hunt | |
| Title: | Chairman, President and CEO | Robert J. Hunt | |
| 5-22-2001
Date |
|||
| By: | /s/ Harry Goldsmith | ||
| Title: | Senior Vice President, General Counsel and Secretary |
June 18,2001
Ms. Lisa Kranc
<ADDRESS>>
<<CITY>>, <<STATE>> <<ZIP>>
Dear Lisa,
On behalf of AutoZone I am delighted to confirm our offer to you for the role of Senior Vice President Marketing.
Our offer includes a base salary of $220,000 per annum plus an annual bonus target of 60% of your base salary. You will be eligible for a performance and salary review at the end of fiscal 2002. Actual bonus awards for Fiscal 2002 will be determined by the achievement of pre-defined Company objectives. Bonus targets can therefore be less than target, but they can also exceed targets based on above plan performance. For Fiscal 2001, which ends at the end of August, your bonus will be prorated based on the period of actual service.
Subject to the approval of the Compensation Committee of the Board of Directors, you will receive an initial stock option grant of 25,000 options. These options will be presented for grant no later than the October 2, 2001 meeting of the Compensation Committee. Thereafter, on an annual basis beginning on or around October of 2002 subsequent grants will be determined by pre-defined performance achievements and the established annual range of options. All stock options grants are made by and subject to the approval of the Compensation Committee or our Board of Directors. Notwithstanding, any and all Plans are subject to change or may be discontinued at any time.
Copies of our current Bonus Plan and Stock Option Incentive Plan are included for your review, however as we discussed, these are under review and new plans should be finalized at our October 2001 Board of Directors meeting.
Our offer of employment also includes relocation support, which includes coverage for the home sale and purchase transaction costs, personal goods shipment, and suitable temporary housing. We will also include a one-time miscellaneous gross payment of $10,000.
You will be eligible to participate in AutoZone's full group benefits and save-up programs, which include medical, dental, vision, life and disability coverage along with a qualified pension and 401(k) program.
Your employment at AutoZone is "at will" and terminable at any time. In the event of any non-cause related termination requested by AutoZone, we will pay you severance equal to your base salary, which severance shall to be paid out pro-rata in regular pay cycles.
Lisa, the entire Executive Committee is enthusiastic about the possibility of you joining our team. I am personally looking forward to your positive response and to working with you in the near future. Please feel free to call Daisy or me to address any questions you may have.
Sincerely,
/s/ Steve Odland
Steve Odland
Chairman, President, and Chief Executive
Officer
MVA
CREDIT AGREEMENT
Dated as of May 22, 2001
among
AUTOZONE, INC.,as Borrower,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
and
FLEET NATIONAL BANK,
as Administrative Agent
and
THE CHASE MANHATTAN BANK,
as Syndication Agent
_____________________________________________________________________________
J.P. MORGAN SECURITIES INC.,
BANC OF AMERICA SECURITIES, LLC
and
FLEET SECURITIES, INC.,
as
Lead Arrangers and Book Runners
with
BANK OF AMERICA, N.A.,
CITIBANK, N.A.
and
SUNTRUST BANK
as Documentation Agents
TABLE OF CONTENTS
SECTION 1 DEFINITIONS
1.2 Computation of Time Periods.
1.3 Accounting Terms.
2.2 Competitive Loan Subfacility.
2.3 Swingline Loan Subfacility.
2.4 Term Loan
3.2 Extension and Conversion.
3.3 Prepayments.
3.4 Termination and Reduction of Revolving Committed Amount.
3.5 Fees.
3.6 Capital Adequacy.
3.7 Inability To Determine Interest Rate.
3.8 Illegality.
3.9 Yield Protection.
3.10 Withholding Tax Exemption.
3.11 Indemnity.
3.12 Pro Rata Treatment.
3.13 Sharing of Payments.
3.14 Payments, Computations, Etc.
3.15 Evidence of Debt.
3.16 Replacement of Lenders.
4.2 Conditions to all Extensions of Credit.
5.2 Organization; Existence; Compliance with Law.
5.3 Power; Authorization; Enforceable Obligations.
5.4 No Legal Bar.
5.5 No Material Litigation.
5.6 No Default.
5.7 Ownership of Property; Liens.
5.8 No Burdensome Restrictions.
5.9 Taxes.
5.10 ERISA.
5.11 Governmental Regulations, Etc.
5.12 Subsidiaries.
5.13 Purpose of Loans.
6.2 Preservation of Existence and Franchises.
6.3 Books and Records.
6.4 Compliance with Law.
6.5 Payment of Taxes and Other Indebtedness.
6.6 Insurance.
6.7 Maintenance of Property.
6.8 Use of Proceeds.
6.9 Audits/Inspections.
6.10 Adjusted Debt to EBITDAR Ratio.
6.11 Interest Coverage Ratio.
7.2 Nature of Business.
7.3 Consolidation, Merger, Sale or Purchase of Assets, etc.
7.4 Fiscal Year.
7.5 Subsidiary Indebtedness.
8.2 Acceleration; Remedies.
9.2 Delegation of Duties.
9.3 Exculpatory Provisions.
9.4 Reliance on Communications.
9.5 Notice of Default.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
9.7 Indemnification.
9.8 Administrative Agent in its Individual Capacity.
9.9 Successor Administrative Agent.
9.10 Syndication Agent.
10.2 Right of Set-Off.
10.3 Benefit of Agreement.
10.4 No Waiver; Remedies Cumulative.
10.5 Payment of Expenses, etc.
10.6 Amendments, Waivers and Consents.
10.7 Counterparts.
10.8 Headings.
10.9 Survival.
10.10 Governing Law; Submission to Jurisdiction; Venue.
10.11 Severability.
10.12 Entirety.
10.13 Binding Effect; Termination.
10.14 Confidentiality.
10.15 Source of Funds.
10.16 Conflict.
Schedule 1.1 Applicable Percentage
Schedule 2.1(a) Lenders
Schedule 2.1(b)(i) Form of Notice of Borrowing
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(f) Form of Competitive Note
Schedule 2.3(d) Form of Swingline Note
Schedule 2.4(e) Form of Term Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 4.1(g) Form of Legal Opinion
Schedule 5.5 Material Litigation
Schedule 5.12 Subsidiaries
Schedule 6.1(c) Form of Officer's Compliance Certificate
Schedule 7.5 Subsidiary Indebtedness
Schedule 10.3(b) Form of Assignment and Acceptance
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of May 22, 2001 (the "Credit Agreement"), is by and among AUTOZONE, INC., a Nevada corporation (the "Borrower"), the several lenders identified on the signature pages hereto and such other lenders as may from time to time become a party hereto (the "Lenders"), FLEET NATIONAL BANK, as administrative agent for the Lenders (in such capacity, the "Administrative Agent") and THE CHASE MANHATTAN BANK, as syndication agent (in such capacity, the "Syndication Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a $600,000,000 credit facility (as such credit facility may be increased or decreased pursuant to the terms hereof) for the purposes hereinafter set forth;
WHEREAS, the Lenders have agreed to make the requested credit facility available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
DEFINITIONS
As used in this Credit Agreement, the following terms shall have the meanings specified below unless the context otherwise requires:
"Administrative Agent" shall have the meaning assigned to such term in the heading hereof, together with any successors or assigns.
"Administrative Agent's Fee Letter" means that certain letter agreement, dated as of May 22, 2001, between the Administrative Agent and the Borrower, as amended, modified, supplemented or replaced from time to time.
"Administrative Agent's Fees" shall have the meaning assigned to such term in Section 3.5(b).
"Affiliate" means, with respect to any Person, any other Person (i) directly or indirectly controlling or controlled by or under direct or indirect common control with such Person or (ii) directly or indirectly owning or holding five percent (5%) or more of the equity interest in such Person. For purposes of this definition, "control" when used with respect to any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.
"Agency Services Address" means Fleet National Bank, 100 Federal Street, MADE10307C, Boston, MA 02110 Attn: Agency Services.
"Applicable Percentage" means, for purposes of calculating the applicable interest rate for any day for any Loan (other than a Competitive Loan or a Quoted Rate Swingline Loan), the applicable rate of the Facility Fee for any day for purposes of Section 3.5(a) or the applicable rate of the Utilization Fee for any day for the purposes of Section 3.5(c), the appropriate applicable percentage set forth on Schedule 1.1. The Applicable Percentages shall be determined and adjusted on the following dates (each a "Calculation Date"):
(ii) where the Borrower previously had a senior unsecured (non-credit enhanced) long term debt rating from S&P and/or Moody's, but either or both of S&P and Moody's withdraws its rating such that the Borrower's senior unsecured (non-credit enhanced) long term debt no longer is rated by either S&P or Moody's, five (5) Business Days after receipt by the Administrative Agent of notice of the withdrawal of the last to exist of such previous debt ratings, based on Pricing Level V until the earlier of (A) such time as S&P and/or Moody's provides another rating for such debt of the Borrower or (B) the Required Lenders have agreed to an alternative pricing grid or other method for determining Pricing Levels pursuant to an effective amendment to this Credit Agreement.
"Approving Lenders" has the meaning set forth in Section 3.4(c).
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the United States Code, as amended, modified, succeeded or replaced from time to time.
"Bankruptcy Event" means, with respect to any Person, the occurrence of any of the following with respect to such Person: (i) a court or governmental agency having jurisdiction in the premises shall enter a decree or order for relief in respect of such Person in an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or ordering the winding up or liquidation of its affairs; or (ii) there shall be commenced against such Person an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed, undischarged or unbonded for a period of sixty (60) consecutive days; or (iii) such Person shall commence a voluntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or consent to the entry of an order for relief in an involuntary case under any such law, or consent to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of such Person or for any substantial part of its Property or make any general assignment for the benefit of creditors; or (iv) such Person shall be unable to, or shall admit in writing its inability to, pay its debts generally as they become due.
"Base Rate" means, for any day, the rate per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the greater of (a) the Federal Funds Rate in effect on such day plus ½ of 1% or (b) the Prime Rate in effect on such day. If for any reason the Administrative Agent shall have determined (which determination shall be conclusive absent manifest error) that it is unable after due inquiry to ascertain the Federal Funds Rate for any reason, including the inability or failure of the Administrative Agent to obtain sufficient quotations in accordance with the terms hereof, the Base Rate shall be determined without regard to clause (a) of the first sentence of this definition until the circumstances giving rise to such inability no longer exist. Any change in the Base Rate due to a change in the Prime Rate or the Federal Funds Rate shall be effective on the effective date of such change in the Prime Rate or the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading hereof, together with any permitted successors and assigns.
"Business Day" means a day other than a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to close, except that, when used in connection with a Eurodollar Loan, such day shall also be a day on which dealings between banks are carried on in U.S. dollar deposits in London, England and New York, New York.
"Calculation Date" has the meaning set forth in the definition of Applicable Percentage.
"Capital Lease" means, as applied to any Person, any lease of any Property (whether real, personal or mixed) by that Person as lessee which, in accordance with GAAP, is or should be accounted for as a capital lease on the balance sheet of that Person.
"Change of Control" means either (i) a "person" or a "group" (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of more than 50% of the then outstanding voting stock of the Borrower or (ii) a majority of the board of directors of the Borrower shall consist of individuals who are not Continuing Directors. For purposes hereof, "Continuing Directors" means, as of any date of determination, (i) an individual who on the date two years prior to such determination date was a member of the Borrower's board of directors or (ii) (a) any director whose nomination for election by the Borrower's shareholders was approved by a vote of a majority of the directors then still in office who either were directors on the date two years prior to such determination date or whose nomination for election was previously so approved (or who are Continuing Directors pursuant to clause (b) below) or (b) any director who was elected by a majority of the directors then still in office who either were directors on the date two years prior to such determination date or whose nomination for election was previously so approved (or who are Continuing Directors pursuant to clause (a) above).
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute thereto, as interpreted by the rules and regulations issued thereunder, in each case as in effect from time to time. References to sections of the Code shall be construed also to refer to any successor sections.
"Commercial Credit Business Arrangement" means any agreement between the Borrower or any of its Subsidiaries and an entity that purchases such Person's commercial accounts receivables with only such limited recourse back to such Person as is customary in factoring arrangements of this type.
"Commitment" means (i) with respect to each Lender, the Revolving Commitment and/or the Term Loan Commitment of such Lender and (ii) with respect to the Swingline Lender, the Swingline Commitment.
"Competitive Bid" means an offer by a Lender to make a Competitive Loan pursuant to the terms of Section 2.2.
"Competitive Bid Rate" means, as to any Competitive Bid made by a Lender in accordance with the provisions of Section 2.2, the fixed rate of interest offered by the Lender making the Competitive Bid.
"Competitive Loan" means a loan made by a Lender in its discretion pursuant to the provisions of Section 2.2.
"Competitive Note" means a promissory note of the Borrower in favor of a Lender delivered pursuant to Section 2.2(f) and evidencing the Competitive Loans, if any, of such Lender, as such promissory note may be amended, modified, restated or replaced from time to time.
"Consolidated Adjusted Debt" means, at any time, the sum of, without duplication, (i) Consolidated Funded Indebtedness and (ii) the product of Consolidated Rents multiplied by 6.0.
"Consolidated EBITDA" means, for any period for the Borrower and its Subsidiaries, Consolidated Net Income plus Consolidated Interest Expense plus all provisions for any Federal, state or other domestic and foreign income taxes plus depreciation and amortization, in each case on a consolidated basis determined in accordance with GAAP applied on a consistent basis. Except as otherwise expressly provided, the applicable period shall be for the four consecutive fiscal quarters ending as of the date of determination.
"Consolidated EBITDAR" means, for any period, the sum of Consolidated EBITDA and Consolidated Rents. Except as otherwise expressly provided, the applicable period shall be for the four consecutive fiscal quarters ending as of the date of determination.
"Consolidated EBITR" means, for any period for the Borrower and its Subsidiaries, Consolidated EBITDA minus depreciation and amortization plus Consolidated Rents, in each case on a consolidated basis as determined in accordance with GAAP applied on a consistent basis. Except as otherwise expressly provided, the applicable period shall be for the four consecutive fiscal quarters ending as of the date of determination.
"Consolidated Funded Indebtedness" means, at any time, the outstanding principal amount of all Funded Indebtedness, without duplication, of the Borrower and its Subsidiaries at such time.
"Consolidated Interest Coverage Ratio" means, as of the last day of any fiscal quarter of the Borrower, the ratio of (i) Consolidated EBITR to (ii) Consolidated Interest Expense plus Consolidated Rents.
"Consolidated Interest Expense" means, for any period for the Borrower and its Subsidiaries, all interest expense plus the interest component under Capital Leases, in each case on a consolidated basis as determined in accordance with GAAP applied on a consistent basis. Except as otherwise expressly provided, the applicable period shall be for the four consecutive fiscal quarters ending as of the date of determination.
"Consolidated Net Income" means, for any period for the Borrower and its Subsidiaries, net income on a consolidated basis determined in accordance with GAAP applied on a consistent basis, but excluding non-recurring charges in an aggregate amount not to exceed $50,000,000 collectively with respect to all periods relevant for the calculation of the financial covenants contained in Sections 6.10 and 6.11. Except as otherwise expressly provided, the applicable period shall be for the four consecutive fiscal quarters ending as of the date of determination.
"Consolidated Rents" means, for any period for the Borrower and its Subsidiaries, all rental expense of the Borrower and its Subsidiaries for such period under operating leases (specifically including rents paid in connection with synthetic leases, tax retention operating leases, off-balance sheet loans or similar off-balance sheet financing products), on a consolidated basis as determined in accordance with GAAP applied on a consistent basis. Except as otherwise expressly provided, the applicable period shall be for the four consecutive fiscal quarters ending as of the date of determination.
"Credit Documents" means a collective reference to this Credit Agreement, the Notes, the Administrative Agent's Fee Letter and all other related agreements and documents issued or delivered hereunder or thereunder or pursuant hereto or thereto.
"Default" means any event, act or condition which with notice or lapse of time, or both, would constitute an Event of Default.
"Designating Lender" has the meaning set forth in Section 10.3(e).
"Disapproving Lenders" has the meaning set forth in Section 3.4(c).
"Dollars" and "$" means dollars in lawful currency of the United States of America.
"Environmental Laws" means any and all lawful and applicable Federal, state, local and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or other governmental restrictions relating to the environment or to emissions, discharges, releases or threatened releases of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes into the environment including, without limitation, ambient air, surface water, ground water, or land, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of pollutants, contaminants, chemicals, or industrial, toxic or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute thereto, as interpreted by the rules and regulations thereunder, all as the same may be in effect from time to time. References to sections of ERISA shall be construed also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common control with the Borrower within the meaning of Section 4001(a)(14) of ERISA, or is a member of a group which includes the Borrower and which is treated as a single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence of a Reportable Event or the substantial cessation of operations (within the meaning of Section 4062(e) of ERISA); (ii) the withdrawal by the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a Multiple Employer Plan during a plan year in which it was a substantial employer (as such term is defined in Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan; (iii) the distribution of a notice of intent to terminate or the actual termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to terminate or the actual termination of a Plan by the PBGC under Section 4042 of ERISA; (v) any event or condition which could reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan; (vi) the complete or partial withdrawal of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for imposition of a lien under Section 302(f) of ERISA exist with respect to any Plan; or (vii) the adoption of an amendment to any Plan requiring the provision of security to such Plan pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan bearing interest at a rate determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each Eurodollar
Loan comprising part of the same borrowing (including conversions, extensions
and renewals), a per annum interest rate determined pursuant to the following
formula:
Eurodollar Rate = Interbank Offered Rate
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under Regulation
D of the Board of Governors of the Federal Reserve System (or any successor),
as such regulation may be amended from time to time or any successor regulation,
as the maximum reserve requirement (including, without limitation, any
basic, supplemental, emergency, special, or marginal reserves) applicable
with respect to Eurocurrency liabilities as that term is defined in Regulation
D (or against any other category of liabilities that includes deposits
by reference to which the interest rate of Eurodollar Loans is determined),
whether or not Lender has any Eurocurrency liabilities subject to such
reserve requirement at that time. Eurodollar Loans shall be deemed to constitute
Eurocurrency liabilities and as such shall be deemed subject to reserve
requirements without benefits of credits for proration, exceptions or offsets
that may be available from time to time to a Lender. The Eurodollar Rate
shall be adjusted automatically on and as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Event of Default" means such term as defined in Section 8.1.
"Existing 364-Day Credit Agreement" means that certain 364-Day Credit Agreement, dated as of May 23, 2000, by and among the Borrower, the lenders party thereto and Bank of America, N.A., as Administrative Agent, as amended or modified.
"Existing Five-Year Facility" means the revolving loan facility established pursuant to the Existing Five-Year Credit Agreement.
"Existing Five-Year Credit Agreement" means that certain Five-Year Credit Agreement, dated as of May 23, 2000, by and among the Borrower, the lenders party thereto and Bank of America, N.A., as Administrative Agent, as amended, modified, supplemented, restated or replaced from time to time.
"Facility Fee" shall have the meaning assigned to such term in Section 3.5(a).
"Facility Fee Calculation Period" shall have the meaning assigned to such term in Section 3.5(a).
"Federal Funds Rate" means, for any day, the rate of interest per annum (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (A) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day and (B) if no such rate is so published on such next preceding Business Day, the Federal Funds Rate for such day shall be the average rate quoted to the Administrative Agent on such day on such transactions as determined by the Administrative Agent.
"Fees" means all fees payable pursuant to Section 3.5.
"Financial Officer" means, with respect to the Borrower, the Treasurer, the Chief Accounting Officer, the General Counsel, the Chief Financial Officer or the Vice President-Finance of the Borrower; provided that the Borrower may designate additional persons or delete persons so authorized by written notice to the Administrative Agent from at least two existing Financial Officers of the Borrower.
"Fleet " means Fleet National Bank and its successors.
"Funded Indebtedness" means, with respect to any Person (for purposes of this sentence only, the "Debtor"), without duplication, (i) all Indebtedness of such Debtor for borrowed money, (ii) all purchase money Indebtedness of such Debtor, including without limitation the principal portion of all obligations of such Debtor under Capital Leases, (iii) all Guaranty Obligations of such Debtor with respect to Funded Indebtedness of another Person, (iv) the maximum available amount of all standby letters of credit or acceptances issued or created for the account of such Debtor, and (v) all Funded Indebtedness of another Person secured by a Lien on any Property of such Debtor, whether or not such Funded Indebtedness has been assumed; provided that Funded Indebtedness shall not include (i) any letters of credit used by such Debtor for the financing of inventory in the ordinary course of business or (ii) any amounts received by such Debtor pursuant to a Commercial Credit Business Arrangement. The Funded Indebtedness of any Person shall include the Funded Indebtedness of any partnership or joint venture in which such Person is a general partner or joint venturer.
"GAAP" means generally accepted accounting principles in the United States applied on a consistent basis and subject to the terms of Section 1.3 hereof.
"Governmental Authority" means any Federal, state, local or foreign court or governmental agency, authority, instrumentality or regulatory body.
"Guaranty Obligations" means, with respect to any Person, without duplication, any obligations of such Person (other than endorsements in the ordinary course of business of negotiable instruments for deposit or collection) guaranteeing or intended to guarantee any Indebtedness of any other Person in any manner, whether direct or indirect, and including without limitation any obligation, whether or not contingent, (i) to purchase any such Indebtedness or any Property constituting security therefor, (ii) to advance or provide funds or other support for the payment or purchase of any such Indebtedness or to maintain working capital, solvency or other balance sheet condition of such other Person (including without limitation keep well agreements, maintenance agreements, comfort letters or similar agreements or arrangements) for the benefit of any holder of Indebtedness of such other Person, (iii) to lease or purchase Property, securities or services primarily for the purpose of assuring the holder of such Indebtedness, or (iv) to otherwise assure or hold harmless the holder of such Indebtedness against loss in respect thereof. The amount of any Guaranty Obligation hereunder shall (subject to any limitations set forth therein) be deemed to be an amount equal to the outstanding principal amount (or maximum principal amount, if larger) of the Indebtedness in respect of which such Guaranty Obligation is made.
"Indebtedness" of any Person means (i) all obligations of such Person for borrowed money, (ii) all obligations of such Person evidenced by bonds, debentures, notes or similar instruments, or upon which interest payments are customarily made, (iii) all obligations of such Person under conditional sale or other title retention agreements relating to Property purchased by such Person (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business), (iv) all obligations of such Person issued or assumed as the deferred purchase price of Property or services purchased by such Person (other than trade debt incurred in the ordinary course of business and due within six months of the incurrence thereof) which would appear as liabilities on a balance sheet of such Person, (v) all obligations of such Person under take-or-pay or similar arrangements or under commodities agreements, (vi) all Indebtedness of others secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien on, or payable out of the proceeds of production from, Property owned or acquired by such Person, whether or not the obligations secured thereby have been assumed, (vii) all Guaranty Obligations of such Person, (viii) the principal portion of all obligations of such Person under Capital Leases, (ix) all obligations of such Person in respect of interest rate protection agreements, foreign currency exchange agreements, commodity purchase or option agreements or other interest or exchange rate or commodity price hedging agreements, (x) the maximum amount of all standby letters of credit issued or bankers' acceptances facilities created for the account of such Person and, without duplication, all drafts drawn thereunder (to the extent unreimbursed), (xi) all preferred stock issued by such Person and required by the terms thereof to be redeemed, or for which mandatory sinking fund payments are due, by a fixed date and (xii) the principal balance outstanding under any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product to which such Person is a party, where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an operating lease in accordance with GAAP; provided that Indebtedness shall not include (i) any letters of credit used by such Person for the financing of inventory in the ordinary course of business or (ii) any amounts received by such Person pursuant to a Commercial Credit Business Arrangement. The Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture in which such Person is a general partner or a joint venturer.
"Interbank Offered Rate" means, for the Interest Period for each Eurodollar Loan comprising part of the same borrowing (including conversions, extensions and renewals), a per annum interest rate (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the rate of interest, determined by the Administrative Agent on the basis of the offered rates for deposits in dollars for a period of time corresponding to such Interest Period (and commencing on the first day of such Interest Period), appearing on Telerate Page 3750 (or, if, for any reason, Telerate Page 3750 is not available, the Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time) two (2) Business Days before the first day of such Interest Period; provided, however, if no such interest rate for a period of time corresponding to such Interest Period appears on Telerate Page 3750 or the Reuters Screen LIBO Page, then the applicable interest rate shall be determined by the Administrative Agent in good faith. As used herein, "Telerate Page 3750" means the display designated as page 3750 by Dow Jones Telerate, Inc. (or such other page as may replace such page on that service for the purpose of displaying the British Bankers Association London interbank offered rates) and "Reuters Screen LIBO Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks).
"Interest Payment Date" means (i) as to any Base Rate Loan, the last day of each March, June, September and December, the date of repayment of principal of such Loan and the Termination Date and (ii) as to any Eurodollar Loan, any Competitive Loan or any Swingline Loan, the last day of each Interest Period for such Loan, the date of repayment of principal of such Loan and on the Termination Date, and in addition where the applicable Interest Period is more than 3 months, then also on the date 3 months from the beginning of the Interest Period, and each 3 months thereafter. If an Interest Payment Date falls on a date which is not a Business Day, such Interest Payment Date shall be deemed to be the next succeeding Business Day, except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day.
"Interest Period" means (i) as to any Eurodollar Loan, a period of one, two, three or six month's duration, as the Borrower may elect, commencing in each case, on the date of the borrowing (including conversions, extensions and renewals), (ii) as to any Competitive Loan, a period commencing in each case on the date of the borrowing and ending on the date specified in the applicable Competitive Bid whereby the offer to make such Competitive Loan was extended (such ending date in any event to be no less than one week and not more than 180 days from the date of the borrowing) and (iii) as to any Swingline Loan, a period commencing in each case on the date of the borrowing and ending on the date agreed by the Borrower and the Swingline Lender in accordance with the provisions of Section 2.3(b)(i) (such ending date in any event to be not more than seven (7) Business Days from the date of borrowing); provided, however, (A) if any Interest Period would end on a day which is not a Business Day, such Interest Period shall be extended to the next succeeding Business Day (except that in the case of Eurodollar Loans where the next succeeding Business Day falls in the next succeeding calendar month, then on the next preceding Business Day), (B) no Interest Period shall extend beyond the Termination Date, and (C) in the case of Eurodollar Loans, where an Interest Period begins on a day for which there is no numerically corresponding day in the calendar month in which the Interest Period is to end, such Interest Period shall end on the last day of such calendar month.
"Lenders" means each of the Persons identified as a "Lender" on the signature pages hereto, and each Person which may become a Lender by way of assignment in accordance with the terms hereof, together with their successors and permitted assigns.
"Lending Installation" means, with respect to a Lender or the Administrative Agent, any office, branch, subsidiary or affiliate of such Lender or the Administrative Agent.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit arrangement, security interest, encumbrance, lien (statutory or otherwise), preference, priority or charge of any kind (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any financing or similar statement or notice filed under the Uniform Commercial Code as adopted and in effect in the relevant jurisdiction or other similar recording or notice statute, and any lease in the nature thereof).
"Loan" or "Loans" means the Term Loan (or any Base Rate Loan or Eurodollar Loan constituting a portion thereof), the Revolving Loans, the Competitive Loans and/or the Swingline Loans (or any Swingline Loan bearing interest at the Base Rate or the Quoted Rate and referred to as a Base Rate Loan or a Quoted Rate Swingline Loan), individually or collectively, as appropriate.
"Master Account" means such account as may be identified by written notice from at least two Financial Officers of the Borrower to the Administrative Agent.
"Material Adverse Effect" means a material adverse effect on (i) the condition (financial or otherwise), operations, business, assets or liabilities of the Borrower and its Subsidiaries, taken as a whole, (ii) the ability of the Borrower to perform any material obligation under the Credit Documents or (iii) any aspect of the Borrower or its business that adversely affects the material rights and remedies of the Lenders under the Credit Documents.
"Materials of Environmental Concern" means any gasoline or petroleum (including crude oil or any fraction thereof) or petroleum products or any hazardous or toxic substances, materials or wastes, defined or regulated as such in or under any Environmental Laws, including, without limitation, asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
"Moody's" means Moody's Investors Service, Inc., or any successor or assignee of the business of such company in the business of rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as defined in Sections 3(37) or 4001(a)(3) of ERISA.
"Multiple Employer Plan" means a Plan which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate and at least one employer other than the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate are contributing sponsors.
"Note" or "Notes" means any Revolving Note, Swingline Note, Competitive Note and/or Term Note, as the context may require.
"Notice of Borrowing" means a written notice of borrowing in substantially the form of Schedule 2.1(b)(i), as required by Section 2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of extension or conversion in substantially the form of Schedule 3.2, as required by Section 3.2.
"Participation Interest" means, the extension of credit by a Lender by way of a purchase of a participation in any Swingline Loans as provided in Section 2.3(b)(iii) or in any Loans as provided in Section 3.13.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Liens" means:
(ii) Liens (other than Liens created or imposed under ERISA) for taxes, assessments or governmental charges or levies not yet due or Liens for taxes being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the Property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof);
(iii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and suppliers and other Liens imposed by law or pursuant to customary reservations or retentions of title arising in the ordinary course of business, provided that any such Liens which are material secure only amounts not yet due and payable or, if due and payable, are unfiled and no other action has been taken to enforce the same or are being contested in good faith by appropriate proceedings for which adequate reserves determined in accordance with GAAP have been established (and as to which the Property subject to any such Lien is not yet subject to foreclosure, sale or loss on account thereof);
(iv) Liens (other than Liens created or imposed under ERISA) incurred or deposits made by the Borrower and its Subsidiaries in the ordinary course of business in connection with workers' compensation, unemployment insurance and other types of social security, or to secure the performance of tenders, statutory obligations, bids, leases, government contracts, performance and return-of-money bonds and other similar obligations (exclusive of obligations for the payment of borrowed money);
(v) Liens in connection with attachments or judgments (including judgment or appeal bonds) provided that the judgments secured shall, within 30 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall have been discharged within 30 days after the expiration of any such stay;
(vi) easements, rights-of-way, restrictions (including zoning restrictions), minor defects or irregularities in title and other similar charges or encumbrances not, in any material respect, impairing the use of the encumbered Property for its intended purposes;
(vii) leases or subleases granted to others not interfering in any material respect with the business of the Borrower and its Subsidiaries taken as a whole;
(viii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;
(ix) Liens on assets at the time such assets are acquired by the Borrower or any Subsidiary in accordance with Section 7.3(d); provided that such Liens are not created in contemplation of such acquisition;
(x) Liens on assets of any Person at the time such Person becomes a Subsidiary in accordance with Section 7.3(d); provided that such Liens are not created in contemplation of such Person becoming a Subsidiary;
(xi) normal and customary rights of setoff upon deposits of cash in favor of banks or other depository institutions;
(xii) Liens on receivables sold pursuant to a Commercial Credit Business Arrangement;
(xiii) Liens on inventory held by the Borrower or any of its Subsidiaries under consignment;
(xiv) Liens on any inventory of the Borrower or any of its Subsidiaries in favor of a vendor of such inventory, arising in the normal course of business upon its sale to the Borrower or any such Subsidiary; and
(xv) other Liens on Property of the Borrower and its Subsidiaries, so long as the Borrower and its Subsidiaries own at all times Property (a) unencumbered by any Liens other than Liens permitted by clauses (i) through (xiv) above and (b), having an aggregate fair market value of at least $2,000,000,000.
"Plan" means any employee benefit plan (as defined in Section 3(3) of ERISA) which is covered by ERISA and with respect to which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate is (or, if such plan were terminated at such time, would under Section 4069 of ERISA be deemed to be) an "employer" within the meaning of Section 3(5) of ERISA.
"Pricing Level" means the applicable pricing level for the Applicable Percentage shown in Schedule 1.1.
"Prime Rate" means the rate of interest per annum publicly announced or established from time to time by Fleet as its prime rate in effect at its principal office in Boston, Massachusetts, with each change in the Prime Rate being effective on the date such change is publicly announced as effective (it being understood and agreed that the Prime Rate is a reference rate used by Fleet in determining interest rates on certain loans and is not intended to be the lowest rate of interest charged on any extension of credit by Fleet to any debtor).
"Property" means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible.
"Quoted Rate" means, with respect to any Quoted Rate Swingline Loan, the fixed percentage rate per annum offered by the Swingline Lender and accepted by the Borrower with respect to such Swingline Loan as provided in accordance with the provisions of Section 2.3.
"Quoted Rate Swingline Loan" means a Swingline Loan bearing interest at a Quoted Rate.
"Register" shall have the meaning given such term in Section 10.3(c).
"Regulation D, T, U, or X" means Regulation D, T, U or X, respectively, of the Board of Governors of the Federal Reserve System as from time to time in effect and any successor to all or a portion thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping or disposing into the environment (including the abandonment or discarding of barrels, containers and other closed receptacles containing any Materials of Environmental Concern).
"Reportable Event" means any of the events set forth in Section 4043(c) of ERISA, other than those events as to which the notice requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders which are then in compliance with their obligations hereunder (as determined by the Administrative Agent) and holding in the aggregate at least 51% of (i) the Revolving Commitments and the outstanding Term Loan (and Participation Interests therein) or (ii) if the Commitments have been terminated, the outstanding Loans and Participation Interests.
"Requirement of Law" means, as to any Person, the certificate of incorporation and by-laws or other organizational or governing documents of such Person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or other Governmental Authority, in each case applicable to or binding upon such Person or any of its material property is subject.
"Revolving Commitment" means, with respect to each Lender, the commitment of such Lender in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 2.1(a) (as such amount may be reduced or increased from time to time in accordance with the provisions of this Credit Agreement), (i) to make Revolving Loans in accordance with the provisions of Section 2.1(a) and (ii) to purchase participation interests in the Swingline Loans in accordance with the provisions of Section 2.3(b)(iii).
"Revolving Commitment Percentage" means for any Lender, the percentage identified as its Revolving Commitment Percentage on Schedule 2.1(a), as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 10.3.
"Revolving Committed Amount" shall have the meaning assigned to such term in Section 2.1(a).
"Revolving Facilities" means a collective reference to (i) the revolving loan facility established pursuant to Section 2.1 and (ii) the Existing Five-Year Facility.
"Revolving Loans" shall have the meaning assigned to such term in Section 2.1(a).
"Revolving Note" means a promissory note of the Borrower in favor of a Lender delivered pursuant to Section 2.1(e) and evidencing the Revolving Loans of such Lender, as such promissory note may be amended, modified, restated or replaced from time to time.
"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, Inc., or any successor or assignee of the business of such division in the business of rating securities.
"SPV" has the meaning set forth in Section 10.3(e).
"Single Employer Plan" means any Plan which is covered by Title IV of ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Subsidiary" means, as to any Person, (a) any corporation more than 50% of whose stock of any class or classes having by the terms thereof ordinary voting power to elect a majority of the directors of such corporation (irrespective of whether or not at the time, any class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency) is at the time owned by such Person directly or indirectly through Subsidiaries, and (b) any partnership, association, joint venture or other entity in which such Person directly or indirectly through Subsidiaries has more than 50% equity interest at any time.
"Swingline Commitment" means the commitment of the Swingline Lender to make Swingline Loans in an aggregate principal amount at any time outstanding of up to the Swingline Committed Amount.
"Swingline Committed Amount" shall have the meaning assigned to such term in Section 2.3(a).
"Swingline Lender" means Fleet National Bank.
"Swingline Loan" shall have the meaning assigned to such term in Section 2.3(a).
"Swingline Note" means the promissory note of the Borrower in favor of the Swingline Lender substantially in the form of Schedule 2.3(d), as such promissory note may be amended, modified, restated or replaced from time to time.
"Syndication Agent" shall have the meaning assigned to such term in the heading hereof together with any successors and assigns.
"Termination Date" means (i) as to the Revolving Loans, Swingline Loans and Competitive Loans, May __, 2002, as such date may be extended pursuant to Section 3.4 and (ii) as to the Term Loan, May __, 2003.
"Term Loan" shall have the meaning assigned to such term in Section 2.4(a).
"Term Loan Commitment" means, with respect to each Lender, the commitment of such Lender to make its portion of the Term Loan in a principal amount equal to such Lender's Term Loan Commitment Percentage (if any) of the Term Loan.
"Term Loan Commitment Percentage" means for any Lender, the percentage identified as its Term Loan Commitment Percentage on Schedule 2.1(a), as such percentage may be modified in connection with any assignment made in accordance with the provisions of Section 10.3.
"Term Note" means a promissory note of the Borrower in favor of a Lender delivered pursuant to Section 2.4(e) and evidencing the portion of the Term Loan made by such Lender, as such promissory note may be amended, modified, restated or replaced from time to time.
"Utilization Fee" shall have the meaning set forth in Section 3.5(c).
"Utilization Fee Period" shall have the meaning assigned to such term in Section 3.5(c).
1.2 Computation of Time Periods.
For purposes of computation of periods of time hereunder, the word "from" means "from and including" and the words "to" and "until" each mean "to but excluding."
Except as otherwise expressly provided herein, all accounting terms
used herein shall be interpreted, and all financial statements and certificates
and reports as to financial matters required to be delivered to the Lenders
hereunder shall be prepared, in accordance with GAAP applied on a consistent
basis. All calculations made for the purposes of determining compliance
with this Credit Agreement shall (except as otherwise expressly provided
herein) be made by application of GAAP applied on a basis consistent with
the most recent annual or quarterly financial statements delivered pursuant
to Section 6.1 hereof (or. prior to the delivery of the first financial
statements pursuant to Section 6.1 hereof, consistent with the financial
statements as at August 26, 2000; provided, however, if (a)
the Borrower shall object to determining such compliance on such basis
at the time of delivery of such financial statements due to any change
in GAAP or the rules promulgated with respect thereto or (b) the Administrative
Agent or the Required Lenders shall so object in writing within 30 days
after delivery of such financial statements, then such calculations shall
be made on a basis consistent with the most recent financial statements
delivered by the Borrower to the Lenders as to which no such objection
shall have been made.
CREDIT FACILITIES
(ii) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is a Revolving Loan shall be in a minimum aggregate principal amount of $5,000,000 and integral multiples of $1,000,000 in excess thereof (or the remaining amount of the Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its Revolving Commitment
Percentage of each Revolving Loan borrowing available to the Administrative
Agent for the account of the Borrower as specified in Section 3.14(a),
or in such other manner as the Administrative Agent may specify in writing,
by 1:00 P.M. (Boston, Massachusetts time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds immediately available
to the Administrative Agent. Such borrowing will then be made available
to the Borrower by the Administrative Agent by crediting the Master Account
with the aggregate of the amounts made available to the Administrative
Agent by the Lenders and in like funds as received by the Administrative
Agent.
(d) Interest. Subject to the provisions of Section 3.1,
(ii) Eurodollar Loans. During such periods as Revolving Loans
shall be comprised in whole or in part of Eurodollar Loans, such Eurodollar
Loans shall bear interest at a per annum rate equal to the Eurodollar Rate
plus
the Applicable Percentage.
(e) Revolving Notes. The Revolving Loans made by each
Lender shall be evidenced by a duly executed promissory note of the Borrower
to such Lender in an original principal amount equal to such Lender's Revolving
Commitment and in substantially the form of Schedule 2.1(e).
(b) Competitive Bid Requests. The Borrower may solicit by making a written or telefax request to all of the Lenders for a Competitive Loan. To be effective, such request must be received by each of the Lenders by 2:00 P.M. (Boston, Massachusetts time) one Business Day prior to the date of the requested borrowing and must specify (i) that a Competitive Loan is requested, (ii) the amount of such Competitive Loan and (iii) the Interest Period for such Competitive Loan.
(c) Competitive Bids. Upon receipt of a request by the Borrower for a Competitive Loan, each Lender may, in its sole discretion, submit a Competitive Bid containing an offer to make a Competitive Loan in an amount up to the amount specified in the related request for Competitive Loans. Such Competitive Bid shall be submitted to the Borrower by telephone notice (to be immediately confirmed by telecopy) no later than 10:30 A.M. (Boston, Massachusetts time) on the date of the requested Competitive Loan. Competitive Bids so made shall be irrevocable. Each Competitive Bid shall specify (i) the date of the proposed Competitive Loan, (ii) the maximum and minimum principal amounts of the Competitive Loan for which such offer is being made (which may be for all or a part of (but not more than) the amount requested by the Borrower), (iii) the applicable Competitive Bid Rate, and (iv) the applicable Interest Period.
(d) Acceptance of Competitive Bids. The Borrower may, before 1:00 P.M. (Boston, Massachusetts time) on the date of the requested Competitive Loan, accept any Competitive Bid by giving the applicable Lender and the Administrative Agent telephone notice (immediately confirmed in writing) of (i) the Lender or Lenders whose Competitive Bid(s) is/are accepted, (ii) the principal amount of the Competitive Bid(s) so accepted and (iii) the Interest Period of the Competitive Bid(s) so accepted. The Borrower may accept any Competitive Bid in whole or in part; provided, however, that (a) the principal amount of each Competitive Loan may not exceed the maximum amount offered in the Competitive Bid and may not be less than the minimum amount offered in the Competitive Bid, (b) the principal amount of each Competitive Loan may not exceed the total amount requested pursuant to subsection (a) above, (c) the Borrower shall not accept a Competitive Bid made at a particular Competitive Bid Rate if it has decided to reject a Competitive Bid made at a lower Competitive Bid Rate and (d) if the Borrower shall accept a Competitive Bid or Bids made at a particular Competitive Bid Rate but the amount of such Competitive Bid or Bids shall cause the total amount of Competitive Bids to be accepted by the Borrower to exceed the total amount requested pursuant to subsection (a) above, then the Borrower shall accept a portion of such Competitive Bid or Bids in an amount equal to the total amount requested pursuant to subsection (a) above less the amount of other Competitive Bids accepted with respect to such request, which acceptance, in the case of multiple Competitive Bids at the same Competitive Bid Rate, shall be made pro rata in accordance with each such Competitive Bid at such Competitive Bid Rate. Competitive Bids so accepted by the Borrower shall be irrevocable.
(e) Funding of Competitive Loans. Upon acceptance by the Borrower pursuant to subsection (d) above of all or a portion of any Lender's Competitive Bid, such Lender shall, before such time as determined by such Lender in accordance with such Lender's customary practices, on the date of the requested Competitive Loan, make such Competitive Loan available by crediting the Master Account with the amount of such Competitive Loan.
(f) Competitive Notes. The Competitive Loans of each Lender shall be evidenced by a single Competitive Note duly executed on behalf of the Borrower, dated the date hereof, in substantially the form of Schedule 2.2(f), payable to the order of such Lender.
(g) Repayment of Competitive Loans. The Borrower shall repay to each Lender which has made a Competitive Loan on the last day of the Interest Period for such Competitive Loan the then unpaid principal amount of such Competitive Loan. Unless the Borrower shall repay the maturing Competitive Loan or give to notice to the Administrative Agent of its intent to otherwise repay such Loan not later than 11:30 A.M. (Boston, Massachusetts time) on the last day of the Interest Period, the Borrower shall be deemed to have requested a Revolving Loan advance comprised of Base Rate Loans in the amount of the maturing Competitive Loan, the proceeds of which will be used to repay such Competitive Loan.
(h) Interest on Competitive Loans. The Borrower shall pay interest to each Lender on the unpaid principal amount of each Competitive Loan from and including the date of such Competitive Loan to but excluding the stated maturity date thereof, at the applicable Competitive Bid Rate for such Competitive Loan (computed on the basis of the actual number of days elapsed over a year of 360 days). Interest on Competitive Loans shall be payable in arrears on each applicable Interest Payment Date (or at such other times as may be specified herein).
(i) Limitation on Number of Competitive Loans. The Borrower shall not request a Competitive Loan if, assuming the maximum amount of Competitive Loans so requested is borrowed as of the date of such request, the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding Competitive Loans plus the aggregate principal amount of outstanding Swingline Loans would exceed the aggregate Revolving Committed Amount.
(j) Change in Procedures for Requesting Competitive Loans. The
Borrower and the Lenders hereby agree that, notwithstanding any other provision
to the contrary contained in this Credit Agreement, upon mutual agreement
of the Administrative Agent and the Borrower and written notice by the
Administrative Agent to the Lenders, all further requests by the Borrower
for Competitive Loans shall be made by the Borrower to the Lenders through
the Administrative Agent in accordance with such procedures as shall be
prescribed by the Administrative Agent and acceptable to the Borrower and
each Lender.
(ii) Minimum Amounts. Each Swingline Loan advance shall be in a minimum principal amount of $1,000,000 and in integral multiples of $500,000 in excess thereof (or the remaining amount of the Swingline Committed Amount, if less).
(iii) Repayment of Swingline Loans. The principal amount of all
Swingline Loans shall be due and payable on the earlier of (A) the maturity
date agreed to by the Swingline Lender and the Borrower with respect to
such Loan (which maturity date shall not be a date more than seven (7)
Business Days from the date of advance thereof) or (B) the Termination
Date. The Swingline Lender may, at any time, in its sole discretion, by
written notice to the Borrower and the Lenders, demand repayment of its
Swingline Loans by way of a Revolving Loan advance, in which case the Borrower
shall be deemed to have requested a Revolving Loan advance comprised solely
of Base Rate Loans in the amount of such Swingline Loans; provided,
however,
that any such demand shall be deemed to have been given one Business Day
prior to the Termination Date and on the date of the occurrence of any
Event of Default described in Section 8.1 and upon acceleration of the
indebtedness hereunder and the exercise of remedies in accordance with
the provisions of Section 8.2. Each Lender hereby irrevocably agrees to
make its pro rata share of each such Revolving Loan in the amount, in the
manner and on the date specified in the preceding sentence notwithstanding
(I) the amount of such borrowing may not comply with the minimum amount
for advances of Revolving Loans otherwise required hereunder, (II) whether
any conditions specified in Section 4.2 are then satisfied, (III) whether
a Default or an Event of Default then exists, (IV) failure of any such
request or deemed request for Revolving Loan to be made by the time otherwise
required hereunder, (V) whether the date of such borrowing is a date on
which Revolving Loans are otherwise permitted to be made hereunder or (VI)
any termination of the Commitments relating thereto immediately prior to
or contemporaneously with such borrowing. In the event that any Revolving
Loan cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each Lender
hereby agrees that it shall forthwith purchase (as of the date such borrowing
would otherwise have occurred, but adjusted for any payments received from
the Borrower on or after such date and prior to such purchase) from the
Swingline Lender such participations in the outstanding Swingline Loans
as shall be necessary to cause each such Lender to share in such Swingline
Loans ratably based upon its Revolving Commitment Percentage (determined
before giving effect to any termination of the Commitments pursuant to
Section 3.4), provided that (A) all interest payable on the Swingline
Loans shall be for the account of the Swingline Lender until the date as
of which the respective participation is purchased and (B) at the time
any purchase of participations pursuant to this sentence is actually made,
the purchasing Lender shall be required to pay to the Swingline Lender,
to the extent not paid to the Swingline Lender by the Borrower in accordance
with the terms of subsection (c)(ii) hereof, interest on the principal
amount of participation purchased for each day from and including the day
upon which such borrowing would otherwise have occurred to but excluding
the date of payment for such participation, at the rate equal to the Federal
Funds Rate.
(B) Quoted Rate Swingline Loans. If such Swingline Loan is a
Quoted Rate Swingline Loan, at a per annum rate (computed on the basis
of the actual number of days elapsed over a year of 360 days) equal to
the Quoted Rate applicable thereto.
(ii) Payment of Interest. Interest on Swingline Loans shall be
payable in arrears on each applicable Interest Payment Date (or at such
other times as may be specified herein).
(b) Minimum Amounts. Each Eurodollar Loan or Base Rate Loan that is part of the Term Loan shall be in an aggregate principal amount that is not less than $5,000,000 and integral multiples of $1,000,000 (or the then remaining principal balance of the Term Loan, if less).
(c) Repayment of Term Loan. The entire unpaid principal amount of the Term Loan shall be due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1:
(ii) Eurodollar Loans. During such periods as the Term Loan shall
be comprised in whole or in part of Eurodollar Loans, such Eurodollar Loans
shall bear interest at a per annum rate equal to the Eurodollar Rate plus
the Applicable Percentage.
(e) Term Notes. The portion of the Term Loan made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower to
such Lender substantially in the form of Schedule 2.4(e).
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
Upon the occurrence, and during the continuance, of an Event of Default, the principal of and, to the extent permitted by law, interest on the Loans and any other amounts owing hereunder or under the other Credit Documents shall bear interest, payable on demand, at a per annum rate 1% greater than the rate which would otherwise be applicable (or if no rate is applicable, whether in respect of interest, fees or other amounts, then 1% greater than the Base Rate).
Subject to the terms of Section 4.2, the Borrower shall have the option, on any Business Day, to extend existing Loans into a subsequent permissible Interest Period or to convert Loans into Loans of another interest rate type; provided, however, that (a) except as provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans only on the last day of the Interest Period applicable thereto, (b) Eurodollar Loans may be extended, and Base Rate Loans may be converted into Eurodollar Loans, only if no Default or Event of Default is in existence on the date of extension or conversion, (c) Loans extended as, or converted into, Eurodollar Loans shall be subject to the terms of the definition of "Interest Period" set forth in Section 1.1 and shall be in such minimum amounts as provided in Section 2.1(b)(ii), (d) no more than 25 Eurodollar Loans shall be outstanding hereunder at any time (it being understood that, for purposes hereof, Eurodollar Loans with different Interest Periods shall be considered as separate Eurodollar Loans, even if they begin on the same date, although borrowings, extensions and conversions may, in accordance with the provisions hereof, be combined at the end of existing Interest Periods to constitute a new Eurodollar Loan with a single Interest Period), (e) any request for extension or conversion of a Eurodollar Loan which shall fail to specify an Interest Period shall be deemed to be a request for an Interest Period of one month and (f) Competitive Loans and Swingline Loans may not be extended or converted pursuant to this Section 3.2. Each such extension or conversion shall be effected by a Financial Officer of the Borrower giving a Notice of Extension/Conversion (or telephone notice promptly confirmed in writing) to the Administrative Agent prior to 11:30 A.M. (Boston, Massachusetts time) on the Business Day of, in the case of the extension of Base Rate Loans, and prior to 2:00 P.M. (Boston, Massachusetts time) on the third Business Day prior to, in the case of the extension of a Eurodollar Loan as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed extension or conversion, specifying the date of the proposed extension or conversion, the Loans to be so extended or converted, the types of Loans into which such Loans are to be converted and, if appropriate, the applicable Interest Periods with respect thereto. Each request for extension or conversion shall be irrevocable and shall constitute a representation and warranty by the Borrower of the matters specified in subsections (b), (c), (d) and (e) of Section 4.2. In the event the Borrower fails to request extension or conversion of any Eurodollar Loan in accordance with this Section, or any such conversion or extension is not permitted or required by this Section, then such Eurodollar Loan shall be automatically converted into a Base Rate Loan at the end of the Interest Period applicable thereto. The Administrative Agent shall give each Lender notice as promptly as practicable of any such proposed extension or conversion affecting any Loan.
(b) Mandatory Prepayments.
(ii) Debt and Equity Issuances. During any period in which the
Borrower has a senior unsecured (non-credit enhanced) long term debt rating
from S&P of below BBB- and a senior unsecured (non-credit enhanced)
long term debt rating from Moody's of below Baa3, immediately upon receipt
by the Borrower or any Subsidiary of proceeds from any Debt or Equity Issuance
(as defined below) the Borrower shall cause 50% of the net cash proceeds
of such Debt or Equity Issuance to be applied as follows:
(B) to permanently reduce on a Dollar for Dollar basis commitments outstanding
under the Revolving Facilities (regardless of whether there are any outstanding
borrowings being prepaid), with such reductions applied pro rata to the
Revolving Facilities (based on outstanding commitments thereunder) to the
extent of outstanding commitments under each Revolving Facility (it being
understood that the aggregate amount of commitment reductions required
to be made by the Borrower under both Revolving Facilities shall not exceed
50% of the net cash proceeds of such Debt or Equity Issuance and that a
commitment reduction under a Revolving Facility shall reduce the individual
commitments of the lenders under such facility on a pro rata basis).
(b) Termination Date. Subject to subclauses (c) and (d) below, the Revolving Commitments of the Lenders shall automatically terminate on the Termination Date.
(c) Extension. The Borrower may, no earlier than 60 days and no later than 30 days prior to the Termination Date applicable to Revolving Loans, Swingline Loans and Competitive Loans, by notice to the Administrative Agent, make written request of the Lenders to extend such Termination Date for an additional period of 364 days. The Administrative Agent will give prompt notice to each of the Lenders of its receipt of any such request for extension of such Termination Date. Each Lender, in its sole discretion, shall make a determination not more than 30 days nor less than 25 days prior to such Termination Date as to whether or not it will agree to extend such Termination Date as requested; provided, however, that failure by any Lender to make a timely response to the Borrower's request for extension of such Termination Date shall be deemed to constitute a refusal by the Lender to extend such Termination Date. If, in response to a request for an extension of such Termination Date, one or more Lenders shall fail to agree to the requested extension (the "Disapproving Lenders"), then the Borrower may elect to either (A) continue the revolving credit facility hereunder at the same level of Revolving Commitments by replacing each of the Disapproving Lenders in accordance with Section 3.16, or (B) provided that the requested extension is approved by Lenders holding at least 51% of the Revolving Commitments hereunder (including for purposes hereof any Replacement Lenders which may replace a Disapproving Lender, the "Approving Lenders"), extend and continue the revolving credit facility at a lower aggregate amount equal to the Revolving Commitments held by the Approving Lenders. In any such case, (i) such Termination Date relating to the Revolving Commitments held by the Disapproving Lenders shall remain as then in effect with repayment of obligations held by such Disapproving Lenders being due on such date and termination of their respective Revolving Commitments on such date, and (ii) such Termination Date relating to the Revolving Commitments held by the Approving Lenders shall be extended by an additional period of 364 days.
(d) Term Out Option. If (i) the Borrower shall have delivered to the Administrative Agent a written notice requesting an extension of the Termination Date applicable to Revolving Loans, Swingline Loans and Competitive Loans at least three (3) Business Days prior to such Termination Date then in effect (which notice the Administrative Agent shall promptly transmit to each Lender) and (ii) no Default or Event of Default exists on the otherwise applicable Termination Date, then such otherwise applicable Termination Date shall be extended (provided that no prior elections have been made under this Section 2.4(d)) to the first anniversary of such Termination Date then in effect. No additional borrowings under the Revolving Credit Facility set forth in Section 2.1 may be made during such extension period and any amounts repaid on Loans outstanding under such facility during such extension period may not be reborrowed. The otherwise Applicable Percentage on all Loans outstanding under this option shall be increased by an additional 0.125% per annum.
(b) Administrative Fees. The Borrower agrees to pay to the Administrative Agent, for its own account, the fees referred to in the Administrative Agent's Fee Letter (collectively, the "Administrative Agent's Fees").
(c) Utilization Fee. During such periods as the aggregate principal amount of all outstanding Loans is greater than or equal to 33% of the Revolving Committed Amount (each a "Utilization Fee Period"), the Borrower agrees to pay to the Administrative Agent for the account of each Lender a fee (the "Utilization Fee") on all Loans outstanding during each such Utilization Fee Period computed at a per annum rate for each day during such period equal to the Applicable Percentage for the Utilization Fee in effect from time to time. The Utilization Fee shall be due and payable in arrears on the last Business Day of each March, June, September and December for all Utilization Fee Periods occurring during the immediately preceding quarter (or portion thereof), beginning with the first of such dates to occur after the Closing Date.
If any Lender determines the amount of capital required or expected to be maintained by such Lender, any Lending Installation of such Lender or any corporation controlling such Lender is increased as a result of a Change, then, within 15 days of demand by such Lender, the Borrower shall pay such Lender the amount necessary to compensate for any shortfall in the rate of return on the portion of such increased capital which such Lender determines is attributable to this Credit Agreement, its Loans or its obligation to make Loans hereunder (after taking into account such Lender's policies as to capital adequacy). "Change" means (i) any change after the Closing Date in the Risk-Based Capital Guidelines or (ii) any adoption of or change in any other law, governmental or quasi-governmental rule, regulation, policy, guideline, interpretation, or directive (whether or not having the force of law) after the Closing Date which affects the amount of capital required or expected to be maintained by any Lender or any Lending Installation or any corporation controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based capital guidelines in effect in the United States on the Closing Date, including transition rules, and (ii) the corresponding capital regulations promulgated by regulatory authorities outside the United States implementing the July 1988 report of the Basle Committee on Banking Regulation and Supervisory Practices Entitled "International Convergence of Capital Measurements and Capital Standards," including transition rules, and any amendments to such regulations adopted prior to the Closing Date.
3.7 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Administrative Agent shall have reasonably determined that, by reason of circumstances affecting the relevant market, adequate and reasonable means do not exist for ascertaining the Eurodollar Rate for such Interest Period, the Administrative Agent shall give telecopy or telephonic notice thereof to the Borrower and the Lenders as soon as practicable thereafter. If such notice is given (a) any Eurodollar Loans requested to be made on the first day of such Interest Period shall be made as Base Rate Loans and (b) any Loans that were to have been converted on the first day of such Interest Period to or continued as Eurodollar Loans shall be converted to or continued as Base Rate Loans. Until such notice has been withdrawn by the Administrative Agent, no further Eurodollar Loans shall be made or continued as such, nor shall the Borrower have the right to convert Base Rate Loans to Eurodollar Loans.
Notwithstanding any other provision herein, if the adoption of or any change in any Requirement of Law or in the interpretation or application thereof occurring after the Closing Date shall make it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated by this Credit Agreement, (a) such Lender shall promptly give written notice of such circumstances to the Borrower and the Administrative Agent (which notice shall be withdrawn whenever such circumstances no longer exist), (b) the commitment of such Lender hereunder to make Eurodollar Loans, continue Eurodollar Loans as such and convert a Base Rate Loan to Eurodollar Loans shall forthwith be canceled and, until such time as it shall no longer be unlawful for such Lender to make or maintain Eurodollar Loans, such Lender shall then have a commitment only to make a Base Rate Loan when a Eurodollar Loan is requested and (c) such Lender's Loans then outstanding as Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans on the respective last days of the then current Interest Periods with respect to such Loans or within such earlier period as required by law. If any such conversion of a Eurodollar Loan occurs on a day which is not the last day of the then current Interest Period with respect thereto, the Borrower shall pay to such Lender such amounts, if any, as may be required pursuant to Section 3.11.
If any law or any governmental or quasi-governmental rule, regulation, policy, guideline or directive (whether or not having the force of law), or any interpretation thereof, or the compliance of any Lender therewith,
(b) imposes or increases or deems applicable any reserve, assessment, insurance charge, special deposit or similar requirements against assets of, deposits with or for the account of, or credit extended by, any Lender or any applicable Lending Installation (other than reserves and assessments taken into account in determining the Base Rate);
then, within 15 days of demand by such Lender, the Borrower shall pay such Lender that portion of such increased expense incurred or reduction in an amount received which such Lender determines is attributable to making, funding and maintaining its Loans and its Commitments. This covenant shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.
3.10 Withholding Tax Exemption.
Each Lender that is not incorporated under the laws of the United States of America or a state thereof shall:
(ii) deliver to the Borrower and the Administrative Agent two (2) further copies of any such form or certification on or before the date that any such form or certification expires or becomes obsolete and after the occurrence of any event requiring a change in the most recent form previously delivered by it to the Borrower; and
(iii) obtain such extensions of time for filing and complete such forms
or certifications as may reasonably be requested by the Borrower or the
Administrative Agent; or
The Borrower promises to indemnify each Lender and to hold each Lender harmless from any loss or expense which such Lender may sustain or incur (other than through such Lender's gross negligence or willful misconduct) as a consequence of (a) default by the Borrower in making a borrowing of, conversion into or continuation of Eurodollar Loans or Quoted Rate Swingline Loans after the Borrower has given a notice requesting the same in accordance with the provisions of this Credit Agreement, (b) default by the Borrower in making any prepayment of a Eurodollar Loan or a Quoted Rate Swingline Loan after the Borrower has given a notice thereof in accordance with the provisions of this Credit Agreement or (c) the making of a prepayment of Eurodollar Loans or Quoted Rate Swingline Loans on a day which is not the last day of an Interest Period with respect thereto. With respect to Eurodollar Loans, such indemnification may include an amount equal to the excess, if any, of (i) the amount of interest which would have accrued on the amount so prepaid, or not so borrowed, converted or continued, for the period from the date of such prepayment or of such failure to borrow, convert or continue to the last day of the applicable Interest Period (or, in the case of a failure to borrow, convert or continue, the Interest Period that would have commenced on the date of such failure) in each case at the applicable rate of interest for such Eurodollar Loans provided for herein (excluding, however, the Applicable Percentage included therein, if any) over (ii) the amount of interest (as reasonably determined by such Lender) which would have accrued to such Lender on such amount by placing such amount on deposit for a comparable period with leading banks in the interbank Eurodollar market. The covenants of the Borrower set forth in this Section 3.11 shall survive the termination of this Credit Agreement and the payment of the Loans and all other amounts payable hereunder.
Except to the extent otherwise provided herein:
(b) Advances. Unless the Administrative Agent shall have been notified in writing by any Lender prior to a borrowing that such Lender will not make the amount that would constitute its ratable share of such borrowing available to the Administrative Agent, the Administrative Agent may assume that such Lender is making such amount available to the Administrative Agent, and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower a corresponding amount. If such amount is not made available to the Administrative Agent by such Lender within the time period specified therefor hereunder, such Lender shall pay to the Administrative Agent, on demand, such amount with interest thereon at a rate equal to the Federal Funds Rate for the period until such Lender makes such amount immediately available to the Administrative Agent. A certificate of the Administrative Agent submitted to any Lender with respect to any amounts owing under this subsection shall be conclusive in the absence of manifest error.
The Lenders agree among themselves that, in the event that any Lender shall obtain payment in respect of any Loan or any other obligation owing to such Lender under this Credit Agreement through the exercise of a right of setoff, banker's lien or counterclaim, or pursuant to a secured claim under Section 506 of Title 11 of the United States Code or other security or interest arising from, or in lieu of, such secured claim, received by such Lender under any applicable bankruptcy, insolvency or other similar law or otherwise, or by any other means, in excess of its pro rata share of such payment as provided for in this Credit Agreement, such Lender shall promptly purchase from the other Lenders a participation in such Loans and other obligations in such amounts, and make such other adjustments from time to time, as shall be equitable to the end that all Lenders share such payment in accordance with their respective ratable shares as provided for in this Credit Agreement. The Lenders further agree among themselves that if payment to a Lender obtained by such Lender through the exercise of a right of setoff, banker's lien, counterclaim or other event as aforesaid shall be rescinded or must otherwise be restored, each Lender which shall have shared the benefit of such payment shall, by repurchase of a participation theretofore sold, return its share of that benefit (together with its share of any accrued interest payable with respect thereto) to each Lender whose payment shall have been rescinded or otherwise restored. The Borrower agrees that any Lender so purchasing such a participation may, to the fullest extent permitted by law, exercise all rights of payment, including setoff, banker's lien or counterclaim, with respect to such participation as fully as if such Lender were a holder of such Loan or other obligation in the amount of such participation. Except as otherwise expressly provided in this Credit Agreement, if any Lender or the Administrative Agent shall fail to remit to the Administrative Agent or any other Lender an amount payable by such Lender or the Administrative Agent to the Administrative Agent or such other Lender pursuant to this Credit Agreement on the date when such amount is due, such payments shall be made together with interest thereon for each date from the date such amount is due until the date such amount is paid to the Administrative Agent or such other Lender at a rate per annum equal to the Federal Funds Rate. If under any applicable bankruptcy, insolvency or other similar law, any Lender receives a secured claim in lieu of a setoff to which this Section 3.13 applies, such Lender shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Lenders under this Section 3.13 to share in the benefits of any recovery on such secured claim.
3.14 Payments, Computations, Etc.
(b) Allocation of Payments After Event of Default. Notwithstanding any other provisions of this Credit Agreement to the contrary, after the occurrence and during the continuance of an Event of Default, all amounts collected or received by the Administrative Agent or any Lender on account of the Loans, Fees or any other amounts outstanding under any of the Credit Documents shall be paid over or delivered as follows:
SECOND, to payment of any fees owed to the Administrative Agent;
THIRD, to the payment of all reasonable out-of-pocket costs and expenses (including without limitation, reasonable attorneys' fees) of each of the Lenders in connection with enforcing its rights under the Credit Documents or otherwise with respect to amounts owing to such Lender;
FOURTH, to the payment of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the Loans;
SIXTH, to all other amounts and other obligations which shall have become due and payable under the Credit Documents or otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above; and
SEVENTH, to the payment of the surplus, if any, to whoever may be lawfully
entitled to receive such surplus.
(b) The Administrative Agent shall maintain the Register pursuant to Section 10.3(c) hereof, and a subaccount for each Lender, in which Register and subaccounts (taken together) shall be recorded (i) the amount, type and Interest Period of each such Loan hereunder, (ii) the amount of any principal or interest due and payable or to become due and payable to each Lender hereunder and (iii) the amount of any sum received by the Administrative Agent hereunder from or for the account of the Borrower and each Lender's share thereof. The Administrative Agent will make reasonable efforts to maintain the accuracy of the subaccounts referred to in the preceding sentence and to promptly update such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts maintained pursuant to subsection (b) of this Section 3.15 (and, if consistent with the entries of the Administrative Agent, subsection (a)) shall be prima facie, but not conclusive, evidence of the existence and amounts of the obligations of the Borrower therein recorded; provided, however, that the failure of any Lender or the Administrative Agent to maintain any such account, such Register or such subaccount, as applicable, or any error therein, shall not in any manner affect the obligation of the Borrower to repay the Loans made by such Lender in accordance with the terms hereof.
In the event any Lender delivers to the Borrower any notice in accordance
with Sections 3.6, 3.8, 3.9 or 3.10, then the Borrower shall have the right,
if no Default or Event of Default then exists, to replace such Lender (the
"Replaced Lender") with one or more additional banks or financial
institutions (collectively, the "Replacement Lender"), provided
that (A) at the time of any replacement pursuant to this Section 3.16,
the Replacement Lender shall enter into one or more assignment agreements
substantially in the form of Schedule 10.3(b) pursuant to, and in
accordance with the terms of, Section 10.3(b) (and with all fees payable
pursuant to said Section 10.3(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the rights
and obligations of the Replaced Lender hereunder and, in connection therewith,
shall pay to the Replaced Lender in respect thereof an amount equal to
the sum of (a) the principal of, and all accrued interest on, all outstanding
Loans of the Replaced Lender, and (b) all accrued, but theretofore unpaid,
fees owing to the Replaced Lender pursuant to Section 3.5(a), and (B) all
obligations of the Borrower owing to the Replaced Lender (including all
obligations, if any, owing pursuant to Section 3.6, 3.8 or 3.9, but excluding
those obligations specifically described in clause (A) above in respect
of which the assignment purchase price has been, or is concurrently being
paid) shall be paid in full to such Replaced Lender concurrently with such
replacement.
CONDITIONS
The obligation of the Lenders to enter into this Credit Agreement and to make the initial Loans shall be subject to satisfaction of the following conditions (in form and substance acceptable to the Lenders):
(b) The Administrative Agent shall have received an appropriate original Revolving Note for each Lender, executed by the Borrower;
(c) The Administrative Agent shall have received an appropriate original Competitive Note for each Lender, executed by the Borrower;
(d) The Administrative Agent shall have received an appropriate original Swingline Note for the Swingline Lender, executed by the Borrower;
(e) The Administrative Agent shall have received an appropriate original Term Note for each Lender, executed by the Borrower;
(f) The Administrative Agent shall have received all documents it may reasonably request relating to the existence and good standing of the Borrower, the corporate or other necessary authority for and the validity of the Credit Documents, and any other matters relevant thereto, all in form and substance reasonably satisfactory to the Administrative Agent;
(g) The Administrative Agent shall have received a legal opinion of Harry L. Goldsmith, Esq., general counsel for the Borrower, dated as of the Closing Date and substantially in the form of Schedule 4.1(g);
(h) Since August 26, 2000 there shall not have occurred nor otherwise exist an event or condition which has a Material Adverse Effect;
(i) The Administrative Agent shall have received, for its own account and for the accounts of the Lenders, all fees and expenses required by this Credit Agreement or any other Credit Document to be paid on or before the Closing Date;
(j) The commitments of the Lenders under the Existing 364-Day Credit Agreement shall have been terminated; and
(k) The Administrative Agent shall have received such other documents, agreements or information which may be reasonably requested by the Administrative Agent.
The obligations of each Lender to make, convert or extend any Loan (including the initial Loans) are subject to satisfaction of the following conditions in addition to satisfaction on the Closing Date of the conditions set forth in Section 4.1:
(b) The representations and warranties set forth in Section 5 shall be, subject to the limitations set forth therein, true and correct in all material respects as of such date (except for those which expressly relate to an earlier date);
(c) There shall not have been commenced against the Borrower an involuntary case under any applicable bankruptcy, insolvency or other similar law now or hereafter in effect, or any case, proceeding or other action for the appointment of a receiver, liquidator, assignee, custodian, trustee, sequestrator (or similar official) of the Borrower or for any substantial part of its Property or for the winding up or liquidation of its affairs, and such involuntary case or other case, proceeding or other action shall remain undismissed, undischarged or unbonded;
(d) No Default or Event of Default shall exist and be continuing either prior to or after giving effect thereto; and
(e) Immediately after giving effect to the making of such Loan (and the application of the proceeds thereof), the sum of the aggregate principal amount of outstanding Revolving Loans plus the aggregate principal amount of outstanding Competitive Loans plus the aggregate principal amount of outstanding Swingline Loans shall not exceed the Revolving Committed Amount.
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents to the Administrative Agent and each Lender that:
The audited consolidated balance sheet of the Borrower and its consolidated Subsidiaries as of August 26, 2000 and the audited consolidated statements of earnings and statements of cash flows for the year ended August 26, 2000 have heretofore been furnished to each Lender. Such financial statements (including the notes thereto) (a) have been audited by Ernst & Young LLP, (b) have been prepared in accordance with GAAP consistently applied throughout the periods covered thereby and (c) present fairly (on the basis disclosed in the footnotes to such financial statements) the consolidated financial condition, results of operations and cash flows of the Borrower and its consolidated Subsidiaries as of such date and for such periods. During the period from August 26, 2000 to and including the Closing Date, there has been no sale, transfer or other disposition by the Borrower or any of its Subsidiaries of any material part of the business or property of the Borrower and its consolidated Subsidiaries, taken as a whole, and no purchase or other acquisition by any of them of any business or property (including any capital stock of any other person) material in relation to the consolidated financial condition of the Borrower and its consolidated Subsidiaries, taken as a whole, in each case, which, is not reflected in the foregoing financial statements or in the notes thereto and has not otherwise been disclosed in writing to the Lenders on or prior to the Closing Date.
5.2 Organization; Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized, validly existing and is in good standing under the laws of the jurisdiction of its incorporation or organization, (b) has the corporate or other necessary power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, except to the extent that the failure to have such legal right would not be reasonably expected to have a Material Adverse Effect, (c) is duly qualified as a foreign entity and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification, other than in such jurisdictions where the failure to be so qualified and in good standing would not be reasonably expected to have a Material Adverse Effect, and (d) is in compliance with all material Requirements of Law, except to the extent that the failure to comply therewith would not, in the aggregate, be reasonably expected to have a Material Adverse Effect.
5.3 Power; Authorization; Enforceable Obligations.
The Borrower has the corporate or other necessary power and authority, and the legal right, to make, deliver and perform the Credit Documents to which it is a party, and in the case of the Borrower, to borrow hereunder, and has taken all necessary corporate action to authorize the borrowings on the terms and conditions of this Credit Agreement and to authorize the execution, delivery and performance of the Credit Documents to which it is a party. No consent or authorization of, filing with, notice to or other similar act by or in respect of, any Governmental Authority or any other Person is required to be obtained or made by or on behalf of the Borrower in connection with the borrowings hereunder or with the execution, delivery, performance, validity or enforceability of the Credit Documents to which the Borrower is a party. This Credit Agreement has been, and each other Credit Document to which the Borrower is a party will be, duly executed and delivered on behalf of the Borrower. This Credit Agreement constitutes, and each other Credit Document to which the Borrower is a party when executed and delivered will constitute, a legal, valid and binding obligation of the Borrower enforceable against such party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
The execution, delivery and performance of the Credit Documents by the Borrower, the borrowings hereunder and the use of the proceeds thereof (a) will not violate any Requirement of Law or contractual obligation of the Borrower or any of its Subsidiaries in any respect that would reasonably be expected to have a Material Adverse Effect, (b) will not result in, or require, the creation or imposition of any Lien on any of the properties or revenues of any of the Borrower or any of its Subsidiaries pursuant to any such Requirement of Law or contractual obligation, and (c) will not violate or conflict with any provision of the Borrower's articles of incorporation or by-laws.
Except as disclosed in Schedule 5.5, there are no actions, suits or proceedings pending or, to the best knowledge of the Borrower, threatened against or affecting the Borrower, any of its Subsidiaries or any of its properties before any Governmental Authority that (a) could reasonably be expected to have a Material Adverse Effect or (b) in any manner draw into question the validity, legality or enforceability of any Credit Document or any transaction contemplated thereby.
Neither the Borrower nor any of its Subsidiaries is in default under or with respect to any of their contractual obligations in any respect which would be reasonably expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing.
5.7 Ownership of Property; Liens.
Each of the Borrower and its Subsidiaries has good record and marketable title in fee simple to, or a valid leasehold interest in, all its material real property, and good title to, or a valid leasehold interest in, all its other material property, and none of such property is subject to any Lien, except for Permitted Liens.
5.8 No Burdensome Restrictions.
Except as previously disclosed in writing to the Lenders on or prior to the Closing Date, no Requirement of Law or contractual obligation of the Borrower or any of its Subsidiaries would be reasonably expected to have a Material Adverse Effect.
Each of the Borrower and its Subsidiaries has filed or caused to be filed all United States federal income tax returns and all other material tax returns which, to the best knowledge of the Borrower, are required to be filed and has paid (a) all taxes shown to be due and payable on said returns or (b) all taxes shown to be due and payable on any assessments of which it has received notice made against it or any of its property and all other taxes, fees or other charges imposed on it or any of its property by any Governmental Authority (other than any (i) taxes, fees or other charges with respect to which the failure to pay, in the aggregate, would not have a Material Adverse Effect or (ii) taxes, fees or other charges the amount or validity of which are currently being contested and with respect to which reserves in conformity with GAAP have been provided on the books of such Person), and no tax Lien has been filed, and, to the best knowledge of the Borrower, no claim is being asserted, with respect to any such tax, fee or other charge.
Except as would not result in a Material Adverse Effect:
(b) The actuarial present value of all "benefit liabilities" (as defined in Section 4001(a)(16) of ERISA), whether or not vested, under each Single Employer Plan, as of the last annual valuation date prior to the date on which this representation is made or deemed made (determined, in each case, utilizing the actuarial assumptions used in such Plan's most recent actuarial valuation report), did not exceed as of such valuation date the fair market value of the assets of such Plan.
(c) Neither the Borrower, any of the Subsidiaries of the Borrower nor any ERISA Affiliate has incurred, or, to the best knowledge of the Borrower, could be reasonably expected to incur, any withdrawal liability under ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the Borrower, any of the Subsidiaries of the Borrower nor any ERISA Affiliate would become subject to any withdrawal liability under ERISA if the Borrower, any of the Subsidiaries of the Borrower or any ERISA Affiliate were to withdraw completely from all Multiemployer Plans and Multiple Employer Plans as of the valuation date most closely preceding the date on which this representation is made or deemed made. Neither the Borrower, any of the Subsidiaries of the Borrower nor any ERISA Affiliate has received any notification that any Multiemployer Plan is in reorganization (within the meaning of Section 4241 of ERISA), is insolvent (within the meaning of Section 4245 of ERISA), or has been terminated (within the meaning of Title IV of ERISA), and no Multiemployer Plan is, to the best knowledge of the Borrower, reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility has occurred with respect to a Plan which has subjected or may subject the Borrower, any of the Subsidiaries of the Borrower or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which the Borrower, any of the Subsidiaries of the Borrower or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.
(e) Neither the Borrower, any Subsidiary of the Borrower nor any ERISA Affiliates has any material liability with respect to "expected post-retirement benefit obligations" within the meaning of the Financial Accounting Standards Board Statement 106.
(f) Neither the execution and delivery of this Credit Agreement nor the consummation of the financing transactions contemplated thereunder will involve any transaction which is subject to the prohibitions of Sections 404, 406 or 407 of ERISA or in connection with which a tax could be imposed pursuant to Section 4975 of the Code. The representation by the Borrower in the preceding sentence is made in reliance upon and subject to the accuracy of the Lenders' representation in Section 10.15 with respect to their source of funds and is subject, in the event that the source of the funds used by the Lenders in connection with this transaction is an insurance company's general asset account, to the application of Prohibited Transaction Class Exemption 95-60, 60 Fed. Reg. 35,925 (1995), compliance with the regulations issued under Section 401(c)(1)(A) of ERISA, or the issuance of any other prohibited transaction exemption or similar relief, to the effect that assets in an insurance company's general asset account do not constitute assets of an "employee benefit plan" within the meaning of Section 3(3) of ERISA of a "plan" within the meaning of Section 4975(e)(1) of the Code.
(b) Neither the Borrower nor any of its Subsidiaries is subject to regulation under the Public Utility Holding Company Act of 1935, the Federal Power Act or the Investment Company Act of 1940, each as amended. In addition, neither the Borrower nor any of its Subsidiaries is (i) an "investment company" registered or required to be registered under the Investment Company Act of 1940, as amended, and is not controlled by such a company, or (ii) a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935, as amended.
(c) Each of the Borrower and its Subsidiaries has obtained all licenses, permits, franchises or other governmental authorizations necessary to the ownership of its respective Property and to the conduct of its business, except where such failure could not reasonably be expected to have a Material Adverse Effect.
(d) Neither the Borrower nor any of its Subsidiaries is in violation of any applicable statute, regulation or ordinance of the United States of America, or of any state, city, town, municipality, county or any other jurisdiction, or of any agency thereof (including without limitation, environmental laws and regulations), except where such violation could not reasonably be expected to have a Material Adverse Effect.
(e) Each of the Borrower and its Subsidiaries is current with all material reports and documents, if any, required to be filed with any state or federal securities commission or similar agency and is in full compliance in all material respects with all applicable rules and regulations of such commissions, except where such failure could not reasonably be expected to have a Material Adverse Effect.
Schedule 5.12 sets forth all the Subsidiaries of the Borrower at the Closing Date, the jurisdiction of their organization and the direct or indirect ownership interest of the Borrower therein.
The proceeds of the Loans hereunder shall be used solely by the Borrower to (a) to refinance existing Indebtedness of the Borrower under existing credit agreements, (b) repurchase stock in the Borrower, (c) to finance acquisitions to the extent permitted under this Credit Agreement and (d) for the working capital, commercial paper back up, capital expenditures and any other lawful corporate purposes of the Borrower and its Subsidiaries.
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that so long as this Credit Agreement is in effect or any amounts payable hereunder or under any other Credit Document shall remain outstanding, and until all of the Commitments hereunder shall have terminated:
The Borrower will furnish, or cause to be furnished, to the Administrative Agent and the Lenders:
(b) Quarterly Financial Statements. As soon as available, and in any event within 50 days after the close of each fiscal quarter of the Borrower and its Subsidiaries (other than the fourth fiscal quarter, in which case 100 days after the end thereof) a consolidated balance sheet and income statement of the Borrower and its Subsidiaries, as of the end of such fiscal quarter, together with related consolidated statements of operations and retained earnings and of cash flows for such fiscal quarter in each case setting forth in comparative form consolidated figures for the corresponding period of the preceding fiscal year, all such financial information described above to be in reasonable form and detail and reasonably acceptable to the Administrative Agent, and accompanied by a certificate of a Financial Officer of the Borrower to the effect that such quarterly financial statements fairly present in all material respects the financial condition of the Borrower and its Subsidiaries and have been prepared in accordance with GAAP, subject to changes resulting from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the financial statements provided for in Sections 6.1(a) and 6.1(b) above, a certificate of a Financial Officer of the Borrower substantially in the form of Schedule 6.1(c), (i) demonstrating compliance with the financial covenants contained in Sections 6.10 and 6.11 by calculation thereof as of the end of each such fiscal period and (ii) stating that no Default or Event of Default exists, or if any Default or Event of Default does exist, specifying the nature and extent thereof and what action the Borrower proposes to take with respect thereto.
(d) Reports. Promptly upon transmission or receipt thereof, (a) copies of any filings and registrations with, and reports to or from, the Securities and Exchange Commission, or any successor agency, and copies of all financial statements, proxy statements, notices and reports as the Borrower or any of its Subsidiaries shall send to its shareholders or to a holder of any Indebtedness owed by the Borrower or any of its Subsidiaries in its capacity as such a holder and (b) upon the request of the Administrative Agent, all reports and written information to and from the United States Environmental Protection Agency, or any state or local agency responsible for environmental matters, the United States Occupational Health and Safety Administration, or any state or local agency responsible for health and safety matters, or any successor agencies or authorities concerning environmental, health or safety matters.
(e) Notices. Upon obtaining knowledge thereof, the Borrower will give written notice to the Administrative Agent immediately of (a) the occurrence of an event or condition consisting of a Default or Event of Default, specifying the nature and existence thereof and what action the Borrower propose to take with respect thereto, and (b) the occurrence of any of the following with respect to the Borrower or any of its Subsidiaries (i) the pendency or commencement of any litigation, arbitral or governmental proceeding against such Person which if adversely determined is reasonably likely to have a Material Adverse Effect, (ii) the institution of any proceedings against such Person with respect to, or the receipt of notice by such Person of potential liability or responsibility for violation, or alleged violation of any federal, state or local law, rule or regulation, including but not limited to, Environmental Laws, the violation of which would likely have a Material Adverse Effect, or (iii) any notice or determination concerning the imposition of any withdrawal liability by a Multiemployer Plan against such Person or any ERISA Affiliate, the determination that a Multiemployer Plan is, or is expected to be, in reorganization within the meaning of Title IV of ERISA or the termination of any Plan.
(f) ERISA. Upon obtaining knowledge thereof, the Borrower will give written notice to the Administrative Agent promptly (and in any event within five business days) of: (i) of any event or condition, including, but not limited to, any Reportable Event, that constitutes, or might reasonably lead to, an ERISA Event; (ii) with respect to any Multiemployer Plan, the receipt of notice as prescribed in ERISA or otherwise of any withdrawal liability assessed against the Borrower or any of its ERISA Affiliates, or of a determination that any Multiemployer Plan is in reorganization or insolvent (both within the meaning of Title IV of ERISA); (iii) the failure to make full payment on or before the due date (including extensions) thereof of all amounts which the Borrower, any of the Subsidiaries of the Borrower or any ERISA Affiliate is required to contribute to each Plan pursuant to its terms and as required to meet the minimum funding standard set forth in ERISA and the Code with respect thereto; or (iv) any change in the funding status of any Plan that reasonably could be expected to have a Material Adverse Effect, together with a description of any such event or condition or a copy of any such notice and a statement by a Financial Officer of the Borrower briefly setting forth the details regarding such event, condition, or notice, and the action, if any, which has been or is being taken or is proposed to be taken by the Borrower with respect thereto. Promptly upon request, the Borrower shall furnish the Administrative Agent and the Lenders with such additional information concerning any Plan as may be reasonably requested, including, but not limited to, copies of each annual report/return (Form 5500 series), as well as all schedules and attachments thereto required to be filed with the Department of Labor and/or the Internal Revenue Service pursuant to ERISA and the Code, respectively, for each "plan year" (within the meaning of Section 3(39) of ERISA).
(g) Other Information. With reasonable promptness upon any such request, such other information regarding the business, properties or financial condition of the Borrower or any of its Subsidiaries as the Administrative Agent or the Required Lenders may reasonably request.
Except as would not result in a Material Adverse Effect, the Borrower will, and will cause each of its Subsidiaries to, do all things necessary to preserve and keep in full force and effect its existence, rights, franchises and authority.
The Borrower will, and will cause each of its Subsidiaries to, keep complete and accurate books and records of its transactions in accordance with good accounting practices on the basis of GAAP (including the establishment and maintenance of appropriate reserves).
The Borrower will, and will cause each of its Subsidiaries to, comply with all laws, rules, regulations and orders, and all applicable restrictions imposed by all Governmental Authorities, applicable to it and its property if noncompliance with any such law, rule, regulation, order or restriction would have a Material Adverse Effect.
6.5 Payment of Taxes and Other Indebtedness.
Except as otherwise provided pursuant to the terms of the definition of "Permitted Liens" set forth in Section 1.1, the Borrower will, and will cause each of its Subsidiaries to, pay and discharge (a) all taxes, assessments and governmental charges or levies imposed upon it, or upon its income or profits, or upon any of its properties, before they shall become delinquent, (b) all lawful claims (including claims for labor, materials and supplies) which, if unpaid, might give rise to a Lien upon any of its properties, and (c) except as prohibited hereunder, all of its other Indebtedness as it shall become due.
The Borrower will, and will cause each of its Subsidiaries to, at all times maintain in full force and effect insurance (including worker's compensation insurance, liability insurance and casualty insurance) in such amounts, covering such risks and liabilities and with such deductibles or self-insurance retentions as are in accordance with normal industry practice.
The Borrower will, and will cause each of its Subsidiaries to, maintain and preserve its properties and equipment material to the conduct of its business in good repair, working order and condition, normal wear and tear and casualty and condemnation excepted, and will make, or cause to be made, in such properties and equipment from time to time all repairs, renewals, replacements, extensions, additions, betterments and improvements thereto as may be needed or proper, to the extent and in the manner customary for companies in similar businesses.
The Borrower will use the proceeds of the Loans solely for the purposes set forth in Section 5.13.
Upon reasonable notice and during normal business hours, the Borrower will, and will cause each of its Subsidiaries to, permit representatives appointed by the Administrative Agent, including, without limitation, independent accountants, agents, attorneys, and appraisers to visit and inspect its property, including its books and records, its accounts receivable and inventory, its facilities and its other business assets, and to make photocopies or photographs thereof and to write down and record any information such representative obtains and shall permit the Administrative Agent or its representatives to investigate and verify the accuracy of information provided to the Lenders and to discuss all such matters with the officers, employees and representatives of such Person.
6.10 Adjusted Debt to EBITDAR Ratio.
The Borrower shall cause the ratio of Consolidated Adjusted Debt to Consolidated EBITDAR as of the last day of each fiscal quarter to be no greater than the amount set forth below with respect to the applicable fiscal quarters set forth below:
|
|
|
| May 2001 |
|
| August 2001 |
|
| November 2001, February 2002 and May 2002 |
|
| August 2002 and thereafter |
|
The Borrower shall cause the Consolidated Interest Coverage Ratio as
of the last day of each fiscal quarter to be no less than 2.50 to 1.0.
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Credit Agreement is in effect or any amounts payable hereunder or under any other Credit Document shall remain outstanding, and until all of the Commitments hereunder shall have terminated:
The Borrower will not, nor will it permit any of its Subsidiaries to, contract, create, incur, assume or permit to exist any Lien with respect to any of their Property, whether now owned or after acquired, except for Permitted Liens.
The Borrower will not, nor will it permit any of its Subsidiaries to, substantively alter the character or conduct of the business conducted by any such Person as of the Closing Date.
7.3 Consolidation, Merger, Sale or Purchase of Assets, etc.
The Borrower will not, nor will it permit any of its Subsidiaries to:
(b) enter into any transaction of merger or consolidation; provided, however, that, so long as no Default or Event of Default would be directly or indirectly caused as a result thereof, (i) the Borrower may merge or consolidate with any of its Subsidiaries provided that the Borrower is the surviving corporation; (ii) any Subsidiary of the Borrower may merge or consolidate with any other Subsidiary of the Borrower; and (iii) the Borrower or any of its Subsidiaries may merge or consolidate with any Person (other than the Borrower or any of its Subsidiaries) provided that (A) the Borrower or a Subsidiary of the Borrower is the surviving corporation and (B) after giving effect on a pro forma basis to such merger or consolidation, no Default or Event of Default would exist hereunder;
(c) sell, lease, transfer or otherwise dispose of Property owned by and material to the Borrower and its Subsidiaries, taken as a whole (other than (i) any such sale, lease, transfer or other disposition by a Subsidiary of the Borrower to the Borrower or any other Subsidiary of the Borrower), provided, however, for the purposes of this subsection (c), sale-leaseback transactions entered into by the Borrower or its Subsidiaries shall not be deemed material to the Borrower and its Subsidiaries, taken as a whole to the extent the aggregate amount with respect to all such transactions entered into after the Closing Date does not exceed $500,000,000; or
(d) except as otherwise permitted by Section 7.3(a) or Section 7.3(b), acquire all or any portion of the capital stock or securities of any other Person or purchase, lease or otherwise acquire (in a single transaction or a series of related transactions) all or any substantial part of the Property of any other Person; provided that (i) the Borrower or any of its Subsidiaries shall be permitted to make acquisitions of the type referred to in this Section 7.3(d), so long as such acquisitions are non-hostile and (ii) after giving effect on a pro forma basis to any such acquisition (including but not limited to any Indebtedness to be incurred or assumed by the Borrower or any of its Subsidiaries in connection therewith), no Default or Event of Default would exist hereunder.
The Borrower will not, nor will it permit any of its Subsidiaries to, change its fiscal year without first obtaining the written consent of the Required Lenders (such consent not to be unreasonably withheld).
The Borrower will not permit any of its Subsidiaries to contract, create, incur, assume or permit to exist any Indebtedness, except:
(b) intercompany Indebtedness owed by a Subsidiary of the Borrower to the Borrower or to another wholly-owned Subsidiary of the Borrower;
(c) Indebtedness of the Subsidiaries incurred after the Closing Date to provide all or a portion of the purchase price of short-lived assets (such as trucks and computer equipment) which may be treated as Capital Leases in accordance with GAAP in an aggregate amount not to exceed $50,000,000 in any fiscal year;
(d) Indebtedness of the Subsidiaries incurred in connection with synthetic leases, tax retention operating leases, off-balance sheet loans or similar off-balance sheet financings in an aggregate amount not to exceed $250,000,000 in any two consecutive fiscal years; and
(e) other Indebtedness in an aggregate principal amount not to exceed
$25,000,000 at any time outstanding.
EVENTS OF DEFAULT
An Event of Default shall exist upon the occurrence of any of the following specified events (each an "Event of Default"):
(ii) default, and such default shall continue for five (5) or more Business
Days, in the payment when due of any interest on the Loans, or of any Fees
or other amounts owing hereunder, under any of the other Credit Documents
or in connection herewith or therewith; or
(c) Covenants. The Borrower shall
(ii) default in the due performance of any term, covenant or agreement contained in Section 6.1 and such default shall continue unremedied for a period of at least 5 days after the earlier of a responsible officer of the Borrower becoming aware of such default or notice thereof by the Administrative Agent.
(iii) default in the due performance or observance by it of any term,
covenant or agreement (other than those referred to in subsections (a),
(b), (c)(i) or (c)(ii) of this Section 8.1) contained in this Credit Agreement
and such default shall continue unremedied for a period of at least 30
days after the earlier of a responsible officer of the Borrower becoming
aware of such default or notice thereof by the Administrative Agent; or
(e) Other Indebtedness. With respect to any Indebtedness (other than Indebtedness outstanding under this Credit Agreement or owing to the Borrower or any of its Subsidiaries) in excess of $25,000,000 in the aggregate for the Borrower and its Subsidiaries taken as a whole, (i) the Borrower or any of its Subsidiaries shall (A) default in any payment (beyond the applicable grace period with respect thereto, if any) with respect to any such Indebtedness, or (B) the occurrence and continuance of a default in the observance or performance relating to such Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event or condition shall occur or condition exist, the effect of which default or other event or condition is to cause, or permit, the holder or holders of such Indebtedness (or trustee or agent on behalf of such holders) to cause, any such Indebtedness to become due prior to the applicable maturity date, but after the expiration of all applicable grace periods, and such Indebtedness shall not be repaid when due; or (ii) any such Indebtedness shall be declared due and payable, or required to be prepaid other than by a regularly scheduled required prepayment, prior to the stated maturity thereof and shall not be repaid when due; or
(f) Judgments. One or more judgments or decrees shall be entered against the Borrower or any of its Subsidiaries involving a liability of $25,000,000 or more in the aggregate (to the extent not paid or covered by insurance) and any such judgments or decrees shall not have been vacated, discharged or stayed or bonded pending appeal within 30 days from the entry thereof or, if longer, within the applicable appeal period (but in no event for more than 90 days from the entry thereof); or
(g) ERISA. Any of the following events or conditions, if such event or condition reasonably could be expected to have a Material Adverse Effect: (1) any "accumulated funding deficiency," as such term is defined in Section 302 of ERISA and Section 412 of the Code, whether or not waived, shall exist with respect to any Plan, or any lien shall arise on the assets of the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate in favor of the PBGC or a Plan; (2) an ERISA Event shall occur with respect to a Single Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in the termination of such Plan for purposes of Title IV of ERISA; (3) an ERISA Event shall occur with respect to a Multiemployer Plan or Multiple Employer Plan, which is, in the reasonable opinion of the Administrative Agent, likely to result in (i) the termination of such Plan for purposes of Title IV of ERISA, or (ii) the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate incurring any liability in connection with a withdrawal from, reorganization of (within the meaning of Section 4241 of ERISA), or insolvency or (within the meaning of Section 4245 of ERISA) such Plan; or (4) any prohibited transaction (within the meaning of Section 406 of ERISA or Section 4975 of the Code) or breach of fiduciary responsibility shall occur which may subject the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of the Code, or under any agreement or other instrument pursuant to which the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate has agreed or is required to indemnify any person against any such liability.
Upon the occurrence of an Event of Default, and at any time thereafter unless and until such Event of Default has been waived by the Required Lenders or cured to the satisfaction of the Required Lenders (pursuant to the voting procedures in Section 10.6), the Administrative Agent shall, upon the request and direction of the Required Lenders, by written notice to the Borrower take any of the following actions:
(b) Acceleration. Declare the unpaid principal of and any accrued interest in respect of all Loans and any and all other indebtedness or obligations of any and every kind owing by the Borrower to the Administrative Agent and/or any of the Lenders hereunder to be due whereupon the same shall be immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by the Borrower.
(c) Enforcement of Rights. Enforce any and all rights and interests created and existing under the Credit Documents and all rights of set-off.
AGENCY PROVISIONS
Each Lender hereby designates and appoints Fleet National Bank as Administrative Agent (in such capacity as Administrative Agent hereunder, the "Administrative Agent") of such Lender to act as specified herein and the other Credit Documents, and each such Lender hereby authorizes the Administrative Agent as the agent for such Lender, to take such action on its behalf under the provisions of this Credit Agreement and the other Credit Documents and to exercise such powers and perform such duties as are expressly delegated by the terms hereof and of the other Credit Documents, together with such other powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary elsewhere herein and in the other Credit Documents, the Administrative Agent shall not have any duties or responsibilities, except those expressly set forth herein and therein, or any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Credit Agreement or any of the other Credit Documents, or shall otherwise exist against the Administrative Agent. The provisions of this Section are solely for the benefit of the Administrative Agent and the Lenders and the Borrower shall have no rights as a third party beneficiary of the provisions hereof. In performing its functions and duties under this Credit Agreement and the other Credit Documents, the Administrative Agent shall act solely as agent of the Lenders and does not assume and shall not be deemed to have assumed any obligation or relationship of agency or trust with or for the Borrower or any of its Affiliates.
The Administrative Agent may execute any of its respective duties hereunder or under the other Credit Documents by or through agents or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties; provided that the use of any agents or attorneys-in-fact shall not relieve the Administrative Agent of its duties hereunder.
The Administrative Agent and its officers, directors, employees, agents, attorneys-in-fact or affiliates shall not be (a) liable for any action lawfully taken or omitted to be taken by it or such Person under or in connection herewith or in connection with any of the other Credit Documents (except for its or such Person's own gross negligence or willful misconduct), or (b) responsible in any manner to any of the Lenders for any recitals, statements, representations or warranties made by the Borrower contained herein or in any of the other Credit Documents or in any certificate, report, document, financial statement or other written or oral statement referred to or provided for in, or received by the Administrative Agent under or in connection herewith or in connection with the other Credit Documents, or enforceability or sufficiency therefor of any of the other Credit Documents, or for any failure of the Borrower to perform its obligations hereunder or thereunder. The Administrative Agent shall not be responsible to any Lender for the effectiveness, genuineness, validity, enforceability, collectibility or sufficiency of this Credit Agreement, or any of the other Credit Documents or for any representations, warranties, recitals or statements made herein or therein or made by the Borrower in any written or oral statement or in any financial or other statements, instruments, reports, certificates or any other documents in connection herewith or therewith furnished or made by the Administrative Agent to the Lenders or by or on behalf of the Borrower to the Administrative Agent or any Lender or be required to ascertain or inquire as to the performance or observance of any of the terms, conditions, provisions, covenants or agreements contained herein or therein or as to the use of the proceeds of the Loans or of the existence or possible existence of any Default or Event of Default or to inspect the properties, books or records of the Borrower or any of its Affiliates.
9.4 Reliance on Communications.
The Administrative Agent shall be entitled to rely, and shall be fully protected in relying, upon any note, writing, resolution, notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document or conversation reasonably believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Borrower, independent accountants and other experts selected by the Administrative Agent with reasonable care). The Administrative Agent may deem and treat the Lenders as the owner of their respective interests hereunder for all purposes unless a written notice of assignment, negotiation or transfer thereof shall have been filed with the Administrative Agent in accordance with Section 10.3(b) hereof. The Administrative Agent shall be fully justified in failing or refusing to take any action under this Credit Agreement or under any of the other Credit Documents unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate or it shall first be indemnified to its satisfaction by the Lenders against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Administrative Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or under any of the other Credit Documents in accordance with a request of the Required Lenders (or to the extent specifically provided in Section 10.6, all the Lenders) and such request and any action taken or failure to act pursuant thereto shall be binding upon all the Lenders (including their successors and assigns).
The Administrative Agent shall not be deemed to have knowledge or notice of the occurrence of any Default or Event of Default hereunder unless the Administrative Agent has received notice from a Lender or the Borrower referring to the Credit Document, describing such Default or Event of Default and stating that such notice is a "notice of default." In the event that the Administrative Agent receives such a notice, the Administrative Agent shall give prompt notice thereof to the Lenders. The Administrative Agent shall take such action with respect to such Default or Event of Default as shall be reasonably directed by the Required Lenders.
9.6 Non-Reliance on Administrative Agent and Other Lenders.
Each Lender expressly acknowledges that each of the Administrative Agent and its officers, directors, employees, agents, attorneys-in-fact or affiliates has not made any representations or warranties to it and that no act by the Administrative Agent or any affiliate thereof hereinafter taken, including any review of the affairs of the Borrower or any of its Affiliates, shall be deemed to constitute any representation or warranty by the Administrative Agent to any Lender. Each Lender represents to the Administrative Agent that it has, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Borrower or its Affiliates and made its own decision to make its Loans hereunder and enter into this Credit Agreement. Each Lender also represents that it will, independently and without reliance upon the Administrative Agent or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Credit Agreement, and to make such investigation as it deems necessary to inform itself as to the business, assets, operations, property, financial and other conditions, prospects and creditworthiness of the Borrower and its Affiliates. Except for notices, reports and other documents expressly required to be furnished to the Lenders by the Administrative Agent hereunder, the Administrative Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, operations, assets, property, financial or other conditions, prospects or creditworthiness of the Borrower or any of its Affiliates which may come into the possession of the Administrative Agent or any of its officers, directors, employees, agents, attorneys-in-fact or affiliates.
The Lenders agree to indemnify the Administrative Agent in its capacity as such (to the extent not reimbursed by the Borrower and without limiting the obligation of the Borrower to do so), ratably according to their respective Commitments (or if the Commitments have expired or been terminated, in accordance with the respective principal amounts of outstanding Loans and Participation Interests of the Lenders), from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever which may at any time (including without limitation at any time following the final payment of all of the obligations of the Borrower hereunder and under the other Credit Documents) be imposed on, incurred by or asserted against the Administrative Agent in its capacity as such in any way relating to or arising out of this Credit Agreement or the other Credit Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by the Administrative Agent under or in connection with any of the foregoing; provided that no Lender shall be liable for the payment of any portion of such liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements resulting from the gross negligence or willful misconduct of the Administrative Agent. If any indemnity furnished to the Administrative Agent for any purpose shall, in the opinion of the Administrative Agent, be insufficient or become impaired, the Administrative Agent may call for additional indemnity and cease, or not commence, to do the acts indemnified against until such additional indemnity is furnished. The agreements in this Section shall survive the repayment of the Loans and other obligations under the Credit Documents and the termination of the Commitments hereunder.
9.8 Administrative Agent in its Individual Capacity.
The Administrative Agent and its affiliates may make loans to, accept deposits from and generally engage in any kind of business with the Borrower, its Subsidiaries or their respective Affiliates as though the Administrative Agent were not the Administrative Agent hereunder. With respect to the Loans made by and all obligations of the Borrower hereunder and under the other Credit Documents, the Administrative Agent shall have the same rights and powers under this Credit Agreement as any Lender and may exercise the same as though it were not the Administrative Agent, and the terms "Lender" and "Lenders" shall include the Administrative Agent in its individual capacity.
9.9 Successor Administrative Agent.
The Administrative Agent may, at any time, resign upon 20 days' written notice to the Lenders, and may be removed, upon show of cause, by the Required Lenders upon 30 days' written notice to the Administrative Agent. Upon any such resignation or removal, the Required Lenders shall have the right to appoint a successor Administrative Agent; provided that, so long as no Default or Event of Default has occurred and is continuing, such successor Administrative Agent shall be reasonably acceptable to the Borrower. If no successor Administrative Agent shall have been so appointed by the Required Lenders, and shall have accepted such appointment, within 30 days after the notice of resignation or notice of removal, as appropriate, then the retiring Administrative Agent shall select a successor Administrative Agent provided such successor is a Lender hereunder or a commercial bank organized under the laws of the United States of America or of any State thereof and has a combined capital and surplus of at least $400,000,000. Upon the acceptance of any appointment as Administrative Agent hereunder by a successor, such successor Administrative Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Administrative Agent, and the retiring Administrative Agent shall be discharged from its duties and obligations as Administrative Agent, as appropriate, under this Credit Agreement and the other Credit Documents and the provisions of this Section 9 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was Administrative Agent under this Credit Agreement.
The Syndication Agent, in its capacity as such, shall have no rights,
powers, duties or obligations under this Credit Agreement or any of the
other Credit Documents.
MISCELLANEOUS
Except as otherwise expressly provided herein, all notices and other communications shall have been duly given and shall be effective (i) when delivered, (ii) when transmitted and received (by confirmation of receipt) via telecopy (or other facsimile device) to the number set out below, (iii) the day following the day on which the same has been delivered prepaid to a reputable national overnight air courier service, or (iv) the third Business Day following the day on which the same is sent by certified or registered mail, postage prepaid, in each case to the respective parties at the address, in the case of the Borrower and the Administrative Agent, set forth below, and, in the case of the Lenders, set forth on Schedule 2.1(a), or at such other address as such party may specify by written notice to the other parties hereto:
if to the Borrower:
123 South Front Street
Memphis, TN 38103
Attn: Chief Financial Officer
Telephone: (901) 495-7181
Telecopy: (901) 495-8317
Agency Services
MADE10307C
One Federal Street
Boston, MA 02110
Attn: Mary Joyce
with a copy to:
Fleet National Bank
Retail & Apparel Division
MADE10008F
100 Federal Street
Boston, MA 02110
Attn: Thomas J. Bullard, Director
Telephone: (617) 434-3824
Telecopy: (617) 434-6685
In addition to any rights now or hereafter granted under applicable law, and not by way of limitation of any such rights, upon the occurrence of an Event of Default, each Lender is authorized at any time and from time to time, without presentment, demand, protest or other notice of any kind (all of which rights being hereby expressly waived), to set-off and to appropriate and apply any and all deposits (general or special) and any other indebtedness at any time held or owing by such Lender (including, without limitation, branches, agencies or Affiliates of such Lender wherever located) to or for the credit or the account of the Borrower against obligations and liabilities of such Person to such Lender hereunder, under the Notes or the other Credit Documents, irrespective of whether such Lender shall have made any demand hereunder and although such obligations, liabilities or claims, or any of them, may be contingent or unmatured, and any such set-off shall be deemed to have been made immediately upon the occurrence of an Event of Default even though such charge is made or entered on the books of such Lender subsequent thereto. Any Person purchasing a participation in the Loans and Commitments hereunder pursuant to Section 3.13 or Section 10.3(d) may exercise all rights of set-off with respect to its participation interest as fully as if such Person were a Lender hereunder.
(b) Assignments. Each Lender may assign all or a portion of its rights and obligations hereunder, pursuant to an assignment agreement substantially in the form of Schedule 10.3(b), to (i) any Lender or any Affiliate or Subsidiary of a Lender, or (ii) any other commercial bank, financial institution or "accredited investor" (as defined in Regulation D of the Securities and Exchange Commission) that is reasonably acceptable to the Administrative Agent and, so long as no Default or Event of Default has occurred and is continuing, is reasonably acceptable to the Borrower; provided that (i) any such assignment (other than any assignment to an existing Lender) shall be in a minimum aggregate amount of $5,000,000 (or, if less, the remaining amount of the Commitment being assigned by such Lender) of the Commitments and in integral multiples of $1,000,000 above such amount and (ii) so long as no Event of Default has occurred and is continuing, no Lender shall assign more than 50% of such Lender's original aggregate Commitments without the written consent of the Borrower. Any assignment hereunder shall be effective upon delivery to the Administrative Agent of written notice of the assignment together with a transfer fee of $3,500 payable to the Administrative Agent for its own account from and after the later of (i) the effective date specified in the applicable assignment agreement and (ii) the date of recording of such assignment in the Register pursuant to the terms of subsection (c) below. The assigning Lender will give prompt notice to the Administrative Agent and the Borrower of any such assignment. Upon the effectiveness of any such assignment (and after notice to, and (to the extent required pursuant to the terms hereof), with the consent of, the Borrower as provided herein), the assignee shall become a "Lender" for all purposes of this Credit Agreement and the other Credit Documents and, to the extent of such assignment, the assigning Lender shall be relieved of its obligations hereunder to the extent of the Loans and Commitment components being assigned. Along such lines the Borrower agrees that upon notice of any such assignment and surrender of the appropriate Note or Notes, it will promptly provide to the assigning Lender and to the assignee separate promissory notes in the amount of their respective interests substantially in the form of the original Note (but with notation thereon that it is given in substitution for and replacement of the original Note or any replacement notes thereof). By executing and delivering an assignment agreement in accordance with this Section 10.3(b), the assigning Lender thereunder and the assignee thereunder shall be deemed to confirm to and agree with each other and the other parties hereto as follows: (i) such assigning Lender warrants that it is the legal and beneficial owner of the interest being assigned thereby free and clear of any adverse claim; (ii) except as set forth in clause (i) above, such assigning Lender makes no representation or warranty and assumes no responsibility with respect to any statements, warranties or representations made in or in connection with this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto, or the execution, legality, validity, enforceability, genuineness, sufficiency or value of this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto or the financial condition of the Borrower or any of its respective Affiliates or the performance or observance by the Borrower of any of its obligations under this Credit Agreement, any of the other Credit Documents or any other instrument or document furnished pursuant hereto or thereto; (iii) such assignee represents and warrants that it is legally authorized to enter into such assignment agreement; (iv) such assignee confirms that it has received a copy of this Credit Agreement, the other Credit Documents and such other documents and information as it has deemed appropriate to make its own credit analysis and decision to enter into such assignment agreement; (v) such assignee will independently and without reliance upon the Administrative Agent, such assigning Lender or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under this Credit Agreement and the other Credit Documents; (vi) such assignee appoints and authorizes the Administrative Agent to take such action on its behalf and to exercise such powers under this Credit Agreement or any other Credit Document as are delegated to the Administrative Agent by the terms hereof or thereof, together with such powers as are reasonably incidental thereto; and (vii) such assignee agrees that it will perform in accordance with their terms all the obligations which by the terms of this Credit Agreement and the other Credit Documents are required to be performed by it as a Lender. If the assignee is not a United States person under Section 7701(a)(30) of the Code, it shall deliver to the Borrower and the Administrative Agent a valid certification as to exemption from deduction or withholding of taxes in accordance with Section 3.10.
(c) Maintenance of Register. The Administrative Agent shall maintain at one of its offices in Boston, Massachusetts (i) a copy of each Lender assignment agreement delivered to it in accordance with the terms of subsection (b) above and (ii) a register for the recordation of the identity of the principal amount, type and Interest Period of each Loan outstanding hereunder, the names, addresses and the Commitments of the Lenders pursuant to the terms hereof from time to time (the "Register"). The Administrative Agent will make reasonable efforts to maintain the accuracy of the Register and to promptly update the Register from time to time, as necessary. The Register shall be prima facie, but not conclusive, evidence of the information contained therein and the Borrower, the Administrative Agent and the Lenders may treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Credit Agreement. The Register shall be available for inspection by the Borrower and each Lender, at any reasonable time and from time to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer, grant or assign participations in all or any part of such Lender's interests and obligations hereunder; provided that (i) such selling Lender shall remain a "Lender" for all purposes under this Credit Agreement (such selling Lender's obligations under the Credit Documents remaining unchanged) and the participant shall not constitute a Lender hereunder, (ii) no such participant shall have, or be granted, rights to approve any amendment or waiver relating to this Credit Agreement or the other Credit Documents except to the extent any such amendment or waiver would (A) reduce the principal of or rate of interest on or Fees in respect of any Loans in which the participant is participating or (B) postpone the date fixed for any payment of principal (including extension of the Termination Date or the date of any mandatory prepayment), interest or Fees in which the participant is participating, and (iii) sub-participations by the participant (except to an affiliate, parent company or affiliate of a parent company of the participant) shall be prohibited. In the case of any such participation, the participant shall not have any rights under this Credit Agreement or the other Credit Documents (the participant's rights against the selling Lender in respect of such participation to be those set forth in the participation agreement with such Lender creating such participation) and all amounts payable by the Borrower hereunder shall be determined as if such Lender had not sold such participation, provided, however, that such participant shall be entitled to receive additional amounts under Sections 3.6, 3.9 and 3.11 on the same basis as if it were a Lender provided that it shall not be entitled to receive any more than the selling Lender would have received had it not sold the participation.
(e) Designation.
(ii) As to any Loans or portion thereof made by it, each SPV shall have all the rights that a Lender making such Loans or portion thereof would have had under this Credit Agreement; provided, however that each SPV shall have granted to its Designating Lender an irrevocable power of attorney, to deliver and receive all communications and notices under this Credit Agreement (and any related documents) and to exercise on such SPV's behalf, all of such SPV's voting rights under this Credit Agreement. No additional Note shall be required to evidence the Loans or portion thereof made by an SPV; and the related Designating Lender shall be deemed to hold its Note as agent for such SPV to the extent of the Loans or portion thereof funded by such SPV. In addition, any payments for the account of any SPV shall be paid to its Designating Lender as agent for such SPV.
(iii) Each party hereto hereby agrees that no SPV shall be liable for any indemnity or payment under this Credit Agreement for which a Lender would otherwise be liable for so long as, and to the extent, the Designating Lender provides such indemnity or makes such payment. In furtherance of the foregoing, each party hereto hereby agrees (which agreement shall survive the termination of this Credit Agreement) that, prior to the date that is one year and one day after the payment in full of all outstanding prior indebtedness of any SPV, it will not institute against, or join any other person in instituting against, such SPV any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or similar proceedings under the laws of the United States or any State thereof.
(iv) In addition, notwithstanding anything to the contrary contained in this Section 10.3 or otherwise in this Credit Agreement, any SPV may (I) at any time and without paying any processing fee therefor, assign or participate all or a portion of its interest in any Loans to the Designating Lender (or to any other SPV of such Designating Lender) or to any financial institutions providing liquidity and/or credit support to or for the account of such SPV to support the funding or maintenance of Loans and (II) disclose on a confidential basis any non-public information relating to its Loans to any rating agency, commercial paper dealer or provider of any surety, guarantee or credit or liquidity enhancements to such SPV. This Section 10.3 may not be amended without the written consent of any Designating Lender affected thereby.
No failure or delay on the part of the Administrative Agent or any Lender in exercising any right, power or privilege hereunder or under any other Credit Document and no course of dealing between the Administrative Agent or any Lender and the Borrower shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder or under any other Credit Document preclude any other or further exercise thereof or the exercise of any other right, power or privilege hereunder or thereunder. The rights and remedies provided herein are cumulative and not exclusive of any rights or remedies which the Administrative Agent or any Lender would otherwise have. No notice to or demand on the Borrower in any case shall entitle the Borrower to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of the Administrative Agent or the Lenders to any other or further action in any circumstances without notice or demand.
10.5 Payment of Expenses, etc.
The Borrower agrees to: (a) pay all reasonable out-of-pocket costs and expenses (i) of the Administrative Agent in connection with the negotiation, preparation, execution and delivery and administration of this Credit Agreement and the other Credit Documents and the documents and instruments referred to therein (including, subject to agreed upon limitations, the reasonable fees and expenses of Moore & Van Allen, PLLC, special counsel to the Administrative Agent and non-duplicative allocated costs of internal counsel) and any amendment, waiver or consent relating hereto and thereto including, but not limited to, any such amendments, waivers or consents resulting from or related to any work-out, renegotiation or restructure relating to the performance by the Borrower under this Credit Agreement and (ii) of the Administrative Agent and the Lenders in connection with enforcement of the Credit Documents and the documents and instruments referred to therein (including, without limitation, in connection with any such enforcement, the reasonable fees and disbursements of counsel (including non-duplicative allocated costs of internal counsel) for the Administrative Agent and each of the Lenders); (b) pay and hold each of the Lenders harmless from and against any and all future stamp and other similar taxes with respect to the foregoing matters and save each of the Lenders harmless from and against any and all liabilities with respect to or resulting from any delay or omission (other than to the extent attributable to such Lender) to pay such taxes; and (c) indemnify each Lender, its officers, directors, employees, representatives, agents and Affiliates from and hold each of them harmless against any and all losses, liabilities, claims, damages or expenses incurred by any of them as a result of, or arising out of, or in any way related to, or by reason of (i) any investigation, litigation or other proceeding (whether or not any Lender is a party thereto, but excluding any investigation initiated by the Person seeking indemnification hereunder) related to the entering into and/or performance of any Credit Document or the use of proceeds of any Loans (including other extensions of credit) hereunder or the consummation of any other transactions contemplated in any Credit Document, including, without limitation, the reasonable fees and disbursements of counsel (including non-duplicative allocated costs of internal counsel) incurred in connection with any such investigation, litigation or other proceeding or (ii) the presence or Release of any Materials of Environmental Concern at, under or from any Property owned, operated or leased by the Borrower or any of its Subsidiaries, or the failure by the Borrower or any of its Subsidiaries to comply with any Environmental Law (but excluding, in the case of either of clause (i) or (ii) above, any such losses, liabilities, claims, damages or expenses to the extent (A) incurred by reason of gross negligence or willful misconduct on the part of the Person to be indemnified, (B) owing to the Borrower or (C) owing to another Person entitled to indemnification hereunder).
10.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any of the terms hereof or thereof may be amended, changed, waived, discharged or terminated unless such amendment, change, waiver, discharge or termination is in writing entered into by, or approved in writing by, the Required Lenders and the Borrower, provided, however, that:
(b) no such amendment, change, waiver, discharge or termination shall, without the consent of each Lender directly affected thereby, (i) except as otherwise permitted under Section 3.4(b), increase the Commitments of the Lenders over the amount thereof in effect (it being understood and agreed that a waiver of any Default or Event of Default shall not constitute a change in the terms of any Commitment of any Lender), (ii) amend, modify or waive any provision of this Section 10.6 or Section 3.6, 3.10, 3.11, 3.12, 3.13, 8.1(a), 10.2, 10.3, 10.5 or 10.9, (iii) reduce or increase any percentage specified in, or otherwise modify, the definition of "Required Lenders," or (iv) consent to the assignment or transfer by the Borrower of any of its rights and obligations under (or in respect of) the Credit Documents to which it is a party;
(c) no provision of Section 2.3 may be amended without the consent of the Swingline Lender and no provision of Section 9 may be amended without the consent of the Administrative Agent; and
(d) designation of the Master Account or of any Financial Officer may not be made without the written consent of at least two Financial Officers of the Borrower.
This Credit Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Credit Agreement to produce or account for more than one such counterpart.
The headings of the sections and subsections hereof are provided for convenience only and shall not in any way affect the meaning or construction of any provision of this Credit Agreement.
All indemnities set forth herein, including, without limitation, in Section 3.9, 3.11, 9.7 or 10.5 shall survive the execution and delivery of this Credit Agreement, the making of the Loans, the repayment of the Loans and other obligations under the Credit Documents and the termination of the Commitments hereunder, and all representations and warranties made by the Borrower herein shall survive delivery of the Notes and the making of the Loans hereunder.
10.10 Governing Law; Submission to Jurisdiction; Venue.
(b) The Borrower hereby irrevocably waives any objection which it may now or hereafter have to the laying of venue of any of the aforesaid actions or proceedings arising out of or in connection with this Credit Agreement or any other Credit Document brought in the courts referred to in subsection (a) hereof and hereby further irrevocably waives and agrees not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in an inconvenient forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE AGENT, THE LENDERS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
If any provision of any of the Credit Documents is determined to be illegal, invalid or unenforceable, such provision shall be fully severable and the remaining provisions shall remain in full force and effect and shall be construed without giving effect to the illegal, invalid or unenforceable provisions.
This Credit Agreement together with the other Credit Documents represent the entire agreement of the parties hereto and thereto, and supersede all prior agreements and understandings, oral or written, if any, including any commitment letters or correspondence relating to the Credit Documents or the transactions contemplated herein and therein.
10.13 Binding Effect; Termination.
(b) The term of this Credit Agreement shall be until no Loans or any other amounts payable hereunder or under any of the other Credit Documents shall remain outstanding and until all of the Commitments hereunder shall have expired or been terminated.
The Administrative Agent and the Lenders agree to keep confidential (and to cause their respective affiliates, officers, directors, employees, agents and representatives to keep confidential) all information, materials and documents furnished to the Administrative Agent or any such Lender by or on behalf of the Borrower (whether before or after the Closing Date) which relates to the Borrower or any of its Subsidiaries (the "Information"). Notwithstanding the foregoing, the Administrative Agent and each Lender shall be permitted to disclose Information (i) to its affiliates, officers, directors, employees, agents and representatives in connection with its participation in any of the transactions evidenced by this Credit Agreement or any other Credit Documents or the administration of this Credit Agreement or any other Credit Documents; (ii) to the extent required by applicable laws and regulations or by any subpoena or similar legal process, or requested by any Governmental Authority; (iii) to the extent such Information (A) becomes publicly available other than as a result of a breach of this Credit Agreement or any agreement entered into pursuant to clause (iv) below, (B) becomes available to the Administrative Agent or such Lender on a non-confidential basis from a source other than the Borrower or (C) was available to the Administrative Agent or such Lender on a non-confidential basis prior to its disclosure to the Administrative Agent or such Lender by the Borrower; (iv) to any assignee or participant (or prospective assignee or participant) so long as such assignee or participant (or prospective assignee or participant) first specifically agrees in a writing furnished to and for the benefit of the Borrower to be bound by the terms of this Section 10.14; (v) to the extent required in connection with the exercise of remedies under this Credit Agreement or any other Credit Documents; or (vi) to the extent that the Borrower shall have consented in writing to such disclosure. Nothing set forth in this Section 10.14 shall obligate the Administrative Agent or any Lender to return any materials furnished by the Borrower.
Each of the Lenders hereby represents and warrants to the Borrower that at least one of the following statements is an accurate representation as to the source of funds to be used by such Lender in connection with the financing hereunder:
(b) to the extent that any part of such funds constitutes assets allocated to any separate account maintained by such Lender, such Lender has disclosed to the Borrower the name of each employee benefit plan whose assets in such account exceed 10% of the total assets of such account as of the date of such purchase (and, for purposes of this subsection (b), all employee benefit plans maintained by the same employer or employee organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets of an insurance company's general account, such insurance company has complied with all of the requirements of the regulations issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit plans which such Lender has identified in writing to the Borrower.
To the extent that there is a conflict or inconsistency between any provision hereof, on the one hand, and any provision of any Credit Document, on the other hand, this Credit Agreement shall control.
[Signature Pages to Follow]
IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date
first above written.
BORROWER:
AUTOZONE, INC.
a Nevada corporation
By: /s/ Robert J. Hunt
Name: Robert J. Hunt
Title: EVP & CFO
By: /s/ Harry L. Goldsmith
Name: Harry L. Goldsmith
Title:Sr. Vice President, Secretary & General Counsel
LENDERS:
FLEET NATIONAL BANK
individually in its capacity as a
Lender and in its capacity as Administrative Agent
By: /s/ Thomas J. Bullard
Name: Thomas J. Bullard
Title: Director
BANK OF AMERICA, N.A.
By: /s/ James L. [illegible]
Name: James L. {illegible]
Title: EVP
THE BANK OF NEW YORK
By: /s/ William M. Barnum
Name: William M. Barnum
Title: Vice President
BANK ONE, NA
By: /s/ John Runger
Name: John Runger
Title: Senior Vice President
BNP PARIBAS
By: /s/ Jeff Tebeaux
Name: Jeff Tebeaux
Title: Associate
By: /s/ Lloyd G. Cox
Name: Lloyd G. Cox
Title: Managing Director
CITICORP USA, INC.
By: /s/ Robert M. Spence
Name: Robert M. Spence
Title: Managing Director
FIFTH THIRD BANK
By: /s/Megan S. Heisel
Name: Megan S. Heisel
Title: Corporate Banking Officer
FIRST UNION NATIONAL BANK
By: /s/ Mark S. Supple
Name: Mark S. Supple
Title: Vice President
HIBERNIA NATIONAL BANK
By: /s/ Andrew B. Booth
Name: Andrew B. Booth
Title: Asst Vice President
THE CHASE MANHATTAN BANK
By: /s/ Margaret T. Lane
Name: Margaret T. Lane
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ James W. Masters
Name: James W. Masters
Title: Senior Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Mark A. LoSchiavo
Name: Mark A. LoSchiavo
Title: AVP
NATIONAL CITY BANK
By: /s/ James C. Ritchie
Name: James C. Ritchie
Title: Assistant Vice President
SUNTRUST BANK
By: /s/ Bryan W. Ford
Name: Bryan W. Ford
Title: Vice President
UMB BANK, N.A.
By: /s/ Charles J. Wolf
Name: Charles J. Wolf
Title: Senior Vice-President
UNION PLANTERS N.A.
By: /s/ Charles F. Rudman
Name: Charles F. Rudman
Title: Executive Vice President
WACHOVIA BANK, N.A.
By: /s/ Anne L. Sayles
Name: Anne L. Sayles
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ George R. Brumder
Name: George R. Brumder
Title: Corporate Banking Officer
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By: /s/ James H. Moore, Jr.
Name: James H. Moore, Jr.
Title: SVP
FIRSTAR BANK, N.A.
By: /s/ Amanda Smith
Name: Amanda Smith
Title: AVP
Schedule 1.1
APPLICABLE PERCENTAGE
Pricing Grid for Revolving Loans
|
Pricing Level |
S&P/Moody's Rating |
Applicable Percentage for
Eurodollar Loans |
Applicable Percentage for
Base Rate Loans |
Applicable Percentage
for Facility Fee |
Applicable Percentage for
Utilization Fee |
| Level I | A-/A3 or above | 40.0 bps | 0 | 10.0 bps | 12.5 bps |
| Level II | BBB+/Baa1 | 50.0 bps | 0 | 12.5 bps | 12.5 bps |
| Level III | BBB/Baa2 | 60.0 bps | 0 | 15.0 bps | 25.0 bps |
| Level IV | BBB-/Baa3 | 90.0 bps | 0 | 22.5 bps | 25.0 bps |
| Level V | Below BBB-/Baa3 | 120.0 bps | 0 | 30.0 bps | 25.0 bps |
Pricing Grid for Term Loan
|
Pricing Level |
S&P/Moody's Rating |
Applicable Percentage for Eurodollar Loans |
Applicable Percentage for
Base Rate Loans |
| Level I | BBB/Baa2 or higher | 112.5 bps | 12.5 bps |
| Level II | BBB-/Baa3 | 150.0 bps | 50.0 bps |
| Level III | Below BBB-/Baa3 | 175.0 bps | 75.0 bps |
The Applicable Percentage shall be based on the applicable Pricing Level corresponding to the Rating(s) then in effect. In the event of a Split Rating, the applicable Pricing Level shall be based on the higher Rating. In the event of a Double Split Rating, the applicable Pricing Level shall be based on the Pricing Level which is one above that corresponding to the lower Rating. If no Rating exists, the applicable Pricing Level shall be based on Pricing Level V until the earlier of (A) such time as S&P and/or Moody's provides another Rating or (B) the Required Lenders have agreed to an alternative pricing grid or other method for determining Pricing Levels pursuant to an effective amendment to this Credit Agreement.
As used herein:
"Rating" means the senior unsecured (non-credit enhanced) long term debt rating of the Borrower, as published by S&P and/or Moody's.
"Split Rating" means the ratings of S&P and Moody's would indicate different Pricing Levels, but the Pricing Levels are not more than one Pricing Level apart.
"Double Split Rating" means the ratings of S&P and Moody's would indicate different Pricing Levels, but the Pricing Levels are two or more Pricing Levels apart.
Schedule 2.1(a)
Commitments as of Closing
| Lender | Revolving Commitments | Term Loan Commitments | ||
| Revolving
Commitment |
Revolving Commitment Percentage | Term Loan
Commitment |
Term Loan Commitment Percentage | |
| Fleet National Bank
100 Federal Street MHDE 10009E Boston, MA 02100 Attn: Thomas J. Bullard Tel: (617) 434-3824 Fax: (617) 434-6685 |
$24,500,000 | 16.75% | $42,500,000 | 21.25% |
| The Chase Manhattan Bank
270 Park Avenue New York, NY 10017 Attn: Barry Bergman Tel: (212) 270-0203 Fax: (212) 270-5646 |
$24,500,000 | 6.125% | $42,500,000 | 21.25% |
| Bank of America, N.A.
Bank of America Corporate Center 100 N. Tryon Street, 16th Floor Charlotte, NC 28255 Attn: Timothy H. Spanos Tel: (704) 386-4507 Fax: (704) 388-8268 |
$67,000,000 | 16.75% | $0 | 0% |
| Citicorp USA, Inc.
399 Park Avenue, 5th Floor Attn: Robert Kane Tel: (212) 559-3414 Fax: (212 793-7590 |
$62,000,000 | 15.5% | $0 | 0% |
| First Union National Bank
15 Penn Square PA4843 Philadelphia, PA 19107 Attn: Tony Braxton Tel: (215) 786-4353 Fax: (215) 973-1887 |
$57,500,000 | 14.375% | $0 | 0% |
| SunTrust Bank
6410 Poplar Avenue Memphis, TN 38119 Attn: Bryan W. Ford Tel: (901) 762-9862 Fax: (901) 766-7565 |
$22,000,000 | 5.5% | $40,000,000 | 20.0% |
| Bank One, NA
1 Bank One Plaza Suite IL-0086 Chicago, IL 60670 Attn: John D. Runger Tel: (312) 732-7101 Fax: (312) 336-4380 |
$12,500,000 | 3.125% | $12,500,000 | 6.25% |
| National City Bank
1900 E. Ninth Street Loc.#2077 Cleveland, OH 44114 Attn: James C. Ritchie Tel: (216) 525-9918 Fax: (216) 222-0003 |
$5,000,000 | 1.25% | $20,000,000 | 10.0% |
| Union Bank of California, N.A.
350 California Street, 6th Floor San Francisco, CA 94104 Attn: Terry Rocha Tel: (415) 705-7594 Fax: (415) 705-7085 |
$15,000,000 | 3.75% | $10,000,000 | 5.0% |
| Keybank National Association
127 Public Square Cleveland, OH 44114 Attn: Mark LoSchiauo Tel: (216) 689-0598 Fax: (216) 689-4981 |
$20,000,000 | 5.0% | $0 | 0% |
| Firstar Bank, N.A.
1 Firstar Plaza, TRAM 12-3 St. Louis, MO 63101-0524 Attn: Amanda Smith Tel: (314) 418-3638 Fax: (314) 418-1963 |
$15,000,000 | 3.75% | $10,000,000 | 5.0% |
| Union Planters Bank N.A.
6200 Poplar Avenue Memphis, TN 38109 Attn: Craig Gardella Tel: (901) 580-5507 Fax: (901) 580-5451 |
$12,500,000 | 3.125% | $0 | 0% |
| Wachovia Bank, N.A.
191 Peachtree Street NE Mail Code GA 31064 Atlanta, GA 30303 Attn: Anne Sayles Tel: (404) 332-4088 Fax: (404) 332-4048 |
$12,500,000 | 3.125% | $0 | 0% |
| The Bank of New York
One Wall Street, 8th Floor New York, NY 10286 Retailing Industry Division Attn: Lucille Cuttone Tel: (212) 635-7879 Fax: (212) 635-1481/1483 |
$12,500,000 | 3.125% | $0 | 0% |
| Fifth Third Bank
38 Fountain Square Plaza MD109054 Cincinnatti, OH 45263 Attn: Megan Heisel Tel: (513) 744-8662 Fax: (513) 744-5947 |
$12,500,000 | 3.125% | $0 | 0% |
| UMB Bank, n.a.
1010 Grand Boulevard Kansas City, MO 64106 Attn: Charles J. Wolf Tel: (816) 860-7130 Fax: (816) 860-7143 |
$10,000,000 | 2.50% | $0 | 0% |
| First Tennessee Bank National
Association
165 Madison Avenue, 9th Floor Memphis, TN 38103-2723 Attn: James H. Moore, Jr. Tel: (901) 523-4108 Fax: (901) 523-4267 |
$10,000,000 | 2.50% | $0 | 0% |
| Hibernia National Bank
313 Carondelet Street New Orleans, LA 70130 Attn: Andrew B. Booth Tel: (504) 533-3142 Fax: (504) 533-5344 |
$5,000,000 | 1.25% | $0 | 0% |
| The Industrial Bank of Japan,
Limited
191 Peachtree Tower Suite 3825 191 Peachtree Street NE Atlanta, GA 30303 Attn: James Masters Tel: (404) 525-8770 ext. 106 Fax: (404) 524-8509 |
$0 | 0% | $12,500,000 | 6.25% |
| BNP Paribas
12201 Merit Drive Suite 860 Dallas, TX 75251 Attn: Jeff Tebeaux Tel: (972) 788-9191 Fax: (972) 788-9140 |
$0 | 0% | $10,000,000 | 5.0% |
| Totals: | $400,000,000 | 100% | $200,000,000 | 100% |
Schedule 2.1(b)(i)
FORM OF NOTICE OF BORROWING
Fleet National Bank,
as Administrative Agent for the Lenders
100 Federal Street
MADE10307C
Boston, MA 02110
Attn: Agency Services
Ladies and Gentlemen:
The undersigned, AUTOZONE, INC. (the "Borrower"), refers to the Credit Agreement dated as of May 22, 2001 (as amended, modified, extended or restated from time to time, the "Credit Agreement"), among the Borrower, the Lenders, Fleet National Bank, as Administrative Agent and The Chase Manhattan Bank, as Syndication Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The Borrower hereby gives notice pursuant to Section 2.1 of the Credit Agreement that it requests a Revolving Loan advance under the Credit Agreement, and in connection therewith sets forth below the terms on which such Revolving Loan advance is requested to be made:
(A) Date of Borrowing
(which is a Business Day)
(B) Principal Amount of Borrowing
(C) Interest rate basis
(D) Interest Period and the last day thereof
In accordance with the requirements of Section 4.2, the Borrower hereby reaffirms the representations and warranties set forth in the Credit Agreement as provided in subsection (b) of such Section, and confirms that the matters referenced in subsections (c), (d) and (e) of such Section, are true and correct.
Very truly yours,
AUTOZONE, INC.
By:
Name:
Title:
Schedule 2.1(e)
FORM OF REVOLVING NOTE
May 22, 2001
FOR VALUE RECEIVED, AUTOZONE, INC., a Nevada corporation (the "Borrower"), hereby promises to pay to the order of __________________________, its successors and assigns (the "Lender"), at the office of Fleet National Bank, as Administrative Agent (the "Administrative Agent"), at 100 Federal Street, MADE10307C, Boston, MA 02110 Attn: Agency Services (or at such other place or places as the holder hereof may designate), at the times set forth in the Credit Agreement, dated as of May 22, 2001, among the Borrower, the Lenders, the Administrative Agent and the Syndication Agent (as it may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in Dollars and in immediately available funds, the aggregate unpaid principal amount of all Revolving Loans made by the Lender to the Borrower pursuant to the Credit Agreement, and to pay interest from the date hereof on the unpaid principal amount hereof, in like money, at said office, on the dates and at the rates selected in accordance with Section 2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 3.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of the Borrower to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated maturity, the Borrower agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on a schedule attached hereto and incorporated herein by reference, or on a continuation thereof which shall be attached hereto and made a part hereof; provided, however, that any failure to endorse such information on such schedule or continuation thereof shall not in any manner affect the obligation of the Borrower to make payments of principal and interest in accordance with the terms of this Note.
This Note and the Revolving Loans evidenced hereby may be transferred in whole or in part only by registration of such transfer on the Register maintained by or on behalf of the Borrower as provided in Section 10.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written.
AUTOZONE, INC.
By:
Name:
Title:
By:
Name:
Title:
Schedule 2.2(f)
FORM OF COMPETITIVE NOTE
FOR VALUE RECEIVED, AUTOZONE, INC., a Nevada corporation (the "Borrower"), hereby promises to pay to the order of __________________________, its successors and permitted assigns (the "Lender"), at the office of Fleet National Bank, as Administrative Agent (the "Administrative Agent"), at 100 Federal Street, MADE10307C, Boston, MA 02110 Attn: Agency Services (or at such other place or places as the holder hereof may designate), at the times set forth in the Credit Agreement, dated as of May 22, 2001, among the Borrower, the Lenders, the Administrative Agent and the Syndication Agent (as it may be amended, modified, extended or restated from time to time, the "Credit Agreement"; all capitalized terms not otherwise defined herein shall have the meanings set forth in the Credit Agreement), but in no event later than the Termination Date, in Dollars and in immediately available funds, the aggregate unpaid principal amount of all Competitive Loans made by the Lender to the Borrower pursuant to the Credit Agreement, and to pay interest from the date hereof on the unpaid principal amount hereof, in like money, at said office, on the dates and at the rates selected in accordance with Section 2.2 of the Credit Agreement and in the respective Competitive Bid applicable to each Competitive Loan borrowing evidenced hereby.
Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 3.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of the Borrower to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated maturity, the Borrower agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on a schedule attached hereto and incorporated herein by reference, or on a continuation thereof which shall be attached hereto and made a part hereof; provided, however, that any failure to endorse such information on such schedule or continuation thereof shall not in any manner affect the obligation of the Borrower to make payments of principal and interest in accordance with the terms of this Note.
This Note and the Loans evidenced hereby may be transferred in whole or in part only by registration of such transfer on the Register maintained by or on behalf of the Borrower as provided in Section 10.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written.
AUTOZONE, INC.
By:
Name:
Title:
By:
Name:
Title:
Schedule 2.3(d)
FORM OF SWINGLINE NOTE
Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 3.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of the Borrower to the Swingline Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated maturity, the Borrower agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on a schedule attached hereto and incorporated herein by reference, or on a continuation thereof which shall be attached hereto and made a part hereof; provided, however, that any failure to endorse such information on such schedule or continuation thereof shall not in any manner affect the obligation of the Borrower to make payments of principal and interest in accordance with the terms of this Note.
This Note and the Loans evidenced hereby may be transferred in whole or in part only by registration of such transfer on the Register maintained by or on behalf of the Borrower as provided in Section 10.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
AUTOZONE, INC.
By:
Name:
Title:
By:
Name:
Title:
Exhibit 2.4(e)
FORM OF TERM NOTE
Upon the occurrence and during the continuance of an Event of Default, the balance outstanding hereunder shall bear interest as provided in Section 3.1 of the Credit Agreement. Further, in the event the payment of all sums due hereunder is accelerated under the terms of the Credit Agreement, this Note, and all other indebtedness of the Borrower to the Lender shall become immediately due and payable, without presentment, demand, protest or notice of any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated maturity, the Borrower agrees to pay, in addition to the principal and interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of the principal hereof and interest hereon and the respective dates thereof shall be endorsed by the holder hereof on a schedule attached hereto and incorporated herein by reference, or on a continuation thereof which shall be attached hereto and made a part hereof; provided, however, that any failure to endorse such information on such schedule or continuation thereof shall not in any manner affect the obligation of the Borrower to make payments of principal and interest in accordance with the terms of this Note.
This Note and the Loans evidenced hereby may be transferred in whole or in part only by registration of such transfer on the Register maintained by or on behalf of the Borrower as provided in Section 10.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed by its duly authorized officer as of the day and year first above written.
AUTOZONE, INC.
By:
Name:
Title:
By:
Name:
Title:
Schedule 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
Fleet National Bank,
100 Federal Street
MADE10307C
Boston, MA 02110
Attn: Agency Services
Ladies and Gentlemen:
The undersigned, AutoZone, Inc. (the "Borrower"), refers to the Credit Agreement dated as of May 22, 2001 (as amended, modified, extended or restated from time to time, the "Credit Agreement"), among the Borrower, the Lenders, Fleet National Bank, as Administrative Agent and The Chase Manhattan Bank, as Syndication Agent. Capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement. The Borrower hereby gives notice pursuant to Section 3.2 of the Credit Agreement that it requests an extension or conversion of a Revolving Loan or a Term Loan (or portion thereof) outstanding under the Credit Agreement, and in connection therewith sets forth below the terms on which such extension or conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the applicable Interest Period)
(B) Principal Amount of Extension or Conversion
(C) Interest rate basis
(D) Interest Period and the last day thereof
In accordance with the requirements of Section 4.2, the Borrower hereby reaffirms the representations and warranties set forth in the Credit Agreement as provided in subsection (b) of such Section, and confirms that the matters referenced in subsections (c), (d) and (e) of such Section, are true and correct.
Very truly yours,
AUTOZONE, INC.
By:
Name:
Title:
Schedule 4.1(g)
FORM OF LEGAL OPINION
This is the form of legal opinion delivered by
AutoZone
in connection with prior AutoZone credit facilities.
[DATE]
Fleet National Bank, as Administrative Agent,
and each of the Lenders party to the
Credit Agreements referred to below
c/o Fleet National Bank
Agency Services
100 Federal Street
MADE10307C
Boston, MA 02110
Attn: Agency Services
RE: AutoZone, Inc. Syndicated Credit Agreement
Ladies and Gentlemen:
I am the Senior Vice President, Secretary and General Counsel of AutoZone, Inc., a Nevada corporation ("AutoZone"), and am familiar with the transactions contemplated by the Credit Agreement dated as of May 22, 2001, among AutoZone, Inc., as Borrower, the several Lenders from time to time party thereto, Fleet National Bank as Administrative Agent, Chase Manhattan Bank, as Syndication Agent ("Credit Agreement"). Unless the context otherwise requires, all terms used in this opinion which are specifically defined in the Credit Agreement shall have the meanings given such terms in the Credit Agreement.
In connection with the opinions expressed below, I have examined, or caused to be examined, the Credit Documents. I have relied upon the representations and warranties contained in each of such documents and upon originals or copies, certified or otherwise identified to my satisfaction, of such corporate records, documents and other instruments as in my judgment are relevant to rendering the opinions expressed below. As to all matters of fact covered by such documents, I have relied, without independent investigation or verification on such documents. In such examination, I have assumed that each of the parties to the Credit Agreement, other than AutoZone, had and has, as the case may be, full power, authority and legal right to enter into each Credit Document to which it is a party and that each such Credit Document was or has been, as the case may be, duly authorized, executed and delivered by each of such parties.
Based on the foregoing, it is my opinion that:
(ii) Each of the Company and its subsidiaries has been duly qualified as a foreign corporation or limited partnership, as the case may be, for the transaction of business and is in good standing under the laws of each jurisdiction in which it owns or leases properties, or conducts any business, so as to require such qualification, or is subject to no material liability or disability by reason of failure to be so qualified in any such jurisdiction;
(iii) Each of the Credit Documents to which AutoZone is a party, was or has been, as the case may be, duly authorized, executed and delivered by AutoZone and together constitute the legal, valid and binding obligations of AutoZone enforceable against AutoZone in accordance with its and their terms.
I do not express any opinion as to matters governed by any law other than the Federal laws of the United States of America, the corporation law of the State of Nevada and the laws of the State of Tennessee. Further, I express no opinion as to the enforceability of the choice of law provisions contained in any of the Credit Documents.
This opinion is rendered solely for your benefit in connection with the transactions described above. This opinion may not be used or relied upon by any other person, and may not be disclosed, quoted, filed with a governmental agency or otherwise referred to without my prior written consent except to your bank examiners, auditors and counsel and to prospective transferees of your interests under the Credit Documents and their professional advisers, or as required by law or pursuant to legal process.
Very truly yours,
Schedule 5.5
Material Litigation
Quinnie
AutoZone, Inc. is a defendant in a class action lawsuit entitled "Melvin Quinnie on behalf of all others similarly situated v. AutoZone, Inc., and DOES 1 through 100, inclusive" filed in the Superior Court of California, County of Los Angeles, in November 1998. The plaintiff claims that the defendants failed to pay overtime to store managers as required by California law and failed to pay terminated managers in a timely manner as required by California law. The plaintiff is seeking injunctive relief, restitution, statutory penalties, prejudgment interest, and reasonable attorneys' fees, expenses and costs. On April 3, 2000, the court certified the class as consisting of all AutoZone store managers, and Chief managers who became AutoZone employees in standardized stores on January 1, 1999, for their claims since January 1, 1999, only. The Company and the plaintiffs' attorneys have reached a settlement that is subject to the execution of a mutually acceptable settlement agreement and court approval. In the event that final settlement is not reached or appealed by the court, the Company will continue to vigorously defend against this action. The potential damages recoverable by any single plaintiff are minimal. However, if the plaintiff class were to prevail on all of its claims, the aggregate amount of damages could be substantial.
Rusch
AutoZone, Inc. and its wholly-owned subsidiary, Chief Auto Parts Inc., are defendants in a purported class action lawsuit entitled "Paul D. Rusch, on behalf of all others similarly situated, v. Chief Auto Parts Inc., and AutoZone, Inc." filed in the Superior Court of California, County of Los Angeles, in May 1999. The plaintiffs claim that the defendants have failed to pay their store managers overtime pay from March 1997 to present. The plaintiffs are seeking back overtime pay, interest, an injunction against the defendants committing such practices in the future, costs, and attorneys' fees. The Company has reached a court-approved settlement agreement with the plaintiffs' attorneys.
Coalition For a Level Playing Field
AutoZone, Inc. is a defendant in a lawsuit entitled "Coalition for a
Level Playing Field, L.L.C., et al., v. AutoZone, Inc., et al.,"
filed in the U.S. District Court for the Eastern District of New York in
February, 2000. The case was filed by over 100 plaintiffs, which are principally
automotive aftermarket warehouse distributors and jobbers, against eight
defendants, which are principally automotive aftermarket parts retailers.
The plaintiffs claim that the defendants have knowingly received volume
discounts, rebates, slotting and other allowances, fees, free inventory,
sham advertising and promotional payments, a share in the manufacturers'
profits, and excessive payments for services purportedly performed for
the manufacturers in violation of the Robinson-Patman Act. Plaintiffs seek
approximately $1 billion in damages (including statutory trebling) and
a permanent injunction prohibiting defendants from committing further violations
of the Robinson-Patman Act and from opening up any further stores to compete
with plaintiffs as long as defendants continue to violate the Act. The
Company believes this suit to be without merit and will vigorously defend
against it.
Schedule 5.12
Subsidiaries
AutoZone, Inc. as of May 14, 2001
Status: Active
Incorporation Nevada
Federal ID# 62-1482048
Subsidiaries
ADAP, Inc.
ALLDATA LLC
AutoZone de Mexico, S. de R.L. de C.V.
AutoZone Development Corporation
AutoZone Florida, L.P.
AutoZone Properties, Inc.
AutoZone Stores, Inc.
AutoZone Texas, L.P.
AutoZone.com, Inc.
AutoZoners, Inc.
AZ Florida Properties, Inc.
Chief Auto Parts, Inc.
DataZone, S. de R.L. de C.V.
ServiceZone, S. de R. L. de C.V.
Speedbar, Inc.
TruckPro, Inc.
Zone Compra, S. de R.L. de C.V.
AutoZone de Mexico, S. de R.L. de C.V.
Schedule 6.2
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 20___.
I, ______________________, [Title] of AutoZone, Inc. (the "Borrower") hereby certify that, to the best of my knowledge and belief, with respect to that certain Credit Agreement dated as of May 22, 2001 (as amended, modified, extended or restated from time to time, the "Credit Agreement"; all of the defined terms in the Credit Agreement are incorporated herein by reference) among the Borrower, the Lenders party thereto, Fleet National Bank, as Administrative Agent and The Chase Manhattan Bank, as Syndication Agent.
b. Since ___________ (the date of the last similar certification, or, if none, the Closing Date) no Default or Event of Default has occurred under the Credit Agreement; and
This ______ day of ___________, 20__.
AUTOZONE, INC.
By:
Name:
Title:
Schedule 7.5
Subsidiary Indebtedness
AutoZone, Inc. as of May 5, 2001
Subsidiary Indebtedness
Indebtedness
Subsidiary as of 05/05/01
Chief Auto Parts, Inc. $4,743,000.00
TruckPro, Inc. $71,028.00
AutoZone Texas, L.P. $15,625,000.00
Schedule 10.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of _______________, 200_ is entered into between ________________ ("Assignor") and ____________________ ("Assignee").
Reference is made to the Credit Agreement dated as of May 22, 2001, as amended and modified from time to time thereafter (the "Credit Agreement") among AutoZone, Inc., the Lenders party thereto, Fleet National Bank, as Administrative Agent and The Chase Manhattan Bank as Syndication Agent. Terms defined in the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the Assignee, and the Assignee hereby purchases and assumes from the Assignor, effective as of the Effective Date set forth below, the interests set forth below (the "Assigned Interest") in the Assignor's rights and obligations under the Credit Agreement, including, without limitation, the interests set forth below in the Commitments and outstanding Loans of the Assignor on the effective date of the assignment designated below (the "Effective Date"), together with unpaid Fees accrued on the assigned Commitments to the Effective Date and unpaid interest accrued on the assigned Loans to the Effective Date. Each of the Assignor and the Assignee hereby makes and agrees to be bound by all the representations, warranties and agreements set forth in Section 10.3(b) of the Credit Agreement, a copy of which has been received by the Assignee. From and after the Effective Date (i) the Assignee, if it is not already a Lender under the Credit Agreement, shall be a party to and be bound by the provisions of the Credit Agreement and, to the extent of the interests purchased and assumed by the Assignee under this Assignment and Acceptance, have the rights and obligations of a Lender thereunder and (ii) the Assignor shall, to the extent of the interests sold and assigned by the Assignor under this Assignment and Acceptance, relinquish its rights and be released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance shall be governed by and construed in accordance with the laws of the State of New York.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Commitments of Assignee after giving effect to this
Assignment and Acceptance as of the Effective Date
(i) Term Loan Commitments $_________________
(ii) Revolving Commitment $_________________
(f) Commitments of Assignor after giving effect to this
Assignment and Acceptance as of the Effective Date
(i) Term Loan Commitment $_________________
(ii) Revolving Commitment $_________________
(g) Commitment Percentages of Assignee
after giving effect to this Assignment and Acceptance
as of the Effective Date
(set forth to at least 8 decimals)
(i) Term Loan Commitment Percentage ______________%
(ii) Revolving Commitment Percentage ______________%
(h) Commitment Percentages of Assignor after giving effect to this
Assignment and Acceptance as of the Effective Date
(set forth to at least 8 decimals)
(i) Term Loan Commitment Percentage ______________%
(ii) Revolving Commitment Percentage ______________%
4. This Assignment and Acceptance shall be effective only upon consent of the Borrower and the Administrative Agent, if applicable, delivery to the Administrative Agent of this Assignment and Acceptance together with the transfer fee payable pursuant to Section 10.3(b) in connection herewith and recordation in the Register pursuant to Section 10.3(c) of the terms hereof.
5. This Assignment and Acceptance may be executed in any number of counterparts, each of which where so executed and delivered shall be an original, but all of which shall constitute one and the same instrument. It shall not be necessary in making proof of this Assignment and Acceptance to produce or account for more than one such counterpart.
The terms set forth above
are hereby agreed to:
________________________, as Assignor
By:
Name:
Title:
_______________________, as Assignee
By:
Name:
Title:
Notice address of Assignee:
<<Assignee>>
Attn:
Telephone: (___)
Telecopy: (___)
CONSENTED TO:
FLEET NATIONAL BANK,
as Administrative Agent
By:
Name:
Title:
AUTOZONE, INC.
By:
Name:
Title:
AMENDMENT NO. 1 TO FIVE-YEAR CREDIT AGREEMENT
THIS AMENDMENT NO. 1 TO FIVE-YEAR CREDIT AGREEMENT (this "Amendment"), dated as of May 22, 2001, is entered into by and among AUTOZONE, INC., a Nevada corporation (the "Borrower"), the Lenders identified on the signature pages hereto and BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (in such capacity, the "Agent"). Terms used but not otherwise defined herein shall have the meanings provided in the Amended Credit Agreement referred to below.
W I T N E S S E T H:
WHEREAS, pursuant to a Five-Year Credit Agreement dated as of May 23, 2000 (the "Credit Agreement") among the Borrower, the Lenders party thereto and the Agent, the Lenders have extended commitments to make a revolving credit facility available to the Borrower; and
WHEREAS, the Borrower, the Required Lenders and the Agent have agreed to amend the Credit Agreement as set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained, the parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. Certain Definitions. Unless otherwise defined herein or the context otherwise requires, the following terms used in this Amendment, including its preamble and recitals, have the following meanings:
"Amendment Effective Date" as defined in Subpart 3.1.
AMENDMENTS TO CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment Effective Date, the Credit Agreement shall be amended in accordance with this Part II. Except as so amended, the Credit Agreement shall continue in full force and effect.
SUBPART 2.1. Amendment to Section 1.1. Section 1.1 of the Credit Agreement is hereby amended by deleting the existing definitions of "364-Day Credit Agreement", "Change of Control", "Commercial Credit Business Arrangement", "Consolidated Adjusted Debt" and "Interbank Offered Rate" and replacing them with the following new definitions:
(b) "Change of Control" means either (i) a "person" or a "group" (within the meaning of Section 13(d) and 14(d)(2) of the Securities Exchange Act of 1934) becomes the "beneficial owner" (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of more than 50% of the then outstanding voting stock of the Borrower or (ii) a majority of the board of directors of the Borrower shall consist of individuals who are not Continuing Directors. For purposes hereof, "Continuing Directors" means, as of any date of determination, (i) an individual who on the date two years prior to such determination date was a member of the Borrower's board of directors or (ii) (a) any director whose nomination for election by the Borrower's shareholders was approved by a vote of a majority of the directors then still in office who either were directors on the date two years prior to such determination date or whose nomination for election was previously so approved (or who are Continuing Directors pursuant to clause (b) below) or (b) any director who was elected by a majority of the directors then still in office who either were directors on the date two years prior to such determination date or whose nomination for election was previously so approved (or who are Continuing Directors pursuant to clause (a) above).
(c) "Commercial Credit Business Arrangement" means any agreement between the Borrower or any of its Subsidiaries and an entity that purchases such Person's commercial accounts receivables with only such limited recourse back to such Person as is customary in factoring arrangements of this type.
(d) "Consolidated Adjusted Debt" means, at any time, the sum of, without duplication, (i) Consolidated Funded Indebtedness and (ii) the product of Consolidated Rents multiplied by 6.0.
(e) "Interbank Offered Rate" means, for the Interest Period for each Eurodollar Loan comprising part of the same borrowing (including conversions, extensions and renewals), a per annum interest rate (rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%) equal to the rate of interest, determined by the Administrative Agent on the basis of the offered rates for deposits in dollars for a period of time corresponding to such Interest Period (and commencing on the first day of such Interest Period), appearing on Telerate Page 3750 (or, if, for any reason, Telerate Page 3750 is not available, the Reuters Screen LIBO Page) as of approximately 11:00 A.M. (London time) two (2) Business Days before the first day of such Interest Period; provided, however, if no such interest rate for a period of time corresponding to such Interest Period appears on Telerate Page 3750 or the Reuters Screen LIBO Page, then the applicable interest rate shall be determined by the Administrative Agent in good faith. As used herein, "Telerate Page 3750" means the display designated as page 3750 by Dow Jones Telerate, Inc. (or such other page as may replace such page on that service for the purpose of displaying the British Bankers Association London interbank offered rates) and "Reuters Screen LIBO Page" means the display designated as page "LIBO" on the Reuters Monitor Money Rates Service (or such other page as may replace the LIBO page on that service for the purpose of displaying London interbank offered rates of major banks).
SUBPART 2.3. Amendment to Section 2.2(c). Section 2.2(c) of the Credit Agreement is hereby amended by deleting the following words from the second sentence therein:
SUBPART 2.4. Amendment to Section 2.2(d). Section 2.2(d) of the Credit Agreement is hereby amended by deleting the following words from the first sentence therein:
SUBPART 2.5. Amendment to Section 3.3(b)(ii). Section 3.3(b)(ii) of the Credit Agreement is hereby deleted in its entirety and is replaced with the following:
(B) to permanently reduce on a Dollar for Dollar basis commitments outstanding under the Facilities (regardless of whether there are any outstanding borrowings being prepaid), with such reductions applied pro rata to the Facilities (based on outstanding commitments thereunder) to the extent of outstanding commitments under each Facility (it being understood that the aggregate amount of commitment reductions required to be made by the Borrower under both Facilities shall not exceed 50% of the net cash proceeds of such Debt or Equity Issuance and that a commitment reduction under a Facility shall reduce the individual commitments of the lenders under such facility on a pro rata basis).
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. Amendment Effective Date. This Amendment shall be and become effective as of the date hereof (the "Amendment Effective Date") when all of the conditions set forth below in this Part III shall have been satisfied.
SUBPART 3.2. Execution of Counterparts of Amendment. The Agent shall have received counterparts (or other evidence of execution, including telephonic message, satisfactory to the Agent) of this Amendment, which collectively shall have been duly executed on behalf of each of the Borrower, the Agent and the Required Lenders.
SUBPART 3.3. Legal Details, Etc. The Agent, for the benefit of the Lenders, and its counsel shall have received, and be satisfied with, any supporting documentation as the Agent may reasonably request.
PART IV
MISCELLANEOUS
SUBPART 4.1. Cross-References. References in this Amendment to any Part or Subpart are, unless otherwise specified, to such Part or Subpart of this Amendment.
SUBPART 4.2. Instrument Pursuant to Credit Agreement. This Amendment is a Credit Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated therein) be construed, administered and applied in accordance with the terms and provisions of the Amended Credit Agreement.
SUBPART 4.3. References in Other Credit Documents. At such time as this Amendment shall become effective pursuant to the terms of Subpart 3.1, all references in the Credit Documents to the "Credit Agreement" shall be deemed to refer to the Credit Agreement as amended by this Amendment.
SUBPART 4.4. Representations and Warranties. The Borrower hereby represents and warrants that:
(b) This Amendment has been duly executed and delivered by the Borrower and constitutes the Borrower's legal, valid and binding obligations, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors' rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
(c) No consent, approval, authorization or order of, or filing, registration or qualification with, any court or governmental authority or third party is required in connection with the execution, delivery or performance by the Borrower of this Amendment.
(d) The representations and warranties set forth in Section 5 of the Amended Credit Agreement are, subject to the limitations set forth therein, true and correct in all material respects as of the Amendment Effective Date (except for those which expressly relate to an earlier date).
(e) Subsequent to the execution and delivery of this Amendment and after giving effect hereto, no Default or Event of Default exists under the Amended Credit Agreement or any of the other Credit Documents.
(f) All of the provisions of the Credit Documents, except as amended hereby, are in full force and effect.
SUBPART 4.6. Counterparts/Telecopy. This Amendment may be executed by the parties hereto in several counterparts, each of which shall be deemed to be an original and all of which shall constitute together but one and the same agreement. Delivery of an executed counterpart by telecopy shall be effective as an original and shall constitute a representation that an original will be delivered.
SUBPART 4.7. Governing Law. THIS AMENDMENT SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT OF LAW PRINCIPLES THEREOF.
SUBPART 4.8. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.
SUBPART 4.9. ENTIRETY. THIS AMENDMENT, THE AMENDED CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS EMBODY THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND SUPERSEDE ALL PRIOR AGREEMENTS AND UNDERSTANDINGS, IF ANY, RELATING TO THE SUBJECT MATTER HEREOF. THESE CREDIT DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.
[Signature pages follow]
This Amendment No. 1 to Five-Year Credit Agreement is executed as of
the day and year first written above.
BORROWER:
AUTOZONE, INC.
a Nevada corporation
By: /s/ James A. Cook, III
Name: James Cook
Title: VP & Treasurer
By: /s/ Harry L. Goldsmith
Name: Harry L. Goldsmith
Title:Sr. Vice President, Secretary & General Counsel
LENDERS:
FLEET NATIONAL BANK
By: /s/ Thomas J. Bullard
Name: Thomas J. Bullard
Title: Director
BANK OF AMERICA, N.A.
By: /s/ Timothy H. Spanos
Name: Timothy H. Spanos
Title: Managing Director
THE BANK OF NEW YORK
By: /s/ Howard F. Bascom, Jr.
Name: Howard F. Bascom, Jr.
Title: Vice President
BANK ONE, NA
By: /s/ Catherine A. Muszynski
Name: Catherine A. Muszynski
Title: Vice President
FIFTH THIRD BANK
By: /s/Megan S. Heisel
Name: Megan S. Heisel
Title: Corporate Banking Officer
HIBERNIA NATIONAL BANK
By: /s/ Andrew B. Booth
Name: Andrew B. Booth
Title: Asst Vice President
THE CHASE MANHATTAN BANK
By: /s/ Barry K. Bergman
Name: Barry K. Bergman
Title: Vice President
KEYBANK NATIONAL ASSOCIATION
By: /s/ Mark A. LoSchiavo
Name: Mark A. LoSchiavo
Title: AVP
NATIONAL CITY BANK
By: /s/ James C. Ritchie
Name: James C. Ritchie
Title: Assistant Vice President
SUNTRUST BANK
By: /s/ Bryan W. Ford
Name: Bryan W. Ford
Title: Vice President
UNION PLANTERS N.A.
By: /s/ Keith Hart
Name: Keith Hart
Title: Vice-President
WACHOVIA BANK, N.A.
By: /s/ Anne L. Sayles
Name: Anne L. Sayles
Title: Senior Vice President
UNION BANK OF CALIFORNIA, N.A.
By: /s/ Theresa L. Rocha
Name: Theresa L. Rocha
Title: Vice President
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
By: /s/ James H. Moore, Jr.
Name: James H. Moore, Jr.
Title: SVP
FIRSTAR BANK, N.A.
By: /s/ Amanda Smith
Name: Amanda Smith
Title: AVP
MERRILL LYNCH BANK USA
By: /s/ D. Kevin Imlay
Name: D. Kevin Imlay
Title: Senior Lending Officer
SUBSIDIARIES OF THE REGISTRANT
| Name | State or Country of Organization or Incorporation | Name under which subsidiary is doing business other than its own |
| ADAP, Inc. |
|
AutoZone |
| ALLDATA LLC | Nevada | |
| AutoZone de Mexico, S. de R.L. de C.V. | Mexico | |
| AutoZone Development Corporation | Nevada | |
| AutoZone Florida, L.P. | Delaware | |
| AutoZone Stores, Inc. | Nevada | |
| AutoZone Texas, L.P. | Delaware | |
| AutoZone.com, Inc. | Nevada | |
| Chief Auto Parts Inc. | Delaware | AutoZone |
| Speedbar, Inc. | Nevada | |
| TruckPro, Inc. | Nevada |
In addition, one subsidiary operating in the United States and five subsidiaries operating outside of the United States have been omitted as they would not, considered in the aggregate as a single subsidiary, constitute a significant subsidiary as defined by Rule 1-02(w) of Regulation S-X.
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report (Form 10-K) of AutoZone, Inc. of our report dated September 21, 2001, included in the 2001 Annual Report to Stockholders of AutoZone, Inc.
Our audits also included the financial statement schedule of AutoZone, Inc. listed in Item 14(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-42797) pertaining to the Amended and Restated AutoZone, Inc. Employee Stock Purchase Plan, the Registration Statement (Form S-8 and S-3 No. 33-41618) pertaining to the AutoZone, Inc. Amended and Restated Stock Option Plan, the Registration Statement (Form S-8 No. 333-88245) pertaining to the AutoZone, Inc. Second Amended and Restated 1996 Stock Option Plan, the Registration Statement (Form S-8 No. 333-88241) pertaining to the AutoZone, Inc. Second Amended and Restated Director Compensation Plan, the Registration Statement (Form S-8 No. 333-88243) pertaining to the AutoZone, Inc. Second Amended and Restated 1998 Director Stock Option Plan and the Registration Statement (Form S-3 No. 333-58565), of our report dated September 21, 2001, with respect to the consolidated financial statements and schedule of AutoZone, Inc. included or incorporated by reference in this Annual Report (Form 10-K) for the year ended August 25, 2001.
/s/ Ernst & Young LLP
Memphis, Tennessee
November 14, 2001