UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x
|
Quarterly
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
|
For
the quarterly period ended May 6, 2006,
or
|
o
|
Transition
report pursuant to Section 13 or 15(d) of the Securities Exchange
Act of
1934
|
|
For
the transition period from _______ to
________.
|
Commission
file number 1-10714
AUTOZONE,
INC.
(Exact
name of registrant as specified in its charter)
Nevada
|
|
62-1482048
|
(State
or other jurisdiction of
|
|
(I.R.S.
Employer
|
incorporation
or organization)
|
|
Identification
No.)
|
123
South Front Street
Memphis,
Tennessee 38103
(Address
of principal executive offices) (Zip Code)
(901)
495-6500
(Registrant's
telephone number, including area code)
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 periods 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
o
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See the definition of
“accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange
Act. (Check one):
Large
accelerated filer x Accelerated
filer o Non-accelerated
filer o
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes o
No
x
Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date.
Common
Stock, $.01 Par Value - 74,294,451 shares outstanding as of May 31,
2006.
TABLE
OF CONTENTS
PART
I.
FINANCIAL INFORMATION
Item
1.
Financial Statements
CONDENSED
CONSOLIDATED BALANCE SHEETS
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES
TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Item
2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
Item
3.
Quantitative and Qualitative Disclosures About Market Risk
Item
4.
Controls and Procedures
PART
II.
OTHER INFORMATION
Item
1.
Legal Proceedings
Item
2.
Changes in Securities and Use of Proceeds
Item
3.
Defaults Upon Senior Securities
Item
4.
Submission of Matters to a Vote of Security Holders
Item
5.
Other Information
Item
6.
Exhibits and Reports on Form 8-K
SIGNATURES
EXHIBIT
INDEX
EX
10.1
LONGO AGREEMENT
EX
10.2
GILES OFFER LETTER
EX
10.3
FIRST AMENDMENT TO CREDIT AGREEMENT
EX
10.4
FOUR YEAR CREDIT AGREEMENT
EX
10.5
SECOND AMENDED AND RESTATED FIVE YEAR CREDIT AGREEMENT
EX.12.1
RATIO OF EARNINGS TO FIXED CHARGES
EX.15.1
LETTER FROM ERNST & YOUNG LLP
EX.31.1
SECTION 302 CERTIFICATION OF PEO
EX.31.2
SECTION 302 CERTIFICATION OF PFO
EX.32.1
SECTION 906 CERTIFICATION OF PEO
EX.32.2
SECTION 906 CERTIFICATION OF PFO
PART
I. FINANCIAL INFORMATION
Item
1. Financial
Statements.
AUTOZONE,
INC.
CONDENSED
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in
thousands)
|
|
May
6,
2006
|
|
August
27,
2005
|
|
ASSETS
|
|
Current
assets
|
|
|
|
|
|
Cash
and cash equivalents
|
|
$
|
83,968
|
|
$
|
74,810
|
|
Accounts
receivable
|
|
|
102,600
|
|
|
118,263
|
|
Merchandise
inventories
|
|
|
1,752,687
|
|
|
1,663,860
|
|
Other
current assets
|
|
|
101,121
|
|
|
72,526
|
|
Total
current assets
|
|
|
2,040,376
|
|
|
1,929,459
|
|
|
|
|
|
|
|
|
|
Property
and equipment
|
|
|
|
|
|
|
|
Property
and equipment
|
|
|
3,139,579
|
|
|
2,978,637
|
|
Less:
Accumulated depreciation and amortization
|
|
|
1,117,887
|
|
|
1,041,022
|
|
|
|
|
2,021,692
|
|
|
1,937,615
|
|
Other
assets
|
|
|
|
|
|
|
|
Goodwill,
net of accumulated amortization
|
|
|
302,645
|
|
|
302,699
|
|
Deferred
income taxes
|
|
|
43,249 |
|
|
32,917 |
|
Other
long-term assets
|
|
|
34,957
|
|
|
42,567
|
|
|
|
|
380,851
|
|
|
378,183
|
|
|
|
$
|
4,442,919
|
|
$
|
4,245,257
|
|
|
|
|
|
|
|
|
|
LIABILITIES
AND STOCKHOLDERS’ EQUITY
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
1,442,132
|
|
$
|
1,539,776
|
|
Accrued
expenses
|
|
|
257,584
|
|
|
255,672
|
|
Income
taxes payable
|
|
|
150,482
|
|
|
4,753
|
|
Deferred
income taxes
|
|
|
15,531
|
|
|
10,958
|
|
Total
current liabilities
|
|
|
1,865,729
|
|
|
1,811,159
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
1,825,125
|
|
|
1,861,850
|
|
Other
liabilities
|
|
|
183,520
|
|
|
181,241
|
|
Stockholders’
equity
|
|
|
568,545
|
|
|
391,007
|
|
|
|
$
|
4,442,919
|
|
$
|
4,245,257
|
|
See
Notes to Condensed Consolidated Financial Statements
AUTOZONE,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in
thousands, except per share amounts)
|
|
Twelve
Weeks Ended
|
|
Thirty-six
Weeks Ended
|
|
|
|
May
6,
2006
|
|
May
7,
2005
|
|
May
6,
2006
|
|
May
7,
2005
|
|
|
|
|
|
|
|
|
|
|
|
Net
sales
|
|
$
|
1,417,433
|
|
$
|
1,338,387
|
|
$
|
4,009,325
|
|
$
|
3,828,645
|
|
Cost
of sales, including warehouse
|
|
|
|
|
|
|
|
|
|
|
|
|
|
and
delivery expenses
|
|
|
713,392
|
|
|
665,284
|
|
|
2,033,566
|
|
|
1,952,370
|
|
Operating,
selling, general and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
administrative
expenses
|
|
|
450,872
|
|
|
413,641
|
|
|
1,338,952
|
|
|
1,251,781
|
|
Operating
profit
|
|
|
253,169
|
|
|
259,462
|
|
|
636,807
|
|
|
624,494
|
|
Interest
expense, net
|
|
|
24,921
|
|
|
24,223
|
|
|
72,994
|
|
|
69,659
|
|
Income
before income taxes
|
|
|
228,248
|
|
|
235,239
|
|
|
563,813
|
|
|
554,835
|
|
Income
taxes
|
|
|
83,820
|
|
|
87,450
|
|
|
207,990
|
|
|
190,431
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
$
|
144,428
|
|
$
|
147,789
|
|
$
|
355,823
|
|
$
|
364,404
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for
basic earnings per share
|
|
|
75,909
|
|
|
78,521
|
|
|
76,427
|
|
|
79,308
|
|
Effect
of dilutive stock equivalents
|
|
|
674
|
|
|
973
|
|
|
643
|
|
|
1,061
|
|
Adjusted
weighted average shares
|
|
|
|
|
|
|
|
|
|
|
|
|
|
for
diluted earnings per share
|
|
|
76,583
|
|
|
79,494
|
|
|
77,070
|
|
|
80,369
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
earnings per share
|
|
$
|
1.90
|
|
$
|
1.88
|
|
$
|
4.66
|
|
$
|
4.59
|
|
Diluted
earnings per share
|
|
$
|
1.89
|
|
$
|
1.86
|
|
$
|
4.62
|
|
$
|
4.53
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See
Notes to Condensed Consolidated Financial Statements
AUTOZONE,
INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in
thousands)
|
|
Thirty-six
Weeks Ended
|
|
|
|
May
6,
2006
|
|
May
7,
2005
|
|
Cash
flows from operating activities
|
|
|
|
|
|
Net
income
|
|
$
|
355,823
|
|
$
|
364,404
|
|
Adjustments
to reconcile net income to net
|
|
|
|
|
|
|
|
cash
provided by operating activities
|
|
|
|
|
|
|
|
Depreciation
and amortization of property and equipment
|
|
|
94,600
|
|
|
96,669
|
|
Deferred
rent liability adjustment
|
|
|
--
|
|
|
21,527
|
|
Amortization
of debt origination fees
|
|
|
1,047
|
|
|
1,829
|
|
Income
tax benefit from exercise of options
|
|
|
(9,365
|
)
|
|
23,374
|
|
Income
from warranty negotiations
|
|
|
--
|
|
|
(1,736
|
)
|
Share-based
compensation expense
|
|
|
12,145
|
|
|
--
|
|
Changes
in operating assets and liabilities
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
15,663
|
|
|
(45,204
|
)
|
Merchandise
inventories
|
|
|
(88,827
|
)
|
|
(97,838
|
)
|
Accounts
payable and accrued expenses
|
|
|
(95,732
|
)
|
|
4,090
|
|
Income
taxes payable
|
|
|
155,094
|
|
|
61,658
|
|
Deferred
income taxes
|
|
|
(8,689
|
)
|
|
(38,890
|
)
|
Other,
net
|
|
|
4,532
|
|
|
13,628
|
|
Net
cash provided by operating activities
|
|
|
436,291
|
|
|
403,511
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
|
(182,168
|
)
|
|
(186,939
|
)
|
Purchase
of marketable securities
|
|
|
(138,157
|
)
|
|
-- |
|
Proceeds
from sale of short-term
investments
|
|
|
121,367
|
|
|
-- |
|
Acquisition
|
|
|
--
|
|
|
(3,116
|
)
|
Disposal
of capital assets
|
|
|
2,456
|
|
|
3,679
|
|
Net
cash used in investing activities
|
|
|
(196,502
|
)
|
|
(186,376
|
)
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities
|
|
|
|
|
|
|
|
Net
proceeds (repayments) of commercial paper
|
|
|
115,300
|
|
|
(252,700
|
)
|
Proceeds
from issuance of debt
|
|
|
--
|
|
|
300,000
|
|
Repayment
of Senior Notes
|
|
|
(150,000
|
)
|
|
--
|
|
Net
proceeds from sale of common stock
|
|
|
35,250
|
|
|
45,212
|
|
Purchase
of treasury stock
|
|
|
(238,111
|
)
|
|
(308,558
|
)
|
Income
tax benefit from exercised options
|
|
|
9,365
|
|
|
--
|
|
Other,
net
|
|
|
(2,435
|
)
|
|
(563
|
)
|
Net
cash used in financing activities
|
|
|
(230,631
|
)
|
|
(216,609
|
)
|
Net
increase in cash and cash equivalents
|
|
|
9,158
|
|
|
526
|
|
Cash
and cash equivalents at beginning of period
|
|
|
74,810
|
|
|
76,852
|
|
Cash
and cash equivalents at end of period
|
|
$
|
83,968
|
|
$
|
77,378
|
|
See
Notes to Condensed Consolidated Financial Statements
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note
A-Basis of Presentation
The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with U.S. generally accepted accounting principles for
interim financial information and with instructions to Form 10-Q and Article
10
of Regulation S-X. Accordingly, they do not include all of the information
and
footnotes required by U.S. generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments, including
normal recurring accruals, considered necessary for a fair presentation have
been included. For further information, refer to the consolidated financial
statements and footnotes included in the 2005 Annual Report to Shareholders
for
AutoZone, Inc. (“AutoZone” or the “Company”), which is incorporated by reference
in its Annual Report on Form 10-K for the year ended August 27, 2005.
Operating
results for the twelve and thirty-six weeks ended May 6, 2006, are not
necessarily indicative of the results that may be expected for the fiscal year
ending August 26, 2006. Each of the first three quarters of our fiscal year
consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. Each
of
the fourth quarters of fiscal 2005 and 2006 has 16 weeks. Additionally, the
Company’s business is somewhat seasonal in nature, with the highest sales
generally occurring in the summer months of June through August and the lowest
sales generally occurring in the winter months of December through
February.
Note
B-Share-Based Payments
Effective
August 28, 2005, the Company adopted Statement of Financial Accounting Standards
(“SFAS”) No. 123(R) “Share-Based Payment” and began recognizing compensation
expense for its share-based payments based on the fair value of the awards.
Share-based payments include stock option grants and certain transactions under
the Company’s other stock plans. SFAS 123(R) requires share-based compensation
expense recognized since August 28, 2005, to be based on the following: a)
grant
date fair value estimated in accordance with the original provisions of SFAS
123, “Accounting for Stock-Based Compensation” for unvested options granted
prior to the adoption date; b) grant date fair value estimated in accordance
with the provisions of SFAS 123(R) for unvested options granted subsequent
to
the adoption date; and c) the discount on shares sold to employees
post-adoption, which represents the difference between the grant date fair
value
and the employee purchase price. Prior to August 28, 2005, the Company accounted
for share-based payments using the intrinsic-value-based recognition method
prescribed by Accounting Principles Board Opinion (“APB”) No. 25, “Accounting
for Stock Issued to Employees,” and SFAS 123. As options were granted at an
exercise price equal to the market value of the underlying common stock on
the
date of grant, no stock-based employee compensation cost was reflected in net
income prior to adopting SFAS 123(R). As the Company adopted SFAS 123(R) under
the modified-prospective-transition method, results from prior periods have
not
been restated.
The
adoption of SFAS 123(R)’s fair value method has resulted in additional
share-based expense (a component of operating, selling and general and
administrative expenses) in the amount of $3.9 million related to stock options
and $287,000 related to share purchase plans for the twelve-week period ended
May 6, 2006, than if the Company had continued to account for share-based
compensation under APB 25. For the twelve-week period ended May 6, 2006, this
additional share-based compensation lowered pre-tax earnings by $4.2 million,
lowered net income by $2.6 million, and lowered basic and diluted earnings
per
share by $0.03.
For
the
thirty-six week period ended May 6, 2006, the adoption of SFAS 123(R)’s fair
value method has resulted in additional share-based expense (a component of
operating, selling and general and administrative expenses) in the amount of
$11.4 million related to stock options and $727,000 related to share purchase
plans than if the Company had continued to account for share-based compensation
under APB 25. For the thirty-six week period ended May 6, 2006 this additional
share-based compensation lowered pre-tax earnings by $12.1 million, lowered
net
income by $7.7 million, and lowered basic and diluted earnings per share by
$0.10. SFAS 123(R) also requires the benefits of tax deductions in excess of
recognized compensation cost to be reported as a financing cash flow, rather
than as an operating cash flow as required prior to SFAS 123(R). For the
thirty-six week period ended May 6, 2006, the $9.4 million excess tax benefit
classified as a financing cash inflow would have been classified as an operating
cash inflow if the Company had not adopted SFAS 123(R). The impact of adopting
SFAS 123(R) on future results will depend on, among other things, levels of
share-based payments granted in the future, actual forfeiture rates and the
timing of option exercises.
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The
following table illustrates the effect on net income and earnings per share
if
the Company had not adopted SFAS 123(R) and applied the fair value recognition
provisions of SFAS 123 to options granted under the Company’s stock plans in all
periods presented. For purposes of this pro forma disclosure, the value of
the
options is estimated using Black-Scholes-Merton multiple option pricing model
for all option grants.
|
|
Twelve
Weeks Ended
|
|
Thirty-six
Weeks Ended
|
|
(in
thousands, except per share amounts)
|
|
May
6,
2006
|
|
May
7,
2005
|
|
May
6,
2006
|
|
May
7,
2005
|
|
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
|
$
|
144,428
|
|
$
|
147,789
|
|
$
|
355,823
|
|
$
|
364,404
|
|
Add:
Share-based payments included in reported net income, net of related
tax
effects per SFAS 123(R)
|
|
|
2,634
|
|
|
--
|
|
|
7,664
|
|
|
--
|
|
Deduct:
Total pro-forma stock-based employee compensation expense determined
under
fair value based method for all awards, net of related tax effects
per
SFAS 123 and APB 25
|
|
|
(2,472
|
)
|
|
(470
|
)
|
|
(5,134
|
)
|
|
(7,550
|
)
|
Pro
forma net income
|
|
$
|
144,590
|
|
$
|
147,319
|
|
$
|
358,353
|
|
$
|
356,854
|
|
Earnings
per share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
- as reported
|
|
$
|
1.90
|
|
$
|
1.88
|
|
$
|
4.66
|
|
$
|
4.59
|
|
Basic
- pro forma
|
|
$
|
1.90
|
|
$
|
1.87
|
|
$
|
4.69
|
|
$
|
4.50
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted
- as reported
|
|
$
|
1.89
|
|
$
|
1.86
|
|
$
|
4.62
|
|
$
|
4.53
|
|
Diluted
- pro forma
|
|
$
|
1.89
|
|
$
|
1.85
|
|
$
|
4.65
|
|
$
|
4.44
|
|
Under
SFAS 123(R) forfeitures are estimated at the time of valuation and reduce
expense ratably over the vesting period. This estimate is adjusted periodically
based on the extent to which actual forfeitures differ, or are expected to
differ, from the previous estimate. Under SFAS 123 and APB 25, the Company
elected to account for forfeitures when awards were actually forfeited, at
which
time all previous proforma expense (which after-tax, approximated $239,000
in
the twelve-week period and $3.5 million in the thirty-six week period ended
May
6, 2006 and $3.3 million in the twelve week period and $3.8 million in the
thirty-six week period ended May 7, 2005) was reversed to reduce pro forma
expense for that period.
AutoZone
grants options to purchase common stock to some of its employees and directors
under various plans at prices equal to the market value of the stock on the
dates the options were granted. Options have a term of 10 years or 10 years
and
one day from grant date. Director options generally vest three years from grant
date. Employee options generally vest in equal annual installments on the first,
second, third and fourth anniversaries of the grant date. Employees generally
have 30 days after the employment relationship ends, or one year after death,
to
exercise all vested options. The fair value of each option grant is separately
estimated for each vesting date. The fair value of each option is amortized
into
compensation expense on a straight-line basis between the grant date for the
award and each vesting date. The Company has estimated the fair value of all
stock option awards as of the date of the grant by applying the
Black-Scholes-Merton multiple-option pricing valuation model. The application
of
this valuation model involves assumptions that are judgmental and highly
sensitive in the determination of compensation expense. The weighted average
for
key assumptions used in determining the fair value of options granted in the
thirty-six-week period ended May 6, 2006 and a summary of the methodology
applied to develop each assumption are as follows:
Expected
price volatility
|
|
|
32
|
%
|
Risk-free
interest rate
|
|
|
4.0
|
%
|
Weighted
average expected lives in years
|
|
|
3.3
|
|
Forfeiture
rate
|
|
|
10
|
%
|
Dividend
yield
|
|
|
0
|
%
|
Expected
Price Volatility -
This is
a measure of the amount by which a price has fluctuated or is expected to
fluctuate. We use actual historical changes in the market value of our stock
to
calculate the volatility assumption as it is management’s belief that this is
the best indicator of future volatility. We calculate daily market value changes
from the date of grant over a past period representative of the expected life
of
the options to determine volatility. An increase in the expected volatility
will
increase compensation expense.
Risk-Free
Interest Rate -
This is
the U.S. Treasury rate for the week of the grant having a term equal to the
expected life of the option. An increase in the risk-free interest rate will
increase compensation expense.
Expected
Lives -
This is
the period of time over which the options granted are expected to remain
outstanding and is based on historical experience. Separate groups of employees
that have similar historical exercise behavior are considered separately for
valuation purposes. Options granted have a maximum term of ten years. An
increase in the expected life will increase compensation expense.
Forfeiture
Rate -
This is
the estimated percentage of options granted that are expected to be forfeited
or
canceled before becoming fully vested. This estimate is based on historical
experience. An increase in the forfeiture rate will decrease compensation
expense.
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Dividend
Yield -
The
Company has not made any dividend payments nor does it have plans to pay
dividends in the foreseeable future. An increase in the dividend yield will
decrease compensation expense.
The
Company generally issues new shares when options are exercised. A summary of
stock option activity since our most recent fiscal year end is as follows:
|
|
Options
|
|
Weighted
Average
Exercise
Price
|
|
Outstanding
August 27, 2005
|
|
|
3,837,486
|
|
$
|
65.87
|
|
Granted
|
|
|
705,595
|
|
|
82.32
|
|
Exercised
|
|
|
(664,444
|
)
|
|
55.53
|
|
Canceled
|
|
|
(448,207
|
)
|
|
75.26
|
|
Outstanding
May 6, 2006
|
|
|
3,430,430
|
|
$
|
70.03
|
|
At
May 6,
2006, the aggregate intrinsic value of all outstanding options was $78.1 million
with a weighted average remaining contractual term of 7.1 years, of which
1,536,694 of the outstanding options are currently exercisable with an aggregate
intrinsic value of $54.2 million, a weighted average exercise price of $57.48
and a weighted average remaining contractual term of 5.6 years. Shares reserved
for future option grants approximated 2.3 million at May 6, 2006. Since August
27, 2005, the weighted average grant date fair value of options granted is
$22.67 and 608,224 options have vested, net of forfeitures, with a weighted
average intrinsic value of $19.95. At May 6, 2006, the total compensation cost
related to non-vested awards not yet recognized was $21.6 million with a
weighted average expense recognition period of 1.4 years.
Under
the
AutoZone, Inc. 2003 Director Stock Option Plan, on January 1 of each year,
each
non-employee director receives an option to purchase 1,500 shares of common
stock, and each non-employee director that owns common stock worth at least
five
times the annual fee paid to each non-employee director on an annual basis
will
receive an additional option to purchase 1,500 shares of common stock. In
addition, each new director receives an option to purchase 3,000 shares upon
election to the Board of Directors, plus a portion of the annual directors’
option grant prorated for the portion of the year actually served in office.
These stock option grants are made at the fair market value as of the grant
date. At May 6, 2006, there were 79,617 outstanding options under the current
and prior plans with 315,883 shares of common stock reserved for future issuance
under the current plan.
Under
the
AutoZone, Inc. 2003 Director Compensation Plan, a non-employee director may
receive no more than one-half of their director fees immediately in cash, and
the remainder of the fees must be taken in common stock or may be deferred
in
units with value equivalent to the value of shares of common stock as of the
grant date. At May 6, 2006, the Company has $1.7 million accrued related to
18,289 director units issued under the current and prior plans with 88,374
shares of common stock reserved for future issuance under the current
plan.
For
the
thirty-six week period ended May 6, 2006, the Company recognized $727,000 in
expense related to the discount on the selling of shares to employees and
executives under various share purchase plans. Under the Company’s share
purchase plans for the thirty-six week period ended May 6, 2006, 40,161 shares
were sold to employees and the Company repurchased, at fair value, 50,195 shares
from employees electing to sell their stock. Issuances of shares under the
share
purchase plans are netted against repurchases and such repurchases are not
included in share repurchases disclosed in “Note G - Stock Repurchase Program.”
At May 6, 2006, 422,757 shares of common stock were reserved for future issuance
under the employee plan and 264,341 shares of common stock were reserved for
future issuance under the executive plan.
There
have been no modifications to the Company’s share-based compensation plans
during the thirty-six week period ended May 6, 2006.
Note
C- Inventories
Inventories
are stated at the lower of cost or market using the last-in, first-out (“LIFO”)
method. Included in inventory are related purchasing, storage and handling
costs. Due to price deflation on the Company’s merchandise purchases, the
Company’s inventory balances are effectively maintained under the first-in,
first-out method as the Company’s policy is not to write up inventory for
favorable LIFO adjustments, resulting in cost of sales being reflected at the
higher amount. The cumulative balance of this unrecorded adjustment, which
would
be reduced upon experiencing price inflation on our merchandise purchases,
was
$191 million at May 6, 2006, and $167 million at August 27, 2005.
AutoZone
has entered into pay-on-scan (“POS”) arrangements with certain vendors, whereby
AutoZone will not purchase merchandise supplied by a vendor until just before
that merchandise is ultimately sold to AutoZone’s customers. Title and certain
risks of ownership remain with the vendor until the merchandise is sold to
AutoZone’s customers. Since the Company does not own merchandise under POS
arrangements until just before it is sold to a customer, such merchandise is
not
recorded on the Company’s balance sheet. Upon the sale of the merchandise to
AutoZone’s customers, AutoZone recognizes the liability for the goods and pays
the vendor in accordance with the agreed-upon terms. Although AutoZone does
not
hold title to the goods, AutoZone controls pricing and has credit collection
risk and therefore, gross revenues under POS arrangements are included in net
sales in the income statement. AutoZone has financed the repurchase of existing
merchandise inventory by certain vendors in order to convert such vendors to
POS
arrangements. These receivables have remaining durations up to 17 months and
approximated $19.9 million at May 6, 2006, and $49.9 million at August 27,
2005.
The current portion of these receivables is reflected in accounts receivable
and
was $19.4 million at May 6, 2006, and $37.5 million at August 27, 2005. The
long-term portion of $530,000 at May 6, 2006, and $12.4 million at August 27,
2005, is reflected as a component of other long-term assets. Merchandise under
POS arrangements was $123.4 million at May 6, 2006, and $151.7 million at August
27, 2005.
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note
D-Legal Proceedings
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 Southern District of New York in October 2004. The case was filed by more
than 200 plaintiffs, which are principally automotive aftermarket warehouse
distributors and jobbers (collectively “Plaintiffs”), against a number of
defendants, including automotive aftermarket retailers and aftermarket
automotive parts manufacturers. In the amended complaint the plaintiffs allege,
inter alia, that some or all of the automotive aftermarket retailer defendants
have knowingly received, in violation of the Robinson-Patman Act (the “Act”),
from various of the manufacturer defendants benefits such as volume discounts,
rebates, early buy allowances and other allowances, fees, inventory without
payment, sham advertising and promotional payments, a share in the
manufacturers' profits, benefits of pay on scan purchases, implementation of
radio frequency identification technology, and excessive payments for services
purportedly performed for the manufacturers. Additionally, a subset of
plaintiffs alleges a claim of fraud against the automotive aftermarket retailer
defendants based on discovery issues in a prior litigation involving similar
Robinson-Patman Act claims. In the prior litigation, the discovery dispute,
as
well as the underlying claims, were decided in favor of AutoZone and the other
automotive aftermarket retailer defendants who proceeded to trial, pursuant
to a
unanimous jury verdict which was affirmed by the Second Circuit Court of
Appeals. In the current litigation, plaintiffs seek an unspecified amount of
damages (including statutory trebling), attorneys' fees, and a permanent
injunction prohibiting the aftermarket retailer defendants from inducing and/or
knowingly receiving discriminatory prices from any of the aftermarket
manufacturer defendants and from opening up any further stores to compete with
plaintiffs as long as defendants allegedly continue to violate the Act. The
Company believes this suit to be without merit and is vigorously defending
against it. Defendants have filed motions to dismiss all claims with prejudice
on substantive and procedural grounds. Additionally, the Defendants have sought
to enjoin plaintiffs from filing similar lawsuits in the future. If granted
in
their entirety, these dispositive motions would resolve the litigation in
Defendants' favor.
On
June
22, 2005, the Attorney General of the State of California, in conjunction with
District Attorneys for San Bernardino, San Joaquin and Monterey Counties, filed
suit in the San Bernardino County Superior Court against AutoZone, Inc. and
its
California subsidiaries. The San Diego County District Attorney later joined
the
suit. The lawsuit alleges that AutoZone failed to follow various state statutes
and regulations governing the storage and handling of used motor oil and other
materials collected for recycling or used for cleaning AutoZone stores and
parking lots. The suit seeks $12.0 million in penalties and injunctive relief.
The
Company currently, and from time to time, is involved in various other legal
proceedings incidental to the conduct of its business. Although the amount
of
liability that may result from these other proceedings cannot be ascertained,
the Company does not currently believe that, in the aggregate, these matters
will result in liabilities material to the Company’s financial condition,
results of operations or cash flows.
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note
E-Pension Plans
Prior
to
January 1, 2003, substantially all full-time employees were covered by a defined
benefit pension plan. The benefits under the plan were based on years of service
and the employee’s highest consecutive five-year average compensation. On
January 1, 2003, the plan was frozen. Accordingly, pension plan participants
will earn no new benefits under the plan formula and no new participants will
join the pension plan.
On
January 1, 2003, the Company’s supplemental defined benefit pension plan for
certain highly compensated employees was also frozen. Accordingly, plan
participants will earn no new benefits under the plan formula and no new
participants will join the supplemental pension plan.
The
components of the Company’s net periodic benefit cost related to all of its
pension plans for all periods presented are as follows:
|
|
Twelve
Weeks Ended
|
|
Thirty-six
Weeks Ended
|
|
(in
thousands)
|
|
May
6,
2006
|
|
May
7,
2005
|
|
May
6,
2006
|
|
May
7,
2005
|
|
|
|
|
|
|
|
|
|
|
|
Interest
cost
|
|
$
|
2,121
|
|
$
|
1,913
|
|
$
|
6,363
|
|
$
|
5,739
|
|
Expected
return on plan assets
|
|
|
(1,978
|
)
|
|
(1,871
|
)
|
|
(5,934
|
)
|
|
(5,613
|
)
|
Amortization
of prior service cost
|
|
|
(145
|
)
|
|
(149
|
)
|
|
(435
|
)
|
|
(447
|
)
|
Amortization
of net loss
|
|
|
1,303
|
|
|
231
|
|
|
3,909
|
|
|
693
|
|
Net
periodic benefit cost
|
|
$
|
1,301
|
|
$
|
124
|
|
$
|
3,903
|
|
$
|
372
|
|
The
Company makes contributions in amounts at least equal to the minimum funding
requirements of the Employee Retirement Income Security Act of 1974. During
the
thirty-six-week period ended May 6, 2006, the Company made approximately $6.2
million in contributions to the plan and expects to fund another $1.2 million
to
$3.5 million during the remainder of this fiscal year.
Note
F-Financing Arrangements
The
Company’s long-term debt consisted of the following:
(in
thousands)
|
|
May
6,
2006
|
|
August
27,
2005
|
|
|
|
|
|
|
|
Bank
Term Loan due December 2009, effective interest rate of
4.55%
|
|
$
|
300,000
|
|
$
|
300,000
|
|
5.875%
Senior Notes due October 2012, effective interest rate of
6.33%
|
|
|
300,000
|
|
|
300,000
|
|
5.5%
Senior Notes due November 2015, effective interest rate of
4.86%
|
|
|
300,000
|
|
|
300,000
|
|
4.75%
Senior Notes due November 2010, effective interest rate of
4.17%
|
|
|
200,000
|
|
|
200,000
|
|
4.375%
Senior Notes due June 2013, effective interest rate of
5.65%
|
|
|
200,000
|
|
|
200,000
|
|
6.5%
Senior Notes due July 2008
|
|
|
190,000
|
|
|
190,000
|
|
7.99%
Senior Notes due April 2006
|
|
|
--
|
|
|
150,000
|
|
Commercial
paper, weighted average interest rate of 5.1% at
May
6, 2006, and 3.6% at August 27, 2005
|
|
|
333,000
|
|
|
217,700
|
|
Other
|
|
|
2,125
|
|
|
4,150
|
|
|
|
$
|
1,825,125
|
|
$
|
1,861,850
|
|
The
Company maintains $1.0 billion of revolving credit facilities with a group
of
banks to primarily support commercial paper borrowings, letters of credit and
other short-term unsecured bank loans. The $300 million credit facility that
matured in May 2006 was replaced with a new $300 million credit facility
expiring in May 2010. The $700 million credit facility that matures in May
2010
was amended so that all of the $1 billion in credit facilities have similar
terms and conditions. These facilities may be increased to $1.3 billion at
AutoZone’s election, allow up to $200 million in letters of credit, and allow up
to $100 million in capital leases. As the available balance is reduced by
commercial paper borrowings and certain outstanding letters of credit, the
Company had $536.2 million in available capacity under these facilities at
May
6, 2006. The rate of interest payable under the credit facilities is a function
of Bank of America’s base rate or a Eurodollar rate (each as defined in the
facility agreements), or a combination thereof.
During
April 2006, the $150.0 million Senior Notes maturing at that time were repaid
with an increase in commercial paper; and the $300.0 million bank term loan
was
amended to have similar terms and conditions as the $1.0 billion credit
facilities, but with a December 2009 maturity.
Commercial
paper and other short-term borrowings are all classified as long-term, as the
Company has the ability and intent to refinance them on a long-term
basis.
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
The
Company’s borrowings under its Senior Notes arrangements contain minimal
covenants, primarily restrictions on liens. Under our other borrowing
arrangements, covenants include limitations on total indebtedness, restrictions
on liens, a minimum fixed charge coverage ratio and a provision where repayment
obligations may be accelerated if AutoZone experiences a change in control
(as
defined in the agreements) of AutoZone or its Board of Directors. All of the
repayment obligations under the Company’s borrowing arrangements may be
accelerated and come due prior to the scheduled payment date if covenants are
breached or an event of default occurs. As of May 6, 2006, the Company was
in
compliance with all covenants and expects to remain in compliance with all
covenants.
Note
G-Stock Repurchase Program
On
March
22, 2006, the Board of Directors increased the Company’s cumulative share
repurchase authorization from $4.4 billion to $4.9 billion. Considering
cumulative repurchases as of May 6, 2006, the Company has $560.1 million
remaining under this increased authorization to repurchase its common stock
in
the open market. From January 1, 1998 to May 6, 2006, the Company has
repurchased a total of 89.5 million shares at an aggregate cost of $4.3 billion;
including 2,445,415 shares of its common stock at an aggregate cost of $238.1
million during the thirty-six-week period ended May 6, 2006.
Note
H-Comprehensive Income
Comprehensive
income includes foreign currency translation adjustments; the impact from
certain derivative financial instruments designated and effective as cash flow
hedges, including changes in fair value, as applicable, and the reclassification
of gains and/or losses from accumulated other comprehensive loss to net income
to offset the earnings impact of the underlying items being hedged; and changes
in the fair value of certain investments classified as available for sale.
Comprehensive income for all periods presented is as follows:
|
|
Twelve
Weeks Ended
|
|
Thirty-six
Weeks Ended
|
|
(in
thousands)
|
|
May
6,
2006
|
|
May
7,
2005
|
|
May
6,
2006
|
|
May
7,
2005
|
|
|
|
|
|
|
|
|
|
|
|
Net
income, as reported
|
|
$
|
144,428
|
|
$
|
147,789
|
|
$
|
355,823
|
|
$
|
364,404
|
|
Foreign
currency translation adjustment
|
|
|
(5,446
|
)
|
|
2,001
|
|
|
(1,487
|
)
|
|
4,368
|
|
Net
impact from derivative instruments
|
|
|
1,647
|
|
|
2,333
|
|
|
4,819
|
|
|
(1,447
|
)
|
Unrealized
losses from marketable securities
|
|
|
(116
|
)
|
|
--
|
|
|
(253
|
)
|
|
--
|
|
Comprehensive
income
|
|
$
|
140,513
|
|
$
|
152,123
|
|
$
|
358,902
|
|
$
|
367,325
|
|
Note
I-Leases
During
the fiscal quarter ended February 12, 2005, the Company completed a detailed
review of its accounting for rent expense and expected useful lives of leasehold
improvements. The Company noted inconsistencies in the periods used to amortize
leasehold improvements and the periods used to straight-line rent expense.
The
Company revised its policy to record rent for all operating leases on a
straight-line basis over the lease term, including any reasonably assured
renewal periods and the period of time prior to the lease term that the Company
is in possession of the leased space for the purpose of installing leasehold
improvements. Differences between recorded rent expense and cash payments are
recorded as a liability in accrued expenses and other long-term liabilities
on
the balance sheet. Additionally, all leasehold improvements are amortized over
the lesser of their useful life or the remainder of the lease term, including
any reasonably assured renewal periods, in effect when the leasehold
improvements are placed in service. During the quarter ended February 12, 2005,
the Company recorded an adjustment in the amount of $40.3 million pre-tax ($25.4
million after-tax), which included the impact on prior years, to reflect
additional amortization of leasehold improvements and additional rent expense
as
if this new policy had always been followed by the Company. The impact of the
cumulative adjustment on fiscal 2005 and any prior year is
immaterial.
AUTOZONE,
INC.
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note
J-Income Taxes
During
the fiscal quarter ended February 12, 2005, the Company recorded a $15.3 million
reduction to income tax expense primarily due to the American Jobs Creation
Act
(the “Act”). The Act was signed into law in October 2004 and provides an
opportunity to repatriate foreign earnings, reinvest them in the United States,
and claim an 85% dividend received deduction on the repatriated earnings
provided certain criteria are met. During the fiscal quarter ended February
12,
2005, the Company determined that it met the criteria of the Act, and it decided
to repatriate its accumulated foreign earnings through fiscal 2005, at which
time approximated $36.7 million, from its Mexico subsidiaries. As the Company
had previously recorded deferred income taxes on these amounts, the planned
repatriation resulted in a one-time reduction to income tax
expense.
Report
of
Independent Registered Public Accounting Firm
The
Board
of Directors and Stockholders
AutoZone,
Inc.
We
have
reviewed the condensed consolidated balance sheet of AutoZone, Inc. as of May
6,
2006, the related condensed consolidated statements of income for the twelve
and
thirty-six week periods ended May 6, 2006 and May 7, 2005, and the condensed
consolidated statements of cash flows for the thirty-six week periods ended
May
6, 2006 and May 7, 2005. These financial statements are the responsibility
of
the Company’s management.
We
conducted our review in accordance with the standards of the Public Company
Accounting Oversight Board (United States). A review of interim financial
information consists principally of applying analytical procedures and making
inquiries of persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with the
standards of the Public Company Accounting Oversight Board, the objective of
which is the expression of an opinion regarding the financial statements taken
as a whole. Accordingly, we do not express such an opinion.
Based
on
our review, we are not aware of any material modifications that should be made
to the condensed consolidated financial statements referred to above for them
to
be in conformity with U.S. generally accepted accounting
principles.
We
have
previously audited, in accordance with the standards of the Public Company
Accounting Oversight Board (United States), the consolidated balance sheet
of
AutoZone, Inc. as of August 27, 2005, and the related consolidated statements
of
income, changes in stockholders’ equity, and cash flows for the year then ended,
not presented herein, and, in our report dated October 19, 2005, we expressed
an
unqualified opinion on those consolidated financial statements. In our opinion,
the information set forth in the accompanying condensed consolidated balance
sheet as of August 27, 2005 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it has been
derived.
/s/
Ernst
& Young LLP
Memphis,
Tennessee
June
6,
2006
Item
2.
|
Management’s
Discussion and Analysis of Financial Condition and Results of
Operations.
|
Overview
We
are
the nation’s leading retailer of automotive parts and accessories, with most of
our sales to do-it-yourself (“DIY”) customers. As of May 6, 2006, we operated
3,791 stores including 92 stores in Mexico and excluding 8 stores that remain
closed as a result of hurricanes, compared with 3,578 stores including 73 stores
in Mexico, at May 7, 2005. Each of our stores carries an extensive product
line
for cars, sport utility vehicles, vans and light trucks, including new and
remanufactured automotive hard parts, maintenance items, accessories and
non-automotive products. Many of our stores also have a commercial sales program
that provides commercial credit and prompt delivery of parts and other products
to local, regional and national repair garages, dealers and service stations.
We
also sell the ALLDATA brand diagnostic and repair software. On the web, we
sell
diagnostic and repair information and automotive hard parts, maintenance items,
accessories and non-automotive products through www.autozone.com.
We do
not derive revenue from automotive repair or installation.
Operating
results for the twelve and thirty-six weeks ended May 6, 2006, are not
necessarily indicative of the results that may be expected for the fiscal year
ending August 26, 2006. Each of the first three quarters of our fiscal year
consists of 12 weeks, and the fourth quarter consists of 16 or 17 weeks. Each
of
the fourth quarters of fiscal 2005 and 2006 has 16 weeks. Additionally, our
business is somewhat seasonal in nature, with the highest sales generally
occurring in the summer months of June through August and the lowest sales
generally occurring in the winter months of December through
February.
Twelve
Weeks Ended May
6, 2006,
Compared
with Twelve Weeks Ended May
7, 2005
Net
sales
for the twelve weeks ended May
6,
2006,
increased $79.0 million, or 5.9%, over net sales of $1.338 billion for the
comparable prior year period. This increase in sales was primarily driven by
sales from new stores as comparable store sales (sales for domestic stores
opened at least one year) increased 2.1%. DIY sales increased 6.0%, commercial
sales decreased 0.3% and combined sales from our ALLDATA and Mexico operations
increased 28.3%.
Gross
profit for the twelve weeks ended May
6,
2006,
was
$704.0 million, or 49.7% of net sales, compared with $673.1 million, or 50.3%
of
net sales, during the comparable prior year period. The decline in gross profit
margin was primarily attributable to a higher penetration of commodity and
maintenance items versus last year, which typically have lower margins. This
was
attributable in part due to a seasonally milder spring selling season. We have
continued to be successful in working with our vendors to offer the right
products at the right prices to our customers. This effort includes supply
chain
initiatives, tailoring merchandise mix, the continued implementation of our
Good/Better/Best product lines, all allowing us to price our products
appropriately and give our customers great value.
Operating,
selling, general and administrative expenses for the twelve weeks ended
May
6,
2006,
was
$450.9 million, or 31.8% of net sales, compared with $413.6 million, or 30.9%
of
net sales, during the comparable prior year period. Expenses for the twelve
weeks ended May
6,
2006,
include
$4.2 million, or 0.3% of net sales, in share-based compensation expense
resulting from the current year adoption of Statement of Financial Accounting
Standards No. 123(R), “Share-Based Payment” (see “Note B - Share-Based
Payments”). The remaining increase in expenses is driven by higher occupancy
costs and increased expenditures to improve the customer’s shopping experience.
These initiatives continue to include expanded hours of operation, enhanced
training programs and ensuring clean, well merchandised stores.
Interest
expense, net for the twelve weeks ended May
6,
2006,
was
$24.9 million compared with $24.2 million during the comparable prior year
period. This increase was due to higher average borrowing rates over the
comparable prior year period. Average borrowings for the twelve weeks ended
May
6,
2006,
were
$1.904 billion, compared with $1.936 billion for the comparable prior year
period. Weighted average borrowing rates were 5.4% at May
6,
2006,
and
5.0% at May
7,
2005.
Our
effective income tax rate was 36.7% of pretax income for the twelve weeks ended
May
6,
2006,
and
37.2% for the comparable prior year period. The actual annual rate for fiscal
2006 will depend on a number of factors, including the amount and source of
operating income and the timing and nature of discrete income tax
events.
Net
income for the twelve week period ended May
6,
2006,
decreased by $3.4 million to $144.4 million, and diluted earnings per share
increased by 1.4% to $1.89 from $1.86 in the comparable prior year period.
The
impact on current quarter diluted earnings per share from the stock repurchases
since the end of the comparable prior year period was an increase of
$0.06.
Thirty-six
Weeks Ended May 6, 2006,
Compared
with Thirty-six Weeks Ended May 7, 2005
Net
sales
for the thirty-six weeks ended May 6, 2006, increased $180.7 million, or 4.7%,
over net sales of $3.829 billion for the comparable prior year period. This
increase in sales was primarily driven by sales from new stores as comparable
store sales (sales for domestic stores opened at least one year) increased
1.1%.
DIY sales increased 4.6%, commercial sales decreased 0.7% and combined sales
from our ALLDATA and Mexico operations increased 28.3%.
Gross
profit for the thirty-six weeks ended May 6, 2006, was $1.976 billion, or 49.3%
of net sales, compared with $1.876 billion, or 49.0% of net sales, during the
comparable prior year period. The improvement in gross profit margin was
primarily attributable to ongoing category management initiatives, partially
off-set by the third quarter’s increased penetration of commodity and
maintenance items versus last year, which typically have lower margins. This
was
attributable in part due to a seasonally milder spring selling season. Our
ongoing category management initiatives have included working with our vendors
to offer the right products at the right prices to our customers. This effort
includes supply chain initiatives, tailoring merchandise mix, the continued
implementation of our Good/Better/Best product lines, all allowing us to price
our products appropriately and give our customers great value.
Operating,
selling, general and administrative expenses for the thirty-six weeks ended
May
6, 2006, was $1.339 billion, or 33.4% of net sales, compared with $1.252
billion, or 32.7% of net sales, during the comparable prior year period.
Expenses for the thirty-six weeks ended May 7, 2005, include a $40.3 million
charge related to accounting for leases (see “Note I - Leases”). Expenses for
the thirty-six weeks ended May 6, 2006, include $12.1 million in share-based
compensation expense resulting from the current year adoption of Statement
of
Financial Accounting Standards No. 123(R), “Share-Based Payment” (see “Note B -
Share-Based Payments”). The remaining increase in expenses is driven by higher
occupancy costs and increased expenditures to improve the customer’s shopping
experience. These initiatives continue to include expanded hours of operation,
enhanced training programs and ensuring clean, well merchandised stores.
Interest
expense, net for the thirty-six weeks ended May 6, 2006, was $73.0 million
compared with $69.7 million during the comparable prior year period. This
increase was due to higher average borrowing rates over the comparable prior
year period. Average borrowings for the thirty-six weeks ended May 6, 2006,
were
$1.916 billion, compared with $1.948 billion for the comparable prior year
period. Weighted average borrowing rates were 5.4% at May 6, 2006, and 5.0%
at
May 7, 2005.
Our
effective income tax rate was 36.9% of pretax income for the thirty-six weeks
ended May 6, 2006, and 34.3% for the comparable prior year period. The
comparable prior year period’s effective income tax rate reflects $15.3 million
in one-time tax benefits related to the repatriation of Mexican earnings as
a
result of the American Jobs Creation Act of 2004, and other discrete income
tax
items (see “Note J - Income Taxes”). The actual annual rate for fiscal 2006 will
depend on a number of factors, including the amount and source of operating
income and the timing and nature of discrete income tax events.
Net
income for the thirty-six week period ended May 6, 2006, decreased by $8.6
million to $355.8 million, and diluted earnings per share increased by 1.8%
to
$4.62 from $4.53 in the comparable prior year period. The impact on current
year
diluted earnings per share from the stock repurchases since the end of the
comparable prior year period was an increase of $0.17.
Liquidity
and Capital Resources
The
primary source of our liquidity is our cash flows realized through the sale
of
automotive parts and accessories. For the thirty-six weeks ended May 6, 2006,
our net cash flows from operating activities provided $436.3 million as compared
with $403.5 million during the comparable prior year period. The year-over-year
improvement in cash flows from operating activities is primarily due to changes
in income tax accounts that are impacted by the timing and amounts of estimated
income tax payments. Although changes in accounts payable and accrued expenses
reduced operating cash flows this year, overall cash flows from operating
activities continue to benefit from our inventory purchases being largely
financed by our vendors, as evidenced by an 82% accounts payable to inventory
ratio and the use of pay-on-scan (“POS”) arrangements with certain vendors.
Under POS arrangements, we do not purchase merchandise supplied by a vendor
until just before that merchandise is ultimately sold to our customers. Title
and certain risks of ownership remain with the vendor until the merchandise
is
sold to our customers. Since we do not own merchandise under POS arrangements
until just before it is sold to a customer, such merchandise is not recorded
on
our balance sheet. Upon the sale of the merchandise to our customer, we
recognize the liability for the goods and pay the vendor in accordance with
the
agreed upon terms. Although we do not hold title to the goods, we control
pricing and have credit collection risk and therefore, gross revenues under
POS
arrangements are included in net sales in the income statement. We have financed
the repurchase of existing merchandise inventory by certain vendors in order
to
convert such vendors to POS arrangements. These receivables have remaining
durations up to 17 months and approximated $19.9 million at May 6, 2006. The
$19.4 million current portion of these receivables is reflected in accounts
receivable and the $530,000 long-term portion is reflected as a component of
other long-term assets at May 6, 2006. Merchandise under POS arrangements was
$123.4 million at May 6, 2006.
Our
net
cash flows from investing activities for the thirty-six weeks ended May 6,
2006,
used $196.5 million as compared with $186.4 million used in the comparable
prior
year period. Capital expenditures for the thirty-six weeks ended May 6, 2006,
were $182.2 million compared to $186.9 million for the comparable prior year
period. During this thirty-six week period, we opened 127 new stores including
11 new stores in Mexico. In the comparable prior year period, we opened 98
new
stores, including 10 new stores in Mexico. We expect to invest in our business
consistent with historical rates during fiscal 2006, primarily related to our
new store development program and enhancements to existing stores and systems.
Investing cash flows were also impacted in the current year by our wholly-owned
insurance captive, which sold $121.4 million in short-term investments to
partially fund the purchase of $138.2 million in marketable debt securities
having longer maturities and higher yields. The holding of these investments,
which approximated $56.6 million at May 6, 2006 and $40.2 million at August
27,
2005, is required by insurance regulations to fund the insurance reserves held
in our wholly-owned insurance captive subsidiary. The Company has classified
such investments as available for sale under the provisions of Statement of
Financial Accounting Standards No. 115, “Accounting for Certain Investments in
Debt and Equity Securities,” as management may elect to sell such securities
before the stated maturities to either fund insurance reserves or invest in
other securities with more attractive yields. As such securities are available
to support the insurance captive subsidiary’s operations, they have been
classified as current assets in the May 6, 2006 condensed consolidated balance
sheet despite the fact that many of the debt securities have a stated maturity
of greater than one year as of May 6, 2006.
Our
net
cash flows from financing activities for the thirty-six weeks ended May 6,
2006,
used $230.6 million compared to $216.6 million provided in the comparable prior
year period. The current year reflects $115.3 million in net proceeds of
commercial paper borrowings versus $252.7 million in net repayments from
commercial paper in the comparable prior year period. The current year reflects
$150.0 million in repayments of senior notes, while the comparable prior year
period reflects $300.0 million in proceeds from the issuance of debt. Stock
repurchases were $238.1 million in the current year as compared with $308.6
million in stock repurchases in the comparable prior year period. For the
thirty-six weeks ended May 6, 2006, proceeds from the sale of common stock
and
exercises of stock options provided $44.6 million, including $9.4 million in
related tax benefits that are reflected in cash flows from financing activities.
In the comparable prior year period, proceeds from the sale of common stock
and
exercises of stock options provided $68.6 million, including $23.4 million
in
related tax benefits that are reflected in cash flows from operating activities.
At May 6, 2006, options to purchase 1.5 million shares were exercisable at
a
weighted average exercise price of $57.48.
Depending
on the timing and magnitude of our future investments (either in the form of
leased or purchased properties or acquisitions), we anticipate that we will
rely
primarily on internally generated funds and available borrowing capacity to
support a majority of our capital expenditures, working capital requirements
and
stock repurchases. The balance may be funded through new borrowings. We
anticipate that we will be able to obtain such financing in view of our credit
rating and favorable experiences in the debt market in the past.
At
May 6,
2006, AutoZone had a senior unsecured debt credit rating from Standard &
Poor’s of BBB+ and a commercial paper rating of A-2. Moody’s Investors Service
had assigned us a senior unsecured debt credit rating of Baa2 and a commercial
paper rating of P-2. As of May 6, 2006, Moody’s and Standard & Poor’s had
AutoZone listed as having a “negative” and “stable” outlook, respectively. On
June 5, 2006, Moody’s upgraded AutoZone from a “negative” to a “stable” outlook.
If our credit ratings drop, our interest expense may increase; similarly, we
anticipate that our interest expense may decrease if our investment ratings
are
raised. If our commercial paper ratings drop below current levels, we may have
difficulty continuing to utilize the commercial paper market and our interest
expense will increase, as we will then be required to access more expensive
bank
lines of credit. If our senior unsecured debt ratings drop below investment
grade, our access to financing may become more limited.
We
maintain $1.0 billion of revolving credit facilities with a group of banks
to
primarily support commercial paper borrowings, letters of credit and other
short-term unsecured bank loans. The $300 million credit facility that matured
in May 2006 was replaced with a new $300 million credit facility expiring in
May
2010. The $700 million credit facility that matures in May 2010 was amended
so
that all of the $1 billion in credit facilities will have the same terms and
conditions, may be increased to $1.3 billion at AutoZone’s election, allow up to
$200 million in letters of credit, and allow up to $100 million in capital
leases. As the available balance is reduced by commercial paper borrowings
and
certain outstanding letters of credit, the Company had $536.2 million in
available capacity under these facilities at May 6, 2006. The rate of interest
payable under the credit facilities is a function of Bank of America’s base rate
or a Eurodollar rate (each as defined in the facility agreements), or a
combination thereof.
Our
borrowings under our Senior Notes arrangements contain minimal covenants,
primarily restrictions on liens. Under our other borrowing arrangements,
covenants include limitations on total indebtedness, restrictions on liens,
a
minimum fixed charge coverage ratio and a provision where repayment obligations
may be accelerated if AutoZone experiences a change in control (as defined
in
the agreements) of AutoZone or its Board of Directors. All of the repayment
obligations under our borrowing arrangements may be accelerated and come due
prior to the scheduled payment date if covenants are breached or an event of
default occurs. As of May 6, 2006, we were in compliance with all covenants
and
expect to remain in compliance with all covenants.
On
March
22, 2006, the Board of Directors increased the Company’s cumulative share
repurchase authorization from $4.4 billion to $4.9 billion. Considering
cumulative repurchases as of May 6, 2006, the Company has $560.1 million
remaining under this increased authorization to repurchase its common stock
in
the open market. From January 1, 1998 to May 6, 2006, the Company has
repurchased a total of 89.5 million shares at an aggregate cost of $4.3 billion;
including 2,445,415 shares of its common stock at an aggregate cost of $238.1
million during the thirty-six-week period ended May 6, 2006.
Off-Balance
Sheet Arrangements
In
conjunction with our commercial sales program, we offer credit to some of our
commercial customers. Certain of the receivables related to the credit program
are sold to a third party at a discount for cash with limited recourse. We
have
established a reserve for this recourse. At May 6, 2006, the receivables
facility had an outstanding balance of $53.3 million and the balance of the
recourse reserve was approximately $2.2 million.
Since
fiscal year end, we have issued additional and increased existing stand-by
letters of credit that are primarily renewed on an annual basis to cover premium
and deductible payments to our workers’ compensation carrier. Our total standby
letters of credit commitment at May 6, 2006 was $131.1 million compared with
$121.2 million at August 27, 2005, and our total surety bonds commitment at
May
6, 2006, was $11.5 million compared with $13.4 million at August 27,
2005.
AutoZone
has entered into pay-on-scan (“POS”) arrangements with certain vendors, whereby
AutoZone will not purchase merchandise supplied by a vendor until just before
that merchandise is ultimately sold to AutoZone’s customers. Title and certain
risks of ownership remain with the vendor until the merchandise is sold to
AutoZone’s customers. Since the Company does not own merchandise under POS
arrangements until just before it is sold to a customer, such merchandise is
not
recorded on the Company’s balance sheet. Upon the sale of the merchandise to
AutoZone’s customers, AutoZone recognizes the liability for the goods and pays
the vendor in accordance with the agreed-upon terms. Although AutoZone does
not
hold title to the goods, AutoZone controls pricing and has credit collection
risk and therefore, gross revenues under POS arrangements are included in net
sales in the income statement. Sales of merchandise under POS approximated
$86.0
million and $303.4 million for the twelve and thirty-six weeks ended May 6,
2006, and $110.5 million and $298.5 million for the twelve and thirty-six weeks
ended May 7, 2005. Merchandise under POS arrangements was $123.4 million at
May
6, 2006, and $151.7 million at August 27, 2005.
Critical
Accounting Policies
Refer
to
our Annual Report to Shareholders, which is incorporated by reference in our
Annual Report on Form 10-K for the fiscal year ended August 27, 2005, for a
summary of our critical accounting policies. The only change to our critical
accounting policies during fiscal 2006 has been to remove product warranties
as
a critical accounting policy due to the insignificance of the remaining warranty
liability.
Forward-Looking
Statements
Certain
statements contained in this Quarterly Report on Form 10-Q are forward-looking
statements. Forward-looking statements typically use words such as “believe,”
“anticipate,” “should,” “intend,” “plan,” “will,” “expect,” “estimate,”
“project,” “positioned,” “strategy,” and similar expressions. These are based on
assumptions and assessments made by our management in light of experience and
perception of historical trends, current conditions, expected future
developments and other factors that they believe to be appropriate. These
forward-looking statements are subject to a number of risks and uncertainties,
including without limitation, competition; product demand; the economy; the
ability to hire and retain qualified employees; consumer debt levels; inflation;
weather; raw material costs of our suppliers; gasoline prices; war and the
prospect of war, including terrorist activity; availability of commercial
transportation; construction delays; access to available and feasible financing;
and changes
in laws or regulations. Forward-looking statements are not guarantees of future
performance and actual results; developments and business decisions may differ
from those contemplated by such forward-looking statements, and such events
could materially and adversely affect our business. Forward-looking statements
speak only as of the date made. Except as required by applicable law, we
undertake no obligation to update publicly any forward-looking statements,
whether as a result of new information, future events or otherwise. Actual
results may materially differ from anticipated results. Please refer to the
Risk
Factors section contained in our Annual Report on Form 10-K for the fiscal
year
ended August 27, 2005, for more information related to those risks.
Item
3.
|
Quantitative
and Qualitative Disclosures About Market
Risk.
|
At
May 6,
2006, the only material changes to our instruments and positions that are
sensitive to market risk since the disclosures in our 2005 Annual Report to
Shareholders, which is incorporated by reference in our Annual Report on Form
10-K,
was
the $115.3 million increase in commercial paper, the $150.0 million repayment
of
senior notes, and the purchase of $138.2 million in marketable securities,
partially off-set by the sale of $121.4 million in short-term investments,
to
support the self-insurance reserves in our wholly-owned insurance captive
subsidiary.
The
fair
value of our debt was estimated at $1.780 billion as of May 6, 2006, and $1.868
billion as of August 27, 2005, based on the quoted market prices for the same
or
similar debt issues or on the current rates available to AutoZone for debt
of
the same remaining maturities. Such fair value is less than the carrying value
of debt by $68.5 million at May 6, 2006, and greater than the carrying value
of
debt by $6.3 million at August 27, 2005. Considering the effect of any interest
rate swaps designated and effective as cash flow hedges, we had $358.1 million
of variable rate debt outstanding at May 6, 2006, and $221.9 million of variable
rate debt outstanding at August 27, 2005. At these borrowing levels for variable
rate debt, a one percentage point increase in interest rates would have had
an
unfavorable impact on our pre-tax earnings and cash flows of $3.6 million in
fiscal 2006 and $2.2 million in fiscal 2005, which includes the effects of
interest rate swaps. The primary interest rate exposure on variable rate debt
is
based on LIBOR. Considering the effect of any interest rate swaps designated
and
effective as cash flow hedges, we had outstanding fixed rate debt of $1.490
billion at May 6, 2006, and $1.640 billion at August 27, 2005. A one percentage
point increase in interest rates would reduce the fair value of our fixed rate
debt by $54.8 million at May 6, 2006, and $65.6 million at August 27,
2005.
Item
4.
|
Controls
and Procedures.
|
An
evaluation was performed under the supervision and with the participation of
our
management, including the Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of our disclosure controls
and
procedures as of May 6, 2006. Based on that evaluation, our management,
including the Chief Executive Officer and Chief Financial Officer, concluded
that our disclosure controls and procedures were effective as of May 6, 2006.
During or subsequent to the quarter ended May 6, 2006, there were no changes
in
our internal controls that have materially affected or are reasonably likely
to
materially affect, internal controls over financial reporting.
PART
II. OTHER INFORMATION
Item
1.
|
Legal
Proceedings.
|
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 Southern District of New York in October 2004. The case was filed by more
than 200 plaintiffs, which are principally automotive aftermarket warehouse
distributors and jobbers (collectively “Plaintiffs”), against a number of
defendants, including automotive aftermarket retailers and aftermarket
automotive parts manufacturers. In the amended complaint the plaintiffs allege,
inter alia, that some or all of the automotive aftermarket retailer defendants
have knowingly received, in violation of the Robinson-Patman Act (the “Act”),
from various of the manufacturer defendants benefits such as volume discounts,
rebates, early buy allowances and other allowances, fees, inventory without
payment, sham advertising and promotional payments, a share in the
manufacturers' profits, benefits of pay on scan purchases, implementation of
radio frequency identification technology, and excessive payments for services
purportedly performed for the manufacturers. Additionally, a subset of
plaintiffs alleges a claim of fraud against the automotive aftermarket retailer
defendants based on discovery issues in a prior litigation involving similar
Robinson-Patman Act claims. In the prior litigation, the discovery dispute,
as
well as the underlying claims, were decided in favor of AutoZone and the other
automotive aftermarket retailer defendants who proceeded to trial, pursuant
to a
unanimous jury verdict which was affirmed by the Second Circuit Court of
Appeals. In the current litigation, plaintiffs seek an unspecified amount of
damages (including statutory trebling), attorneys' fees, and a permanent
injunction prohibiting the aftermarket retailer defendants from inducing and/or
knowingly receiving discriminatory prices from any of the aftermarket
manufacturer defendants and from opening up any further stores to compete with
plaintiffs as long as defendants allegedly continue to violate the Act. The
Company believes this suit to be without merit and is vigorously defending
against it. Defendants have filed motions to dismiss all claims with prejudice
on substantive and procedural grounds. Additionally, the Defendants have sought
to enjoin plaintiffs from filing similar lawsuits in the future. If granted
in
their entirety, these dispositive motions would resolve the litigation in
Defendants' favor.
On
June
22, 2005, the Attorney General of the State of California, in conjunction with
District Attorneys for San Bernardino, San Joaquin and Monterey Counties, filed
suit in the San Bernardino County Superior Court against AutoZone, Inc. and
its
California subsidiaries. The San Diego County District Attorney later joined
the
suit. The lawsuit alleges that AutoZone failed to follow various state statutes
and regulations governing the storage and handling of used motor oil and other
materials collected for recycling or used for cleaning AutoZone stores and
parking lots. The suit seeks $12.0 million in penalties and injunctive relief.
AutoZone
is 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,
results of operations, or cash flows.
Item
2.
|
Changes
in Securities and Use of
Proceeds.
|
Shares
of
common stock repurchased by the Company during the quarter ended May 6, 2006,
were as follows:
Issuer
Repurchases of Equity Securities
Period
|
|
Total
Number of Shares Purchased
|
|
Average
Price Paid per Share
|
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
|
Maximum
Dollar Value that May Yet Be Purchased Under the Plans or Programs
|
|
February
12, 2006 to
March
11, 2006
|
|
|
256,216
|
|
$
|
95.86
|
|
|
87,414,629
|
|
$
|
263,886,224
|
|
March
12, 2006 to
April
8, 2006
|
|
|
1,810,122
|
|
|
98.87
|
|
|
89,224,751
|
|
|
584,915,480
|
|
April
9, 2006 to
May
6, 2006
|
|
|
256,077
|
|
|
96.81
|
|
|
89,480,828
|
|
|
560,123,726
|
|
Total
|
|
|
2,322,415
|
|
$
|
98.31
|
|
|
89,480,828
|
|
$
|
560,123,726
|
|
All
of
the above repurchases were part of publicly announced plans that were authorized
by the Company’s Board of Directors for a maximum of $4.9 billion in common
shares. The program was initially announced in January 1998, and was most
recently amended in March 2006, to increase the repurchase authorization to
$4.9
billion from $4.4 billion. The program does not have an expiration date.
Item
3.
|
Defaults
Upon Senior Securities.
|
Not
applicable.
Item
4.
|
Submission
of Matters to a Vote of Security
Holders.
|
Not
applicable.
Item
5.
|
Other
Information.
|
Not
applicable.
The
following exhibits are filed as part of this report:
|
3.1
|
Restated
Articles of Incorporation of AutoZone, Inc. incorporated by reference
to
Exhibit 3.1 to the Form 10-Q for the quarter ended February 13,
1999.
|
|
3.2
|
Third
Amended and Restated By-laws of AutoZone, Inc. incorporated by reference
to Exhibit 3.1 to the Form 8-K dated October 1,
2002.
|
|
*10.1 |
Agreement
dated as of October 19, 2005, between AutoZone, Inc. and Michael
E.
Longo.
|
|
*10.2 |
Offer
letter dated
April 13, 2006, to William
T. Giles.
|
|
10.3 |
First
Amendment dated as of May 5, 2006, to the Credit Agreement dated
as of
December 23, 2004, among AutoZone, Inc., as Borrower, the Several
Lenders
from time to time party thereto, Bank
of America, N.A,
as Administrative Agent, and Wachovia Bank, National Association,
as
Syndication Agent.
|
|
10.4 |
Four-Year
Credit Agreement dated as of May 5, 2006, among AutoZone, Inc. as
Borrower, the Several Lenders from time to time party thereto, Bank
of
America, N.A., as Administrative Agent, and Citicorp USA, Inc. as
Syndication Agent.
|
|
10.5 |
Second
Amended and Restated Five-Year Credit Agreement dated as of May 5,
2006,
among AutoZone, Inc. as Borrower, the Several Lenders from time to
time
party thereto, Bank of America, N.A. as Administrative Agent and
Swingline
Lender, and Citicorp USA, Inc. as Syndication
Agent.
|
|
12.1
|
Computation
of Ratio of Earnings to Fixed Charges.
|
|
15.1
|
Letter
Regarding Unaudited Interim Financial
Statements.
|
|
31.1 |
Certification
of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant to
Section
302 of the Sarbanes-Oxley Act of
2002.
|
|
31.2 |
Certification
of Principal Accounting Officer Pursuant to Rules 13a-14(a) and 15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant to
Section
302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1 |
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2 |
Certification
of Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
Management contract or compensatory arrangement.
SIGNATURES
Pursuant
to the requirements 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/ WILLIAM
T. GILES |
|
William
T. Giles |
|
Executive
Vice
President and Chief Financial Officer |
|
(Principal
Financial Officer) |
|
|
|
|
|
|
|
By: |
/s/ CHARLIE
PLEAS, III |
|
Charlie
Pleas, III |
|
Vice
President, Controller |
|
(Principal Accounting Officer) |
|
|
Dated: June 7, 2006 |
|
EXHIBIT
INDEX
The
following exhibits are filed as part of this report:
|
3.1
|
Restated
Articles of Incorporation of AutoZone, Inc. incorporated by reference
to
Exhibit 3.1 to the Form 10-Q for the quarter ended February 13,
1999.
|
|
3.2
|
Third
Amended and Restated By-laws of AutoZone, Inc. incorporated by
reference
to Exhibit 3.1 to the Form 8-K dated October 1,
2002.
|
|
*10.1 |
Agreement
dated as of October 19, 2005, between AutoZone, Inc. and Michael
E.
Longo.
|
|
*10.2 |
Offer
letter dated
April 13, 2006, to William
T. Giles.
|
|
10.3 |
First
Amendment dated as of May 5, 2006, to the Credit Agreement dated
as of
December 23, 2004, among AutoZone, Inc., as Borrower, the Several
Lenders
from time to time party thereto, Bank
of America, N.A,
as Administrative Agent, and Wachovia Bank, National Association,
as
Syndication Agent.
|
|
10.4 |
Four-Year
Credit Agreement dated as of May 5, 2006, among AutoZone, Inc.
as
Borrower, the Several Lenders from time to time party thereto,
Bank of
America, N.A., as Administrative Agent, and Citicorp USA, Inc.
as
Syndication Agent.
|
|
10.5 |
Second
Amended and Restated Five-Year Credit Agreement dated as of May
5, 2006,
among AutoZone, Inc. as Borrower, the Several Lenders from time
to time
party thereto, Bank of America, N.A. as Administrative Agent and
Swingline
Lender, and Citicorp USA, Inc. as Syndication
Agent.
|
|
12.1
|
Computation
of Ratio of Earnings to Fixed Charges.
|
|
15.1
|
Letter
Regarding Unaudited Interim Financial
Statements.
|
|
31.1 |
Certification
of Principal Executive Officer Pursuant to Rules 13a-14(a) and
15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant
to Section
302 of the Sarbanes-Oxley Act of
2002.
|
|
31.2 |
Certification
of Principal Accounting Officer Pursuant to Rules 13a-14(a) and
15d-14(a)
under the Securities Exchange Act of 1934, as adopted pursuant
to Section
302 of the Sarbanes-Oxley Act of
2002.
|
|
32.1 |
Certification
of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
|
32.2 |
Certification
of Principal Accounting Officer Pursuant to 18 U.S.C. Section 1350
as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002.
|
*
Management contract or compensatory arrangement.
Exhibit
10.1
AGREEMENT
THIS
AGREEMENT is between AutoZone, Inc., a Nevada corporation and its various
subsidiaries (collectively “AutoZone”), and Michael E. Longo, an individual
(“Employee”) dated as of October 19, 2005 (“Agreement”).
WHEREAS,
Employee and AutoZone entered into an Employment and Non-Compete Agreement
dated
August 31, 1999, (“Prior Agreement”);
WHEREAS,
the parties mutually desire to terminate the Prior Agreement and substitute
this
Agreement in its place.
NOW,
THEREFORE, it is AGREED as follows:
1.
Effective
Date.
The
Prior Agreement is hereby terminated and of no effect. Employee resigns his
employment with AutoZone as of October 28, 2005, (“Effective Date”). Employee
resigns as an officer of AutoZone, Inc. and any and all of its affiliates and
subsidiaries (both direct and indirect) as of the Effective Date.
2.
Release.
Except
for the obligations undertaken pursuant to the terms of the Agreement, Employee
releases and forever discharges AutoZone and its employees, agents,
subsidiaries, predecessors, successors, affiliates, and assigns from all claims
of whatsoever nature and the right to receive compensation from such claims,
growing out of or in any way directly or indirectly connected with the
employment relationship between Employee and AutoZone, included but not limited
to:
|
A.
|
Breach
of any express or implied term or condition of
employment;
|
|
B.
|
Any
other causes of action under any federal, state or local law, rule
or
regulation, including but not limited to claims under any worker’s
compensation law, the Age Discrimination in Employment Act (as amended),
the Older Workers’ Benefit Protection Act, the Civil Rights Act of 1991,
the Civil Rights Act of 1964 (as amended), the Civil Rights Act of
1866,
the American with Disabilities Act of 1990, the Family and Medical
Leave
Act of 1993, and/or the Tax Reform Act of 1986 (as amended);
and/or
|
|
C.
|
Any
right to receive any monetary damages or liability payments from
any
actions at law or in equity filed on his behalf with regard to his
employment with or arising out of or relating to his employment with
AutoZone.
|
(It
is
important that you read and understand the terms of this Agreement in full
and
that if you decide to sign it, that you do so knowingly and voluntarily. We
suggest you consult an attorney about this Agreement and your rights before
signing it. You will not waive or give up any rights to claims you may have
against AutoZone that may arise after the date that you sign this Agreement.
Although we encourage you to seek advice of counsel concerning your rights
and
will be happy to answer questions about our offer, the offer is not negotiable.
In other words, you may accept the offer as stated or reject the offer and
receive the benefits to which you are entitled by law.)
3.
Recision.
AutoZone’s offer as described in this Agreement will remain open and effective
for twenty-one (21) days from the date of this Agreement. You may elect to
accept or reject this offer within that time period. If you do nothing within
the twenty-one (21) day period, the offer shall be deemed withdrawn by
AutoZone.
If
you do
sign the Agreement within the twenty-one (21) day period, you will have seven
(7) days following the date you signed this Agreement to change your mind and
revoke the Agreement in writing. Therefore, this Agreement will not be in effect
until seven (7) days have passed following the date you sign this
Agreement.
4.
Benefits.
In
consideration of the release granted by Employee and the other obligations
undertaken by Employee pursuant to this Agreement, Employee shall receive,
subject to the limitations contained in this Agreement, the following Benefits
in his favor:
A.
Severance
pay for a period of one hundred four (104) weeks at Employee’s current weekly
base salary rate, paid in equal bi-weekly installments as currently received
by
Employee, at the same time as AutoZone’s regular payroll. In the event you elect
COBRA coverage, each week of pay will also include an additional amount
sufficient to cover the difference between premium payments currently being
deducted for group health insurance and the premium payment pursuant to COBRA
for such period of time as COBRA coverage is allowed pursuant regulations and
the AutoZone medical plan. In the event you obtain other health insurance during
the term of this agreement, you must immediately notify AutoZone, in writing.
Upon receipt of this notification, AutoZone will reduce your pay by the excess
COBRA payments. As used in this Agreement, “bi-weekly” means “once every two
weeks.”
B.
Vacation
pay for which you are eligible, but have not taken, as of the Effective Date
of
this agreement.
C.
You
will
receive your eligible Fiscal 2006 bonus, prorated through the Effective Date
of
your employment with AutoZone. This bonus will be calculated in the same manner
(except for being prorated through the Effective Date) and paid at the same
time
as bonus payouts for Fiscal 2006 as it would have been had Employee been
employed by AutoZone on the date bonuses for fiscal 2006 are paid to AutoZone
vice presidents.
Employee
understands and agrees that the only salary or benefits he will receive from
AutoZone are set forth herein, and that all other salary or benefits he is
presently receiving from AutoZone shall be and are terminated as of the
Effective Date.
The
parties understand that applicable local, state, and federal tax deductions
and
withholdings will be made from all of the appropriate payments. The parties
further understand and agree that payment of Benefits in no way increases the
vesting period for 401K, pension plans or stock option agreements. Any vested,
but unexercised, stock options may be exercised within thirty (30) days of
the
employment termination date pursuant to the stock option agreements. Any
unvested stock options will terminate pursuant to the stock option
agreements.
5.
Non-Compete.
Employee further agrees that he will not, for the period of two (2) year from
the Effective 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 in which AutoZone operates now or shall
operate during the two (2) year term of the Non-Compete agreement (herein called
“Competitor”) as an employee, consultant, beneficial or record owner, 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. The parties further agree that if, at any time, despite the
express agreement of the parties hereto, a court of competent jurisdiction
holds
that any portion of this Non-Compete section is unenforceable for any reason,
Employee shall forfeit any benefits provided pursuant to this Agreement. In
the
event of breach by Employee of any provision of the Non-Compete section,
Employee acknowledges that such breach will cause irreparable damage to
AutoZone, 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, AutoZone 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 AutoZone shall be entitled
to the remedies set forth in the section entitled “Remedies”.
Employee
agrees not to hire, for himself or any other entity, encourage anyone or entity
to hire, or entice away from AutoZone any employee of AutoZone during the term
of this non-compete obligation.
6.
Confidentiality,
Nondisparagement and AutoZone Property.
Unless
otherwise required by law, Employee shall hold in confidence any proprietary
or
confidential information obtained by him during his employment with AutoZone,
which shall include, but not be limited to, information regarding AutoZone’s
present and future business plans, systems, operations and personnel matters.
Employee acknowledges that all such confidential or proprietary information
is
and shall remain the sole property of AutoZone and all embodiments of such
information shall remain with or be returned to AutoZone. Employee agrees to
immediately return to AutoZone any and all property of AutoZone.
Further,
Employee agrees to make no disparaging comments regarding AutoZone, AutoZone’s
business practices, AutoZone’s management, officers, directors or employees, or
any other aspect of AutoZone or his employment with AutoZone to any other
person, party or entity.
7.
Complete
Agreement.
This
Agreement contains the entire agreement between the parties with respect to
the
matters covered herein and integrates and merges all prior understandings,
discussions and negotiations. No other agreement, 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.
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 in the state or
federal courts located in Shelby County, Tennessee.
8.
Construction.
If any
section or provision of this Agreement shall be subject to two constructions,
one of which would render such section or provision invalid, then such section
or provision shall be given that construction that would render it
valid.
9.
Remedies.
In the
event of breach by Employee of any provision of this Agreement, Employee
acknowledges that such breach will cause irreparable damage to AuoZone, 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, AutoZone
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. In the event Employee breaches this Agreement in any way,
any unpaid Benefits shall immediately terminate. AutoZone shall have the right,
but not the obligation, to exercise any of its remedies under this Agreement
or
any that may be allowed by law in the event of a breach of this Agreement.
Any
such remedies available to AutoZone shall be cumulative, not
exclusive.
10.
Further
Assurances.
Employee warrants and represents to AutoZone that he has returned to AutoZone
all keys, documents, and other property of AutoZone. Should Employee fail or
refuse to return any AutoZone property, AutoZone shall be entitled to exercise
its rights under “Remedies”, in addition to any rights that AutoZone may have by
law.
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/ William C.
Rhodes, III |
|
|
/s/
Michael E.
Longo |
Title:
President & CEO |
|
|
Employee |
|
|
|
|
By: /s/ Harry L. Goldsmith |
|
|
10/19/05 |
|
|
|
Date |
Title: Exec. V.P., General Counsel &
Secretary |
|
|
|
Exhibit
10.2
April
13,
2006
Mr.
Bill
Giles
59
Spier
Drive
South
Orange, NJ 07079
Dear
Bill:
On
behalf
of AutoZone, I am delighted to offer to you the position of Executive Vice
President, Chief Financial Officer, subject to Board approval, reporting
directly to me. This position is a member of the Executive
Committee.
Our
offer
includes a base salary of $430,000 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 2006. We will guarantee your Fiscal 2006 Bonus at 100% payout,
prorated for your time in position for Fiscal 2006. Actual bonus awards for
Fiscal 2007 will be determined by the achievement of pre-defined Company and
Business Unit objectives. Bonus can therefore be less than target, but can
also
exceed targets based on above plan performance.
Subject
to the approval of the Compensation Committee of the Board of Directors of
AutoZone, Inc., you will receive an initial AutoZone, Inc. common stock option
grant of 40,000 non-qualified stock options, which will be granted in accordance
with the AutoZone, Inc. Second Amended and Restated 1996 Stock Option Plan.
These options will be presented to the Compensation Committee for consideration
at or before the next meeting of the Compensation Committee which occurs after
your start date. Thereafter, on an annual basis, beginning on or around October
2006, subsequent grants will be determined by pre-defined performance
achievements and the established annual range of options. All stock option
grants are made by the Compensation Committee of the Board of Directors of
AutoZone. Notwithstanding, any and all Stock Option Plans and future grants
are
subject to change or may be discontinued at any time.
Our
offer
of employment also includes relocation support, outlined in the Relocation
Policy you will receive. This includes coverage for the home sale and purchase
transaction costs, personal goods shipment, and suitable temporary housing.
The
cap for eligibility for the home sale program will be a home sale value not
to
exceed $1,200,000. We will also include a one-time miscellaneous gross payment
of $10,000, as noted in the relocation policy (minus tax withholding and other
customary deductions).
AutoZone
will provide a gross sign-on bonus of $50,000, payable 1/2 up front and 1/2
after one year of service. Tax withholding and other reasonable and customary
deductions will be deducted from the $50,000 gross payment.
You
will
be eligible to participate in AutoZone's full group benefit programs, which
currently include medical, dental, vision, life and 401(k) program (subject
to
the terms and conditions of each program). There is also a company paid
Executive Disability Plan to include short-term and long-term
disability.
As
an
Executive Vice President, you are eligible to participate in our Executive
Medical Health Plan and the Executive Stock Purchase Plan. You are also eligible
for four weeks of vacation. These benefits are granted and reviewed on an annual
basis. All benefits are subject to review and may change from time to time.
Notwithstanding,
your employment will be “at will” and terminable at any time.
Bill,
the
entire Executive Committee and the Board are enthusiastic about you joining
our
team. I am personally looking forward to your positive response and to working
with you for many years to come. Please feel free to call me or Tim Briggs
if
you have any questions.
Sincerely,
/s/
Bill
Bill
Rhodes
President
& CEO
Exhibit
10.3
FIRST
AMENDMENT TO CREDIT AGREEMENT
THIS
FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”)
dated
as of May 5, 2006 is by and among AUTOZONE, INC., a
Nevada
corporation (the “Borrower”),
the
Lenders party hereto, BANK OF AMERICA, N.A., as
Administrative Agent, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication
Agent.
W
I T N E
S S E T H
WHEREAS,
a $300,000,000 term loan has been established pursuant to the terms of that
certain Credit Agreement dated as of December 23, 2004 (as amended, restated,
modified or supplemented from time to time, the “Credit
Agreement”)
among
the Borrower, the Lenders from time to time party thereto, the Administrative
Agent and the Syndication Lender;
WHEREAS,
the Borrower has requested that the Lenders amend the Credit Agreement to modify
certain provisions contained therein; and
WHEREAS,
the Required Lenders have agreed to amend the Credit Agreement on the terms
and
subject to the conditions set forth herein.
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:
1. Defined
Terms.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings provided to such terms in the Credit Agreement.
2. Amendments.
Effective upon the satisfaction of the conditions precedent set forth in Section
3 hereof, the Credit Agreement is hereby amended as follows:
(a) The
Credit Agreement is hereby amended by replacing each reference to “Fleet
National Bank” and “Fleet” therein with a reference to “Bank of America, N.A.”
and “Bank of America”.
(b) Section
1.1 of the Credit Agreement is hereby amended by amending the definition of
“Applicable Percentage” to delete the next to the last sentence thereof and
replace it with the following:
“Such
determinations by the Administrative Agent shall be conclusive, absent
convincing evidence to the contrary.”
(c) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Consolidated EBITDA” to insert the following phrase at the end of the first
sentence thereof, immediately prior to the reference to “.”:
“or
otherwise defined herein”
(d) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Consolidated Net Income” to insert the following phrase immediately
following the word “excluding”:
“(i)
share-based expenses and all other non-cash charges (other than any such charges
that would result in an accrual or a reserve for cash charges in the future),
and (ii)”
(e) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Consolidated Rents” to insert the following phrase at the end of the first
sentence thereof, immediately prior to the reference to “.”:
“,
but
excluding rental expense related to any operating lease that has been converted
to a Capital Lease”
(f) Section
1.1 of the Credit Agreement is hereby further amended by deleting the definition
of “Funded Indebtedness” in its entirety and replacing it with the
following:
“Funded
Indebtedness”
means,
with respect to any Person (for purposes of this sentence only, the
"Debtor"),
without duplication and on a consolidated basis, (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 amount of
all
(x) drawn and unreimbursed documentary letters of credit, (y) standby letters
of
credit and (z) bankers acceptances, in each case issued or created for the
account of such Debtor and, without duplication, all drafts drawn thereunder
(to
the extent unreimbursed); 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. 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.
(g) Section
1.1 of the Credit Agreement is hereby further amended by deleting the definition
of “Indebtedness” in its entirety and replacing it with the
following:
“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) subject to the proviso below, the maximum amount of
all
letters of credit issued or bankers’ acceptances 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 documentary letters of credit or other
letters of credit used by such Person for the financing of inventory in the
ordinary course of business, except to the extent such letters of credit have
been drawn upon and unreimbursed 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.
(h) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Mexican Subsidiaries” to insert the following phrase immediately prior to
the first reference to “and”:
“Controladora
AutoZone, S. de R.L. de C.V.,”
(i) Section
1.1 of the Credit Agreement is hereby further amended to insert the following
definition in the appropriate alphabetical order:
"Arrangers"
means
Banc of America Securities LLC and Wachovia Capital Markets, LLC, together
with
any successors or assigns.
“Bank
of America”
means
Bank of America, N.A. and its successors, as successor to Fleet National
Bank.
(j) Section
3.2 of the Credit Agreement is hereby amended by deleting the reference to
“2:00
P.M.” and replacing it with a reference to “11:00 A.M.”.
(k) Section
3.2 of the Credit Agreement is hereby further amended by deleting the second
sentence thereof in its entirety and replacing it with the
following:
“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 11:00 A.M. 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.”
(l) Section
3.15(c) of the Credit Agreement is hereby amended by deleting the phrase “prima
facie, but not conclusive” and replacing it with the phrase “conclusive, absent
convincing evidence to the contrary”.
(m) Section
5.11(b) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
“(b) Neither
the Borrower nor any of its Subsidiaries is subject to regulation under 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 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.”
(n) Section
6.1(a) of the Credit Agreement is hereby amended by deleting the phrase “a
consolidated balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal year, together with related
consolidated statements of operations and retained earnings and of cash flows”
and replacing it with the following:
“as
of
the end of such fiscal year, a consolidated balance sheet, consolidated
statement of income, consolidated statement of stockholders’ equity and
consolidated statement of cash flows of the Borrower and its
Subsidiaries”
(o) Section
6.1(b) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
“(b) Quarterly
Financial Statements.
Beginning with the fiscal quarter ending May 6, 2006, as soon as available,
and
in any event within the earlier of (i) the 50th
day
after the end of each of the first three fiscal quarters of each fiscal year
of
the Borrower and (ii) the day that is five (5) Business Days after the date
the
Borrower's quarterly report on Form 10-Q is required to be filed with the
Securities and Exchange Commission, as of the end of such fiscal quarter,
together with a related condensed consolidated balance sheet, a condensed
consolidated statement of income and a condensed consolidated statement of
cash
flows of the Borrower and its Subsidiaries for such fiscal quarter, in each
case
setting forth in comparative form consolidated figures for the corresponding
period of the preceding fiscal year, except for the condensed consolidated
balance sheet that will be presented in comparative form to the Borrower’s most
recent audited consolidated balance sheet, 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.
(p) Section
6.1(e) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
“(e) Notices.
The
Borrower will give written notice to the Administrative Agent (a) immediately
upon obtaining knowledge thereof, of 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 proposes to take with respect thereto
and
(b) upon occurrence of any of the following with respect to the Borrower or
any
of its Subsidiaries: (i) promptly upon the Borrower’s determination thereof, the
pendency or commencement of any litigation, arbitral or governmental proceeding
against such Person which is reasonably likely to have a Material Adverse
Effect, (ii) promptly upon the Borrower’s determination thereof, 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) immediately upon obtaining
knowledge thereof, of 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.”
(q) Section
7.5(c) of the Credit Agreement is hereby amended by deleting the reference
to
“$50,000,000” therein and replacing it with a reference to
“$100,000,000”.
(r) Section
10.1(a)(ii) of the Credit Agreement is hereby deleted in its entirety and
replaced with the following:
“(ii) if
to the
Administrative Agent (for payments and requests for Credit
Extensions):
Bank
of
America, N.A.
2001
Clayton Road, Building B
Mail
Code: CA4-702-02-25
Concord,
CA 94520-2405
Attention:
Glenis Croucher
Telephone:
925-675-8328
Facsimile:
888-969-3315
Electronic
Mail: glenis.croucher@bankofamerica.com
Payment
Instructions:
Bank
of
America, N.A.
New
York,
NY
ABA
# 026
009 593
Account
No.: 3750836479
Account
Name: Credit Services #5596
Ref:
AutoZone
Other
notices to the Administrative Agent:
Bank
of
America, N.A.
Agency
Management
101
North
Tryon Street, 15th
Floor
Mail
Code: NC1-001-15-14
Charlotte,
NC 28255
Attention:
Kimberly Crane
Telephone:
704-387-5451
Facsimile:
704-409-0901
Electronic
Mail: kimberly.crane@bankofamerica.com.”
(s) Section
10.3(b) of the Credit Agreement is hereby amended by deleting the phrase “of
$3,500” and replacing it with the phrase “in accordance with Schedule
10.3(c)”.
(t) Section
10 of the Credit Agreement is hereby further amended by inserting the following
as a new Section 10.18:
“10.18 No
Advisory or Fiduciary Responsibility.
In
connection with all aspects of each transaction contemplated hereby, the
Borrower acknowledges and agrees that: (i) the credit facility provided
for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other
modification hereof or of any other Credit Document) are an arm’s-length
commercial transaction between the Borrower and its Affiliates,
on the one hand, and the Administrative Agent and the Arrangers, on the other
hand, and the Borrower is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Credit Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, the Administrative Agent and each Arranger
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary, for the Borrower or any of its Affiliates,
stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor either Arranger has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of the Borrower with respect to
any
of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof
or
of any other Credit Document (irrespective of whether the Administrative Agent
or either
Arranger has advised or is currently advising the Borrower or any of
its Affiliates
on other matters) and neither the Administrative Agent nor either Arranger
has
any obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Credit Documents; (iv) the Administrative Agent
and the
Arrangers and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower
and
its Affiliates, and neither the Administrative Agent nor either Arranger has
any
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship arising out of the transactions contemplated hereby;
and (v) the Administrative Agent and Arrangers have not provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any
of
the transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Credit Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate. The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty arising out of the transactions contemplated
hereby.”
(u) The
Schedules to the Credit Agreement are hereby amended by (i) inserting Schedule
10.3(c) and (ii) deleting Schedules 5.5 and 7.5 in their entirety and replacing
them with Schedules 5.5 and 7.5 attached hereto as Exhibit A.
3. Condition
Precedent.
This
Amendment shall become effective as of the date hereof upon receipt by the
Administrative Agent of the following:
(a) counterparts
of this Amendment duly executed by the Borrower and the Required
Lenders;
(b) evidence
that the “Closing Date” as defined in each of (i) that certain Four-Year Credit
Agreement, dated as of the date hereof, by and among the Borrower, the Lenders
from time to time party thereto and the Administrative Agent and (ii) that
certain Second Amended and Restated Five-Year Credit Agreement, dated as of
the
date hereof, by and among the Borrower, the Lenders from time to time party
thereto and the Administrative Agent have been has occurred, and such agreements
have become effective;
(c) Fees.
Any
fees required to be paid on or before the First Amendment Effective Date shall
have been paid.
(d) Attorney
Costs.
Unless
waived by the Administrative Agent, the Borrower shall have paid all costs
and
expenses of Moore & Van Allen PLLC, outside counsel to the Administrative
Agent, to the extent invoiced prior to or on the First Amendment Effective
Date,
plus
such
additional amounts as shall constitute its reasonable estimate of such costs
and
expenses incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude a final settling
of
accounts between the Borrower and the Administrative Agent).
(e) Accuracy
of Representations and Warranties.
The
representations and warranties of the Borrower and each other Loan Party
contained in Section 4 hereof shall be true and correct on and as of the First
Amendment Effective Date.
(f) No
Default.
No
Default shall exist and be continuing as of the First Amendment Effective
Date.
4. Representations
and Warranties.
The
Borrower hereby
represents and warrants that (a) it has the requisite organizational power
and
authority to execute, deliver and perform this Amendment, (b) it is duly
authorized to, and has been authorized by all necessary organizational action
to, execute, deliver and perform this Amendment, (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 it of
this
Amendment, (d) the execution, delivery and performance by it of this Amendment
do not and will not conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents
of
any Borrower or any of their Subsidiaries or any indenture or other material
agreement or instrument to which any such Person is a party or by which any
of
its properties may be bound or the approval of any Governmental Authority
relating to such Person except as could not reasonably be expected to have
a
Material Adverse Effect, (e)
the
representations and warranties contained in Article V of the Credit Agreement
are true and correct in all material respects on and as of the date hereof
as
though made on and as of such date (except for those which expressly relate
to
an earlier date) and (f) after giving effect to this Amendment, no Default
or
Event of Default exists under the Credit Agreement on and as of the date hereof
or will occur as a result of the transactions contemplated hereby.
5. No
Other Changes; Ratification.
Except
as expressly modified hereby, all of the terms and provisions of the Credit
Agreement (including schedules and exhibits thereto) and the other Credit
Documents shall remain in full force and effect. The term “this Agreement” or
“Credit Agreement” and all similar references as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as herein specifically agreed, the Credit Agreement is hereby
ratified and confirmed and shall remain in full force and effect according
to
its terms.
6. Costs
and Expenses.
The
Borrower agrees to pay all reasonable costs and expenses of the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment, including without limitation the reasonable fees and expenses of
Moore & Van Allen, PLLC.
7. Counterparts;
Facsimile.
This
Amendment may be executed in any number of counterparts, each of which when
so
executed and delivered shall be deemed an original and it shall not be necessary
in making proof of this Amendment to produce or account for more than one such
counterpart. Delivery of an executed counterpart of this Amendment by telecopy
or electronic mail by any party hereto shall be effective as such party’s
original executed counterpart.
8. Governing
Law.
This
Amendment shall be deemed to be a contract made under, and for all purposes
shall be construed in accordance with, the laws of the State of New
York.
9. Entirety.
This
Amendment 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. This Amendment and the other 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.
There are no oral agreements between the parties.
[SIGNATURE
PAGES FOLLOW]
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: AUTOZONE,
INC.
By:
/s/
James A. Cook III
Name:
James A. Cook III
Title:
Vice President and Treasurer
By:
/s/
Harry L. Goldsmith
Name:
Harry L. Goldsmith
Title:
Executive Vice President, Secretary &
General
Counsel
ADMINISTRATIVE
AGENT: BANK
OF AMERICA, N.A.,
as
Administrative Agent
By:/s/
Mollie S. Camp
Name:
Mollie S. Camp
Title:
Vice President
LENDERS:
BANK
OF AMERICA, N.A.,
as
a
Lender
By:
/s/
Dan Killian
Name:
Dan
M. Killian
Title:
Senior Vice President
Wachovia
Bank, National Association
By:
/s/
Anthony D. Braxton
Name:
Anthony D. Braxton
Title:
Director
BNP
PARIBAS
By:
/s/
Brad Ellis
Name:
Brad Ellis
Title:
Vice President
By:
/s/
Aurora Abella
Name:
Aurora Abella
Title:
Vice
President
[LENDER]
Regions
Bank
By:
/s/
Corey Burgess
Name:
Title:
Vice President
Calyon
New York Branch
By:
/s/
David P. Cagle
Name:
David P. Cagle
Title:
Managing Director
By:
/s/
Brian Myers
Name:
Brian Myers
Title:
Managing
Director
Union
Bank of California N.A.
By:
/s/
Theresa L. Rocha
Name:
Theresa L. Rocha
Title:
Vice President
Fifth
Third Bank
By:
/s/
John K. Perez
Name:
John K. Perez
Title:
Vice President
[US
Bank National Association]
By:
/s/
Heather Hinkelman
Name:
Heather Hinkelman
Title:
Banking Officer
The
Bank of New York
By:
/s/
Scott DeTraglia
Name:
Scott DeTraglia
Title:
Vice President
The
Chiba Bank, Ltd.
By:
/s/
Morio Tsumita
Name:
Morio Tsumita
Title:
General Manager
Comerica
Bank
By:
/s/
Heather Whiting
Name:
Heather Whiting
Title:
Assistant Vice President
Exhibit
10.4
Execution
Copy
[Published
CUSIP Number: ________________]
FOUR-YEAR
CREDIT AGREEMENT
Dated
as
of May 5, 2006
among
AUTOZONE,
INC.,
as
Borrower,
THE
SEVERAL LENDERS
FROM
TIME
TO TIME PARTY HERETO
AND
BANK
OF
AMERICA, N.A.,
as
Administrative Agent
and
CITICORP
USA, INC.,
as
Syndication Agent
______________________________________________________________
BANC
OF
AMERICA SECURITIES LLC
and
CITIGROUP
GLOBAL MARKETS INC.,
as
Joint
Lead Arrangers and Joint Book Managers
and
JPMORGAN
CHASE BANK,
WACHOVIA
BANK, NATIONAL ASSOCIATION
and
SUNTRUST
BANK,
as
Co-Documentation Agents
TABLE
OF CONTENTS
|
|
Page
|
SECTION
1 DEFINITIONS
|
1
|
1.1
|
Definitions.
|
1
|
1.2
|
Computation
of Time Periods.
|
18
|
1.3
|
Accounting
Terms.
|
18
|
1.4
|
Time
of Day.
|
18
|
SECTION
2 CREDIT FACILITIES
|
18
|
2.1
|
Revolving
Loans.
|
18
|
SECTION
3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES
|
23
|
3.1
|
Default
Rate.
|
23
|
3.2
|
Extension
and Conversion.
|
23
|
3.3
|
Prepayments.
|
24
|
3.4
|
Termination,
Reduction and Increase of Revolving Committed Amount.
|
25
|
3.5
|
Fees.
|
28
|
3.6
|
Capital
Adequacy.
|
28
|
3.7
|
Inability
To Determine Interest Rate.
|
29
|
3.8
|
Illegality.
|
29
|
3.9
|
Yield
Protection.
|
29
|
3.10
|
Withholding
Tax Exemption.
|
30
|
3.11
|
Indemnity.
|
31
|
3.12
|
Pro
Rata Treatment.
|
32
|
3.13
|
Payments
Generally; Administrative Agent’s Clawback.
|
33
|
3.14
|
Sharing
of Payments.
|
34
|
3.15
|
Payments,
Computations, Etc.
|
35
|
3.16
|
Evidence
of Debt.
|
37
|
3.17
|
Replacement
of Lenders.
|
37
|
SECTION
4 CONDITIONS
|
38
|
4.1
|
Closing
Conditions.
|
38
|
4.2
|
Conditions
to all Extensions of Credit.
|
39
|
SECTION
5 REPRESENTATIONS AND WARRANTIES
|
40
|
5.1
|
Financial
Position; No Internal Control Event.
|
40
|
5.2
|
Organization;
Existence; Compliance with Law.
|
40
|
5.3
|
Power;
Authorization; Enforceable Obligations.
|
41
|
5.4
|
No
Legal Bar.
|
41
|
5.5
|
No
Material Litigation.
|
41
|
5.6
|
No
Default.
|
41
|
5.7
|
Ownership
of Property; Liens.
|
42
|
5.8
|
No
Burdensome Restrictions.
|
42
|
5.9
|
Taxes.
|
42
|
5.10
|
ERISA.
|
42
|
5.11
|
Governmental
Regulations, Etc.
|
44
|
5.12
|
Subsidiaries.
|
45
|
5.13
|
Purpose
of Loans.
|
45
|
5.14
|
Disclosure.
|
45
|
5.15
|
Taxpayer
Identification Number.
|
45
|
SECTION
6 AFFIRMATIVE COVENANTS
|
45
|
6.1
|
Information
Covenants.
|
45
|
6.2
|
Preservation
of Existence and Franchises.
|
50
|
6.3
|
Books
and Records.
|
50
|
6.4
|
Compliance
with Law.
|
50
|
6.5
|
Payment
of Taxes and Other Indebtedness.
|
50
|
6.6
|
Insurance.
|
50
|
6.7
|
Maintenance
of Property.
|
50
|
6.8
|
Use
of Proceeds.
|
51
|
6.9
|
Audits/Inspections.
|
51
|
6.10
|
Adjusted
Debt to EBITDAR Ratio.
|
51
|
6.11
|
Interest
Coverage Ratio.
|
51
|
SECTION
7 NEGATIVE COVENANTS
|
51
|
7.1
|
Liens.
|
51
|
7.2
|
Nature
of Business.
|
51
|
7.3
|
Consolidation,
Merger, Sale or Purchase of Assets, etc.
|
52
|
7.4
|
Fiscal
Year.
|
53
|
7.5
|
Subsidiary
Indebtedness.
|
53
|
SECTION
8 EVENTS OF DEFAULT
|
54
|
8.1
|
Events
of Default.
|
54
|
8.2
|
Acceleration;
Remedies.
|
56
|
SECTION
9 AGENCY PROVISIONS
|
57
|
9.1
|
Appointment
and Authority.
|
57
|
9.2
|
Delegation
of Duties.
|
57
|
9.3
|
Exculpatory
Provisions.
|
57
|
9.4
|
Reliance
on Communications.
|
58
|
9.5
|
Notice
of Default.
|
58
|
9.6
|
Non-Reliance
on Administrative Agent and Other Lenders.
|
59
|
9.7
|
Indemnification.
|
60
|
9.8
|
Administrative
Agent in its Individual Capacity.
|
60
|
9.9
|
Successor
Administrative Agent.
|
61
|
9.10
|
Syndication
Agent.
|
61
|
SECTION
10 MISCELLANEOUS
|
62
|
10.1
|
Notices.
|
62
|
10.2
|
Right
of Set-Off.
|
64
|
10.3
|
Successors
and Assigns.
|
64
|
10.4
|
No
Waiver; Remedies Cumulative.
|
68
|
10.5
|
Payment
of Expenses, etc.
|
68
|
10.6
|
Amendments,
Waivers and Consents.
|
69
|
10.7
|
Counterparts.
|
70
|
10.8
|
Headings.
|
70
|
10.9
|
Survival.
|
70
|
10.10
|
Governing
Law; Submission to Jurisdiction; Venue.
|
71
|
10.11
|
Severability.
|
71
|
10.12
|
Entirety.
|
71
|
10.13
|
Binding
Effect; Termination.
|
72
|
10.14
|
Confidentiality.
|
72
|
10.15
|
Source
of Funds.
|
73
|
10.16
|
Conflict.
|
73
|
10.17
|
USA
PATRIOT Act Notice.
|
74
|
10.18
|
No
Advisory or Fiduciary Responsibility.
|
74
|
SCHEDULES
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
3.2
|
|
Form
of Notice of Extension/Conversion
|
Schedule
3.4(b)
|
|
Form
of New Commitment Agreement
|
Schedule
4.1(f)
|
|
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
10.1
|
|
Administrative
Agent’s Office; Certain Addresses for Notices
|
Schedule
10.3(a)
|
|
Form
of Assignment and Acceptance
|
Schedule
10.3(b)
|
|
Processing
and Recordation Fees
|
FOUR-YEAR
CREDIT AGREEMENT
THIS
FOUR-YEAR CREDIT AGREEMENT
dated as
of May 5, 2006 (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"),
BANK
OF AMERICA, N.A.,
as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"),
and
CITICORP
USA, INC.,
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 certain financial accommodations
to the Borrower in the form of a revolving credit facility, as more particularly
described herein;
WHEREAS,
the
Lenders have agreed to provide such financial accommodations 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:
SECTION
1
DEFINITIONS
1.1 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 April 7, 2006, 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).
"Administrative
Questionnaire"
means
an Administrative Questionnaire in a form supplied
by the Administrative Agent.
"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.
"Amended
and Restated Five-Year Credit Agreement"
means
that certain Second Amended and Restated Five-Year Credit Agreement dated as
of
the date hereof by and among the Borrower, the lenders party thereto, Bank
of
America, N.A., as administrative agent and Citicorp USA, Inc., as syndication
agent, as amended, modified, restated, supplemented or replaced from time to
time.
"Applicable
Percentage"
means,
for purposes of calculating the applicable interest rate for any day for any
Revolving Loan, the applicable rate of the Facility Fee for any day for purposes
of Section 3.5(a), 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"):
(i) where
the
Borrower has a senior unsecured (non-credit enhanced) long term debt rating
from
S&P and/or Moody’s, five (5) Business Days after receipt of notice by the
Administrative Agent of a change in any such debt rating, based on such debt
rating(s); and
(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.
|
The
Applicable Percentage shall be effective from a Calculation Date
until the
next such Calculation Date. The Administrative Agent shall determine
the
appropriate Applicable Percentages promptly upon receipt of the notices
and information necessary to make such determination and shall promptly
notify the Borrower and the Lenders of any change thereof. Such
determinations by the Administrative Agent shall be conclusive,
absent convincing evidence to the contrary.
|
"Arrangers"
means
Banc of America Securities LLC and
Citigroup Global Markets Inc.,
together with any successors or assigns.
"Assignee
Group"
means
two or more Eligible Assignees that are Affiliates of one another.
"Assignment
and Assumption"
means
an assignment and assumption entered into by a Lender and an Eligible Assignee
with the consent of any party whose consent is required by Section
10.3(b),
and
accepted by the Administrative Agent, in substantially the form of Schedule
10.3(a)
or any
other form approved by the Administrative Agent.
"Audited
Financial Statements"
means
the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended August 27, 2005, and
the related
consolidated statements of income or operations, stockholders’ equity and cash
flows
for
such fiscal year of the Borrower and its Subsidiaries, including the notes
thereto.
"Bank
of America"
means
Bank of America, N.A. and its successors.
"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 a fluctuating rate per annum equal to the higher of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such
day as publicly announced from time to time by Bank of America as its "prime
rate." The "prime rate" is a rate set by Bank of America based upon various
factors including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing
some
loans, which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America shall take effect at the opening
of
business on the day specified in the public announcement of such
change.
"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 new 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). Notwithstanding the foregoing, a
Reorganization permitted by under Section 7.3 hereof shall not be deemed a
Change of Control for the purposed of this Credit Agreement.
"Change
of Control Notice"
shall
have the meaning specified in Section 3.4(e).
"Change
of Control Prepayment Amount"
shall
have the meaning specified in Section 3.4(e).
"Change
of Control Standstill Period"
shall
have the meaning specified in Section 3.4(e).
"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
with respect to each Lender, the Revolving Commitment of such
Lender.
"Commitment
Percentage"
means,
for any Lender, the percentage which such Lender’s Revolving Commitment then
constitutes of the aggregate Revolving Committed Amount.
"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 or otherwise defined herein. 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 and on a consolidated basis, 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 (i) share-based expenses and all other non-cash charges
(other than any such charges that would result in an accrual or a reserve for
cash charges in the future); and (ii) non-recurring charges in an aggregate
amount not to exceed $50,000,000 collectively with respect to all periods
relevant for the calculation of the financial covenants contained in Sections
6.10 and 6.11. Except as otherwise expressly provided, the applicable period
shall be for the four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated
Rents"
means,
for any period for the Borrower and its Subsidiaries, all rental expense of
the
Borrower and its Subsidiaries for such period under operating leases
(specifically including rents paid in connection with synthetic leases, tax
retention operating leases, off-balance sheet loans or similar off-balance
sheet
financing products), on a consolidated basis as determined in accordance with
GAAP applied on a consistent basis, but excluding rental expense related to
any
operating lease that has been converted to a Capital Lease. Except as otherwise
expressly provided, the applicable period shall be for the four consecutive
fiscal quarters ending as of the date of determination.
"Credit
Documents"
means a
collective reference to this Credit Agreement, the Notes, the Administrative
Agent’s Fee Letter and all other related agreements and documents issued or
delivered hereunder or thereunder or pursuant hereto or thereto.
"Default"
means
any event, act or condition which with notice or lapse of time, or both, would
constitute an Event of Default.
"Designating
Lender"
has the
meaning set forth in Section 10.3(e).
"Dollars"
and
"$"
means
dollars in lawful currency of the United States of America.
"Eligible
Assignee"
means
any Person that meets the requirements to be an assignee under Section
10.3(b)(iii),
(v)
and
(vi)
(subject
to such consents, if any, as may be required under Section
10.3(b)(iii)).
"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
Base Rate"
has the
meaning specified in the definition of Eurodollar Rate.
"Eurodollar
Loan"
means
any Loan bearing interest at a rate determined by reference to the Eurodollar
Rate.
"Eurodollar
Rate"
means
for any Interest Period with respect to any Eurodollar Loan, a rate per annum
determined by the Administrative Agent pursuant to the following
formula:
Eurodollar
Rate =
|
Eurodollar
Base Rate
1.00
- Eurodollar Reserve Percentage
|
Where,
"Eurodollar
Base Rate"
means,
for any Interest Period with respect to a Eurodollar Loan, the rate per annum
equal to the British Bankers Association LIBOR Rate ("BBA
LIBOR"),
as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time
to
time) at approximately 11:00 A.M., London time, two Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery
on
the first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the
"Eurodollar Rate" for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued
or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 A.M.
(London time) two Business Days prior to the commencement of such Interest
Period.
"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 Amended and Restated 364-Day Credit Agreement dated as of May
17,
2004 (and extended on May 16, 2005 pursuant to the terms of Section 3.4(c)
thereof) by and among the Borrower, the lenders party thereto, Fleet National
Bank, as administrative agent, and Citicorp USA, Inc., as syndication agent,
as
amended, modified, restated, supplemented or replaced from time to
time.
"Facilities"
means a
collective reference to (i) the revolving loan facility established pursuant
to
Section 2.1 and (ii) the revolving loan facility established pursuant to the
Amended and Restated Five-Year Credit Agreement.
"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 Controller, the General
Counsel, or the Chief Financial Officer 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.
"Foreign
Lender"
means
any Lender that is organized under the laws of a jurisdiction other than that
in
which the Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.
"Funded
Indebtedness"
means,
with respect to any Person (for purposes of this sentence only, the
"Debtor"),
without duplication and on a consolidated basis, (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 amount of
all
(x) drawn and unreimbursed documentary letters of credit, (y) standby letters
of
credit and (z) bankers acceptances, in each case issued or created for the
account of such Debtor and, without duplication, all drafts drawn thereunder
(to
the extent unreimbursed); 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. 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) subject to the proviso below, the maximum amount of
all
letters of credit issued or bankers’ acceptances 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 documentary letters of credit or other
letters of credit used by such Person for the financing of inventory in the
ordinary course of business, except to the extent such letters of credit have
been drawn upon and unreimbursed 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.
"Information"
has the
meaning specified in Section 10.14.
"Interest
Payment Date"
means
(i) as to any Base Rate Loan, the last Business 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 or any Competitive 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) and (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); 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.
"Internal
Control Event"
means a
material weakness in, or fraud that involves management or other employees
who
have a significant role in, the Borrower’s internal controls over financial
reporting, in each case as described in the Securities Laws or as otherwise
determined by the Borrower’s external auditors on a quarterly basis that has
resulted in or could reasonably be expected to result in a misstatement in
any
material respect, in any financial information delivered or to be delivered
to
the Administrative Agent or the Lenders, of (i) covenant compliance calculations
provided hereunder or (ii) the assets, liabilities, financial condition or
results of operations of the Borrower and its Subsidiaries on a consolidated
basis that has not been (x) disclosed to the Administrative Agent, who in turn
discloses such material weaknesses to the Lenders, and (y) remedied or otherwise
diligently addressed (or is in the process of being diligently addressed) by
the
Borrower in accordance with recommendations made by the Borrower's auditors
in
consultation with the Borrower.
"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
condi-tional 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 Revolving Loans and/or the Competitive Loans.
"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.
"Mexican
Subsidiaries"
means,
collectively, the following Subsidiaries of the Borrower: AutoZone
de Mexico, S. de R.L. de C.V., Zone Compra, S. de R.L. de C.V., Service Zone,
S.de R.L. de C.V., Data Zone, S. de R.L. de C.V., Controladora AutoZone, S.
de
R.L. de C.V., and
any
other Subsidiary of the Borrower formed after the Closing Date and organized
under the laws of Mexico.
"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.
"New
Commitment Agreement"
means a
New Commitment Agreement substantially in the form of Schedule
3.4(b),
as
executed pursuant to Section 3.4(b).
"Note"
or
"Notes"
means
any Revolving Note and/or any Competitive 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.
"Participant"
has the
meaning specified in Section
10.3(d).
"Participation
Interest"
means,
the extension of credit by a Lender by way of a purchase of a participation
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.
"PCAOB"
means
the Public Company Accounting Oversight Board.
"Permitted
Liens"
means:
(i) Liens
in
favor of the Administrative Agent on behalf of the Lenders;
(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.
"Person"
means
any individual, partnership, joint venture, firm, corporation, limited liability
company, association, trust or other enterprise (whether or not incorporated)
or
any Governmental Authority.
"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.
"Platform"
has the
meaning specified in Section 6.1.
"Pricing
Level"
means
the applicable pricing level for the Applicable Percentage shown in Schedule
1.1.
"Property"
means
any interest in any kind of property or asset, whether real, personal or mixed,
or tangible or intangible.
"Register"
shall
have the meaning given such term in Section 10.3(c).
"Registered
Public Accounting Firm"
has the
meaning specified in the Securities Laws and shall be independent of the
Borrower as prescribed by the Securities Laws.
"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.
"Related
Parties"
means,
with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.
"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).
"Reorganization"
shall
have the meaning specified in Section 7.03.
"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 more than 50% of (i) the Commitment Percentages 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), to make Revolving Loans in accordance
with
the provisions of Section 2.1(a).
"Revolving
Committed Amount"
shall
have the meaning assigned to such term in Section 2.1(a).
"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.
"Sarbanes-Oxley"
means
the Sarbanes-Oxley Act of 2002.
"SEC"
means
the Securities and Exchange Commission, or any Governmental Authority succeeding
to any of its principal functions.
"Securities
Laws"
means
the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley
and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the
PCAOB.
"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.
"Syndication
Agent"
means
Citicorp USA, Inc., together with any successors and assigns.
"Term
Loan Amendment"
means
the First Amendment dated on or about the date hereof to that certain Credit
Agreement dated as of December 23, 2004 by and among the Borrower, the lenders
from time to time party thereto, Fleet National Bank, as administrative agent,
and Wachovia Bank, National Association, as syndication agent.
"Terminating
Lenders"
shall
have the meaning specified in Section 3.4(e).
"Termination
Date"
means
May 5, 2010, provided,
however
that if
such date is not a Business Day, the Termination Date shall be the next
preceding Business Day.
"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."
1.3 Accounting
Terms.
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 27, 2005);
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.
1.4 Time
of Day.
Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable).
SECTION
2
CREDIT
FACILITIES
2.1 Revolving
Loans.
(a) Revolving
Commitment.
Subject
to the terms and conditions hereof and in reliance upon the representations
and
warranties set forth herein, each Lender severally agrees to make available
to
the Borrower revolving credit loans requested by the Borrower in Dollars
("Revolving
Loans")
up to
such Lender’s Revolving Commitment from time to time from the Closing Date until
the Termination Date, or such earlier date as the Revolving Commitments shall
have been terminated as provided herein for the purposes hereinafter set forth;
provided,
however,
that
the sum of the aggregate principal amount of outstanding Revolving Loans shall
not exceed THREE
HUNDRED MILLION DOLLARS ($300,000,000.00)
(as such
aggregate maximum amount may be reduced or increased from time to time as
provided in Sections 3.3 and 3.4, the "Revolving
Committed Amount");
provided,
further,
(i)
with regard to each Lender individually, such Lender’s outstanding Revolving
Loans shall not exceed such Lender’s Revolving Commitment, and (ii) with regard
to the Lenders collectively, the sum of the aggregate principal amount of
outstanding Revolving Loans plus
the
aggregate principal amount of outstanding Competitive Loans shall not at any
time exceed the Revolving Committed Amount. Revolving Loans may consist of
Base
Rate Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request, and may be repaid and reborrowed in accordance with the provisions
hereof; provided,
however,
that no
more than 25 Eurodollar
Loans shall be outstanding hereunder at any time. 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. Revolving Loans hereunder may be repaid
and
reborrowed in accordance with the provisions hereof. Notwithstanding the
foregoing, the Borrower may not request any Loans hereunder while a Change
of
Control Standstill Period shall be in effect pursuant to Section
3.4(e)
hereof.
(b) Revolving
Loan Borrowings.
(i) Notice
of Borrowing.
The
Borrower shall request a Revolving Loan borrowing by notice, which may be given
by telephone and promptly confirmed in writing. Each such notice must be
received by the Administrative Agent not later than (i) 12:00 noon on the
Business Day of the requested borrowing in the case of Base Rate Loans, and
(ii)
11:00 A.M. three Business Days prior to the date of the requested borrowing
in
the case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable, executed by a Financial Officer of the Borrower and shall specify
(A) that a Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable Interest Period in
the
case of a Eurodollar Loan, then such notice shall be deemed to be a request
for
an Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base Rate Loan hereunder.
The Administrative Agent shall give notice to each affected Lender promptly
upon
receipt of each Notice of Borrowing pursuant to this Section 2.1(b)(i), the
contents thereof and each such Lender’s share of any borrowing to be made
pursuant thereto.
(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 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. 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.
(c) Repayment.
The
principal amount of all Revolving Loans shall be due and payable in full on
the
Termination Date, subject to the provisions of Sections 3.4(c) and
(e).
(d) Interest.
Subject
to the provisions of Section 3.1,
(i) Base
Rate Loans.
During
such periods as Revolving Loans shall be comprised in whole or in part of Base
Rate Loans, such Base Rate Loans shall bear interest at a per annum rate equal
to the Base Rate plus
the
Applicable Percentage; and
(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.
Interest
on Revolving Loans shall be payable in arrears on each applicable Interest
Payment Date (or at such other times as may be specified herein).
(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).
2.2 Competitive
Loan Subfacility.
(a) Competitive
Loans.
Subject
to the terms and conditions and relying upon the representations and warranties
herein set forth, the Borrower may, from time to time from the Closing Date
until the Termination Date, request and each Lender may, in its sole discretion,
agree to make, Competitive Loans in Dollars to the Borrower; provided,
however,
that
(i) the aggregate principal amount of outstanding Competitive Loans shall not
at
any time exceed the Revolving Committed Amount, and (ii) 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 plus
the L/C
Obligations outstanding shall not at any time exceed the Revolving Committed
Amount. Each Competitive Loan shall be not less than $10,000,000 in the
aggregate and integral multiples of $1,000,000 in excess thereof (or the
remaining portion of the Revolving Committed Amount, if less). Notwithstanding
the foregoing, the Borrower may not request any Loans hereunder while a Change
of Control Standstill Period shall be in effect pursuant to Section
3.4(e)
hereof.
(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. 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) by 11:00 A.M.
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 11:00 A.M. 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 11:00 A.M. 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 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.
SECTION
3
OTHER
PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default
Rate.
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).
3.2 Extension
and Conversion.
The
Borrower shall have the option, on any Business Day, to deliver a Notice of
Extension/Conversion to (i) extend existing Loans into a single subsequent
permissible Interest Period, (ii) convert Loans into Loans of another interest
rate type or (iii) extend existing Loans into automatic rolling subsequent
three-month Interest Periods; provided that, with respect to this clause (iii)
such Loans will be automatically extended on the last day of each three-month
Interest Period into the subsequent three-month Interest Period (as requested
pursuant to the relevant Notice of Extension/Conversion) until such time as
the
Borrower delivers a new Notice of Extension/Conversion, which new Notice of
Extension/Conversion shall be delivered prior to 11:00 A.M. on the fifth
Business Day prior to the last day of the then current Interest Period;
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
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 11:00 A.M. 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.
3.3 Prepayments.
(a) Voluntary
Prepayments.
The
Borrower shall have the right to prepay Loans (other than Competitive Loans,
which may not be prepaid) in whole or in part from time to time, subject to
Section 3.11, but otherwise without premium or penalty; provided,
however,
that
(i) Base Rate Loans may only be prepaid on one Business Day's prior written
notice to the Administrative Agent and specifying the applicable Loans to be
prepaid; (ii) Eurodollar Loans may only be prepaid on three Business Days’ prior
written notice to the Administrative Agent and specifying the applicable Loans
to be prepaid; and (iii) each such partial prepayment of Loans shall be in
the
case of Revolving Loans, in a minimum principal amount of $5,000,000 and
multiples of $1,000,000 in excess thereof (or, if less, the full remaining
amount of the Revolving Loan being prepaid). Subject to the foregoing terms,
amounts prepaid under this Section 3.3(a) shall be applied as the Borrower
may
elect.
(b) Mandatory
Prepayments.
(i) Commitment
Limitation.
If at
any time, the sum of the aggregate principal amount of outstanding Revolving
Loans plus
the
aggregate principal amount of outstanding Competitive Loans shall exceed the
Revolving Committed Amount, the Borrower promises to immediately prepay Loans
in
an amount sufficient to eliminate such excess (such payments to be applied
as
set forth in clause (ii) below).
(iiii) Application
of Mandatory Prepayments.
All
amounts required to be paid pursuant to this Section 3.3(b) shall be
applied as follows: (A) with respect to all amounts paid pursuant to
Section 3.3(b), to Revolving Loans. Within
the parameters of the applications set forth above, payments shall be applied
first to Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. All payments under this Section 3.3(b) shall be
subject to Section 3.11, but otherwise without premium or
penalty,
and
shall
be
accompanied by interest on the principal amount paid through the date of
payment.
(c) General.
All
prepayments made pursuant to this Section 3.3 shall (i) be subject to Section
3.11 and (ii) unless the Borrower shall specify otherwise, be applied first
to
Base Rate Loans, if any, and then to Eurodollar Loans in direct order of
Interest Period maturities. Except as otherwise set forth in subclause (b)
above, amounts prepaid on the Revolving Loans may be reborrowed in accordance
with the provisions hereof.
3.4 Termination,
Reduction and Increase of Revolving Committed Amount.
(a) Voluntary
Reductions.
The
Borrower may from time to time permanently reduce or terminate the Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of $5,000,000
or in integral multiples of $1,000,000 in excess thereof (or, if less, the
full
remaining amount of the then applicable Revolving Committed Amount)) upon five
Business Days’ prior written notice to the Administrative Agent; provided,
however,
no such
termination or reduction shall be made which would cause the aggregate principal
amount of outstanding Revolving Loans plus
the
aggregate principal amount of outstanding Competitive Loans to exceed the
Revolving Committed Amount unless, concurrently with such termination or
reduction, the Revolving Loans and/or the Competitive Loans are repaid to the
extent necessary to eliminate such excess. The Commitments of the Lenders shall
automatically terminate on the Termination Date. The Administrative Agent shall
promptly notify each affected Lender of receipt by the Administrative Agent
of
any notice from the Borrower pursuant to this Section 3.4(a).
(b) Additional
Commitments.
The
Borrower shall have the right no more than once a year to
increase the Facilities up to an aggregate amount of $1,300,000,000 (with such
increase to be applied pro rata to the Facilities) without the consent of the
Lenders, subject however to the satisfaction of each of the following terms
and
conditions:
(i) to
the
knowledge of the Administrative Agent, no Default or Event of Default shall
exist and be continuing at the time of such increase;
(ii) concurrently
with the Borrower’s request for such increase hereunder, the Borrower shall
deliver to the Administrative Agent, an officer’s certificate substantially in
the form of Schedule 6.1(c) certifying that no Default or Event of Default
has
occurred and is continuing and demonstrating compliance with each of the
financial covenants set forth in Sections 6.10 and 6.11 both before and after
giving effect to the increase requested hereunder;
(iii) such
increase shall be allocated in the following order:
(A) first,
to
the existing Lenders consenting to an increase in the amount of their Revolving
Commitments; provided
that (1)
on or before the tenth Business Day following notification of a requested
increase in the Revolving Committed Amount, each Lender shall notify the
Borrower of the desired increase, if any, in its Revolving Commitment and (2)
if
the aggregate increases in the Revolving Commitments requested by the existing
Lenders shall exceed the requested increase in the Revolving Committed Amount,
the Revolving Commitments of such Lenders shall be increased on a pro rata
basis
according to the existing Commitment Percentage of such Lenders;
and
(B) second,
to any other commercial bank, financial institution or "accredited investor"
(as
defined in Regulation D of the SEC) reasonably acceptable to the Administrative
Agent and the Borrower;
(iv) each
Person providing a new Commitment shall execute a New Commitment Agreement
substantially in the form of Schedule
3.4(b)
hereto
and, upon such execution and the satisfaction of the other terms and conditions
of this Section 3.4(b), such Person shall thereupon become a party hereto and
have the rights and obligations of a Lender under this Credit Agreement as
more
specifically provided in the New Commitment Agreement; and
(v) the
Administrative Agent shall promptly notify each Lender of (A) the new Revolving
Committed Amount and (B) each Lender’s Commitment Percentage, in each case after
giving effect to the one-time increase in Revolving Commitment referred to
in
this Section 3.4(b).
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On
the date (which date shall be a Business Day) on which the increase
in the
Revolving Committed Amount occurs the Administrative Agent and the
Lenders
shall make adjustments among the Lenders with respect to the Revolving
Loans outstanding hereunder and under the Four-Year Credit Agreement
and
amounts of principal, interest, fees and other amounts paid or payable
with respect thereto as shall be necessary in order to reallocate
among
the Lenders such outstanding amounts based on the new Commitment
Percentages and to otherwise carry out fully the terms of this Section
3.4(b). The Borrower agrees that, in connection with any such increase
in
the Revolving Committed Amount, it will promptly (i) provide to each
Lender providing a new or increased Revolving Commitment (upon surrender
of the existing Revolving Note of such Lender in the case of an existing
Lender) a Revolving Note in the amount of its new or increased (as
applicable) Revolving Commitment substantially in the form of the
Revolving Note attached hereto as Schedule
2.1(e)
(but, in the case of a new Revolving Note given to an existing Lender
that
increases its Revolving Commitment, with notation thereon that it
is given
in substitution for and replacement of the original Revolving Note
or any
replacement notes thereof) and (ii) provide to each Lender (upon
surrender
of the existing Competitive Note of such Lender in the case of an
existing
Lender) a Competitive Note in the amount of the new Revolving Committed
Amount substantially in the form of the Competitive Note attached
hereto
as Schedule
2.2(f)
(but, in the case of a new Competitive Note given to an existing
Lender,
with notation thereon that it is given in substitution for and replacement
of the original Competitive Note or any replacement notes thereof).
Each
of the parties hereto acknowledges and agrees that no Lender shall
be
obligated to increase its Revolving Commitment pursuant to the terms
of
this Section 3.4(b).
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(c) Termination
Date.
The
Revolving Commitments of the Lenders shall automatically terminate on the
Termination Date.
(d)[Intentionally
Omitted.]
(e)Change
of Control.
(i) As
set
forth in Sections 2.1(a) above, the Borrower may not request any Loans hereunder
while a Change of Control Standstill Period shall be in effect pursuant to
this
Section 3.4(e). Subject
to the procedures set forth below in this clause (ii) of this Section 3.4(e),
upon the occurrence of a Change of Control and the expiration of the 20-day
notice period described below, each Lender shall have the right to terminate
its
Commitment hereunder and require that the Borrower prepay (and the Borrower
agrees to so prepay) in full such Lender's outstanding Loans (such amount the
"Change
of Control Prepayment Amount"),
plus
accrued and unpaid fees and interest, if any, to the date of prepayment and
all
other obligations due to such Lender under this Credit Agreement and the other
Credit Documents.
(ii) Upon
the
occurrence of any Change of Control, the Administrative Agent shall
mail a notice (the "Change
of Control Notice")
simultaneously to all Lenders providing each Lender with notice of its rights
under this Section 3.4(e) and a period of twenty (20) calendar days to evaluate
the Change of Control and make a determination as to whether such Lender will
terminate its Commitments and accept payment of the Change of Control Prepayment
Amount, or whether such Lender will accept such Change of Control and continue
as a Lender hereunder. The period beginning on the effective date of such Change
of Control and continuing through the expiration of such twenty (20) notice
day
period shall be referred to herein as a "Change
of Control Standstill Period").
The
Borrower may not request any Loans hereunder while a Change of Control
Standstill Period shall be in effect pursuant to this Section
3.4(e).
(iii) Lenders
electing to have their Loans prepaid pursuant to this Section 3.4(e) shall
so
notify the Administrative Agent as directed in the Change of Control Notice;
provided,
however,
that
failure by any Lender to make a timely response shall be deemed to constitute
an
election by such Lender to terminate its Commitment and accept prepayment of
its
Loans. Upon the expiration date of the Change of Control Standstill Period,
(A)
all Lenders electing to terminate their Commitments (the "Terminating
Lenders")
shall
surrender their Notes to the Administrative Agent at the address specified
in
Section 11.02, (B) all Notes held by Terminating Lenders shall be cancelled
by
the Borrower and the Borrower shall pay the applicable Change of Control
Prepayment Amounts to the Administrative Agent, for the account of the
Terminating Lenders, and all other Obligations due to the Terminating Lenders
under this Agreement and the other Credit Documents, (C) the Commitments of
the
Terminating Lenders hereunder shall be terminated and the Revolving Committed
Amount shall be automatically reduced by an amount equal to the aggregate amount
of the Commitments so terminated, and (D) and the Commitments of those Lenders
not electing to terminate their Commitments shall automatically
continue.
(f) General.
The
Borrower shall pay to the Administrative Agent for the account of the Lenders
in
accordance with the terms of Section 3.5(a), on the date of each termination
or
reduction of the Revolving Committed Amount, the Facility Fee accrued through
the date of such termination or reduction on the amount of the Revolving
Committed Amount so terminated or reduced.
3.5 Fees.
(a) Facility
Fee.
In
consideration of the Revolving Commitments of the Lenders hereunder, the
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a fee (the "Facility
Fee")
on the
Revolving Committed Amount computed at a per annum rate for each day during
the
applicable Facility Fee Calculation Period (hereinafter defined) equal to the
Applicable Percentage in effect from time to time. The Facility Fee shall
commence to accrue on the Closing Date and shall be due and payable in arrears
on the last Business Day of each March, June, September and December (and any
date that the Revolving Committed Amount is reduced or increased as provided
in
Section 3.4 and the Termination Date) for the immediately preceding quarter
(or
portion thereof) (each such quarter or portion thereof for which the Facility
Fee is payable hereunder being herein referred to as a "Facility
Fee Calculation Period"),
beginning with the first of such dates to occur after the Closing
Date.
(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 50% of the Revolving Committed Amount (each such period
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.
3.6 Capital
Adequacy.
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 (as defined below),
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.
3.8 Illegality.
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.
3.9 Yield
Protection.
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,
(a)
subjects
any Lender or any applicable Lending Installation to any tax, duty, charge
or
withholding on or from payments due from the Borrower (excluding federal
taxation of the overall net income of any Lender or applicable Lending
Installation), or changes the basis of taxation of payments to any Lender in
respect of its Loans or other amounts due it hereunder;
(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);
and
the
result of which is to increase the cost to any Lender of making, funding or
maintaining loans or reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with loans, or requires any Lender
or any applicable Lending Installation to make any payment calculated by
reference to the amount of loans held or interest received by it, by an amount
deemed material by such Lender;
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:
(a) (i) on
or
before the date of any payment by the Borrower under this Credit Agreement
or
Notes to such Lender, deliver to the Borrower and the Administrative Agent
(A)
two (2) duly completed copies of United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the case may be, certifying
that
it is entitled to receive payments under this Credit Agreement and any Notes
without deduction or withholding of any United States federal income taxes
and
(B) an Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be, certifying that it is entitled to an exemption from United
States backup withholding tax;
(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
(b) in
the
case of any such Lender that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (i) represent to the Borrower (for
the benefit of the Borrower and the Administrative Agent) that it is not a
bank
within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (ii)
agree to furnish to the Borrower on or before the date of any payment by the
Borrower, with a copy to the Administrative Agent two (2) accurate and complete
original signed copies of Internal Revenue Service Form W-8, or successor
applicable form certifying to such Lender’s legal entitlement at the date of
such certificate to an exemption from U.S. withholding tax under the provisions
of Section 881(c) of the Internal Revenue Code with respect to payments to
be
made under this Credit Agreement and any Notes (and to deliver to the Borrower
and the Administrative Agent two (2) further copies of such form on or before
the date it expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recently provided form and, if necessary, obtain
any extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms), and (iii) agree,
to
the extent legally entitled to do so, upon reasonable request by the Borrower,
to provide to the Borrower (for the benefit of the Borrower and the
Administrative Agent) such other forms as may be reasonably required in order
to
establish the legal entitlement of such Lender to an exemption from withholding
with respect to payments under this Credit Agreement and any Notes;
unless
in
any such case any change in treaty, law or regulation has occurred after the
date such Person becomes a Lender hereunder which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent in either case. Each Person that shall
become a Lender or a participant of a Lender pursuant to subsection 10.3 shall,
upon the effectiveness of the related transfer, be required to provide all
of
the forms, certifications and statements required pursuant to this subsection,
provided
that in
the case of a participant of a Lender the obligations of such participant of
a
Lender pursuant to this Section 3.10 shall be determined as if the participant
of a Lender were a Lender except that such participant of a Lender shall furnish
all such required forms, certifications and statements to the Lender from which
the related participation shall have been purchased.
3.11 Indemnity.
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 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 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
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.
3.12 Pro
Rata Treatment.
Except
to
the extent otherwise provided herein:
(a) Loans.
Each
Loan, each payment or prepayment of principal of any Loan, each payment of
interest on the Loans, each payment of Facility Fees, each payment of
Utilization Fees, each reduction of the Revolving Committed Amount and each
conversion or extension of any Loan, shall be allocated pro rata among the
Lenders in accordance with the respective principal amounts of their outstanding
Loans and Participation Interests. With respect to Competitive Loans, if the
Borrower fails to specify the particular Competitive Loan or Loans as to which
any payment or other amount should be applied and it is not otherwise clear
as
to the particular Competitive Loan or Loans to which such payment or other
amounts relate, or any such payment or other amount is to be applied to
Competitive Loans without regard to any such direction by the Borrower, then
each payment or prepayment of principal on Competitive Loans and each payment
of
interest or other amount on or in respect of Competitive Loans, shall be
allocated pro rata among the relevant Lenders of Competitive Loans in accordance
with the then outstanding amounts of their respective Competitive
Loans.
(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.
3.13 Payments
Generally; Administrative Agent’s Clawback.
(a) General.
All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall be
made
to the Administrative Agent, for the account of the respective Lenders to which
such payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 4:00 P.M. on the date specified
herein. The Administrative Agent will promptly distribute to each Lender its
Applicable Percentage (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender’s Lending
Office. All payments received by the Administrative Agent after 4:00 P.M.
shall be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue. If any payment to be made by the
Borrower shall come due on a day other than a Business Day, payment shall be
made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.
(b) (i)
Funding
by Lenders; Presumption by Administrative Agent.
Unless
the Administrative Agent shall have received notice from a Lender prior to
the
proposed date of any Committed Borrowing of Eurodollar Rate Loans (or, in the
case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on
the
date of such Committed Borrowing) that such Lender will not make available
to
the Administrative Agent such Lender’s share of such Committed Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Sections 2.1(b) and 3.2 (or, in the case of
a Committed Borrowing of Base Rate Loans, that such Lender has made such share
available in accordance with and at the time required by Sections 2.1(b)
and 3.2) and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact
made
its share of the applicable Committed Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to
the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case of a
payment to be made by the Borrower, the interest rate applicable to Base Rate
Loans. If the Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrower the amount of such interest paid
by
the Borrower for such period. If such Lender pays its share of the applicable
Committed Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Committed Loan included in such Committed Borrowing.
Any payment by the Borrower shall be without prejudice to any claim the Borrower
may have against a Lender that shall have failed to make such payment to the
Administrative Agent.
(ii) Payments
by Borrower; Presumptions by Administrative Agent.
Unless
the Administrative Agent shall have received notice from the Borrower prior
to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on
such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the Borrower has
not
in fact made such payment, then each of the Lenders severally agrees to repay
to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender, in immediately available funds with interest thereon, for each day
from
and including the date such amount is distributed to it to but excluding the
date of payment to the Administrative Agent, at the greater of the Federal
Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation.
A
notice
of the Administrative Agent to any Lender or the Borrower with respect to any
amount owing under this subsection (b) shall be conclusive, absent
convincing evidence to the contrary.
(c) Failure
to Satisfy Conditions Precedent.
If any
Lender makes available to the Administrative Agent funds for any Loan to be
made
by such Lender as provided in the foregoing provisions of this Section 3, and
such funds are not made available to the Borrower by the Administrative Agent
because the conditions to the applicable Credit Extension set forth in Section
4
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.
(d) Obligations
of Lenders Several.
The
obligations of the Lenders hereunder to make Committed Loans and to make
payments pursuant to Section 9.7 are several and not joint. The failure of
any Lender to make any Committed Loan, to fund any such participation or to
make
any payment under Section 9.7 on any date required hereunder shall not
relieve any other Lender of its corresponding obligation to do so on such date,
and no Lender shall be responsible for the failure of any other Lender to so
make its Committed Loan, to purchase its participation or to make its payment
under Section 9.7.
(e) Funding
Source.
Nothing
herein shall be deemed to obligate any Lender to obtain the funds for any Loan
in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.
3.14 Sharing
of Payments.
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.
3.15 Payments,
Computations, Etc.
(a) Except
as
otherwise specifically provided herein, all payments hereunder (other than
payments in respect of Competitive Loans) shall be made to the Administrative
Agent in dollars in immediately available funds, without offset, deduction,
counterclaim or withholding of any kind, at the Administrative Agent’s office
specified in Schedule
2.1(a)
not
later than 4:00 P.M. on the date when due. Payments received after such time
shall be deemed to have been received on the next succeeding Business Day.
The
Administrative Agent may (but shall not be obligated to) debit the amount of
any
such payment which is not made by such time to any ordinary deposit account
of
the Borrower maintained with the Administrative Agent (with notice to the
Borrower). The Borrower shall, at the time it makes any payment under this
Credit Agreement (other than payments in respect of Competitive Loans), specify
to the Administrative Agent the Loans, Fees, interest or other amounts payable
by the Borrower hereunder to which such payment is to be applied (and in the
event that it fails so to specify, or if such application would be inconsistent
with the terms hereof, the Administrative Agent shall distribute such payment
to
the Lenders in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder, subject
to the terms of Section 3.12(a)). The Administrative Agent will distribute
such
payments to such Lenders, if any such payment is received prior to 12:00 Noon
on
a Business Day in like funds as received prior to the end of such Business
Day
and otherwise the Administrative Agent will distribute such payment to such
Lenders on the next succeeding Business Day. All payments of principal and
interest in respect of Competitive Loans shall be made in accordance with the
terms of Section 2.2. Whenever any payment hereunder shall be stated to be
due
on a day which is not a Business Day, the due date thereof shall be extended
to
the next succeeding Business Day (subject to accrual of interest and Fees for
the period of such extension), except that in the case of Eurodollar Loans,
if
the extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day. Except as expressly provided otherwise herein, all computations of interest
and fees shall be made on the basis of actual number of days elapsed over a
year
of 360 days, except with respect to computation of interest on Base Rate Loans
which (unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as appropriate.
Interest shall accrue from and include the date of borrowing, but exclude the
date of payment.
(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:
FIRST,
to
the payment of all reasonable out-of-pocket costs and expenses (including
without limitation reasonable attorneys’ fees) of the Administrative Agent in
connection with enforcing the rights of the Lenders under the Credit
Documents;
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 whomever may be lawfully entitled
to
receive such surplus.
In
carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; and (ii)
each of
the Lenders shall receive an amount equal to its pro rata share (based on the
proportion that the then outstanding Loans held by such Lender bears to the
aggregate then outstanding Loans) of amounts available to be applied pursuant
to
clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above.
3.16 Evidence
of Debt.
(a) Each
Lender shall maintain an account or accounts evidencing each Loan made by such
Lender to the Borrower from time to time, including the amounts of principal
and
interest payable and paid to such Lender from time to time under this Credit
Agreement. Each Lender will make reasonable efforts to maintain the accuracy
of
its account or accounts and to promptly update its account or accounts from
time
to time, as necessary.
(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 conclusive,
absent convincing evidence to the contrary,
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.
3.17 Replacement
of Lenders.
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 and Assumptions 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.
SECTION
4
CONDITIONS
4.1 Closing
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):
(a) The
Administrative Agent shall have received original counterparts of this Credit
Agreement executed by each of the parties hereto;
(b) The
Administrative Agent shall have received an appropriate original Revolving
Note
for each Lender requesting a Revolving Note, executed by the
Borrower;
(c) The
Administrative Agent shall have received an appropriate original Competitive
Note for each Lender requesting a Competitive Note, executed by the
Borrower;
(d) [intentionally
omitted];
(e) 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;
(f) 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(f);
(g) Since
August 27, 2005 there shall not have occurred or otherwise exist an event or
condition which has a Material Adverse Effect;
(h) 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;
(i) The
Administrative Agent shall have received evidence that all obligations due
and
owing under the Existing Five-Year Credit Agreement shall have been, or
concurrently with the date hereof will be, paid in full;
(j) The
Administrative Agent shall have received evidence that all obligations due
and
owing under the Existing 364-Day Credit Agreement shall have been, or
concurrently with the date hereof will be, paid in full and such facility
terminated;
(k) The
Administrative Agent shall have received evidence that the "Closing Date" under
the Amended and Restated Five-Year Credit Agreement shall have occurred
simultaneously;
(l) The
Administrative Agent shall have received evidence that the effectiveness of
the
Term Loan Amendment shall have occurred simultaneously; and
(m) The
Administrative Agent shall have received such other documents, agreements or
information which may be reasonably requested by the Administrative
Agent.
4.2 Conditions
to all Extensions of Credit.
The
obligations of each Lender to make, convert or extend any Loan (including the
initial Loans) hereunder 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:
(a) The
Borrower shall have delivered in the case of any Revolving Loan to the
Administrative Agent, an appropriate Notice of Borrowing or Notice of
Extension/Conversion,;
(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 shall not exceed
the
Revolving Committed Amount.
The
delivery of each Notice of Borrowing and each Notice of Extension/Conversion
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), (d) and (e) above.
Notwithstanding the foregoing, the Borrower may not request any Loans hereunder
while a Change of Control Standstill Period shall be in effect pursuant to
Section
3.4(e)
hereof.
SECTION
5
REPRESENTATIONS
AND WARRANTIES
The
Borrower hereby represents to the Administrative Agent and each Lender
that:
5.1 Financial
Position; No Internal Control Event.
(a) The
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of August 27, 2005 and the audited consolidated statements
of
earnings and statements of cash flows for the year ended August 27, 2005 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 position, 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 27,
2005 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 position 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. Since August 27, 2005, through and including the Closing Date,
there has not occurred an event or condition which has had a Material Adverse
Effect.
(b) To
the
best knowledge of the Borrower, no Internal Control Event exists or has occurred
since the date of the Audited Financial Statements through the Closing
Date.
5.2 Organization;
Existence; Compliance with Law.
Each
of
the Borrower and its Subsidiaries (a) is duly organized, validly existing and
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).
5.4 No
Legal Bar.
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.
5.5 No
Material Litigation.
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.
5.6 No
Default.
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.
5.9 Taxes.
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.
5.10 ERISA.
Except
as
would not result in a Material Adverse Effect:
(a) During
the five-year period prior to the date on which this representation is made
or
deemed made: (i) no ERISA Event has occurred, and, to the best knowledge of
the
Borrower, no event or condition has occurred or exists as a result of which
any
ERISA Event could reasonably be expected to occur, with respect to any Plan;
(ii) no "accumulated funding deficiency," as such term is defined in Section
302
of ERISA and Section 412 of the Code, whether or not waived, has occurred with
respect to any Plan; (iii) each Single Employer Plan and, to the best knowledge
of the Borrower, each Multiemployer Plan has been maintained, operated, and
funded in compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state laws;
and (iv) no lien in favor of the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.
(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
any
of Section 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 any of Section 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.
5.11 Governmental
Regulations, Etc.
(a) No
part
of the pro-ceeds of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any "margin stock" in violation of Regulation
U. If requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U. No indebtedness being reduced or retired out of the proceeds
of
the Loans was or will be incurred for the purpose of purchasing or carrying
any
margin stock within the meaning of Regulation U or any "margin security" within
the meaning of Regulation T. "Margin stock" within the meanings of Regulation
U
does not constitute more than 25% of the value of the consolidated assets of
the
Borrower and its Subsidiaries. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect use
of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as
amended, or regulations issued pursuant thereto, or Regulation T, U or X.
(b) Neither
the Borrower nor any of its Subsidiaries is subject to regulation under 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 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.
(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.
5.12 Subsidiaries.
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.
5.13 Purpose
of Loans.
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 other lawful
corporate purposes of the Borrower and its Subsidiaries.
5.14 Disclosure.
No
certificate (including any financial statements or other documents or attached
thereto) furnished by or on behalf of the Borrower to the Administrative Agent
or any Lender in connection with the transactions contemplated hereby and the
negotiation of this Credit Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading.
5.15 Taxpayer
Identification Number.
The
Borrower's true and correct U.S. taxpayer identification number is set forth
on
Schedule
10.1.
SECTION
6
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:
6.1 Information
Covenants.
The
Borrower will furnish, or cause to be furnished, to the Administrative Agent
and
the Lenders:
(a) Annual
Financial Statements.
As soon
as available, and in any event within the earlier of (i) the 100th
day
after the end of each fiscal year of the Borrower and (ii) the day that is
ten
(10) Business Days after the date the Borrower's annual report on Form 10-K
is
required to be filed with the SEC, as of the end of such fiscal year, a
consolidated balance sheet, consolidated statement of income, consolidated
statement of stockholders’ equity and consolidated statement of cash flows of
the Borrower and its Subsidiaries for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal year, all such
financial information described above to be in reasonable form and detail
and
prepared in accordance with GAAP, such consolidated statements to be audited
and
accompanied by (i)
a
report and opinion of Ernst & Young LLP or another Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to
the
Required Lenders, which report and opinion shall
be
prepared in accordance with generally accepted auditing standards and applicable
Securities Laws and shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception as to the scope
of
such audit or with respect to the absence of any material misstatement and
(ii) an opinion of such Registered Public Accounting Firm independently
assessing the Borrower’s internal controls over financial reporting in
accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No.
2,
and Section 404 of Sarbanes-Oxley expressing a conclusion that contains no
statement that there is a material weakness in such internal controls, except
for such material weaknesses that have been (x) disclosed to the Administrative
Agent (it being understood that the Borrower’s filing with the SEC of a notice
of such material weakness shall be deemed disclosure to the Administrative
Agent), who in turn discloses such material weaknesses to the Lenders, and
(y)
remedied or otherwise diligently addressed (or in the process of being
diligently addressed) by the Borrower in accordance with recommendations made
by
the Borrower's external auditors in consultation with the Borrower.
(b) Quarterly
Financial Statements.
Beginning with the fiscal quarter ending May 6, 2006, as soon as available,
and
in any event within the earlier of (i) the 50th
day
after the end of each of the first three fiscal quarters of each fiscal year
of
the Borrower and (ii) the day that is five (5) Business Days after the date
the
Borrower's quarterly report on Form 10-Q is required to be filed with the SEC,
as of the end of such fiscal quarter, together with a related condensed
consolidated balance sheet, a condensed consolidated statement of income and
a
condensed consolidated statement of cash flows of the Borrower and its
Subsidiaries for such fiscal quarter, in each case setting forth in comparative
form consolidated figures for the corresponding period of the preceding fiscal
year, except for the condensed consolidated balance sheet that will be presented
in comparative form to the Borrower’s most recent audited consolidated balance
sheet, 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, (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 and (iii) certifying as
to
the Borrower's current senior unsecured (non-credit enhanced) long term debt
rating from S&P and/or Moody's.
(d) Reports.
Promptly upon transmission or receipt thereof, (a) copies of any filings on
Forms 8-K, 10-Q or 10-K and any other material filings or registrations with
the
SEC, or any successor agency, and copies of all financial statements, proxy
statements, material notices and material 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 environ-mental matters, the United
States Occupational Health and Safety Administration, or any state or local
agency respon-sible for health and safety matters, or any successor agencies
or
authorities concerning environmental, health or safety matters.
(e) Notices.
The
Borrower will give written notice to the Administrative Agent (a) immediately
upon obtaining knowledge thereof, of 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 proposes to take with respect thereto,
(b)
upon the occurrence of any of the following with respect to the Borrower or
any
of its Subsidiaries: (i) promptly upon the Borrower’s determination thereof, the
pendency or commencement of any litigation, arbitral or governmental proceeding
against such Person which is reasonably likely to have a Material Adverse
Effect, (ii) promptly upon the Borrower’s determination thereof, 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) immediately upon obtaining
knowledge thereof, of 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, (c) immediately upon obtaining knowledge thereof,
of
any change in accounting policies or financial reporting practices by the
Borrower or any Subsidiary that the Borrower’s external auditors consider to
have a material impact on the consolidated financial statements of the Borrower
and its Subsidiary, and (d) immediately upon obtaining knowledge thereof, of
the
determination by the Registered Public Accounting Firm providing the opinion
required under Section 6.1(a)(ii) (in connection with its preparation of such
opinion) or the Borrower's determination at any time of the occurrence or
existence of any Internal Control Event.
(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) Change
of Control; Reorganization. Upon
obtaining knowledge thereof, the Borrower will promptly provide the
Administrative Agent and the Lenders with (i) written notice of any actual
or
expected Change of Control or Reorganization, (ii) the
circumstances and relevant facts regarding such Change of Control or
Reorganization (including the information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such Change
of
Control or Reorganization, as the case may be), and
(iii)
such
additional information and documents regarding such Change
of
Control or
Reorganization as
may be
reasonably requested by the Administrative Agent and/or any Lender.
(h) Debt
Rating.
No
later
than five (5) days after a Financial Officer obtains knowledge of any such
issuance of change, give notice to the Administrative Agent (by telephone,
followed promptly by written notice transmitted by facsimile with a hard copy
sent promptly thereafter) of any issuance of change (either expressly or
pursuant to a letter from S&P or Moody’s stating an "implied" rating), in
rating by S&P or Moody’s in respect of the Borrower’s non-credit enhanced
senior long-term debt (secured or unsecured), together with details
thereof.
(i) 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.
Documents
required to be delivered pursuant to Section 6.1(a), (b) or (d) (to
the extent any such documents are included in materials otherwise filed with
the
SEC)
may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the website
address listed in Section 10.1; or (ii) on which such documents are
posted on the Borrower’s behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided
that:
(i) the Borrower shall deliver paper copies of all officer’s certificates
delivered pursuant to Section 6.1(c) to the Administrative Agent or any Lender
that requests the Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent (by
telecopier, electronic mail or automatic electronic notification via the
Borrower’s website) of the posting of any documents required to be delivered
pursuant to Section 6.1(a), (b) or (d). Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the officer's certificate required by Section 6.1(c) to the
Administrative Agent. Except for such officer's certificates required by
Section 6.1(c), the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
The
Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, "Borrower
Materials")
by
posting the Borrower Materials on IntraLinks or another similar electronic
system (the "Platform")
and
(b) certain of the Lenders may be "public-side" Lenders (i.e.,
Lenders
that do not wish to receive material non-public information with respect to
the
Borrower or its securities) (each, a "Public
Lender").
The
Borrower hereby agrees that, so long as it is the issuer of any outstanding
debt
or equity securities that are registered or issued pursuant to a private
offering or is actively contemplating issuing any such securities, (w) all
Borrower Materials that are to be made available to Public Lenders shall be
made
available by means of the Platform and shall be clearly and conspicuously marked
"PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
"PUBLIC," the Borrower shall be deemed to have authorized the Administrative
Agent, the Arrangers and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower
or
its securities for purposes of United States Federal and state securities
laws, it being understood that certain of such Borrower Materials may be subject
to the confidentiality requirements set forth herein and in the other Credit
Documents; (y) all Borrower Materials marked "PUBLIC" are permitted to be
made available through a portion of the Platform designated "Public Investor;"
and (z) the Administrative Agent and the Arranger shall be entitled to
treat any Borrower Materials that are not marked "PUBLIC" as being suitable
only
for posting on a portion of the Platform not designated "Public Investor".
Notwithstanding the foregoing, the Borrower shall be under no obligation to
mark
any Borrower Materials "Public".
6.2 Preservation
of Existence and Franchises.
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.
6.3 Books
and Records.
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).
6.4 Compliance
with Law.
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.
6.6 Insurance.
The
Borrower will, and will cause each of its Subsidiaries to, at all times maintain
in full force and effect insurance, which may include self insurance, in such
amounts and covering such risks as is consistent with sound business practices
and similarly situated corporations.
6.7 Maintenance
of Property.
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.
6.8 Use
of Proceeds.
The
Borrower will use the proceeds of the Loans solely for the purposes set forth
in
Section 5.13.
6.9 Audits/Inspections.
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 3.00
to
1.00.
6.11 Interest
Coverage Ratio.
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.
SECTION
7
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:
7.1 Liens.
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.
7.2 Nature
of Business.
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:
(a) except
in
connection with a disposition of assets permitted by the terms of subsection
(c)
below, dissolve, liquidate or wind up their affairs;
(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; (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; and (iv)
the Borrower may consummate the Reorganization pursuant to and in accordance
with the provisions of the last paragraph of this Section 7.3.
(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; and, provided further,
the
Borrower may consummate the Reorganization pursuant to and in accordance with
the last paragraph of this Section
7.3;
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.
Notwithstanding
the foregoing, but subject to the following provisions of this paragraph, the
Borrower
will be permitted to effect an internal reorganization that will result in
the
AutoZone parent company changing its state of incorporation from Nevada to
Delaware and that will be accomplished either by (i) the Borrower merging with
and into a new wholly-owned Subsidiary of the Borrower, which Subsidiary (x)
will be incorporated in the state of Delaware and the surviving corporation
of
such merger, (y) shall, as a result of such merger, assume by operation of
law
all of the rights and obligations of the Borrower under the Credit Agreement,
and (z) shall, immediately after the consummation of such merger, have
management and controlling ownership substantially similar to that of the
Borrower immediately prior to the consummation of such merger or (ii) the
Borrower becoming a wholly-owned Subsidiary of a new holding company
incorporated in the State of Delaware, the outstanding capital stock of which
holding company will be owned by the current shareholders of the Borrower
(either such transaction, the "Reorganization").
The
Lenders hereby agree that the Borrower shall be permitted to consummate the
Reorganization so long as (i) the consummation of the Reorganization shall
not
result in a material and adverse impact to the interests of the Administrative
Agent and/or the Lenders under the Credit Agreement and the Notes, and (ii)
after giving effect to the Reorganization, (A) the Borrower become a
wholly-owned subsidiary of a corporation organized in the State of Delaware
and
(B) that the management and controlling ownership of such parent corporation
immediately after the consummation of the Reorganization be substantially
similar to that of the Borrower immediately prior to the consummation of the
Reorganization. The Borrower hereby agrees (i) to provide the Administrative
Agent and the Lenders with such additional information and documents related
to
the Reorganization as may be reasonably requested by the Administrative Agent
and/or any Lender and (ii) to execute within a reasonable time after
consummation of the Reorganization (not to exceed sixty (60) days unless
otherwise agreed by the Administrative Agent) such appropriate amendments,
corporate authority documents and other supporting documents to or under the
Credit Agreement evidencing any changes made necessary by the consummation
of
the Reorganization (including, without limitation, (x)
in
the event the Borrower merges with and into a new wholly-owned Subsidiary of
the
Borrower, a legal opinion of Borrower’s counsel, in form and substance
reasonably acceptable to the Administrative Agent’s legal counsel, addressing
the enforceability of the Credit Documents with respect to such surviving
Subsidiary and (y) in the event that the Borrower becomes a wholly-owned
subsidiary of a new parent holding company incorporated in Delaware, a guaranty
by such new parent holding company of the Borrower’s obligations under the
Credit Agreement) and such other changes as may be mutually agreed to by the
Borrower (or its successor, if applicable) and the parties hereto, each in
form
and substance reasonably acceptable to the Borrower (or its successor, if
applicable), the Administrative Agent and the Required Lenders. The Borrower
acknowledges that the agreement of the Lenders evidenced in this paragraph
is
given in reliance upon the foregoing conditions and agreements and shall be
deemed revoked if any such condition or agreement is breached.
7.4 Fiscal
Year.
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).
7.5 Subsidiary
Indebtedness.
The
Borrower will not permit any of its Subsidiaries to contract, create, incur,
assume or permit to exist any Indebtedness, except:
(a) Indebtedness
set forth on Schedule
7.5
(and any
renewals, refinancings or extensions thereof on terms and conditions no more
favorable, in the aggregate, to such creditor than such existing Indebtedness
and in a principal amount not in excess of that outstanding as of the date
of
such renewal, refinancing or extension);
(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 $100,000,000 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 $150,000,000 in
any
two consecutive fiscal years;
(e) Indebtedness
of the Mexican Subsidiaries in an aggregate principal amount for all Mexican
Subsidiaries not to exceed $150,000,000 at
any
time outstanding; and
(f) other
Indebtedness in an aggregate principal amount not to exceed
$25,000,000 at
any
time outstanding.
SECTION
8
EVENTS
OF DEFAULT
8.1 Events
of Default.
An
Event
of Default shall exist upon the occurrence of any of the following specified
events (each an "Event
of Default"):
(a) Payment.
The
Borrower shall
(i) default
in the payment when due of any principal of any of the Loans, or
(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
(b) Representations.
Any
representation, warranty or statement made or deemed to be made by the Borrower
herein, in any of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall prove
untrue in any material respect on the date as of which it was deemed to have
been made; or
(c) Covenants.
The
Borrower shall
(i) default
in the due performance or observance of any term, covenant or agreement
contained in Sections 6.2, 6.8, 6.10, 6.11 or 7.1 through 7.3, inclusive, and
7.5, or
(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
(d) Bankruptcy,
etc.
Any
Bankruptcy Event shall occur with respect to the Borrower or any of its
Subsidiaries; 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 $35,000,000 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) 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.
8.2 Acceleration;
Remedies.
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:
(a) Termination
of Commitments.
Declare
the Commitments terminated whereupon the Commitments shall be immediately
terminated.
(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.
Notwithstanding
the foregoing, if an Event of Default specified in Section 8.1(d) shall occur,
then the Commitments shall automatically terminate and all Loans, all accrued
interest in respect thereof, all accrued and unpaid Fees and other indebtedness
or obligations owing to the Administrative Agent and/or any of the Lenders
hereunder in respect thereof automatically shall immediately become due and
payable without the giving of any notice or other action by the Administrative
Agent or the Lenders.
SECTION
9
AGENCY
PROVISIONS
9.1 Appointment
and Authority.
Each
Lender hereby designates and appoints Bank of America 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.
9.2 Delegation
of Duties.
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.
9.3 Exculpatory
Provisions.
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, facsimile, 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).
9.5 Notice
of Default.
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.
9.7 Indemnification.
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.
Bank
of
America
and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind
of
banking, trust, financial advisory, underwriting or other business with each
of
the Borrower and its respective Affiliates as though Bank
of
America
were not
the Administrative Agent hereunder, as applicable, and without notice to or
consent of the Lenders. The Lenders acknowledge that, pursuant to such
activities, Bank
of
America
and its
Affiliates may receive information regarding the Borrower or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Borrower or such Affiliate) and acknowledge that the Administrative
Agent shall be under no obligation to provide such information to them. With
respect to its Loans, Bank
of
America
shall
have the same rights and powers under the Credit Agreement as any other Lender
and may exercise such rights and powers as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" include Bank
of
America,
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 the Borrower. Upon receipt of any such notice of resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the
United States; 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
such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders, appoint a successor
Administrative Agent meeting the qualifications set forth above; provided
that if
the Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents, (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender
directly, until such time as the Required Lenders appoint a successor
Administrative Agent as provided for above in this Section and (3) the retiring
Administrative Agent will provide to the Borrower and the Lenders reasonable
access to the Register and/or copies of each Lender’s Administrative
Questionnaire. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
(or
retired) Administrative Agent, and the retiring Administrative Agent shall
be
discharged from all of its duties and obligations hereunder or under the other
Credit Documents (if not already discharged therefrom as provided above in
this
Section). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Credit Documents, the
provisions of this Article and Section 9.7 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.
9.10 Syndication
Agent.
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.
SECTION
10
MISCELLANEOUS
10.1 Notices.
(a) Notices
Generally.
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 on which the same
has been delivered by a reputable national overnight air courier service to
the
addressee, or (iv) the day on which the same is delivered to the addressee
or
delivery refused by the addressee by certified or registered mail, postage
prepaid, in each case to the respective parties at the address, in the case
of
the
Borrower or the Administrative Agent, to the address, telecopier number,
electronic mail address or telephone number specified for such Person on
Schedule 10.1,
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.
(b) Electronic
Communications.
Notices
and other communications to the Lenders hereunder may be delivered or furnished
by electronic communication (including e-mail and Internet or intranet websites)
pursuant to procedures approved by the Administrative Agent, provided that
the
foregoing shall not apply to notices to any Lender pursuant to Section 2 if
such
Lender has notified the Administrative Agent that it is incapable of receiving
notices under such Section by electronic communication. The Administrative
Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication
is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business
on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described
in
the foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.
(c) The
Platform.
THE
PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE AGENT PARTIES (AS DEFINED
BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS
OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN
OR
OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH
THE
BORROWER MATERIALS OR THE PLATFORM. FURTHERMORE, THE BORROWER DOES NOT WARRANT
THE ADEQUACY OF THE PLATFORM, AND MAKES NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR
A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS IN CONNECTION WITH THE PLATFORM. In no event
shall
the Administrative Agent or any of its Related Parties (collectively, the "Agent
Parties") have any liability to the Borrower, any Lender or any other Person
for
losses, claims, damages, liabilities or expenses of any kind (whether in tort,
contract or otherwise) arising out of the Borrower’s or the Administrative
Agent’s transmission of Borrower Materials through the Internet, except to the
extent that such losses, claims, damages, liabilities or expenses are determined
by a court of competent jurisdiction by a final and nonappealable judgment
to
have resulted from the gross negligence or willful misconduct of such Agent
Party; provided, however, that in no event shall any Agent Party have any
liability to the Borrower, any Lender or any other Person for indirect, special,
incidental, consequential or punitive damages (as opposed to direct or actual
damages).
(d) Change
of Address, Etc.
Each of
the Borrower and the Administrative Agent may change its address, telecopier
or
telephone number for notices and other communications hereunder by notice to
the
other parties hereto. Each other Lender may change its address, telecopier
or
telephone number for notices and other communications hereunder by notice to
the
Borrower and the Administrative Agent. In addition, each Lender agrees to notify
the Administrative Agent from time to time to ensure that the Administrative
Agent has on record (i) an effective address, contact name, telephone
number, telecopier number and electronic mail address to which notices and
other
communications may be sent and (ii) accurate wire instructions for such
Lender.
(e) Reliance
by Administrative Agent and Lenders.
The
Administrative Agent and the Lenders shall be entitled to rely and act upon,
in
good faith, any notices (including telephonic Committed Loan Notices)
purportedly given by or on behalf of the Borrower and reasonably understood
by
the Administrative Agent and/or the Lenders, as applicable, to be authentic
even
if (i) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any other form of notice
specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any confirmation thereof. The Borrower shall indemnify
the Administrative Agent and the Related Parties of each of them from all
losses, costs, expenses and liabilities resulting from the reliance by such
Person on each notice purportedly given by or on behalf of the Borrower (but
excluding any such losses, costs, expenses and liabilities that (x) are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
the
Administrative Agent or such Related Party or (y) result from a claim
brought by the Borrower against the Administrative Agent or such Related Party
for breach in bad faith of such party’s obligations hereunder or under any other
Credit Document, if the Borrower has obtained a final and nonappealable judgment
in its favor on such claim as determined by a court of competent jurisdiction).
All telephonic notices to and other telephonic communications with the
Administrative Agent may be recorded by the Administrative Agent, and each
of
the parties hereto hereby consents to such recording.
10.2 Right
of Set-Off.
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.
10.3 Successors
and Assigns.
(a) Successors
and Assigns Generally.
The
provisions of this Credit Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent
of
the Administrative Agent and each Lender other than in connection with a
Reorganization permitted by Section 7.3 hereof and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to
an
assignee in accordance with the provisions of Section
10.3(b),
(ii) by
way of participation in accordance with the provisions of Section
10.3(d),
(iii)
to an SPV in accordance with the provisions of Section
10.3(g)
or (iv)
by way of a pledge of its Loans hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Credit Agreement, expressed or implied, shall be construed
to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided
in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent and the Lenders) any
legal or equitable right, remedy or claim under or by reason of this Credit
Agreement.
(b) Assignments
by Lenders.
Any
Lender may at any time assign to one or more assignees all or a portion of
its
rights and obligations under this Credit Agreement (including all or a portion
of its Commitment(s) and the Loans at the time owing to it; provided,
that
any such assignment shall be subject to the following conditions:
(i) Minimum
Amounts.
(A) in
the
case of an assignment of the entire remaining amount of the assigning Lender’s
Commitment under any Facility and the Loans at the time owing to it under such
Facility or in the case of an assignment to a Lender, an Affiliate of a Lender,
no minimum amount need be assigned; and
(B) in
any
case not described in subsection (b)(i)(A) of this Section, the aggregate amount
of the Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the Commitment is not then in effect, the principal outstanding balance
of the Loans of the assigning Lender subject to each such assignment, determined
as of the date the Assignment and Assumption with respect to such assignment
is
delivered to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000, in the case of any assignment in respect of the Revolving Credit
Facility, and in integral multiples of $1,000,000 in excess thereof;
provided,
however,
that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee
(or
to an Eligible Assignee and members of its Assignee Group) will be treated
as a
single assignment for purposes of determining whether such minimum amount has
been met;
(ii) Proportionate
Amounts.
Each
partial assignment shall be made as an assignment of a proportionate part of
all
the assigning Lender’s rights and obligations under this Credit Agreement with
respect to the Loans or the Commitment assigned, except that this clause (ii)
shall not prohibit any Lender from assigning all or a portion of its rights
and
obligations among separate Facilities on a non-pro rata basis;
(iii) Required
Consents.
The
following consents shall be required for any assignment (subject to the
applicable limitations set forth below):
(A) the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless an Event of Default has occurred and is
continuing at the time of such assignment;
(B) the
consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
Commitment if such assignment is to a Person that is not a Lender with a
Commitment in respect of the applicable Facility or an Affiliate of such Lender;
and
(iv) Assignment
and Assumption.
The
parties to each assignment shall execute and deliver to the Administrative
Agent
an Assignment and Assumption, together with a processing and recordation fee
in
the amount, if any, required as set forth in Schedule
10.3(b)
(unless
waived by the Administrative Agent in its sole discretion); provided,
however,
that
the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee,
if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
(v) No
Assignment to Borrower.
No such
assignment shall be made to the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.
(vi) No
Assignment to Natural Persons.
No such
assignment shall be made to a natural person.
Subject
to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party
to
this Credit Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Credit Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from
its
obligations under this Credit Agreement (and, in the case of an Assignment
and
Assumption covering all of the assigning Lender’s rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 3.9, 3.10 and 3.11 with
respect to facts and circumstances occurring prior to the effective date of
such
assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender
of
rights or obligations under this Credit Agreement that does not comply with
this
subsection shall be treated for purposes of this Credit Agreement as a sale
by
such Lender of a participation in such rights and obligations in accordance
with
Section 10.3(d).
(c) Register.
The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation
of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans owing to, each Lender 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
(including with regard to assignments of Loans and transfers of Notes). The
entries in the Register shall be conclusive, absent convincing evidence to
the
contrary, 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, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Participations.
Any
Lender may at any time, without the consent of, or notice to, the Borrower
or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a "Participant")
in all
or a portion of such Lender’s rights and/or obligations under this Credit
Agreement (including all or a portion of its Commitment and/or the Loans owing
to it); provided
that
(i) such Lender’s obligations under this Credit Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent and the Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under this Credit Agreement. Any agreement or instrument pursuant
to
which a Lender sells such a participation shall provide that such Lender shall
retain the sole right to enforce this Credit Agreement and to approve any
amendment, modification or waiver of any provision of this Credit Agreement;
provided
that
such agreement or instrument may provide that such Lender will not, without
the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 10.6 that affects such Participant.
Subject to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Section 3.9, 3.10 and
3.11 to
the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 10.3(b). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.2 as
though
it were a Lender, provided such Participant agrees to be subject to Section
3.13
as though it were a Lender.
(e) Limitations
upon Participant Rights.
A
Participant shall not be entitled to receive any greater payment under Section
3.9, 3.10 and 3.11 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless
the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.10 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
3.10
as though it were a Lender.
(f) Electronic
Execution of Assignments.
The
words "execution," "signed," "signature," and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures
or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or
the
use of a paper-based recordkeeping system, as the case may be, to the extent
and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.
(g) Special
Purpose Funding Vehicles.
Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting
Lender")
may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the Borrower
(an "SPV")
the
option to provide all or any part of any Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Credit Agreement; provided
that (i)
nothing herein shall constitute a commitment by any SPV to fund any Loan, and
(ii) if an SPV elects not to exercise such option or otherwise fails to make
all
or any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof or, if it fails to do so, to make such payment
to the Administrative Agent as is required under Section 3.14. Each party hereto
hereby agrees that (i) neither the grant to any SPV nor the exercise by any
SPV
of such option shall increase the costs or expenses or otherwise increase or
change the obligations of the Borrower under this Credit Agreement (including
its obligations under Section 3.04), (ii) no SPV shall be liable for any
indemnity or similar payment obligation under this Credit Agreement for which
a
Lender would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Credit Document, remain the lender of record hereunder. The
making of a Loan by an SPV hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. 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 commercial paper or other senior debt 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 proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPV may (i) with notice to,
but
without prior consent of the Borrower and the Administrative Agent and with
the
payment of a processing fee in the amount of $2,500 (unless waived by the
Administrative Agent in its sole discretion), assign all or any portion of
its
right to receive payment with respect to any Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to
its
funding of Loans to any rating agency, commercial paper dealer or provider
of
any surety or Guarantee or credit or liquidity enhancement to such
SPV.
10.4 No
Waiver; Remedies Cumulative.
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 and the Arrangers (and their respective Affiliates)
in connection with the syndication of the credit facilities provided for herein,
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 any
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 (and their respective Affiliates)
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 the Administrative Agent, each
Lender, and their respective officers, directors, employees, representatives,
agents and Affiliates (each an "Indemnitee") 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
the Administrative Agent or 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 that (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence
or
willful misconduct of such Indemnitee or (y) result from a claim brought by
the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Credit Document, if the Borrower has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction).
In no
event shall the Administrative Agent or any Lender be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Credit Agreement, nor shall the Administrative Agent or
any
Lender have any liability for any indirect or consequential damages relating
to
this Credit Agreement or any other Credit Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date).
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:
(a) no
such
amendment, change, waiver, discharge or termination shall, without the consent
of each Lender directly affected thereby, (i) reduce the rate or extend the
time
of payment of interest (other than as a result of (x) waiving the applicability
of any post-default increase in interest rates or (y) an amendment approved
by
the Required Lenders as set forth in the definition of "Applicable Percentage"
following the withdrawal by S&P and Moody’s of their ratings on the
Borrower’s senior unsecured (non-credit enhanced) long term debt) on any Loan or
fees hereunder, (ii) reduce the rate or extend the time of payment of any fees
owing hereunder, (iii) extend (A) the Commitments of the Lenders, or (B) the
final maturity of any Loan, or any portion thereof, or (iv) reduce the principal
amount on any Loan;
(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 9 may be amended without the consent of the Administrative
Agent, such consent not to be unreasonably withheld; 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.
10.7 Counterparts.
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.
10.8 Headings.
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.
10.9 Survival.
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.
(a) THIS
CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Credit Agreement or any other Credit
Document may be brought in the courts of the State of New York in New York
County, or of the United States for the Southern District of New York, and,
by
execution and delivery of this Credit Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. The Borrower
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the address
set out for notices pursuant to Section 10.1, such service to become effective
three (3) days after such mailing. Nothing herein shall affect the right of
the
Administrative Agent to serve process in any other manner permitted by law
or to
commence legal proceedings or to otherwise proceed against the Borrower in
any
other jurisdiction.
(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.
10.11 Severability.
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.
10.12 Entirety.
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.
(a) This
Credit Agreement shall become effective at such time on or after the Closing
Date when it shall have been executed by the Borrower and the Administrative
Agent, and the Administrative Agent shall have received copies hereof (telefaxed
or otherwise) which, when taken together, bear the signatures of each Lender,
and thereafter this Credit Agreement shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns.
(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.
10.14 Confidentiality.
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
actual or prospective assignee, participant or counterparty (or its advisors)
to
any swap, hedge, securitization or derivative transaction relating to any of
its
rights or obligations under this Agreement or relating to the Borrower and
its
obligations so long as such actual or prospective assignee, participant or
counterparty (or its advisor) first specifically agrees in a writing furnished
to and for the benefit of the Borrower to be bound by that 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.
10.15 Source
of Funds.
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
used by such Lender in connection with the financing hereunder:
(a) no
part
of such funds constitutes assets allocated to any separate account (as such
term
is defined in Section 3(17) of ERISA) maintained by such Lender in which any
employee benefit plan (or its related trust) has any interest;
(b) the
source is either (i) an insurance company pooled separate account, within
the meaning of Prohibited Transaction Class Exemption ("PTE") 90-1 (issued
by the United States Department of Labor January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of PTE 91-38 (issued
June 12, 1991 and amended by PTE 2002-13 (issued March 1, 2002)), the
requirements of Section III(b) of PTE 90-1 or Section III(b) of PTE 91-38 are
and will continue to be satisfied, and no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially
owns
more than 10% of all assets allocated to such pooled separate account or
collective investment fund;
(c) the
source is an "insurance company general account" within the meaning of PTE
95-60
(issued July 12, 1995 and amended by PTE 2002-13 (issued March 1,
2002)) and there is no employee benefit plan, treating as a single plan all
plans maintained by the same employer or employee organization, with respect
to
which the amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent (10%) of the
total reserves and liabilities of such general account (exclusive of separate
account liabilities) plus surplus, as set forth in the NAIC Annual Statement
for
such Lender most recently filed with such Lender's state of
domicile;
(d) the
source constitutes assets of an "investment fund" (within the meaning of Part
V
of PTE 84-14 issued March 13, 1984 and amended by PTE 2002-13 (issued March
1,
2002) (the "QPAM Exemption")) managed by a "qualified professional asset
manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
and the applicable conditions of the QPAM Exemption are satisfied;
or
(e) such
funds constitute assets of one or more employee benefit plans which such Lender
has identified in writing to the Borrower.
As
used
in this Section 10.15, the term "employee benefit plan" shall have the
meaning assigned to such term in Section 3(3) of ERISA.
10.16 Conflict.
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.
10.17 USA
PATRIOT Act Notice.
Each
Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot
Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
"Act"),
it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.
10.18 No
Advisory or Fiduciary Responsibility.
In
connection with all aspects of each transaction contemplated hereby, the
Borrower acknowledges and agrees that: (i) the credit facility provided
for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other
modification hereof or of any other Credit Document) are an arm’s-length
commercial transaction between the Borrower and its Affiliates,
on the one hand, and the Administrative Agent and the Arrangers, on the other
hand, and the Borrower is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Credit Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, the Administrative Agent and each Arranger
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary, for the Borrower or any of its Affiliates,
stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor either Arranger has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of the Borrower with respect to
any
of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof
or
of any other Credit Document (irrespective of whether the Administrative Agent
or either
Arranger has advised or is currently advising the Borrower or any of
its Affiliates
on other matters) and neither the Administrative Agent nor either Arranger
has
any obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Credit Documents; (iv) the Administrative Agent
and the
Arrangers and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower
and
its Affiliates, and neither the Administrative Agent nor either Arranger has
any
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship arising out of the transactions contemplated hereby;
and (v) the Administrative Agent and Arrangers have not provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any
of
the transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Credit Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate. The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty arising out of the transactions contemplated
hereby.
[Signature
Pages to Follow]
AUTOZONE,
INC.
By:
/s/
James A. Cook III
Name:
James A. Cook III
Title:
Vice President and Treasurer
By:
/s/
Harry L. Goldsmith
Name:
Harry L. Goldsmith
Title:
Executive Vice President, Secretary &
General
Counsel
ADMINISTRATIVE
AGENT: BANK
OF AMERICA, N.A.,
as
Administrative Agent
By:
/s/
Mollie S. Camp
Name:
Mollie S. Camp
Title:
Vice President
LENDERS:
BANK
OF AMERICA,
N.A.,
as
a
Lender
By:
/s/
Dan Killian
Name:
Dan
M. Killian
Title:
Senior Vice President
CITICORP
USA, INC.
By:
/s/
P. Nesbit
Name:
P.
Nesbit
Title:
Director
JPMorgan
Chase Bank, N.A.
By:
/s/
Barry Bergman
Name:
Barry Bergman
Title:
Managing Director
SunTrust
Bank
By:
/s/
Bryan W. Ford
Name:
Bryan
W. Ford
Title:
Director
Wachovia
Bank, National Association
By:
/s/
Anthony D. Braxton
Name:
Anthony D. Braxton
Title:
Director
MERRILL
LYNCH BANK USA
By:
/s/
David Millett
Name:
David Millett
Title:
Vice President
BNP
PARIBAS
By:
/s/
Brad Ellis
Name:
Brad Ellis
Title:
Vice President
By:
/s/
Aurora Abella
Name:
Aurora Abella
Title:
Vice
President
KeyBank
National Association
By:
/s/
Marianne T. Meil
Name:
Marianne T. Meil
Title:
Senior Vice president
National
City Bank
By:
/s/
Michael J. Durbin
Name:
Michael J. Durbin
Title:
Senior Vice President
Union
Bank of California, N.A.
By:
/s/
Theresa L. Rocha
Name:
Theresa L. Rocha
Title:
Vice President
[US
Bank National Association]
By:
/s/
Heather Hinkelman
Name:
Heather Hinkelman
Title:
Banking Officer
The
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Houston
Agency
By:
/s/
Douglas M. Barnell
Name:
Douglas M. Barnell
Title:
Vice President & Manager
Calyon
New York Branch
By:
/s/
David P. Cagle
Name:
David P. Cagle
Title:
Managing Director
By:
/s/
Brian Myers
Name:
Brian Myers
Title:
Managing
Director
Fifth
Third Bank
By:
/s/
John K. Perez
Name:
John K. Perez
Title:
Vice President
FORTIS
CAPITAL CORP
By:
/s/
R.L.A. Rutgers van Rozenburg
Name:
R.L.A. Rutgers van Rozenburg
Title:
By:
/s/
Daniel M. Jaffe
Name:
Daniel M. Jaffe
Title:
Vice President
Wells
Fargo Bank, N.A.
By:
/s/
Zach Johnson
Name:
Zach Johnson
Title:
Senior Vice President
Comerica
Bank
By:
/s/
Heather Whiting
Name:
Heather Whiting
Title:
Assistant Vice President
Mizuho
Corporate Bank, Ltd.
By:
/s/
Bertram Tang
Name:
Bertram Tang
Title:
Senior Vice President & Team Leader
AmSouth
Bank
By:
/s/
Elizabeth H. Vaughn
Name:
Elizabeth H. Vaughn
Title:
Vice President
The
Bank of New York
By:
/s/
Scott DeTraglia
Name:
Scott DeTraglia
Title:
Vice President
FIRST
TENNESSEE BANK NATIONAL ASSOCIATION
By:
/s/
Michael S. Roseman
Name:
Michael S. Roseman
Title:
Vice President
The
Northern Trust Company
By:
/s/
Thomas R. Hasenauer
Name:
Thomas R. Hasenauer
Title:
Vice President
BRANCH
BANKING AND TRUST COMPANY
By:
/s/
Roberts A. Bass
Name:
Roberts A. Bass
Title:
Senior Vice President
Capital
One, N.A.
By:
/s/
Julie Nosser
Name:
Julie Nosser
Title:
Assistant Vice President
Exhibit
10.5
[Published
CUSIP Number: ________________]
SECOND
AMENDED AND RESTATED
FIVE-YEAR
CREDIT AGREEMENT
Dated
as
of May 5, 2006
among
AUTOZONE,
INC.,
as
Borrower,
THE
SEVERAL LENDERS
FROM
TIME
TO TIME PARTY HERETO
AND
BANK
OF
AMERICA, N.A.,
as
Administrative Agent and Swingline Lender
and
CITICORP
USA, INC.,
as
Syndication Agent
______________________________________________________________
BANC
OF
AMERICA SECURITIES LLC
and
CITIGROUP
GLOBAL MARKETS INC.,
as
Joint
Lead Arrangers and Joint Book Managers
and
JPMORGAN
CHASE BANK,
WACHOVIA
BANK, NATIONAL ASSOCIATION
and
SUNTRUST
BANK,
as
Co-Documentation Agents
TABLE
OF CONTENTS
|
Page
|
SECTION
1 DEFINITIONS
|
2
|
1.1
|
Definitions.
|
2
|
1.2
|
Computation
of Time Periods.
|
21
|
1.3
|
Accounting
Terms.
|
21
|
1.4
|
Time
of Day.
|
21
|
SECTION
2 CREDIT FACILITIES
|
21
|
2.1
|
Revolving
Loans.
|
21
|
2.2
|
Competitive
Loan Subfacility.
|
23
|
2.3
|
Swingline
Loan Subfacility.
|
26
|
2.4
|
Letters
of Credit.
|
28
|
SECTION
3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES
|
38
|
3.1
|
Default
Rate.
|
38
|
3.2
|
Extension
and Conversion.
|
38
|
3.3
|
Prepayments.
|
39
|
3.4
|
Termination,
Reduction and Increase of Revolving Committed Amount.
|
40
|
3.5
|
Fees.
|
43
|
3.6
|
Capital
Adequacy.
|
45
|
3.7
|
Inability
To Determine Interest Rate.
|
45
|
3.8
|
Illegality.
|
45
|
3.9
|
Yield
Protection.
|
46
|
3.10
|
Withholding
Tax Exemption.
|
46
|
3.11
|
Indemnity.
|
48
|
3.12
|
Pro
Rata Treatment.
|
48
|
3.13
|
Payments
Generally; Administrative Agent’s Clawback.
|
49
|
3.14
|
Sharing
of Payments.
|
51
|
3.15
|
Payments,
Computations, Etc.
|
51
|
3.16
|
Evidence
of Debt.
|
53
|
3.17
|
Replacement
of Lenders.
|
54
|
SECTION
4 CONDITIONS
|
54
|
4.1
|
Closing
Conditions.
|
54
|
4.2
|
Conditions
to all Extensions of Credit.
|
55
|
SECTION
5 REPRESENTATIONS AND WARRANTIES
|
56
|
5.1
|
Financial
Condition; No Internal Control Event.
|
56
|
5.2
|
Organization;
Existence; Compliance with Law.
|
57
|
5.3
|
Power;
Authorization; Enforceable Obligations.
|
57
|
5.4
|
No
Legal Bar.
|
58
|
5.5
|
No
Material Litigation.
|
58
|
5.6
|
No
Default.
|
58
|
5.7
|
Ownership
of Property; Liens.
|
58
|
5.8
|
No
Burdensome Restrictions.
|
58
|
5.9
|
Taxes.
|
59
|
5.10
|
ERISA.
|
59
|
5.11
|
Governmental
Regulations, Etc.
|
60
|
5.12
|
Subsidiaries.
|
61
|
5.13
|
Purpose
of Loans.
|
61
|
5.14
|
Disclosure.
|
61
|
5.15
|
Taxpayer
Identification Number.
|
62
|
SECTION
6 AFFIRMATIVE COVENANTS
|
62
|
6.1
|
Information
Covenants.
|
62
|
6.2
|
Preservation
of Existence and Franchises.
|
66
|
6.3
|
Books
and Records.
|
66
|
6.4
|
Compliance
with Law.
|
66
|
6.5
|
Payment
of Taxes and Other Indebtedness.
|
67
|
6.6
|
Insurance.
|
67
|
6.7
|
Maintenance
of Property.
|
67
|
6.8
|
Use
of Proceeds.
|
67
|
6.9
|
Audits/Inspections.
|
67
|
6.10
|
Adjusted
Debt to EBITDAR Ratio.
|
67
|
6.11
|
Interest
Coverage Ratio.
|
68
|
SECTION
7 NEGATIVE COVENANTS
|
68
|
7.1
|
Liens.
|
68
|
7.2
|
Nature
of Business.
|
68
|
7.3
|
Consolidation,
Merger, Sale or Purchase of Assets, etc.
|
68
|
7.4
|
Fiscal
Year.
|
70
|
7.5
|
Subsidiary
Indebtedness.
|
70
|
SECTION
8 EVENTS OF DEFAULT
|
71
|
8.1
|
Events
of Default.
|
71
|
8.2
|
Acceleration;
Remedies.
|
73
|
SECTION
9 AGENCY PROVISIONS
|
74
|
9.1
|
Appointment
and Authority.
|
74
|
9.2
|
Delegation
of Duties.
|
74
|
9.3
|
Exculpatory
Provisions.
|
75
|
9.4
|
Reliance
on Communications.
|
75
|
9.5
|
Notice
of Default.
|
76
|
9.6
|
Non-Reliance
on Administrative Agent and Other Lenders.
|
76
|
9.7
|
Indemnification.
|
77
|
9.8
|
Administrative
Agent in its Individual Capacity.
|
77
|
9.9
|
Successor
Administrative Agent.
|
78
|
9.10
|
Syndication
Agent.
|
78
|
SECTION
10 MISCELLANEOUS
|
79
|
10.1
|
Notices.
|
79
|
10.2
|
Right
of Set-Off.
|
81
|
10.3
|
Successors
and Assigns.
|
81
|
10.4
|
No
Waiver; Remedies Cumulative.
|
86
|
10.5
|
Payment
of Expenses, etc.
|
86
|
10.6
|
Amendments,
Waivers and Consents.
|
87
|
10.7
|
Counterparts.
|
88
|
10.8
|
Headings.
|
88
|
10.9
|
Survival.
|
88
|
10.10
|
Governing
Law; Submission to Jurisdiction; Venue.
|
88
|
10.11
|
Severability.
|
89
|
10.12
|
Entirety.
|
89
|
10.13
|
Binding
Effect; Amendment and Restatement of Existing Five-Year Credit Agreement;
Termination.
|
90
|
10.14
|
Confidentiality.
|
90
|
10.15
|
Source
of Funds.
|
91
|
10.16
|
Conflict.
|
92
|
10.17
|
USA
PATRIOT Act Notice.
|
92
|
10.18
|
No
Advisory or Fiduciary Responsibility.
|
92
|
SCHEDULES
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
|
|
Existing
Letters of Credit
|
Schedule
3.2
|
|
Form
of Notice of Extension/Conversion
|
Schedule
3.4(b)
|
|
Form
of New Commitment Agreement
|
Schedule
4.1(f)
|
|
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
10.1
|
|
Administrative
Agent’s Office; Certain Addresses for Notices
|
Schedule
10.3(a)
|
|
Form
of Assignment and Acceptance
|
Schedule
10.3(b)
|
|
Processing
and Recordation Fees
|
SECOND
AMENDED AND RESTATED FIVE-YEAR CREDIT AGREEMENT
THIS
SECOND AMENDED AND RESTATED FIVE-YEAR CREDIT AGREEMENT
dated as
of May 5, 2006 (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"),
BANK
OF AMERICA, N.A.,
as
administrative agent for the Lenders (in such capacity, the "Administrative
Agent"),
and
CITICORP
USA, INC.,
as
syndication agent (in such capacity, the "Syndication
Agent").
W
I T N E S S E T H
WHEREAS,
the
Borrower, the Lenders, Bank of America, N.A., as Administrative Agent, and
certain other Persons are party to an Amended and Restated Five-Year Credit
Agreement dated as of May 17, 2004 (as amended prior to the date hereof, the
"Existing
Five-Year Credit Agreement");
WHEREAS,
the
Borrower has requested that the Lenders make certain changes to the terms
available to the Borrower under the Existing Five-Year Credit Agreement, as
more
particularly described herein;
WHEREAS,
the
Lenders have agreed to make such changes to the existing credit facilities
and
to amend and restate the Existing Five-Year Credit Agreement on the terms and
conditions hereinafter set forth;
WHEREAS,
concurrently with the effectiveness of such amendment and restatement of the
Existing Five-Year Credit Agreement, the Existing Five-Year Credit Agreement
will be amended and restated in its entirety, the financial institutions party
thereto will have no further obligations thereunder and will cease to be parties
to such agreement and the Borrower (as defined in the Existing Five-Year Credit
Agreement) will have no further obligations thereunder, except for those
obligations that by their terms survive termination of the Existing Five-Year
Credit Agreement.
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:
SECTION
1
DEFINITIONS
1.1 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 April 7, 2006, 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).
"Administrative
Questionnaire"
means
an Administrative Questionnaire in a form supplied
by the Administrative Agent.
"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.
"Applicable
Percentage"
means,
for purposes of calculating the applicable interest rate for any day for any
Revolving Loan, the applicable rate of the Facility Fee for any day for purposes
of Section 3.5(a), the applicable rate of the Utilization Fee for any day for
the purposes of Section 3.5(c), or the applicable rate of the Letter of Credit
Fee for any day for the purposes of 3.5(d)(i), 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"):
(i) where
the
Borrower has a senior unsecured (non-credit enhanced) long term debt rating
from
S&P and/or Moody’s, five (5) Business Days after receipt of notice by the
Administrative Agent of a change in any such debt rating, based on such debt
rating(s); and
(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.
|
The
Applicable Percentage shall be effective from a Calculation Date
until the
next such Calculation Date. The Administrative Agent shall determine
the
appropriate Applicable Percentages promptly upon receipt of the notices
and information necessary to make such determination and shall promptly
notify the Borrower and the Lenders of any change thereof. Such
determinations by the Administrative Agent shall be conclusive,
absent convincing evidence to the contrary.
|
"Arrangers"
means
Banc of America Securities LLC and
Citigroup Global Markets Inc.,
together with any successors or assigns.
"Assignee
Group"
means
two or more Eligible Assignees that are Affiliates of one another.
"Assignment
and Assumption"
means
an assignment and assumption entered into by a Lender and an Eligible Assignee
with the consent of any party whose consent is required by Section
10.3(b),
and
accepted by the Administrative Agent, in substantially the form of Schedule
10.3(a)
or any
other form approved by the Administrative Agent.
"Audited
Financial Statements"
means
the audited consolidated balance sheet of the
Borrower and its Subsidiaries for the fiscal year ended August 27, 2005, and
the
related
consolidated statements of income or operations, stockholders’ equity and cash
flows
for
such fiscal year of the Borrower and its Subsidiaries, including the notes
thereto.
"Bank
of America"
means
Bank of America, N.A. and its successors.
"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 a fluctuating rate per annum equal to the higher of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for such
day as publicly announced from time to time by Bank of America as its "prime
rate." The "prime rate" is a rate set by Bank of America based upon various
factors including Bank of America’s costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing
some
loans, which may be priced at, above, or below such announced rate. Any change
in such rate announced by Bank of America shall take effect at the opening
of
business on the day specified in the public announcement of such
change.
"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.
"Cash
Collateralize"
means
the pledge and deposit with or delivery to the Administrative Agent, for the
benefit of the respective L/C Issuers and the Lenders, as collateral for the
L/C
Obligations, cash or deposit account balances pursuant to documentation in
form
and substance satisfactory to the Administrative Agent and the respective L/C
Issuers (which documents are hereby consented to by the Lenders). The terms
"Cash Collateralized", "Cash Collateral", "Cash Collateralization" and "Cash
Collateralizes" shall have corresponding meanings. The Borrower hereby grants
the Administrative Agent, for the benefit of the respective L/C Issuer and
the
Lenders, a Lien on all such cash and deposit account balances. Cash collateral
shall be maintained in blocked, non-interest bearing deposit accounts of the
Administrative Agent. Notwithstanding the foregoing if, upon the termination
of
the Commitments and an acceleration of the Borrower’s obligations pursuant to
Section 8.2, a Letter of Credit may for any reason remain outstanding and
partially or wholly undrawn, the cash collateral required pursuant to Section
2.4(g) may instead, at the option of the Administrative Agent, be held in a
blocked, non-interest bearing deposit account of the respective L/C
Issuer.
"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 new 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). Notwithstanding the foregoing, a
Reorganization permitted by under Section 7.3 hereof shall not be deemed a
Change of Control for the purposed of this Credit Agreement.
"Change
of Control Notice"
shall
have the meaning specified in Section 3.4(e).
"Change
of Control Prepayment Amount"
shall
have the meaning specified in Section 3.4(e).
"Change
of Control Standstill Period"
shall
have the meaning specified in Section 3.4(e).
"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 of such Lender, (ii)
with respect to the Swingline Lender, the Swingline Commitment, and (iii) with
respect to any L/C Issuer, the commitment to issue, extend and/or amend Letters
of Credit under the Letter of Credit Sublimit.
"Commitment
Percentage"
means,
for any Lender, the percentage which such Lender’s Revolving Commitment then
constitutes of the aggregate Revolving Committed Amount.
"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 or otherwise defined herein. 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 and on a consolidated basis, 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 (i) share-based expenses and all other non-cash charges
(other than any such charges that would result in an accrual or a reserve for
cash charges in the future); and (ii) non-recurring charges in an aggregate
amount not to exceed $50,000,000 collectively with respect to all periods
relevant for the calculation of the financial covenants contained in Sections
6.10 and 6.11. Except as otherwise expressly provided, the applicable period
shall be for the four consecutive fiscal quarters ending as of the date of
determination.
"Consolidated
Rents"
means,
for any period for the Borrower and its Subsidiaries, all rental expense of
the
Borrower and its Subsidiaries for such period under operating leases
(specifically including rents paid in connection with synthetic leases, tax
retention operating leases, off-balance sheet loans or similar off-balance
sheet
financing products), on a consolidated basis as determined in accordance with
GAAP applied on a consistent basis, but excluding rental expense related to
any
operating lease that has been converted to a Capital Lease. Except as otherwise
expressly provided, the applicable period shall be for the four consecutive
fiscal quarters ending as of the date of determination.
"Credit
Documents"
means a
collective reference to this Credit Agreement, the Notes, the L/C Documents
(except that L/C Documents shall not constitute Credit Documents for purposes
of
Section 10.6), the Administrative Agent’s Fee Letter and all other related
agreements and documents issued or delivered hereunder or thereunder or pursuant
hereto or thereto.
"Default"
means
any event, act or condition which with notice or lapse of time, or both, would
constitute an Event of Default.
"Designating
Lender"
has the
meaning set forth in Section 10.3(e).
"Dollars"
and
"$"
means
dollars in lawful currency of the United States of America.
"Eligible
Assignee"
means
any Person that meets the requirements to be an assignee under Section
10.3(b)(iii),
(v)
and
(vi)
(subject
to such consents, if any, as may be required under Section
10.3(b)(iii)).
"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
Base Rate"
has the
meaning specified in the definition of Eurodollar Rate.
"Eurodollar
Loan"
means
any Loan bearing interest at a rate determined by reference to the Eurodollar
Rate.
"Eurodollar
Rate"
means
for any Interest Period with respect to any Eurodollar Loan, a rate per annum
determined by the Administrative Agent pursuant to the following
formula:
Eurodollar
Rate =
|
Eurodollar
Base Rate
1.00
- Eurodollar Reserve Percentage
|
Where,
"Eurodollar
Base Rate"
means,
for any Interest Period with respect to a Eurodollar Loan, the rate per annum
equal to the British Bankers Association LIBOR Rate ("BBA
LIBOR"),
as
published by Reuters (or other commercially available source providing
quotations of BBA LIBOR as designated by the Administrative Agent from time
to
time) at approximately 11:00 A.M., London time, two Business Days prior to
the commencement of such Interest Period, for Dollar deposits (for delivery
on
the first day of such Interest Period) with a term equivalent to such Interest
Period. If such rate is not available at such time for any reason, then the
"Eurodollar Rate" for such Interest Period shall be the rate per annum
determined by the Administrative Agent to be the rate at which deposits in
Dollars for delivery on the first day of such Interest Period in same day funds
in the approximate amount of the Eurodollar Rate Loan being made, continued
or
converted by Bank of America and with a term equivalent to such Interest Period
would be offered by Bank of America’s London Branch to major banks in the London
interbank eurodollar market at their request at approximately 11:00 A.M.
(London time) two Business Days prior to the commencement of such Interest
Period.
"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 Amended and Restated 364-Day Credit Agreement dated as of May
17,
2004 (and extended on May 16, 2005 pursuant to the terms of Section 3.4(c)
thereof) by and among the Borrower, the lenders party thereto, Fleet National
Bank, as administrative agent, and Citicorp USA, Inc., as syndication agent,
as
amended, modified, restated, supplemented or replaced from time to
time.
"Existing
Letters of Credit"
means
the letters of credit outstanding on the Closing Date and identified on
Schedule
2.4.
"Facilities"
means a
collective reference to (i) the revolving loan facility established pursuant
to
Section 2.1 and (ii) the revolving loan facility established pursuant to the
Four-Year Credit Agreement.
"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 Controller, the General
Counsel, or the Chief Financial Officer 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.
"Foreign
Lender"
means
any Lender that is organized under the laws of a jurisdiction other than that
in
which the Borrower is resident for tax purposes. For purposes of this
definition, the United States, each State thereof and the District of Columbia
shall be deemed to constitute a single jurisdiction.
"Four-Year
Credit Agreement"
means
that certain Four-Year Credit Agreement dated as of the date hereof by and
among
the Borrower, the lenders party thereto, Bank of America, N.A., as
administrative agent and Citicorp USA, Inc., as syndication agent, as amended,
modified, restated, supplemented or replaced from time to time.
"Funded
Indebtedness"
means,
with respect to any Person (for purposes of this sentence only, the
"Debtor"),
without duplication and on a consolidated basis, (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 amount of
all
(x) drawn and unreimbursed documentary letters of credit, (y) standby letters
of
credit and (z) bankers acceptances, in each case issued or created for the
account of such Debtor and, without duplication, all drafts drawn thereunder
(to
the extent unreimbursed); 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. 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) subject to the proviso below, the maximum amount of
all
letters of credit issued or bankers’ acceptances 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 documentary letters of credit or other
letters of credit used by such Person for the financing of inventory in the
ordinary course of business, except to the extent such letters of credit have
been drawn upon and unreimbursed 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.
"Information"
has the
meaning specified in Section 10.14.
"Interest
Payment Date"
means
(i) as to any Base Rate Loan, the last Business 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 to 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.
"Internal
Control Event"
means a
material weakness in, or fraud that involves management or other employees
who
have a significant role in, the Borrower’s internal controls over financial
reporting, in each case as described in the Securities Laws or as otherwise
determined by the Borrower’s external auditors on a quarterly basis that has
resulted in or could reasonably be expected to result in a misstatement in
any
material respect, in any financial information delivered or to be delivered
to
the Administrative Agent or the Lenders, of (i) covenant compliance calculations
provided hereunder or (ii) the assets, liabilities, financial condition or
results of operations of the Borrower and its Subsidiaries on a consolidated
basis that has not been (x) disclosed to the Administrative Agent, who in turn
discloses such material weaknesses to the Lenders, and (y) remedied or otherwise
diligently addressed (or is in the process of being diligently addressed) by
the
Borrower in accordance with recommendations made by the Borrower's auditors
in
consultation with the Borrower.
"ISP"
means,
with respect to any Letter of Credit, the "International
Standby Practices 1998"
published by the Institute of International Banking Law & Practice (or such
later version thereof as may be in effect at the time of issuance).
"L/C
Advance"
means,
with respect to each Lender, such Lender’s participation in any L/C Borrowing in
accordance with its Commitment Percentage.
"L/C
Borrowing"
means
an extension of credit resulting from a drawing under any Letter of Credit
which
has not been reimbursed on the date when made or refinanced as a Revolving
Loan.
"L/C
Credit Extension"
means,
with respect to any Letter of Credit, the issuance thereof or extension of
the
expiry date thereof, or the renewal or increase of the amount
thereof.
"L/C
Documents"
means,
with respect to any Letter of Credit, such Letter of Credit, any amendments
thereto, any documents delivered in connection therewith, any application
therefor, and any agreements, instruments, guarantees or other documents
(whether general in application or applicable only to such Letter of Credit)
governing or providing for (i) the rights and obligations of the parties
concerned or at risk or (ii) any collateral security for such
obligations.
"L/C
Issuer"
means
(i) SunTrust, Bank of America, Wachovia
or, with the consent of the Borrower and the Administrative Agent, any other
Lender that has agreed to act as the successor primary issuer of Letters of
Credit, (ii) with respect to any Existing Letter of Credit, the Lender that
issued (in its capacity as an L/C Issuer hereunder) such Letter of Credit and
(iii) with respect to any Letter of Credit requested hereunder, the L/C Issuer
that has agreed to issue such Letter of Credit hereunder.
"L/C
Issuer Fees"
shall
have the meaning assigned to such term in Section 3.5(d)(ii).
"L/C
Obligations"
means,
at any time, the sum of (i) the maximum amount which is, or at any time
thereafter may become, available to be drawn under Letters of Credit then
outstanding, assuming compliance with all requirements for drawings referred
to
in such Letters of Credit plus
(ii) the
aggregate amount of all drawings under Letters of Credit and honored by an
L/C
Issuer but not theretofore reimbursed, including all L/C
Borrowings.
"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.
"Letter
of Credit"
means
any letter of credit issued hereunder and shall include the Existing Letters
of
Credit. A Letter of Credit may be a commercial letter of credit or a standby
letter of credit.
"Letter
of Credit Application"
means
an application and agreement for the issuance or amendment of a letter of credit
in the form from time to time in use by an L/C Issuer.
"Letter
of Credit Expiration Date"
means
the day that is five (5) days prior to the Termination Date (or, if such day
is
not a Business Day, the next preceding Business Day).
"Letter
of Credit Fee"
shall
have the meaning assigned to such term in Section 3.5(d)(i).
"Letter
of Credit Sublimit"
means
an amount equal to the lesser of the Revolving Committed Amount and
$200,000,000. The Letter of Credit Sublimit is part of, and not in addition
to,
the Revolving Committed Amount.
"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
condi-tional 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 Revolving Loans, the Competitive Loans, 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) and, to the extent
applicable, the L/C Borrowings, 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.
"Mexican
Subsidiaries"
means,
collectively, the following Subsidiaries of the Borrower: AutoZone
de Mexico, S. de R.L. de C.V., Zone Compra, S. de R.L. de C.V., Service Zone,
S.de R.L. de C.V., Data Zone, S. de R.L. de C.V., Controladora AutoZone, S.
de
R.L. de C.V., and
any
other Subsidiary of the Borrower formed after the Closing Date and organized
under the laws of Mexico.
"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.
"New
Commitment Agreement"
means a
New Commitment Agreement substantially in the form of Schedule
3.4(b),
as
executed pursuant to Section 3.4(b).
"Note"
or
"Notes"
means
any Revolving Note, any Competitive Note or the Swingline 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.
"Participant"
has the
meaning specified in Section
10.3(d).
"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.
"PCAOB"
means
the Public Company Accounting Oversight Board.
"Permitted
Liens"
means:
(i) Liens
in
favor of the Administrative Agent on behalf of the Lenders;
(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.
"Person"
means
any individual, partnership, joint venture, firm, corporation, limited liability
company, association, trust or other enterprise (whether or not incorporated)
or
any Governmental Authority.
"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.
"Platform"
has the
meaning specified in Section 6.1.
"Pricing
Level"
means
the applicable pricing level for the Applicable Percentage shown in Schedule
1.1.
"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).
"Registered
Public Accounting Firm"
has the
meaning specified in the Securities Laws and shall be independent of the
Borrower as prescribed by the Securities Laws.
"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.
"Related
Parties"
means,
with respect to any Person, such Person’s Affiliates and the partners,
directors, officers, employees, agents and advisors of such Person and of such
Person’s Affiliates.
"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).
"Reorganization"
shall
have the meaning specified in Section 7.03.
"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 more than 50% of (i) the Commitment Percentages 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), (ii) to purchase participation interests
in Letters of Credit in accordance with the provisions of Section 2.4(c), and
(iii) to purchase participation interests in the Swingline Loans in accordance
with the provisions of Section 2.3(b)(iii).
"Revolving
Committed Amount"
shall
have the meaning assigned to such term in Section 2.1(a).
"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.
"Sarbanes-Oxley"
means
the Sarbanes-Oxley Act of 2002.
"SEC"
means
the Securities and Exchange Commission, or any Governmental Authority succeeding
to any of its principal functions.
"Securities
Laws"
means
the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley
and the applicable accounting and auditing principles, rules, standards and
practices promulgated, approved or incorporated by the SEC or the
PCAOB.
"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.
"SunTrust"
means
SunTrust Bank and its successors.
"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
Bank of America.
"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 in the
original principal amount of $50,000,000, as such promissory note may be
amended, modified, restated or replaced from time to time.
"Syndication
Agent"
means
Citicorp USA, Inc., together with any successors and assigns.
"Term
Loan Amendment"
means
the First Amendment dated on or about the date hereof to that certain Credit
Agreement dated as of December 23, 2004 by and among the Borrower, the lenders
from time to time party thereto, Fleet National Bank, as administrative agent,
and Wachovia Bank, National Association, as syndication agent.
"Terminating
Lenders"
shall
have the meaning specified in Section 3.4(e).
"Termination
Date"
means
May 5, 2010, provided,
however
that if
such date is not a Business Day, the Termination Date shall be the next
preceding Business Day.
"Unreimbursed
Amount"
has the
meaning specified in Section
2.4(c)(i).
"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).
"Wachovia"
means
Wachovia Bank, National Association and its successors.
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."
1.3 Accounting
Terms.
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 27, 2005);
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.
1.4 Time
of Day.
Unless
otherwise specified, all references herein to times of day shall be references
to Eastern time (daylight or standard, as applicable).
SECTION
2
CREDIT
FACILITIES
2.1 Revolving
Loans.
(a) Revolving
Commitment.
Subject
to the terms and conditions hereof and in reliance upon the representations
and
warranties set forth herein, each Lender severally agrees to make available
to
the Borrower revolving credit loans requested by the Borrower in Dollars
("Revolving
Loans")
up to
such Lender’s Revolving Commitment from time to time from the Closing Date until
the Termination Date, or such earlier date as the Revolving Commitments shall
have been terminated as provided herein for the purposes hereinafter set forth;
provided,
however,
that
the sum of the aggregate principal amount of outstanding Revolving Loans shall
not exceed SEVEN
HUNDRED MILLION DOLLARS ($700,000,000.00)
(as such
aggregate maximum amount may be reduced or increased from time to time as
provided in Sections 3.3 and 3.4, the "Revolving
Committed Amount");
provided,
further,
(i)
with regard to each Lender individually, such Lender’s outstanding Revolving
Loans shall not exceed such Lender’s Revolving Commitment, and (ii) with regard
to the Lenders collectively, 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 plus
the L/C
Obligations outstanding shall not at any time exceed the Revolving Committed
Amount. Revolving Loans may consist of Base Rate Loans or Eurodollar Loans,
or a
combination thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof; provided,
however,
that no
more than 25 Eurodollar
Loans shall be outstanding hereunder at any time. 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. Revolving Loans hereunder may be repaid
and
reborrowed in accordance with the provisions hereof. Notwithstanding the
foregoing, the Borrower may not request any Loans hereunder while a Change
of
Control Standstill Period shall be in effect pursuant to Section
3.4(e)
hereof.
(b) Revolving
Loan Borrowings.
(i) Notice
of Borrowing.
The
Borrower shall request a Revolving Loan borrowing by notice, which may be given
by telephone and promptly confirmed in writing. Each such notice must be
received by the Administrative Agent not later than (i) 12:00 noon on the
Business Day of the requested borrowing in the case of Base Rate Loans, and
(ii)
11:00 A.M. three Business Days prior to the date of the requested borrowing
in
the case of Eurodollar Loans. Each such request for borrowing shall be
irrevocable, executed by a Financial Officer of the Borrower and shall specify
(A) that a Revolving Loan is requested, (B) the date of the requested borrowing
(which shall be a Business Day), (C) the aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised of Base Rate Loans,
Eurodollar Loans or a combination thereof, and if Eurodollar Loans are
requested, the Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable Interest Period in
the
case of a Eurodollar Loan, then such notice shall be deemed to be a request
for
an Interest Period of one month, or (II) the type of Revolving Loan requested,
then such notice shall be deemed to be a request for a Base Rate Loan hereunder.
The Administrative Agent shall give notice to each affected Lender promptly
upon
receipt of each Notice of Borrowing pursuant to this Section 2.1(b)(i), the
contents thereof and each such Lender’s share of any borrowing to be made
pursuant thereto.
(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 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. 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.
(c) Repayment.
The
principal amount of all Revolving Loans shall be due and payable in full on
the
Termination Date, subject to the provisions of Sections 3.4(c) and
(e).
(d) Interest.
Subject
to the provisions of Section 3.1,
(i) Base
Rate Loans.
During
such periods as Revolving Loans shall be comprised in whole or in part of Base
Rate Loans, such Base Rate Loans shall bear interest at a per annum rate equal
to the Base Rate plus
the
Applicable Percentage; and
(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.
Interest
on Revolving Loans shall be payable in arrears on each applicable Interest
Payment Date (or at such other times as may be specified herein).
(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).
2.2 Competitive
Loan Subfacility.
(a) Competitive
Loans.
Subject
to the terms and conditions and relying upon the representations and warranties
herein set forth, the Borrower may, from time to time from the Closing Date
until the Termination Date, request and each Lender may, in its sole discretion,
agree to make, Competitive Loans in Dollars to the Borrower; provided,
however,
that
(i) the aggregate principal amount of outstanding Competitive Loans shall not
at
any time exceed the Revolving Committed Amount, and (ii) 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 plus
the L/C
Obligations outstanding shall not at any time exceed the Revolving Committed
Amount. Each Competitive Loan shall be not less than $10,000,000 in the
aggregate and integral multiples of $1,000,000 in excess thereof (or the
remaining portion of the Revolving Committed Amount, if less). Notwithstanding
the foregoing, the Borrower may not request any Loans hereunder while a Change
of Control Standstill Period shall be in effect pursuant to Section
3.4(e)
hereof.
(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. 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) by 11:00 A.M.
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 11:00 A.M. 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 11:00 A.M. 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 plus
the L/C
Obligations outstanding 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.
2.3 Swingline
Loan Subfacility.
(a) Swingline
Commitment.
Subject
to the terms and conditions hereof and in reliance upon the representations
and
warranties herein set forth, the Swingline Lender, in its individual capacity,
agrees to make certain revolving credit loans requested by the Borrower in
Dollars to the Borrower (each a "Swingline
Loan"
and,
collectively, the "Swingline
Loans")
from
time to time from the Closing Date until the Termination Date for the purposes
hereinafter set forth; provided,
however,
(i) the
aggregate principal amount of Swingline Loans outstanding at any time shall
not
exceed FIFTY
MILLION DOLLARS ($50,000,000.00)
(the
"Swingline
Committed Amount"),
and
(ii) 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 plus
the L/C
Obligations outstanding shall not exceed the Revolving Committed Amount.
Swingline Loans hereunder shall be made as Base Rate Loans or Quoted Rate
Swingline Loans as the Borrower may request in accordance with the provisions
of
this Section 2.3, and may be repaid and reborrowed in accordance with the
provisions hereof. Notwithstanding the foregoing, the Borrower may not request
any Loans hereunder while a Change of Control Standstill Period shall be in
effect pursuant to Section
3.4(e)
hereof.
(b) Swingline
Loan Advances.
(i) Notices;
Disbursement.
Whenever the Borrower desires a Swingline Loan advance hereunder it shall give
written notice (or telephone notice promptly confirmed in writing) to the
Swingline Lender not later than 2:00 P.M. on the Business Day of the requested
Swingline Loan advance. Each such notice shall be irrevocable and shall specify
(A) that a Swingline Loan advance is requested, (B) the date of the requested
Swingline Loan advance (which shall be a Business Day) and (C) the principal
amount of the Swingline Loan advance requested. Each Swingline Loan shall be
made as a Base Rate Loan or a Quoted Rate Swingline Loan and shall have such
maturity date as the Swingline Lender and the Borrower shall agree upon receipt
by the Swingline Lender of any such notice from the Borrower. The Swingline
Lender shall initiate the transfer of funds representing the Swingline Loan
advance to the Master Account by 3:30 P.M. on the Business Day of the requested
borrowing.
(ii) Minimum
Amounts.
Each
Swingline Loan advance shall be in a minimum principal amount of $1,000,000
and
in integral multiples of $1,000,000 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), (B) the Termination Date,
or (C) the demand of the Swingline Lender. 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 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.
(c) Interest
on Swingline Loans.
(i) Subject
to the provisions of Section 3.1, each Swingline Loan shall bear interest as
follows:
(A) Base
Rate Loans.
If such
Swingline Loan is a Base Rate Loan, at a per annum rate (computed on the basis
of the actual number of days elapsed over a year of 365 days) equal to the
Base
Rate plus
the
Applicable Percentage.
(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.
|
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Notwithstanding
any other provision to the contrary set forth in this Credit Agreement,
in
the event that the principal amount of any Quoted Rate Swingline
Loan is
not repaid on the last day of the Interest Period for such Loan,
then such
Loan shall be automatically converted into a Base Rate Loan at the
end of
such Interest Period.
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(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).
(d) Swingline
Note.
The
Swingline Loans shall be evidenced by a duly executed promissory note of the
Borrower to the Swingline Lender in an original principal amount equal to the
Swingline Committed Amount substantially in the form of Schedule
2.3(d).
2.4 Letters
of Credit.
(a) The
Letter of Credit Commitment.
(i) Subject
to the terms and conditions set forth herein, (A) each L/C Issuer agrees, in
reliance upon the agreements of the other Lenders set forth in this Section
2.4,
(1) from time to time on any Business Day during the period from the Closing
Date until the Letter of Credit Expiration Date, to issue a requested Letter
of
Credit for the account of the Borrower, and to amend or renew a Letter of Credit
previously issued by such L/C Issuer, in accordance with subsection (b) below,
and (2) to honor drafts under any Letter of Credit such L/C Issuer has issued;
and (B) the Lenders severally agree to participate in Letters of Credit issued
for the account of the Borrower; provided that no L/C Issuer shall be obligated
to make any L/C Credit Extension with respect to any Letter of Credit, and
no
Lender shall be obligated to participate in any Letter of Credit, to the extent
that, as of the date of such L/C Credit Extension, (x) the sum of the aggregate
principal amount of outstanding Revolving Loans plus the aggregate principal
amount of outstanding Swingline Loans plus the aggregate principal amount of
the
Competitive Loans plus L/C Obligations outstanding shall exceed the Revolving
Committed Amount or (y) the L/C Obligations would exceed the Letter of Credit
Sublimit. Within the foregoing limits, and subject to the terms and conditions
hereof, the Borrower’s ability to obtain Letters of Credit shall be fully
revolving, and accordingly the Borrower may, during the foregoing period, obtain
Letters of Credit to replace Letters of Credit that have expired or that have
been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed
to have been issued pursuant hereto, and from and after the Closing Date shall
be subject to and governed by the terms and conditions hereof. Notwithstanding
the foregoing, the Borrower may not request any Letters of Credit hereunder
while a Change of Control Standstill Period shall be in effect pursuant to
Section
3.4(e)
hereof.
(ii) No
L/C
Issuer shall be under any obligation to issue any Letter of Credit
if:
(A) any
order, judgment or decree of any Governmental Authority or arbitrator shall
by
its terms purport to enjoin or restrain such L/C Issuer from issuing such Letter
of Credit, or any law applicable to such L/C Issuer or any request or directive
(whether or not having the force of law) from any Governmental Authority with
jurisdiction over such L/C Issuer shall prohibit, or request that such L/C
Issuer refrain from, the issuance of letters of credit generally or such Letter
of Credit in particular or shall impose upon such L/C Issuer with respect to
such Letter of Credit any restriction, reserve or capital requirement (for
which
such L/C Issuer is not otherwise compensated hereunder) not in effect on the
Closing Date, or shall impose upon such L/C Issuer any unreimbursed loss, cost
or expense which was not applicable on the Closing Date and which such L/C
Issuer in good faith deems material to it;
(B) the
expiry date of such requested Letter of Credit would occur more than eighteen
months after the date of issuance or last renewal, unless the Required Lenders
have approved such expiry date;
(C) the
expiry date of such requested Letter of Credit would occur after the Letter
of
Credit Expiration Date, unless all the Lenders have approved such expiry date
(pursuant to additional documentation in form and substance satisfactory to
the
Administrative Agent and the applicable L/C Issuer); or
(D) such
Letter of Credit is in a face amount less than $100,000, in the case of a
commercial Letter of Credit, or $100,000, in the case of a standby Letter of
Credit, or is to be denominated in a currency other than Dollars.
(iii) No
L/C
Issuer shall be under any obligation to amend any Letter of Credit if (A) such
L/C Issuer would have no obligation at such time to issue such Letter of Credit
in its amended form under the terms hereof, or (B) the beneficiary of such
Letter of Credit does not accept the proposed amendment to such Letter of
Credit.
(b) Procedures
for Issuance and Amendment of Letters of Credit; Auto-Renewal Letters of
Credit.
(i) Each
Letter of Credit shall be issued or amended, as the case may be, upon the
request of the Borrower delivered to an L/C Issuer (with a copy to the
Administrative Agent) in the form of a Letter of Credit Application,
appropriately completed and signed by a Financial Officer of the Borrower.
Such
L/C Application must be received by such L/C Issuer and the Administrative
Agent
not later than 11:00 A.M. at least three Business Days prior to the proposed
issuance date or date of amendment, as the case may be. In the case of a request
for an initial issuance of a Letter of Credit, such Letter of Credit Application
shall specify in form and detail satisfactory to such L/C Issuer: (A) the
proposed issuance date of the requested Letter of Credit (which shall be a
Business Day); (B) the amount thereof; (C) the expiry date thereof; (D) the
name
and address of the beneficiary thereof; (E) the documents to be presented by
such beneficiary in case of any drawing thereunder; (F) the full text of any
certificate to be presented by such beneficiary in case of any drawing
thereunder; and (G) such other matters as such L/C Issuer may require. In the
case of a request for an amendment of any outstanding Letter of Credit, such
Letter of Credit Application shall specify in form and detail satisfactory
to
the applicable L/C Issuer (A) the Letter of Credit to be amended; (B) the
proposed date of amendment thereof (which shall be a Business Day); (C) the
nature of the proposed amendment; and (D) such other matters as such L/C Issuer
may require.
(ii) Promptly
after receipt of any Letter of Credit Application, the L/C Issuer receiving
such
Letter of Credit Application will confirm with the Administrative Agent (by
telephone or in writing) that the Administrative Agent has received a copy
of
such Letter of Credit Application from the Borrower and, if not, such L/C Issuer
will provide the Administrative Agent with a copy thereof. Upon receipt by
such
L/C Issuer of confirmation from the Administrative Agent that the requested
issuance or amendment is permitted in accordance with the terms hereof (such
confirmation shall be provided to such L/C Issuer no later than the next
Business Day following the Administrative Agent’s receipt of a copy of such
Letter of Credit Application), then, subject to the terms and conditions hereof,
such L/C Issuer shall, on the requested date, issue a Letter of Credit for
the
account of the Borrower or enter into the applicable amendment, as the case
may
be, in each case in accordance with such L/C Issuer's usual and customary
business practices. Immediately upon the issuance of each Letter of Credit,
each
Lender shall be deemed to, and hereby irrevocably and unconditionally agrees
to,
purchase from the issuing L/C Issuer a risk participation in such Letter of
Credit in an amount equal to the product of such Lender’s Commitment Percentage
times
the
amount of such Letter of Credit.
(iii) If
the
Borrower so requests in any applicable Letter of Credit Application, any L/C
Issuer may, in its sole and absolute discretion, agree to issue a Letter of
Credit that has automatic renewal provisions (each, an "Auto-Renewal
Letter of Credit");
provided
that any
such Auto-Renewal Letter of Credit must permit such L/C Issuer to prevent any
such renewal at least once in each twelve-month period (commencing with the
date
of issuance of such Letter of Credit) by giving prior notice to the beneficiary
thereof not later than a day (the "Nonrenewal
Notice Date")
in
each such twelve-month period to be agreed upon at the time such Letter of
Credit is issued. Unless otherwise directed by such L/C Issuer, the Borrower
shall not be required to make a specific request to such L/C Issuer for any
such
renewal. Once an Auto-Renewal Letter of Credit has been issued, the Lenders
shall be deemed to have authorized (but may not require) such L/C Issuer to
permit the renewal of such Letter of Credit at any time to an expiry date not
later than the Letter of Credit Expiration Date; provided,
however,
that
such L/C Issuer shall not permit any such renewal if (A) such L/C Issuer would
have no obligation at such time to issue such Letter of Credit in its renewed
form under the terms hereof, or (B) it has received notice (which may be by
telephone or in writing) on or before the day that is two Business Days before
the Nonrenewal Notice Date (1) from the Administrative Agent that the Required
Lenders have elected not to permit such renewal or (2) from the Administrative
Agent, any Lender or the Borrower that one or more of the applicable conditions
specified in Section 4.2 is not then satisfied. No L/C Issuer shall be under
any
obligation to permit the renewal of an Auto-Renewal Letter of Credit if such
L/C
Issuer would have no obligation at such time to issue such Letter of Credit
under the terms of this Section 2.4.
(iv) Promptly
after its delivery of any Letter of Credit or any amendment to a Letter of
Credit to an advising bank with respect thereto or to the beneficiary thereof,
each L/C Issuer will also deliver to the Borrower and the Administrative Agent
a
true and complete copy of such Letter of Credit or amendment. On the Business
Day that is three Business Days prior to the last Business Day of each March,
June, September and December, each L/C Issuer will deliver to the Administrative
Agent a report of all outstanding Letters of Credit issued, delivered, extended
and/or amended by such L/C Issuer for the current calendar quarter (or portion
thereof), with an estimate of any activity that is expected to occur during
the
remainder of such calendar quarter. The
Administrative Agent shall maintain at one of its offices in Boston,
Massachusetts a register for the recordation of the identity of the principal
amount, type and undrawn amount of each Letter of Credit outstanding hereunder,
the names and addresses of each beneficiary thereunder and the L/C Advances
of
the Lenders pursuant to the terms hereof from time to time (the "L/C
Register").
(c) Drawings
and Reimbursements; Funding of Participations.
(i) Upon
receipt from the beneficiary of any Letter of Credit of any notice of a drawing
under such Letter of Credit, the applicable L/C Issuer shall notify the Borrower
and the Administrative Agent thereof. Not later than 11:00 A.M. on the date
of
any payment by such L/C Issuer under a Letter of Credit (each such date, an
"Honor
Date"),
the
Borrower shall reimburse such L/C Issuer through the Administrative Agent in
an
amount equal to the amount of such drawing (it being understood that such
reimbursement may be accomplished pursuant to the application of funds held
in a
cash collateral account in accordance with the documentation governing such
account). If the Borrower fails to so reimburse such L/C Issuer through the
Administrative Agent by such time, such L/C Issuer shall, prior to 11:00 A.M.
on
such date, so notify the Administrative Agent and the Administrative Agent
shall
promptly notify each Lender of the Honor Date, the amount of the unreimbursed
drawing (the "Unreimbursed
Amount"),
and
such Lender’s Commitment Percentage thereof. In such event, the Borrower shall
be deemed to have requested a Base Rate Loan to be disbursed on the Honor Date
in an amount equal to the Unreimbursed Amount, without regard to the minimum
and
multiples specified in Section 2.1(b)(ii) for the principal amount of Base
Rate
Loans, but subject to the amount of the unutilized portion of the Revolving
Committed Amount and the conditions set forth in Section 4.2 (other than the
delivery of a Notice of Borrowing). Any notice given by any L/C Issuer or the
Administrative Agent pursuant to this Section 2.4(c)(i) may be given by
telephone if immediately confirmed in writing; provided
that the
lack of such an immediate confirmation shall not affect the conclusiveness
or
binding effect of such notice.
(ii) Each
Lender (including the Lender acting as L/C Issuer) shall upon any notice
pursuant to Section 2.4(c)(i) make funds available to the Administrative Agent
for the account of the issuing L/C Issuer in an amount equal to its Commitment
Percentage of the Unreimbursed Amount not later than 1:00 p.m. on the Business
Day specified in such notice by the Administrative Agent, whereupon, subject
to
the provisions of Section 2.4(c)(iii), each Lender that so makes funds available
shall be deemed to have made a Base Rate Loan to the Borrower in such amount.
The Administrative Agent shall remit the funds so received to such L/C
Issuer.
(iii) With
respect to any Unreimbursed Amount that is not fully refinanced by a Base Rate
Loan because the conditions set forth in Section 4.2 cannot be satisfied or
for
any other reason, the Borrower shall be deemed to have incurred from the
applicable L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount
that is not so refinanced, which L/C Borrowing shall be due and payable on
demand (together with interest) and shall bear interest at the default rate
as
set forth in Section 3.1. In such event, the applicable L/C Issuer shall
promptly notify the Administrative Agent, who in turn will promptly notify
each
Lender, and each Lender (including the Lender acting as L/C Issuer) that has
not
made funds available to such L/C Issuer pursuant to Section 2.4(c)(ii) shall,
promptly upon any such notice, make funds available to the Administrative Agent
for the account of such L/C Issuer in an amount equal to its Commitment
Percentage of such L/C Borrowing, whereupon each Lender that so makes funds
available shall be deemed to have made payment in respect of its participation
in such L/C Borrowing and such payment shall constitute an L/C Advance from
such
Lender in satisfaction of its participation obligation under this Section 2.4.
Likewise, to the extent a Lender has already made funds available pursuant
to
Section 2.4(c)(ii) in respect of any Unreimbursed Amount and such Unreimbursed
Amount may not be refinanced by a Base Rate Loan because the conditions set
forth in Section 4.2 cannot be satisfied or for any other reason, the funds
made
available by such Lender pursuant to Section 2.4(c)(ii) in respect of such
Unreimbursed Amount shall be deemed payment in respect of its participation
in
the related L/C Borrowing and such payment shall constitute an L/C Advance
from
such Lender in satisfaction of its participation obligation under this Section
2.4. The Administrative Agent shall remit the funds so received to the
applicable L/C Issuer.
(iv) Until
each Lender funds its Loan or L/C Advance pursuant to this Section 2.4(c) to
reimburse the issuing L/C Issuer for any amount drawn under any Letter of
Credit, interest in respect of such Lender’s Commitment Percentage of such
amount shall be solely for the account of such L/C Issuer.
(v) Each
Lender’s obligation to make Base Rate Loans or L/C Advances to reimburse an L/C
Issuer for amounts drawn under Letters of Credit, as contemplated by this
Section 2.4(c), shall be absolute and unconditional and shall not be affected
by
any circumstance, including, without limitation, (A) any set-off, counterclaim,
recoupment, defense or other right which such Lender may have against any L/C
Issuer, the Borrower or any other Person for any reason whatsoever; (B) the
occurrence or continuance of a Default or Event of Default, or (C) any other
occurrence, event or condition, whether or not similar to any of the foregoing;
provided,
however,
that
each Lender’s obligation to make Base Rate Loans pursuant to this Section 2.4(c)
is subject to the conditions set forth in Section 4.2 (other than delivery
by
the Borrower of a Notice of Borrowing). Any such reimbursement shall not relieve
or otherwise impair the obligation of the Borrower to reimburse any L/C Issuer
for the amount of any payment made by such L/C Issuer under any Letter of
Credit, together with interest as provided herein.
(vi) If
any
Lender fails to make available to the Administrative Agent for the account
of
any L/C Issuer any amount required to be paid by such Lender pursuant to the
foregoing provisions of this Section 2.4(c) by the time specified in Section
2.4(c)(ii), such L/C Issuer shall be entitled (acting through the Administrative
Agent) to recover from such Lender, on demand, such amount with interest thereon
for the period from the date such payment is required to the date on which
such
payment is immediately available to such L/C Issuer at a rate per annum equal
to
the greater of the Federal Funds Rate and a rate determined by the L/C Issuer
in
accordance with banking industry rules on interbank compensation, plus any
administrative, processing or similar fees customarily charged by the L/C Issuer
in connection with the foregoing. If such Lender pays such amount (with interest
and fees as aforesaid), the amount so paid shall constitute such Lender's
Committed Loan included in the relevant Committed Borrowing or L/C Advance
in
respect of the relevant L/C Borrowing, as the case may be. A certificate of
such
L/C Issuer submitted (through the Administrative Agent) to any Lender with
respect to any amounts owing under this clause (vi) shall be conclusive absent
manifest error.
(vii) With
respect to any payment in respect of a Letter of Credit, each Lender (including
the Lender acting as L/C Issuer) agrees to act in accordance with the ratable
sharing of payments provisions set forth in Section 3.13.
(d) Repayment
of Participations.
(i) At
any
time after any L/C Issuer has made a payment under any Letter of Credit and
has
received from any Lender such Lender’s L/C Advance in respect of such payment in
accordance with Section 2.4(c), if the Administrative Agent receives for the
account of such L/C Issuer any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise, including proceeds of Cash Collateral
applied thereto by the Administrative Agent), or any payment of interest
thereon, the Administrative Agent will distribute to such Lender its Commitment
Percentage thereof in the same funds as those received by the Administrative
Agent.
(ii) If
any
payment received by the Administrative Agent for the account of any L/C Issuer
pursuant to Section 2.4(c)(i) is required to be returned, each Lender shall
pay
to the Administrative Agent for the account of such L/C Issuer its Commitment
Percentage thereof on demand of the Administrative Agent, plus interest thereon
from the date of such demand to the date such amount is returned by such Lender,
at a rate per annum equal to the Federal Funds Rate from time to time in
effect.
(e) Obligations
Absolute. In
the
absence of gross negligence or willful misconduct and subject to Section 2.4(h)
regarding the applicability of ISP and "UCP", the obligation of the Borrower
to
reimburse the applicable L/C Issuer for each drawing under each Letter of
Credit, and to repay each L/C Borrowing and each drawing under a Letter of
Credit that is refinanced by a Base Rate Loan, shall be absolute, unconditional
and irrevocable, and shall be paid strictly in accordance with the terms of
this
Credit Agreement under all circumstances, including the following:
(i) any
lack
of validity or enforceability of such Letter of Credit, this Credit Agreement,
or any other agreement or instrument relating thereto;
(ii) the
existence of any claim, counterclaim, set-off, defense or other right that
the
Borrower may have at any time against any beneficiary or any transferee of
such
Letter of Credit (or any Person for whom any such beneficiary or any such
transferee may be acting), any L/C Issuer or any other Person, whether in
connection with this Credit Agreement, the transactions contemplated hereby
or
by such Letter of Credit or any agreement or instrument relating thereto, or
any
unrelated transaction;
(iii) any
draft, demand, certificate or other document presented under such Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any respect
or any statement therein being untrue or inaccurate in any respect; or any
loss
or delay in the transmission or otherwise of any document required in order
to
make a drawing under such Letter of Credit;
(iv) any
payment by any L/C Issuer under such Letter of Credit against presentation
of a
draft or certificate that appears on its face to be in order but that
nevertheless does not strictly comply with the terms of such Letter of Credit;
or any payment made by any L/C Issuer under such Letter of Credit to any Person
purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for
the
benefit of creditors, liquidator, receiver or other representative of or
successor to any beneficiary or any transferee of such Letter of Credit,
including any arising in connection with any proceeding under any debtor relief
law; or
(v) any
other
circumstance or happening whatsoever, whether or not similar to any of the
foregoing, including any other circumstance that might otherwise constitute
a
defense available to, or a discharge of, the Borrower.
The
Borrower shall promptly examine a copy of each Letter of Credit and each
amendment thereto that is delivered to it and, in the event of any claim of
noncompliance with the Borrower’s instructions or other irregularity, the
Borrower will immediately notify the applicable L/C Issuer. The Borrower shall
be conclusively deemed to have waived any such claim against the applicable
L/C
Issuer and its correspondents unless such notice is given as
aforesaid.
(f) Role
of L/C Issuers. Each
Lender and the Borrower agree that, in paying any drawing under a Letter of
Credit, the applicable L/C Issuers shall not have any responsibility to obtain
any document (other than any sight draft, certificates and documents expressly
required by the Letter of Credit) or to ascertain or inquire as to the validity
or accuracy of any such document or the authority of the Person executing or
delivering any such document. No L/C Issuer nor any Affiliate thereof nor any
of
the respective correspondents, participants or assignees of any L/C Issuer
shall
be liable to any Lender for (i) any action taken or omitted in connection
herewith at the request or with the approval of the Lenders or the Required
Lenders, as applicable; (ii) any action taken or omitted in the absence of
gross
negligence or willful misconduct; or (iii) the due execution, effectiveness,
validity or enforceability of any document or instrument related to any Letter
of Credit or Letter of Credit Application. The Borrower hereby assumes all
risks
of the acts or omissions of any beneficiary or transferee with respect to its
use of any Letter of Credit (other than the presentation of any sight draft,
certificates and documents expressly required by the Letter of Credit);
provided,
however,
that
this assumption is not intended to, and shall not, preclude the Borrower’s
pursuing such rights and remedies as it may have against the beneficiary or
transferee at law or under any other agreement. No L/C Issuer nor any Affiliate
thereof, nor any of the respective correspondents, participants or assignees
of
any L/C Issuer, shall be liable or responsible for any of the matters described
in clauses (i) through (v) of Section
2.4(e);
provided,
however,
that
anything in such clauses to the contrary notwithstanding, the Borrower may
have
a claim against an L/C Issuer, and such L/C Issuer may be liable to the
Borrower, to the extent, but only to the extent, of any direct, as opposed
to
consequential or exemplary, damages suffered by the Borrower which the Borrower
proves were caused by such L/C Issuer's willful misconduct or gross negligence
or such L/C Issuer's willful failure to pay under any Letter of Credit after
the
presentation to it by the beneficiary of a sight draft and certificate(s)
strictly complying with the terms and conditions of a Letter of
Credit.
In
furtherance and not in limitation of the foregoing, any L/C Issuer may accept
documents that appear on their face to be in order, without responsibility
for
further investigation, regardless of any notice or information to the contrary,
and such L/C Issuer shall not be responsible for the validity or sufficiency
of
any instrument transferring or assigning or purporting to transfer or assign
a
Letter of Credit or the rights or benefits thereunder or proceeds thereof,
in
whole or in part, which may prove to be invalid or ineffective for any
reason.
(g) Cash
Collateral.
(i) Upon
the
request of the Administrative Agent, (x) if an L/C Issuer has honored any full
or partial drawing request under any Letter of Credit and such drawing has
resulted in an L/C Borrowing, or (y) if, as of (I) the Letter of Credit
Expiration Date or (II) a termination of the Commitments and an acceleration
of
the Borrower’s obligations pursuant to Section 8.2, any Letter of Credit may for
any reason remain outstanding and partially or wholly undrawn, the Borrower
shall immediately repay the then outstanding amount of all L/C Borrowings and/or
Cash Collateralize the then outstanding amount of all L/C Obligations, as
applicable (in an amount equal to such outstanding amount determined as of
the
date of such L/C Borrowing, the Letter of Credit Expiration Date or date of
termination of the Commitments and acceleration of the Borrower’s obligations
pursuant to Section 8.2, as the case may be, such amount to be applied in the
manner set forth in Section 3.3(b)(iv)).
(ii) Upon
the
(x) termination or expiration of any Letter of Credit, the Administrative Agent
shall return and release to the Borrower the amounts Cash Collateralized equal
to the L/C Obligation associated with the terminated or expired Letter of Credit
(but only to the extent that all remaining L/C Obligations that are then
required to be Cash Collateralized under this Credit Agreement are fully Cash
Collateralized) or (y) payment in full in cash of all of the obligations owed
under this Credit Agreement, the termination or cancellation of all Letters
of
Credit issued hereunder, and the termination of all commitments hereunder,
the
pledge, Lien and security interest granted hereby shall terminate and all rights
to the amounts Cash Collateralized shall revert to the Borrower. Upon any such
termination, the Administrative Agent will, at the Borrower’s expense, execute
and deliver to the Borrower such documents as it shall reasonably request to
evidence such termination.
(h) Applicability
of ISP and UCP.
Unless
otherwise expressly agreed by the L/C Issuer and the Borrower when a Letter
of
Credit is issued (including any such agreement applicable to an Existing Letter
of Credit), (i) the rules of the ISP shall apply to each standby Letter of
Credit, and (ii) the rules of the Uniform Customs and Practice for
Documentary Credits, as most recently published by the International Chamber
of
Commerce at the time of issuance shall apply to each commercial Letter of
Credit.
(i) Conflict
with Letter of Credit Application.
In the
event of any conflict between the terms hereof and the terms of any Letter
of
Credit Application, the terms hereof shall control.
(j) Assignments.
Each
Lender may assign all or a portion of its rights and obligations of
participation in the Letters of Credit issued hereunder in accordance with
the
terms and conditions for such assignments as set forth in Section 10.3(b).
If at
any time Bank
of
America
or such
other L/C Issuer assigns all of its Commitment and Loans pursuant to Section
10.3(b), Bank
of
America
or such
L/C Issuer may, upon thirty (30) days’ notice to the Borrower and the Lenders,
resign as an L/C Issuer. In the event of any such resignation of an L/C Issuer,
the Borrower shall be entitled to appoint from among the Lenders a successor
L/C
Issuer hereunder; provided,
however,
that no
failure by the Borrower to appoint any such successor shall affect the
resignation of any L/C Issuer. Each of Bank of America, SunTrust, Wachovia
and
such other L/C Issuer shall retain all the rights and obligations of an L/C
Issuer hereunder with respect to all Letters of Credit outstanding as of the
effective date of its resignation as an L/C Issuer and all L/C Obligations
with
respect thereto (including the right to require the Lenders to make Base Rate
Loans or fund participations in Letters of Credit pursuant to Section
2.4(c)).
(k) Amendment.
Notwithstanding anything in Section 10.6 to the contrary, no provision of this
Section 2.4 may be amended without the consent of any L/C Issuer directly
affected thereby.
(l) Responsibility
of L/C Issuer for Causing the Letter of Credit Sublimit To Be
Exceeded.
If any
L/C Issuer (i) issues or amends a Letter of Credit without confirming with
the
Administrative Agent that the requested issuance or amendment is permitted
in
accordance with the terms hereof as is required pursuant to Section 2.4(b)(ii)
(or in disregard of the information conveyed by the Administrative Agent in
response to such confirmation request) or (ii) fails to provide the
Administrative Agent with a proper reporting of any activity with respect to
Letters of Credit issued or requested of such L/C Issuer during the current
calendar quarter as is required pursuant to Section 2.4(b)(iv), and the result
of such action or inaction is to cause, at any time, (A) the outstanding L/C
Obligations to exceed the Letter of Credit Sublimit or (B) 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 plus
the L/C
Obligations outstanding to exceed the Revolving Committed Amount, then such
L/C
Issuer shall be solely responsible for collecting payment for unreimbursed
draws
thereunder from the Borrower, and the Lenders shall not be required to
participate in the L/C Obligations relating thereto.
SECTION
3
OTHER
PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default
Rate.
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).
3.2 Extension
and Conversion.
The
Borrower shall have the option, on any Business Day, to deliver a Notice of
Extension/Conversion to (i) extend existing Loans into a single subsequent
permissible Interest Period, (ii) convert Loans into Loans of another interest
rate type or (iii) extend existing Loans into automatic rolling subsequent
three-month Interest Periods; provided that, with respect to this clause (iii)
such Loans will be automatically extended on the last day of each three-month
Interest Period into the subsequent three-month Interest Period (as requested
pursuant to the relevant Notice of Extension/Conversion) until such time as
the
Borrower delivers a new Notice of Extension/Conversion, which new Notice of
Extension/Conversion shall be delivered prior to 11:00 A.M. on the fifth
Business Day prior to the last day of the then current Interest Period;
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 11:00 A.M.
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.
3.3 Prepayments.
(a) Voluntary
Prepayments.
The
Borrower shall have the right to prepay Loans (other than Competitive Bid Loans,
which may not be prepaid) in whole or in part from time to time, subject to
Section 3.11, but otherwise without premium or penalty; provided,
however,
that
(i) Base Rate Loans may only be prepaid on one Business Day's prior written
notice to the Administrative Agent and specifying the applicable Loans to be
prepaid; (ii) Eurodollar Loans may only be prepaid on three Business Days’ prior
written notice to the Administrative Agent and specifying the applicable Loans
to be prepaid; (iii) any prepayment of Eurodollar Loans or Quoted Rate Swingline
Loans will be subject to Section 3.11; and (iv) each such partial prepayment
of
Loans shall be (A) in the case of Revolving Loans, in a minimum principal amount
of $5,000,000 and multiples of $1,000,000 in excess thereof (or, if less, the
full remaining amount of the Revolving Loan being prepaid) and (B) in the case
of Swingline Loans, in a minimum principal amount of $250,000 and multiples
of
$100,000 in excess thereof (or, if less, the full remaining amount of the then
outstanding Swingline Loans). Subject to the foregoing terms, amounts prepaid
under this Section 3.3(a) shall be applied as the Borrower may
elect.
(b) Mandatory
Prepayments.
(i) Commitment
Limitation.
If at
any time, the sum of the aggregate principal amount of outstanding Revolving
Loans plus
the
aggregate principal amount of outstanding Competitive Loans plus
L/C
Obligations outstanding plus
the
aggregate principal amount of outstanding Swingline Loans shall exceed the
Revolving Committed Amount, the Borrower promises to immediately prepay Loans
and/or Cash Collateralize undrawn L/C Obligations in an amount sufficient to
eliminate such excess (such payments to be applied as set forth in clause (iv)
below).
(ii) Letter
of Credit Sublimit.
If at
any time, the sum of the aggregate principal amount of L/C Obligations shall
exceed the Letter of Credit Sublimit, the Borrower shall immediately repay
L/C
Borrowings and, within seven (7) days, Cash Collateralize undrawn L/C
Obligations in an amount sufficient to eliminate such excess (such payments
to
be applied as set forth in clause (iv) below). It is understood that if the
Borrower is able to eliminate such excess within the seven-day grace period
through the reduction of L/C Obligations, then no Cash Collateralization shall
be required by the Borrower under this clause (iii).
(iii) Application
of Mandatory Prepayments.
All
amounts required to be paid pursuant to this Section 3.3(b) (as well as
amount required to be paid pursuant to Section 2.4(g)(i)) shall be applied
as
follows: (A) with respect to all amounts paid pursuant to
Section 3.3(b)(i) or Section 3.3(b)(ii), to (I) Swingline Loans, (II) L/C
Borrowings that have not been reimbursed through L/C Advances, (III) L/C
Advances and Revolving Loans, (IV) Competitive Loans and (V) Cash Collateralize
undrawn L/C Obligations and (B) with
respect to all amounts paid pursuant to Section 3.3(b)(iii), to (I) L/C
Borrowings that have not been reimbursed through L/C Advances, (II) L/C Advances
and (III) Cash Collateralize undrawn L/C Obligations. Within
the parameters of the applications set forth above, payments shall be applied
first to Base Rate Loans and then to Eurodollar Loans in direct order of
Interest Period maturities. All payments under this Section 3.3(b) shall be
subject to Section 3.11, but otherwise without premium or
penalty,
and
shall
be
accompanied by interest on the principal amount paid through the date of
payment.
(c) General.
All
prepayments made pursuant to this Section 3.3 shall (i) be subject to Section
3.11 and (ii) unless the Borrower shall specify otherwise, be applied first
to
Base Rate Loans, if any, and then to Eurodollar Loans in direct order of
Interest Period maturities. Except as otherwise set forth in subclause (b)
above, amounts prepaid on the Revolving Loans may be reborrowed in accordance
with the provisions hereof.
3.4 Termination,
Reduction and Increase of Revolving Committed Amount.
(a) Voluntary
Reductions.
The
Borrower may from time to time permanently reduce or terminate the Revolving
Committed Amount in whole or in part (in minimum aggregate amounts of $5,000,000
or in integral multiples of $1,000,000 in excess thereof (or, if less, the
full
remaining amount of the then applicable Revolving Committed Amount)) upon five
Business Days’ prior written notice to the Administrative Agent; provided,
however,
no such
termination or reduction shall be made which would cause the aggregate principal
amount of outstanding Revolving Loans plus
the
aggregate principal amount of outstanding Competitive Loans plus
L/C
Obligations outstanding plus
the
aggregate principal amount of outstanding Swingline Loans to exceed the
Revolving Committed Amount unless, concurrently with such termination or
reduction, the Revolving Loans and/or Competitive Loans are repaid to the extent
necessary to eliminate such excess. The Commitments of the Lenders shall
automatically terminate on the Termination Date. The Administrative Agent shall
promptly notify each affected Lender of receipt by the Administrative Agent
of
any notice from the Borrower pursuant to this Section 3.4(a).
(b) Additional
Commitments.
The
Borrower shall have the right no more than once a year to
increase the Facilities up to an aggregate amount of $1,300,000,000 (with such
increase to be applied pro rata to the Facilities) without the consent of the
Lenders, subject however to the satisfaction of each of the following terms
and
conditions:
(i) to
the
knowledge of the Administrative Agent, no Default or Event of Default shall
exist and be continuing at the time of such increase;
(ii) concurrently
with the Borrower’s request for such increase hereunder, the Borrower shall
deliver to the Administrative Agent, an officer’s certificate substantially in
the form of Schedule 6.1(c) certifying that no Default or Event of Default
has
occurred and is continuing and demonstrating compliance with each of the
financial covenants set forth in Sections 6.10 and 6.11 both before and after
giving effect to the increase requested hereunder;
(iii) such
increase shall be allocated in the following order:
(A) first,
to
the existing Lenders consenting to an increase in the amount of their Revolving
Commitments; provided
that (1)
on or before the tenth Business Day following notification of a requested
increase in the Revolving Committed Amount, each Lender shall notify the
Borrower of the desired increase, if any, in its Revolving Commitment and (2)
if
the aggregate increases in the Revolving Commitments requested by the existing
Lenders shall exceed the requested increase in the Revolving Committed Amount,
the Revolving Commitments of such Lenders shall be increased on a pro rata
basis
according to the existing Commitment Percentage of such Lenders;
and
(B) second,
to any other commercial bank, financial institution or "accredited investor"
(as
defined in Regulation D of the SEC) reasonably acceptable to the Administrative
Agent and the Borrower;
(iv) each
Person providing a new Commitment shall execute a New Commitment Agreement
substantially in the form of Schedule
3.4(b)
hereto
and, upon such execution and the satisfaction of the other terms and conditions
of this Section 3.4(b), such Person shall thereupon become a party hereto and
have the rights and obligations of a Lender under this Credit Agreement as
more
specifically provided in the New Commitment Agreement; and
(v) the
Administrative Agent shall promptly notify each Lender of (A) the new Revolving
Committed Amount and (B) each Lender’s Commitment Percentage, in each case after
giving effect to the one-time increase in Revolving Commitment referred to
in
this Section 3.4(b).
|
On
the date (which date shall be a Business Day) on which the increase
in the
Revolving Committed Amount occurs the Administrative Agent and the
Lenders
shall make adjustments among the Lenders with respect to the Revolving
Loans outstanding hereunder and under the Four-Year Credit Agreement
and
amounts of principal, interest, fees and other amounts paid or payable
with respect thereto as shall be necessary in order to reallocate
among
the Lenders such outstanding amounts based on the new Commitment
Percentages and to otherwise carry out fully the terms of this Section
3.4(b). The Borrower agrees that, in connection with any such increase
in
the Revolving Committed Amount, it will promptly (i) provide to each
Lender providing a new or increased Revolving Commitment (upon surrender
of the existing Revolving Note of such Lender in the case of an existing
Lender) a Revolving Note in the amount of its new or increased (as
applicable) Revolving Commitment substantially in the form of the
Revolving Note attached hereto as Schedule
2.1(e)
(but, in the case of a new Revolving Note given to an existing Lender
that
increases its Revolving Commitment, with notation thereon that it
is given
in substitution for and replacement of the original Revolving Note
or any
replacement notes thereof) and (ii) provide to each Lender (upon
surrender
of the existing Competitive Note of such Lender in the case of an
existing
Lender) a Competitive Note in the amount of the new Revolving Committed
Amount substantially in the form of the Competitive Note attached
hereto
as Schedule
2.2(f)
(but, in the case of a new Competitive Note given to an existing
Lender,
with notation thereon that it is given in substitution for and replacement
of the original Competitive Note or any replacement notes thereof).
Each
of the parties hereto acknowledges and agrees that no Lender shall
be
obligated to increase its Revolving Commitment pursuant to the terms
of
this Section 3.4(b).
|
(c) Termination
Date.
The
Revolving Commitments of the Lenders, the commitment of any L/C Issuer to issue
Letters of Credit under the Letter of Credit Sublimit and the Swingline
Commitment of the Swingline Lender shall automatically terminate on the
Termination Date.
(d)[Intentionally
Omitted.]
(e)Change
of Control.
(i) As
set
forth in Sections 2.1(a), 2.2(a), 2.3(a) and 2.4(a) above, the Borrower may
not
request any Loans or Letters of Credit hereunder while a Change of Control
Standstill Period shall be in effect pursuant to this Section 3.4(e).
Subject
to the procedures set forth below in this clause (ii) of this Section 3.4(e),
upon the occurrence of a Change of Control and the expiration of the 20-day
notice period described below, each Lender shall have the right to terminate
its
Commitment hereunder and require that the Borrower prepay (and the Borrower
agrees to so prepay) in full such Lender's outstanding Loans and Cash
Collateralize such Lender's L/C Obligations (such
amount the "Change
of Control Prepayment Amount"),
plus
accrued and unpaid fees and interest, if any, to the date of prepayment and
all
other obligations due to such Lender under this Credit Agreement and the other
Credit Documents. The portion of any such prepayment attributable to (and equal
to) such Lender's L/C Obligations shall be retained by the applicable L/C
Issuer(s) and applied to Cash Collateralize such Lender's L/C Obligations,
whereupon such Lender shall be released from all of its obligations to the
Borrower, the Administrative Agent and/or such L/C Issuer in respect of Letters
of Credit under this Credit Agreement.
(ii) Upon
the
occurrence of any Change of Control, the Administrative Agent shall
mail a notice (the "Change
of Control Notice")
simultaneously to all Lenders providing each Lender with notice of its rights
under this Section 3.4(e) and a period of twenty (20) calendar days to evaluate
the Change of Control and make a determination as to whether such Lender will
terminate its Commitments and accept payment of the Change of Control Prepayment
Amount, or whether such Lender will accept such Change of Control and continue
as a Lender hereunder. The period beginning on the effective date of such Change
of Control and continuing through the expiration of such twenty (20) notice
day
period shall be referred to herein as a "Change
of Control Standstill Period").
The
Borrower may not request any Loans hereunder while a Change of Control
Standstill Period shall be in effect pursuant to this Section
3.4(e).
(iii) Lenders
electing to have their Loans prepaid pursuant to this Section 3.4(e) shall
so
notify the Administrative Agent as directed in the Change of Control Notice;
provided,
however,
that
failure by any Lender to make a timely response shall be deemed to constitute
an
election by such Lender to terminate its Commitment and accept prepayment of
its
Loans. Upon the expiration date of the Change of Control Standstill Period,
(A)
all Lenders electing to terminate their Commitments (the "Terminating
Lenders")
shall
surrender their Notes to the Administrative Agent at the address specified
in
Section 11.02, (B) all Notes held by Terminating Lenders shall be cancelled
by
the Borrower and the Borrower shall pay the applicable Change of Control
Prepayment Amounts to the Administrative Agent, for the account of the
Terminating Lenders, and all other Obligations due to the Terminating Lenders
under this Agreement and the other Credit Documents, (C) the Commitments of
the
Terminating Lenders hereunder shall be terminated and the Revolving Committed
Amount shall be automatically reduced by an amount equal to the aggregate amount
of the Commitments so terminated, and (D) and the Commitments of those Lenders
not electing to terminate their Commitments shall automatically
continue.
(f) General.
The
Borrower shall pay to the Administrative Agent for the account of the Lenders
in
accordance with the terms of Section 3.5(a), on the date of each termination
or
reduction of the Revolving Committed Amount, the Facility Fee accrued through
the date of such termination or reduction on the amount of the Revolving
Committed Amount so terminated or reduced.
3.5 Fees.
(a) Facility
Fee.
In
consideration of the Revolving Commitments of the Lenders hereunder, the
Borrower agrees to pay to the Administrative Agent for the account of each
Lender a fee (the "Facility
Fee")
on the
Revolving Committed Amount computed at a per annum rate for each day during
the
applicable Facility Fee Calculation Period (hereinafter defined) equal to the
Applicable Percentage in effect from time to time. The Facility Fee shall
commence to accrue on the Closing Date and shall be due and payable in arrears
on the last Business Day of each March, June, September and December (and any
date that the Revolving Committed Amount is reduced or increased as provided
in
Section 3.4 and the Termination Date) for the immediately preceding quarter
(or
portion thereof) (each such quarter or portion thereof for which the Facility
Fee is payable hereunder being herein referred to as a "Facility
Fee Calculation Period"),
beginning with the first of such dates to occur after the Closing
Date.
(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,
plus
all L/C
Obligations outstanding is greater than or equal to 50% of the Revolving
Committed Amount (each such period 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, plus
all L/C
Obligations 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.
(d) Letter
of Credit Fees.
(i) Letter
of Credit Fee.
In
consideration of the issuance of Letters of Credit hereunder, the Borrower
promises to pay to the Administrative Agent for the account of each Lender
a fee
(the "Letter
of Credit Fee")
on
such Lender’s Commitment Percentage of the average daily maximum amount
available to be drawn under each Letter of Credit computed at a per annum rate
for each day from the date of issuance to the date of expiration equal to the
Applicable Percentage for Eurodollar Loans and Letter of Credit Fee. The Letter
of Credit Fee will be payable quarterly in arrears on the last Business Day
of
each March, June, September and December for the immediately preceding quarter
(or a portion thereof).
(ii) L/C
Issuer Fees.
In
addition to the Letter of Credit Fee payable pursuant to clause (i) above,
the
Borrower promises to pay to each L/C Issuer for its own account without sharing
by the other Lenders (A)
a
letter of credit fronting fee as negotiated between the Borrower and such L/C
Issuer on the average daily maximum amount available to be drawn under each
Letter of Credit issued by such L/C Issuer computed at the per annum rate for
each day from the date of issuance to the date of expiration and (B)
such
other customary charges from time to time of such L/C Issuer with respect to
the
issuance, amendment, transfer, administration, cancellation and conversion
of,
and drawings under, and other processing fees, and other standard costs and
charges, of such L/C Issuer relating to such Letters of Credit as from time
to
time in effect, due and payable on demand therefor by such L/C Issuer
(collectively, the "L/C
Issuer Fees").
3.6 Capital
Adequacy.
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 (as defined below),
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.
3.8 Illegality.
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.
3.9 Yield
Protection.
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,
(a)
subjects
any Lender or any applicable Lending Installation to any tax, duty, charge
or
withholding on or from payments due from the Borrower (excluding federal
taxation of the overall net income of any Lender or applicable Lending
Installation), or changes the basis of taxation of payments to any Lender in
respect of its Loans or other amounts due it hereunder;
(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);
and
the
result of which is to increase the cost to any Lender of making, funding or
maintaining loans or reduces any amount receivable by any Lender or any
applicable Lending Installation in connection with loans, or requires any Lender
or any applicable Lending Installation to make any payment calculated by
reference to the amount of loans held or interest received by it, by an amount
deemed material by such Lender;
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:
(a) (i) on
or
before the date of any payment by the Borrower under this Credit Agreement
or
Notes to such Lender, deliver to the Borrower and the Administrative Agent
(A)
two (2) duly completed copies of United States Internal Revenue Service Form
1001 or 4224, or successor applicable form, as the case may be, certifying
that
it is entitled to receive payments under this Credit Agreement and any Notes
without deduction or withholding of any United States federal income taxes
and
(B) an Internal Revenue Service Form W-8 or W-9, or successor applicable form,
as the case may be, certifying that it is entitled to an exemption from United
States backup withholding tax;
(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
(b) in
the
case of any such Lender that is not a "bank" within the meaning of Section
881(c)(3)(A) of the Internal Revenue Code, (i) represent to the Borrower (for
the benefit of the Borrower and the Administrative Agent) that it is not a
bank
within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (ii)
agree to furnish to the Borrower on or before the date of any payment by the
Borrower, with a copy to the Administrative Agent two (2) accurate and complete
original signed copies of Internal Revenue Service Form W-8, or successor
applicable form certifying to such Lender’s legal entitlement at the date of
such certificate to an exemption from U.S. withholding tax under the provisions
of Section 881(c) of the Internal Revenue Code with respect to payments to
be
made under this Credit Agreement and any Notes (and to deliver to the Borrower
and the Administrative Agent two (2) further copies of such form on or before
the date it expires or becomes obsolete and after the occurrence of any event
requiring a change in the most recently provided form and, if necessary, obtain
any extensions of time reasonably requested by the Borrower or the
Administrative Agent for filing and completing such forms), and (iii) agree,
to
the extent legally entitled to do so, upon reasonable request by the Borrower,
to provide to the Borrower (for the benefit of the Borrower and the
Administrative Agent) such other forms as may be reasonably required in order
to
establish the legal entitlement of such Lender to an exemption from withholding
with respect to payments under this Credit Agreement and any Notes;
unless
in
any such case any change in treaty, law or regulation has occurred after the
date such Person becomes a Lender hereunder which renders all such forms
inapplicable or which would prevent such Lender from duly completing and
delivering any such form with respect to it and such Lender so advises the
Borrower and the Administrative Agent in either case. Each Person that shall
become a Lender or a participant of a Lender pursuant to subsection 10.3 shall,
upon the effectiveness of the related transfer, be required to provide all
of
the forms, certifications and statements required pursuant to this subsection,
provided
that in
the case of a participant of a Lender the obligations of such participant of
a
Lender pursuant to this Section 3.10 shall be determined as if the participant
of a Lender were a Lender except that such participant of a Lender shall furnish
all such required forms, certifications and statements to the Lender from which
the related participation shall have been purchased.
3.11 Indemnity.
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.
3.12 Pro
Rata Treatment.
Except
to
the extent otherwise provided herein:
(a) Loans.
Each
Loan, each payment or prepayment of principal of any Loan, each payment of
interest on the Loans, each payment of Facility Fees, each payment of
Utilization Fees, each reduction of the Revolving Committed Amount and each
conversion or extension of any Loan, shall be allocated pro rata among the
Lenders in accordance with the respective principal amounts of their outstanding
Loans and Participation Interests. With respect to Competitive Loans, if the
Borrower fails to specify the particular Competitive Loan or Loans as to which
any payment or other amount should be applied and it is not otherwise clear
as
to the particular Competitive Loan or Loans to which such payment or other
amounts relate, or any such payment or other amount is to be applied to
Competitive Loans without regard to any such direction by the Borrower, then
each payment or prepayment of principal on Competitive Loans and each payment
of
interest or other amount on or in respect of Competitive Loans, shall be
allocated pro rata among the relevant Lenders of Competitive Loans in accordance
with the then outstanding amounts of their respective Competitive
Loans.
(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.
3.13 Payments
Generally; Administrative Agent’s Clawback.
(a) General.
All
payments to be made by the Borrower shall be made without condition or deduction
for any counterclaim, defense, recoupment or setoff. Except as otherwise
expressly provided herein, all payments by the Borrower hereunder shall be
made
to the Administrative Agent, for the account of the respective Lenders to which
such payment is owed, at the Administrative Agent’s Office in Dollars and in
immediately available funds not later than 4:00 P.M. on the date specified
herein. The Administrative Agent will promptly distribute to each Lender its
Applicable Percentage (or other applicable share as provided herein) of such
payment in like funds as received by wire transfer to such Lender’s Lending
Office. All payments received by the Administrative Agent after 4:00 P.M.
shall be deemed received on the next succeeding Business Day and any applicable
interest or fee shall continue to accrue. If any payment to be made by the
Borrower shall come due on a day other than a Business Day, payment shall be
made on the next following Business Day, and such extension of time shall be
reflected in computing interest or fees, as the case may be.
(b) (i)
Funding
by Lenders; Presumption by Administrative Agent.
Unless
the Administrative Agent shall have received notice from a Lender prior to
the
proposed date of any Committed Borrowing of Eurodollar Rate Loans (or, in the
case of any Committed Borrowing of Base Rate Loans, prior to 12:00 noon on
the
date of such Committed Borrowing) that such Lender will not make available
to
the Administrative Agent such Lender’s share of such Committed Borrowing, the
Administrative Agent may assume that such Lender has made such share available
on such date in accordance with Sections 2.1(b) and 3.2 (or, in the case of
a Committed Borrowing of Base Rate Loans, that such Lender has made such share
available in accordance with and at the time required by Sections 2.1(b)
and 3.2) and may, in reliance upon such assumption, make available to the
Borrower a corresponding amount. In such event, if a Lender has not in fact
made
its share of the applicable Committed Borrowing available to the Administrative
Agent, then the applicable Lender and the Borrower severally agree to pay to
the
Administrative Agent forthwith on demand such corresponding amount in
immediately available funds with interest thereon, for each day from and
including the date such amount is made available to the Borrower to but
excluding the date of payment to the Administrative Agent, at (A) in the
case of a payment to be made by such Lender, the greater of the Federal Funds
Rate and a rate determined by the Administrative Agent in accordance with
banking industry rules on interbank compensation and (B) in the case of a
payment to be made by the Borrower, the interest rate applicable to Base Rate
Loans. If the Borrower and such Lender shall pay such interest to the
Administrative Agent for the same or an overlapping period, the Administrative
Agent shall promptly remit to the Borrower the amount of such interest paid
by
the Borrower for such period. If such Lender pays its share of the applicable
Committed Borrowing to the Administrative Agent, then the amount so paid shall
constitute such Lender’s Committed Loan included in such Committed Borrowing.
Any payment by the Borrower shall be without prejudice to any claim the Borrower
may have against a Lender that shall have failed to make such payment to the
Administrative Agent.
(ii) Payments
by Borrower; Presumptions by Administrative Agent.
Unless
the Administrative Agent shall have received notice from the Borrower prior
to
the date on which any payment is due to the Administrative Agent for the account
of the Lenders or the L/C Issuer hereunder that the Borrower will not make
such
payment, the Administrative Agent may assume that the Borrower has made such
payment on such date in accordance herewith and may, in reliance upon such
assumption, distribute to the Lenders or the L/C Issuer, as the case may be,
the
amount due. In such event, if the Borrower has not in fact made such payment,
then each of the Lenders or the L/C Issuer, as the case may be, severally agrees
to repay to the Administrative Agent forthwith on demand the amount so
distributed to such Lender or the L/C Issuer, in immediately available funds
with interest thereon, for each day from and including the date such amount
is
distributed to it to but excluding the date of payment to the Administrative
Agent, at the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation.
A
notice
of the Administrative Agent to any Lender or the Borrower with respect to any
amount owing under this subsection (b) shall be conclusive, absent
convincing evidence to the contrary.
(c) Failure
to Satisfy Conditions Precedent.
If any
Lender makes available to the Administrative Agent funds for any Loan to be
made
by such Lender as provided in the foregoing provisions of this Section 3, and
such funds are not made available to the Borrower by the Administrative Agent
because the conditions to the applicable Credit Extension set forth in Section
4
are not satisfied or waived in accordance with the terms hereof, the
Administrative Agent shall return such funds (in like funds as received from
such Lender) to such Lender, without interest.
(d) Obligations
of Lenders Several.
The
obligations of the Lenders hereunder to make Committed Loans, to fund
participations in Letters of Credit and Swingline Loans and to make payments
pursuant to Section 9.7 are several and not joint. The failure of any
Lender to make any Committed Loan, to fund any such participation or to make
any
payment under Section 9.7 on any date required hereunder shall not relieve
any other Lender of its corresponding obligation to do so on such date, and
no
Lender shall be responsible for the failure of any other Lender to so make
its
Committed Loan, to purchase its participation or to make its payment under
Section 9.7.
(e) Funding
Source.
Nothing
herein shall be deemed to obligate any Lender to obtain the funds for any Loan
in any particular place or manner or to constitute a representation by any
Lender that it has obtained or will obtain the funds for any Loan in any
particular place or manner.
3.14 Sharing
of Payments.
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.
3.15 Payments,
Computations, Etc.
(a) Except
as
otherwise specifically provided herein, all payments hereunder (other than
payments in respect of Competitive Loans) shall be made to the Administrative
Agent in dollars in immediately available funds, without offset, deduction,
counterclaim or withholding of any kind, at the Administrative Agent’s office
specified in Schedule
2.1(a)
not
later than 4:00 P.M. on the date when due. Payments received after such time
shall be deemed to have been received on the next succeeding Business Day.
The
Administrative Agent may (but shall not be obligated to) debit the amount of
any
such payment which is not made by such time to any ordinary deposit account
of
the Borrower maintained with the Administrative Agent (with notice to the
Borrower). The Borrower shall, at the time it makes any payment under this
Credit Agreement (other than payments in respect of Competitive Loans), specify
to the Administrative Agent the Loans, Fees, interest or other amounts payable
by the Borrower hereunder to which such payment is to be applied (and in the
event that it fails so to specify, or if such application would be inconsistent
with the terms hereof, the Administrative Agent shall distribute such payment
to
the Lenders in such manner as the Administrative Agent may determine to be
appropriate in respect of obligations owing by the Borrower hereunder, subject
to the terms of Section 3.12(a)). The Administrative Agent will distribute
such
payments to such Lenders, if any such payment is received prior to 12:00 Noon
on
a Business Day in like funds as received prior to the end of such Business
Day
and otherwise the Administrative Agent will distribute such payment to such
Lenders on the next succeeding Business Day. All payments of principal and
interest in respect of Competitive Loans shall be made in accordance with the
terms of Section 2.2. Whenever any payment hereunder shall be stated to be
due
on a day which is not a Business Day, the due date thereof shall be extended
to
the next succeeding Business Day (subject to accrual of interest and Fees for
the period of such extension), except that in the case of Eurodollar Loans,
if
the extension would cause the payment to be made in the next following calendar
month, then such payment shall instead be made on the next preceding Business
Day. Except as expressly provided otherwise herein, all computations of interest
and fees shall be made on the basis of actual number of days elapsed over a
year
of 360 days, except with respect to computation of interest on Base Rate Loans
which (unless the Base Rate is determined by reference to the Federal Funds
Rate) shall be calculated based on a year of 365 or 366 days, as appropriate.
Interest shall accrue from and include the date of borrowing, but exclude the
date of payment.
(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, L/C Obligations, Fees or any other amounts outstanding
under any of the Credit Documents shall be paid over or delivered as
follows:
FIRST,
to
the payment of all reasonable out-of-pocket costs and expenses (including
without limitation reasonable attorneys’ fees) of the Administrative Agent in
connection with enforcing the rights of the Lenders under the Credit
Documents;
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 (including,
without limitation, the
payment or cash collateralization of the outstanding L/C Obligations);
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 whomever may be lawfully entitled
to
receive such surplus.
In
carrying out the foregoing, (i) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (ii)
each of
the Lenders shall receive an amount equal to its pro rata share (based on the
proportion that the then outstanding Loans held by such Lender bears to the
aggregate then outstanding Loans) of amounts available to be applied pursuant
to
clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above;
and
(iii) to the extent that any amounts available for distribution pursuant to
clause "FIRST" above are attributable to the issued but undrawn amount of
outstanding Letters of Credit, such amounts shall be Cash Collateralized by
the
Administrative Agent and applied (A) first, to reimburse the applicable L/C
Issuers from time to time for any drawings under such Letters of Credit and
(B) then, following the expiration of all Letters of Credit, to all other
obligations of the types described in clauses "THIRD" and "SIXTH" above in
the manner provided in this Section 3.14(b).
3.16 Evidence
of Debt.
(a) Each
Lender shall maintain an account or accounts evidencing each Loan made by such
Lender to the Borrower from time to time, including the amounts of principal
and
interest payable and paid to such Lender from time to time under this Credit
Agreement. Each Lender will make reasonable efforts to maintain the accuracy
of
its account or accounts and to promptly update its account or accounts from
time
to time, as necessary.
(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 conclusive,
absent convincing evidence to the contrary,
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.
3.17 Replacement
of Lenders.
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 and Assumptions 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.
SECTION
4
CONDITIONS
4.1 Closing
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):
(a) The
Administrative Agent shall have received original counterparts of this Credit
Agreement executed by each of the parties hereto;
(b) The
Administrative Agent shall have received an appropriate original Revolving
Note
for each Lender requesting a Revolving Note, executed by the
Borrower;
(c) The
Administrative Agent shall have received an appropriate original Competitive
Note for each Lender requesting a Competitive Note, 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 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;
(f) 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(f);
(g) Since
August 27, 2005 there shall not have occurred or otherwise exist an event or
condition which has a Material Adverse Effect;
(h) 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;
(i) The
Administrative Agent shall have received evidence that all obligations due
and
owing under the Existing Five-Year Credit Agreement shall have been, or
concurrently with the date hereof will be, paid in full;
(j) The
Administrative Agent shall have received evidence that all obligations due
and
owing under the Existing 364-Day Credit Agreement shall have been, or
concurrently with the date hereof will be, paid in full and such facility
terminated;
(k) The
Administrative Agent shall have received evidence that the "Closing Date" under
the Four-Year Credit Agreement shall have occurred simultaneously;
(l) The
Administrative Agent shall have received evidence that the effectiveness of
the
Term Loan Amendment shall have occurred simultaneously; and
(m) The
Administrative Agent shall have received such other documents, agreements or
information which may be reasonably requested by the Administrative
Agent.
4.2 Conditions
to all Extensions of Credit.
The
obligations of each Lender to make, convert or extend any Loan (including the
initial Loans), and of any L/C Issuer to issue a Letter of Credit hereunder
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:
(a) The
Borrower shall have delivered (A) in the case of any Revolving Loan to the
Administrative Agent, an appropriate Notice of Borrowing or Notice of
Extension/Conversion, (B) in the case of any Swingline Loan to the
Administrative Agent, an appropriate Notice of Borrowing or Notice of
Extension/Conversion or (C) in the case of any Letter of Credit, to the
applicable L/C Issuer an appropriate request for issuance (with a copy to the
Administrative Agent) in accordance with the provisions of Section
2.4(b);
(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) or the issuance of such Letter of Credit, as applicable,
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 plus
the L/C
Obligations outstanding shall not exceed the Revolving Committed
Amount.
The
delivery of each Notice of Borrowing and each Notice of Extension/Conversion
shall constitute a representation and warranty by the Borrower of the
correctness of the matters specified in subsections (b), (c), (d) and (e) above.
Notwithstanding the foregoing, the Borrower may not request any Loans hereunder
while a Change of Control Standstill Period shall be in effect pursuant to
Section
3.4(e)
hereof.
SECTION
5
REPRESENTATIONS
AND WARRANTIES
The
Borrower hereby represents to the Administrative Agent and each Lender
that:
5.1 Financial
Position; No Internal Control Event.
(a) The
audited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as of August 27, 2005 and the audited consolidated statements
of
earnings and statements of cash flows for the year ended August 27, 2005 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 position, 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 27,
2005 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 position 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. Since August 27, 2005, through and including the Closing Date,
there has not occurred an event or condition which has had a Material Adverse
Effect.
(b) To
the
best knowledge of the Borrower, no Internal Control Event exists or has occurred
since the date of the Audited Financial Statements through the Closing
Date.
5.2 Organization;
Existence; Compliance with Law.
Each
of
the Borrower and its Subsidiaries (a) is duly organized, validly existing and
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).
5.4 No
Legal Bar.
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.
5.5 No
Material Litigation.
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.
5.6 No
Default.
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.
5.9 Taxes.
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.
5.10 ERISA.
Except
as
would not result in a Material Adverse Effect:
(a) During
the five-year period prior to the date on which this representation is made
or
deemed made: (i) no ERISA Event has occurred, and, to the best knowledge of
the
Borrower, no event or condition has occurred or exists as a result of which
any
ERISA Event could reasonably be expected to occur, with respect to any Plan;
(ii) no "accumulated funding deficiency," as such term is defined in Section
302
of ERISA and Section 412 of the Code, whether or not waived, has occurred with
respect to any Plan; (iii) each Single Employer Plan and, to the best knowledge
of the Borrower, each Multiemployer Plan has been maintained, operated, and
funded in compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state laws;
and (iv) no lien in favor of the PBGC or a Plan has arisen or is reasonably
likely to arise on account of any Plan.
(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
any
of Section 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 any of Section 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.
5.11 Governmental
Regulations, Etc.
(a) No
part
of the pro-ceeds of the Loans will be used, directly or indirectly, for the
purpose of purchasing or carrying any "margin stock" in violation of Regulation
U. If requested by any Lender or the Administrative Agent, the Borrower will
furnish to the Administrative Agent and each Lender a statement to the foregoing
effect in conformity with the requirements of FR Form U-1 referred to in said
Regulation U. No indebtedness being reduced or retired out of the proceeds
of
the Loans was or will be incurred for the purpose of purchasing or carrying
any
margin stock within the meaning of Regulation U or any "margin security" within
the meaning of Regulation T. "Margin stock" within the meanings of Regulation
U
does not constitute more than 25% of the value of the consolidated assets of
the
Borrower and its Subsidiaries. None of the transactions contemplated by this
Credit Agreement (including, without limitation, the direct or indirect use
of
the proceeds of the Loans) will violate or result in a violation of the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934,
as
amended, or regulations issued pursuant thereto, or Regulation T, U or X.
(b) Neither
the Borrower nor any of its Subsidiaries is subject to regulation under 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 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.
(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.
5.12 Subsidiaries.
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.
5.13 Purpose
of Loans.
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 other lawful
corporate purposes of the Borrower and its Subsidiaries. The Letters of Credit
shall be used only for or in connection with obligations relating to
transactions entered into by the Borrower in the ordinary course of
business.
5.14 Disclosure.
No
certificate (including any financial statements or other documents or attached
thereto) furnished by or on behalf of the Borrower to the Administrative Agent
or any Lender in connection with the transactions contemplated hereby and the
negotiation of this Credit Agreement or delivered hereunder (as modified or
supplemented by other information so furnished) contains any material
misstatement of fact or omits to state any material fact necessary to make
the
statements therein, in the light of the circumstances under which they were
made, not misleading.
5.15 Taxpayer
Identification Number.
The
Borrower's true and correct U.S. taxpayer identification number is set forth
on
Schedule
10.1.
SECTION
6
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:
6.1 Information
Covenants.
The
Borrower will furnish, or cause to be furnished, to the Administrative Agent
and
the Lenders:
(a) Annual
Financial Statements.
As soon
as available, and in any event within the earlier of (i) the 100th
day
after the end of each fiscal year of the Borrower and (ii) the day that is
ten
(10) Business Days after the date the Borrower's annual report on Form 10-K
is
required to be filed with the SEC, as of the end of such fiscal year, a
consolidated balance sheet, consolidated statement of income, consolidated
statement of stockholders’ equity and consolidated statement of cash flows of
the Borrower and its Subsidiaries for such fiscal year, setting forth in
comparative form consolidated figures for the preceding fiscal year, all such
financial information described above to be in reasonable form and detail
and
prepared in accordance with GAAP, such consolidated statements to be audited
and
accompanied by (i)
a
report and opinion of Ernst & Young LLP or another Registered Public
Accounting Firm of nationally recognized standing reasonably acceptable to
the
Required Lenders, which report and opinion shall
be
prepared in accordance with generally accepted auditing standards and applicable
Securities Laws and shall not be subject to any "going concern" or like
qualification or exception or any qualification or exception as to the scope
of
such audit or with respect to the absence of any material misstatement and
(ii) an opinion of such Registered Public Accounting Firm independently
assessing the Borrower’s internal controls over financial reporting in
accordance with Item 308 of SEC Regulation S-K, PCAOB Auditing Standard No.
2,
and Section 404 of Sarbanes-Oxley expressing a conclusion that contains no
statement that there is a material weakness in such internal controls, except
for such material weaknesses that have been (x) disclosed to the Administrative
Agent (it being understood that the Borrower’s filing with the SEC of a notice
of such material weakness shall be deemed disclosure to the Administrative
Agent), who in turn discloses such material weaknesses to the Lenders, and
(y)
remedied or otherwise diligently addressed (or in the process of being
diligently addressed) by the Borrower in accordance with recommendations made
by
the Borrower's external auditors in consultation with the Borrower.
(b) Quarterly
Financial Statements.
Beginning with the fiscal quarter ending May 6, 2006, as soon as available,
and
in any event within the earlier of (i) the 50th
day
after the end of each of the first three fiscal quarters of each fiscal year
of
the Borrower and (ii) the day that is five (5) Business Days after the date
the
Borrower's quarterly report on Form 10-Q is required to be filed with the SEC,
as of the end of such fiscal quarter, together with a related condensed
consolidated balance sheet, a condensed consolidated statement of income and
a
condensed consolidated statement of cash flows of the Borrower and its
Subsidiaries for such fiscal quarter, in each case setting forth in comparative
form consolidated figures for the corresponding period of the preceding fiscal
year, except for the condensed consolidated balance sheet that will be presented
in comparative form to the Borrower’s most recent audited consolidated balance
sheet, 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, (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 and (iii) certifying as
to
the Borrower's current senior unsecured (non-credit enhanced) long term debt
rating from S&P and/or Moody's.
(d) Reports.
Promptly upon transmission or receipt thereof, (a) copies of any filings on
Forms 8-K, 10-Q or 10-K and any other material filings or registrations with
the
SEC, or any successor agency, and copies of all financial statements, proxy
statements, material notices and material 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 environ-mental matters, the United
States Occupational Health and Safety Administration, or any state or local
agency respon-sible for health and safety matters, or any successor agencies
or
authorities concerning environmental, health or safety matters.
(e) Notices.
The
Borrower will give written notice to the Administrative Agent (a) immediately
upon obtaining knowledge thereof, of 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 proposes to take with respect thereto,
(b)
upon the occurrence of any of the following with respect to the Borrower or
any
of its Subsidiaries: (i) promptly upon the Borrower’s determination thereof, the
pendency or commencement of any litigation, arbitral or governmental proceeding
against such Person which is reasonably likely to have a Material Adverse
Effect, (ii) promptly upon the Borrower’s determination thereof, 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) immediately upon obtaining
knowledge thereof, of 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, (c) immediately upon obtaining knowledge thereof,
of
any change in accounting policies or financial reporting practices by the
Borrower or any Subsidiary that the Borrower’s external auditors consider to
have a material impact on the consolidated financial statements of the Borrower
and its Subsidiary, and (d) immediately upon obtaining knowledge thereof, of
the
determination by the Registered Public Accounting Firm providing the opinion
required under Section 6.1(a)(ii) (in connection with its preparation of such
opinion) or the Borrower's determination at any time of the occurrence or
existence of any Internal Control Event.
(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) Change
of Control; Reorganization. Upon
obtaining knowledge thereof, the Borrower will promptly provide the
Administrative Agent and the Lenders with (i) written notice of any actual
or
expected Change of Control or Reorganization, (ii) the
circumstances and relevant facts regarding such Change of Control or
Reorganization (including the information with respect to pro forma historical
income, cash flow and capitalization, each after giving effect to such Change
of
Control or Reorganization, as the case may be), and
(iii)
such
additional information and documents regarding such Change
of
Control or
Reorganization as
may be
reasonably requested by the Administrative Agent and/or any Lender.
(h) Debt
Rating.
No
later
than five (5) days after a Financial Officer obtains knowledge of any such
issuance of change, give notice to the Administrative Agent (by telephone,
followed promptly by written notice transmitted by facsimile with a hard copy
sent promptly thereafter) of any issuance of change (either expressly or
pursuant to a letter from S&P or Moody’s stating an "implied" rating), in
rating by S&P or Moody’s in respect of the Borrower’s non-credit enhanced
senior long-term debt (secured or unsecured), together with details
thereof.
(i) 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.
Documents
required to be delivered pursuant to Section 6.1(a), (b) or (d) (to
the extent any such documents are included in materials otherwise filed with
the
SEC)
may be
delivered electronically and if so delivered, shall be deemed to have been
delivered on the date (i) on which the Borrower posts such documents, or
provides a link thereto on the Borrower’s website on the Internet at the website
address listed in Section 10.1; or (ii) on which such documents are
posted on the Borrower’s behalf on an Internet or intranet website, if any, to
which each Lender and the Administrative Agent have access (whether a
commercial, third-party website or whether sponsored by the Administrative
Agent); provided
that:
(i) the Borrower shall deliver paper copies of all officer’s certificates
delivered pursuant to Section 6.1(c) to the Administrative Agent or any Lender
that requests the Borrower to deliver such paper copies until a written request
to cease delivering paper copies is given by the Administrative Agent or such
Lender and (ii) the Borrower shall notify the Administrative Agent (by
telecopier, electronic mail or automatic electronic notification via the
Borrower’s website) of the posting of any documents required to be delivered
pursuant to Section 6.1(a), (b) or (d). Notwithstanding anything
contained herein, in every instance the Borrower shall be required to provide
paper copies of the officer's certificate required by Section 6.1(c) to the
Administrative Agent. Except for such officer's certificates required by
Section 6.1(c), the Administrative Agent shall have no obligation to
request the delivery or to maintain copies of the documents referred to above,
and in any event shall have no responsibility to monitor compliance by the
Borrower with any such request for delivery, and each Lender shall be solely
responsible for requesting delivery to it or maintaining its copies of such
documents.
The
Borrower hereby acknowledges that (a) the Administrative Agent and/or the
Arrangers will make available to the Lenders materials and/or information
provided by or on behalf of the Borrower hereunder (collectively, "Borrower
Materials")
by
posting the Borrower Materials on IntraLinks or another similar electronic
system (the "Platform")
and
(b) certain of the Lenders may be "public-side" Lenders (i.e.,
Lenders
that do not wish to receive material non-public information with respect to
the
Borrower or its securities) (each, a "Public
Lender").
The
Borrower hereby agrees that, so long as it is the issuer of any outstanding
debt
or equity securities that are registered or issued pursuant to a private
offering or is actively contemplating issuing any such securities, (w) all
Borrower Materials that are to be made available to Public Lenders shall be
made
available by means of the Platform and shall be clearly and conspicuously marked
"PUBLIC" which, at a minimum, shall mean that the word "PUBLIC" shall appear
prominently on the first page thereof; (x) by marking Borrower Materials
"PUBLIC," the Borrower shall be deemed to have authorized the Administrative
Agent, the Arrangers and the Lenders to treat such Borrower Materials as not
containing any material non-public information with respect to the Borrower
or
its securities for purposes of United States Federal and state securities
laws, it being understood that certain of such Borrower Materials may be subject
to the confidentiality requirements set forth herein and in the other Credit
Documents; (y) all Borrower Materials marked "PUBLIC" are permitted to be
made available through a portion of the Platform designated "Public Investor;"
and (z) the Administrative Agent and the Arranger shall be entitled to
treat any Borrower Materials that are not marked "PUBLIC" as being suitable
only
for posting on a portion of the Platform not designated "Public Investor".
Notwithstanding the foregoing, the Borrower shall be under no obligation to
mark
any Borrower Materials "Public".
6.2 Preservation
of Existence and Franchises.
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.
6.3 Books
and Records.
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).
6.4 Compliance
with Law.
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.
6.6 Insurance.
The
Borrower will, and will cause each of its Subsidiaries to, at all times maintain
in full force and effect insurance, which may include self insurance, in such
amounts and covering such risks as is consistent with sound business practices
and similarly situated corporations.
6.7 Maintenance
of Property.
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.
6.8 Use
of Proceeds.
The
Borrower will use the proceeds of the Loans solely for the purposes set forth
in
Section 5.13.
6.9 Audits/Inspections.
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 3.00
to
1.00.
6.11 Interest
Coverage Ratio.
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.
SECTION
7
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:
7.1 Liens.
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.
7.2 Nature
of Business.
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:
(a) except
in
connection with a disposition of assets permitted by the terms of subsection
(c)
below, dissolve, liquidate or wind up their affairs;
(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; (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; and (iv)
the Borrower may consummate the Reorganization pursuant to and in accordance
with the provisions of the last paragraph of this Section 7.3.
(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; and, provided further,
the
Borrower may consummate the Reorganization pursuant to and in accordance with
the last paragraph of this Section
7.3;
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.
Notwithstanding
the foregoing, but subject to the following provisions of this paragraph, the
Borrower
will be permitted to effect an internal reorganization that will result in
the
AutoZone parent company changing its state of incorporation from Nevada to
Delaware and that will be accomplished either by (i) the Borrower merging with
and into a new wholly-owned Subsidiary of the Borrower, which Subsidiary (x)
will be incorporated in the state of Delaware and the surviving corporation
of
such merger, (y) shall, as a result of such merger, assume by operation of
law
all of the rights and obligations of the Borrower under the Credit Agreement,
and (z) shall, immediately after the consummation of such merger, have
management and controlling ownership substantially similar to that of the
Borrower immediately prior to the consummation of such merger or (ii) the
Borrower becoming a wholly-owned Subsidiary of a new holding company
incorporated in the State of Delaware, the outstanding capital stock of which
holding company will be owned by the current shareholders of the Borrower
(either such transaction, the "Reorganization").
The
Lenders hereby agree that the Borrower shall be permitted to consummate the
Reorganization so long as (i) the consummation of the Reorganization shall
not
result in a material and adverse impact to the interests of the Administrative
Agent and/or the Lenders under the Credit Agreement and the Notes, and (ii)
after giving effect to the Reorganization, (A) the Borrower become a
wholly-owned subsidiary of a corporation organized in the State of Delaware
and
(B) that the management and controlling ownership of such parent corporation
immediately after the consummation of the Reorganization be substantially
similar to that of the Borrower immediately prior to the consummation of the
Reorganization. The Borrower hereby agrees (i) to provide the Administrative
Agent and the Lenders with such additional information and documents related
to
the Reorganization as may be reasonably requested by the Administrative Agent
and/or any Lender and (ii) to execute within a reasonable time after
consummation of the Reorganization (not to exceed sixty (60) days unless
otherwise agreed by the Administrative Agent) such appropriate amendments,
corporate authority documents and other supporting documents to or under the
Credit Agreement evidencing any changes made necessary by the consummation
of
the Reorganization (including, without limitation, (x)
in
the event the Borrower merges with and into a new wholly-owned Subsidiary of
the
Borrower, a legal opinion of Borrower’s counsel, in form and substance
reasonably acceptable to the Administrative Agent’s legal counsel, addressing
the enforceability of the Credit Documents with respect to such surviving
Subsidiary and (y) in the event that the Borrower becomes a wholly-owned
subsidiary of a new parent holding company incorporated in Delaware, a guaranty
by such new parent holding company of the Borrower’s obligations under the
Credit Agreement) and such other changes as may be mutually agreed to by the
Borrower (or its successor, if applicable) and the parties hereto, each in
form
and substance reasonably acceptable to the Borrower (or its successor, if
applicable), the Administrative Agent and the Required Lenders. The Borrower
acknowledges that the agreement of the Lenders evidenced in this paragraph
is
given in reliance upon the foregoing conditions and agreements and shall be
deemed revoked if any such condition or agreement is breached.
7.4 Fiscal
Year.
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).
7.5 Subsidiary
Indebtedness.
The
Borrower will not permit any of its Subsidiaries to contract, create, incur,
assume or permit to exist any Indebtedness, except:
(a) Indebtedness
set forth on Schedule
7.5
(and any
renewals, refinancings or extensions thereof on terms and conditions no more
favorable, in the aggregate, to such creditor than such existing Indebtedness
and in a principal amount not in excess of that outstanding as of the date
of
such renewal, refinancing or extension);
(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 $100,000,000 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 $150,000,000 in
any
two consecutive fiscal years;
(e) Indebtedness
of the Mexican Subsidiaries in an aggregate principal amount for all Mexican
Subsidiaries not to exceed $150,000,000 at
any
time outstanding; and
(f) other
Indebtedness in an aggregate principal amount not to exceed
$25,000,000 at
any
time outstanding.
SECTION
8
EVENTS
OF DEFAULT
8.1 Events
of Default.
An
Event
of Default shall exist upon the occurrence of any of the following specified
events (each an "Event
of Default"):
(a) Payment.
The
Borrower shall
(i) default
in the payment when due of any principal of any of the Loans, or
(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
(b) Representations.
Any
representation, warranty or statement made or deemed to be made by the Borrower
herein, in any of the other Credit Documents, or in any statement or certificate
delivered or required to be delivered pursuant hereto or thereto shall prove
untrue in any material respect on the date as of which it was deemed to have
been made; or
(c) Covenants.
The
Borrower shall
(i) default
in the due performance or observance of any term, covenant or agreement
contained in Sections 6.2, 6.8, 6.10, 6.11 or 7.1 through 7.3, inclusive, and
7.5, or
(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
(d) Bankruptcy,
etc.
Any
Bankruptcy Event shall occur with respect to the Borrower or any of its
Subsidiaries; 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 $35,000,000 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) 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.
(i) Letters
of Credit.
The
Borrower shall (i) default in the payment when due of any reimbursement
obligations arising from drawings under Letters of Credit (it being understood
that such payment may be accomplished pursuant to the application of proceeds
from a new Base Rate Loan made in accordance with the provisions of Section
2.4(c) or pursuant to the application of funds held in a cash collateral
account) or (ii) default, and such defaults shall continue for five (5) or
more
Business Days, in the payment when due of any interest on any reimbursement
obligations arising from drawings under Letters of Credit.
8.2 Acceleration;
Remedies.
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:
(a) Termination
of Commitments.
Declare
the Commitments terminated whereupon the Commitments shall be immediately
terminated.
(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.
(d) Cash
Collateral.
Direct
the Borrower to pay (and the Borrower agrees that upon receipt of such notice,
or upon the occurrence of an Event of Default under Section 8.1(d), it will
immediately pay) to the Administrative Agent additional cash, to be held by
the
Administrative Agent (or as otherwise specified in the definition of "Cash
Collateralize"), for the benefit of the Lenders, in a cash collateral account
as
additional security for the L/C Obligations in respect of subsequent drawings
under all then outstanding Letters of Credit in an amount equal to the maximum
aggregate amount which may be drawn under all Letters of Credits then
outstanding.
Notwithstanding
the foregoing, if an Event of Default specified in Section 8.1(d) shall occur,
then the Commitments shall automatically terminate and all Loans, reimbursement
obligations arising from drawings under Letters of Credit, all accrued interest
in respect thereof, all accrued and unpaid Fees and other indebtedness or
obligations owing to the Administrative Agent and/or any of the Lenders
hereunder in respect thereof automatically shall immediately become due and
payable without the giving of any notice or other action by the Administrative
Agent or the Lenders.
SECTION
9
AGENCY
PROVISIONS
9.1 Appointment
and Authority.
(a) Each
Lender hereby designates and appoints Bank of America 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.
(b) Each
L/C
Issuer shall act on behalf of the Lenders with respect to any Letters of Credit
issued by it and the documents associated therewith until such time (and except
for so long) as the Administrative Agent may agree at the request of the
Required Lenders to act for such L/C Issuer with respect thereto; provided,
however,
that
such L/C Issuer shall have all of the benefits and immunities (i) provided
to the Administrative Agent in this Section 9 with respect to any acts taken
or
omissions suffered by such L/C Issuer in connection with Letters of Credit
issued by it or proposed to be issued by it and the application and agreements
for letters of credit pertaining to the Letters of Credit as fully as if the
term "Administrative Agent" as used in this Section 9 included such L/C Issuer
with respect to such acts or omissions, and (ii) as additionally provided
herein with respect to such L/C Issuer.
9.2 Delegation
of Duties.
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.
9.3 Exculpatory
Provisions.
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, facsimile, 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).
9.5 Notice
of Default.
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.
9.7 Indemnification.
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.
Bank
of
America,
each
other L/C Issuer and their respective Affiliates may make loans to, issue
letters of credit for the account of, accept deposits from, acquire equity
interests in and generally engage in any kind of banking, trust, financial
advisory, underwriting or other business with each of the Borrower and its
respective Affiliates as though Bank
of
America
were not
the Administrative Agent or such L/C Issuer were not an L/C Issuer hereunder,
as
applicable, and without notice to or consent of the Lenders. The Lenders
acknowledge that, pursuant to such activities, Bank
of
America,
each
L/C Issuer and their respective Affiliates may receive information regarding
the
Borrower or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Borrower or such Affiliate) and
acknowledge that neither the Administrative Agent nor such L/C Issuer shall
be
under any obligation to provide such information to them. With respect to its
Loans or any Letter of Credit issued by it, Bank
of
America
or such
other L/C Issuer, as applicable, shall have the same rights and powers under
the
Credit Agreement as any other Lender and may exercise such rights and powers
as
though it were not the Administrative Agent or an L/C Issuer, and the terms
"Lender" and "Lenders" include Bank
of
America
or such
other L/C Issuer, as applicable, 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, the L/C Issuer and the Borrower. Upon receipt of any such notice of
resignation, the Required Lenders shall have the right, in consultation with
the
Borrower, to appoint a successor, which shall be a bank with an office in the
United States, or an Affiliate of any such bank with an office in the
United States; 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
such successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the retiring
Administrative Agent gives notice of its resignation, then the retiring
Administrative Agent may on behalf of the Lenders and the L/C Issuer, appoint
a
successor Administrative Agent meeting the qualifications set forth above;
provided
that if
the Administrative Agent shall notify the Borrower and the Lenders that no
qualifying Person has accepted such appointment, then such resignation shall
nonetheless become effective in accordance with such notice and (1) the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Credit Documents, (2) all
payments, communications and determinations provided to be made by, to or
through the Administrative Agent shall instead be made by or to each Lender
and
the L/C Issuer directly, until such time as the Required Lenders appoint a
successor Administrative Agent as provided for above in this Section and (3)
the
retiring Administrative Agent will provide to the Borrower and the Lenders
reasonable access to the Register and/or copies of each Lender’s Administrative
Questionnaire. Upon the acceptance of a successor’s appointment as
Administrative Agent hereunder, such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
(or
retired) Administrative Agent, and the retiring Administrative Agent shall
be
discharged from all of its duties and obligations hereunder or under the other
Credit Documents (if not already discharged therefrom as provided above in
this
Section). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent’s resignation hereunder and under the other Credit Documents, the
provisions of this Article and Section 9.7 shall continue in effect for the
benefit of such retiring Administrative Agent, its sub-agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Administrative Agent was acting as
Administrative Agent.
9.10 Syndication
Agent.
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.
SECTION
10
MISCELLANEOUS
10.1 Notices.
(a) Notices
Generally.
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 on which the same
has been delivered by a reputable national overnight air courier service to
the
addressee, or (iv) the day on which the same is delivered to the addressee
or
delivery refused by the addressee by certified or registered mail, postage
prepaid, in each case to the respective parties at the address, in the case
of
the
Borrower, the Administrative Agent, the L/C Issuer or the Swing Line Lender,
to
the address, telecopier number, electronic mail address or telephone number
specified for such Person on Schedule 10.1,
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.
(b) Electronic
Communications.
Notices
and other communications to the Lenders and the L/C Issuer hereunder may be
delivered or furnished by electronic communication (including e-mail and
Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent, provided that the foregoing shall not apply to notices
to
any Lender or the L/C Issuer pursuant to Section 2 if such Lender or the L/C
Issuer, as applicable, has notified the Administrative Agent that it is
incapable of receiving notices under such Section by electronic communication.
The Administrative Agent or the Borrower may, in its discretion, agree to accept
notices and other communications to it hereunder by electronic communications
pursuant to procedures approved by it, provided that approval of such procedures
may be limited to particular notices or communications.
Unless
the Administrative Agent otherwise prescribes, (i) notices and other
communications sent to an e-mail address shall be deemed received upon the
sender’s receipt of an acknowledgement from the intended recipient (such as by
the "return receipt requested" function, as available, return e-mail or other
written acknowledgement), provided that if such notice or other communication
is
not sent during the normal business hours of the recipient, such notice or
communication shall be deemed to have been sent at the opening of business
on
the next business day for the recipient, and (ii) notices or communications
posted to an Internet or intranet website shall be deemed received upon the
deemed receipt by the intended recipient at its e-mail address as described
in
the foregoing clause (i) of notification that such notice or communication
is available and identifying the website address therefor.
(c) The
Platform.
THE
PLATFORM IS PROVIDED "AS IS" AND "AS AVAILABLE." THE AGENT PARTIES (AS DEFINED
BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS
OR
THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN
OR
OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED
OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH
THE
BORROWER MATERIALS OR THE PLATFORM. FURTHERMORE, THE BORROWER DOES NOT WARRANT
THE ADEQUACY OF THE PLATFORM, AND MAKES NO WARRANTY OF ANY KIND, EXPRESS,
IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR
A
PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM
VIRUSES OR OTHER CODE DEFECTS IN CONNECTION WITH THE PLATFORM. In no event
shall
the Administrative Agent or any of its Related Parties (collectively, the "Agent
Parties") have any liability to the Borrower, any Lender, the L/C Issuer or
any
other Person for losses, claims, damages, liabilities or expenses of any kind
(whether in tort, contract or otherwise) arising out of the Borrower’s or the
Administrative Agent’s transmission of Borrower Materials through the Internet,
except to the extent that such losses, claims, damages, liabilities or expenses
are determined by a court of competent jurisdiction by a final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Agent Party; provided, however, that in no event shall any Agent Party
have
any liability to the Borrower, any Lender, the L/C Issuer or any other Person
for indirect, special, incidental, consequential or punitive damages (as opposed
to direct or actual damages).
(d) Change
of Address, Etc.
Each of
the Borrower, the Administrative Agent, the L/C Issuer and the Swingline Lender
may change its address, telecopier or telephone number for notices and other
communications hereunder by notice to the other parties hereto. Each other
Lender may change its address, telecopier or telephone number for notices and
other communications hereunder by notice to the Borrower, the Administrative
Agent, the L/C Issuer and the Swingline Lender. In addition, each Lender agrees
to notify the Administrative Agent from time to time to ensure that the
Administrative Agent has on record (i) an effective address, contact name,
telephone number, telecopier number and electronic mail address to which notices
and other communications may be sent and (ii) accurate wire instructions
for such Lender.
(e) Reliance
by Administrative Agent, L/C Issuer and Lenders.
The
Administrative Agent and the Lenders shall be entitled to rely and act upon,
in
good faith, any notices (including telephonic Committed Loan Notices and
Swingline Loan Notices) purportedly given by or on behalf of the Borrower and
reasonably understood by the Administrative Agent and/or the Lenders, as
applicable, to be authentic even if (i) such notices were not made in a
manner specified herein, were incomplete or were not preceded or followed by
any
other form of notice specified herein, or (ii) the terms thereof, as
understood by the recipient, varied from any confirmation thereof. The Borrower
shall indemnify the Administrative Agent and the Related Parties of each of
them
from all losses, costs, expenses and liabilities resulting from the reliance
by
such Person on each notice purportedly given by or on behalf of the Borrower
(but excluding any such losses, costs, expenses and liabilities that
(x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of the Administrative Agent or such Related Party or (y) result
from a claim brought by the Borrower against the Administrative Agent or such
Related Party for breach in bad faith of such party’s obligations hereunder or
under any other Credit Document, if the Borrower has obtained a final and
nonappealable judgment in its favor on such claim as determined by a court
of
competent jurisdiction). All telephonic notices to and other telephonic
communications with the Administrative Agent may be recorded by the
Administrative Agent, and each of the parties hereto hereby consents to such
recording.
10.2 Right
of Set-Off.
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.
10.3 Successors
and Assigns.
(a) Successors
and Assigns Generally.
The
provisions of this Credit Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent
of
the Administrative Agent and each Lender other than in connection with a
Reorganization permitted by Section 7.3 hereof and no Lender may assign or
otherwise transfer any of its rights or obligations hereunder except (i) to
an
assignee in accordance with the provisions of Section
10.3(b),
(ii) by
way of participation in accordance with the provisions of Section
10.3(d),
(iii)
to an SPV in accordance with the provisions of Section
10.3(g),
or (iv)
by way of a pledge of its Loans hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Credit Agreement, expressed or implied, shall be construed
to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided
in
subsection (d) of this Section and, to the extent expressly contemplated hereby,
the Related Parties of each of the Administrative Agent, the L/C Issuer and
the
Lenders) any legal or equitable right, remedy or claim under or by reason of
this Credit Agreement.
(b) Assignments
by Lenders.
Any
Lender may at any time assign to one or more assignees all or a portion of
its
rights and obligations under this Credit Agreement (including all or a portion
of its Commitment(s) and the Loans (including for purposes of this Section
10.3(b),
participations in L/C Obligations and in Swingline Loans) at the time owing
to
it; provided,
that
any such assignment shall be subject to the following conditions:
(i) Minimum
Amounts.
(A) in
the
case of an assignment of the entire remaining amount of the assigning Lender’s
Commitment under any Facility and the Loans at the time owing to it under such
Facility or in the case of an assignment to a Lender, an Affiliate of a Lender,
no minimum amount need be assigned; and
(B) in
any
case not described in subsection (b)(i)(A) of this Section, the aggregate amount
of the Commitment (which for this purpose includes Loans outstanding thereunder)
or, if the Commitment is not then in effect, the principal outstanding balance
of the Loans of the assigning Lender subject to each such assignment, determined
as of the date the Assignment and Assumption with respect to such assignment
is
delivered to the Administrative Agent or, if "Trade Date" is specified in the
Assignment and Assumption, as of the Trade Date, shall not be less than
$5,000,000, in the case of any assignment in respect of the Revolving Credit
Facility, and in integral multiples of $1,000,000 in excess thereof;
provided,
however,
that
concurrent assignments to members of an Assignee Group and concurrent
assignments from members of an Assignee Group to a single Eligible Assignee
(or
to an Eligible Assignee and members of its Assignee Group) will be treated
as a
single assignment for purposes of determining whether such minimum amount has
been met;
(ii) Proportionate
Amounts.
Each
partial assignment shall be made as an assignment of a proportionate part of
all
the assigning Lender’s rights and obligations under this Credit Agreement with
respect to the Loans or the Commitment assigned, except that this clause (ii)
shall not (A) apply to the Swingline Lender’s rights and obligations in respect
of Swingline Loans or (B) prohibit any Lender from assigning all or a portion
of
its rights and obligations among separate Facilities on a non-pro rata
basis;
(iii) Required
Consents.
The
following consents shall be required for any assignment (subject to the
applicable limitations set forth below):
(A) the
consent of the Borrower (such consent not to be unreasonably withheld or
delayed) shall be required unless an Event of Default has occurred and is
continuing at the time of such assignment;
(B) the
consent of the Administrative Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments in respect of any
Commitment if such assignment is to a Person that is not a Lender with a
Commitment in respect of the applicable Facility or an Affiliate of such Lender;
and
(C) the
consent of the L/C Issuer (such consent not to be unreasonably withheld or
delayed) shall be required for any assignment that increases the obligation
of
the assignee to participate in exposure under one or more Letters of Credit
(whether or not then outstanding); and
(D) the
consent of the Swingline Lender (such consent not to be unreasonably withheld
or
delayed) shall be required for any assignment in respect of the
Facility.
(iv) Assignment
and Assumption.
The
parties to each assignment shall execute and deliver to the Administrative
Agent
an Assignment and Assumption, together with a processing and recordation fee
in
the amount, if any, required as set forth in Schedule
10.3(b)
(unless
waived by the Administrative Agent in its sole discretion); provided,
however,
that
the Administrative Agent may, in its sole discretion, elect to waive such
processing and recordation fee in the case of any assignment. The assignee,
if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.
(v) No
Assignment to Borrower.
No such
assignment shall be made to the Borrower or any of the Borrower’s Affiliates or
Subsidiaries.
(vi) No
Assignment to Natural Persons.
No such
assignment shall be made to a natural person.
Subject
to acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date specified
in each Assignment and Assumption, the assignee thereunder shall be a party
to
this Credit Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Credit Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Assumption, be released from
its
obligations under this Credit Agreement (and, in the case of an Assignment
and
Assumption covering all of the assigning Lender’s rights and obligations under
this Credit Agreement, such Lender shall cease to be a party hereto but shall
continue to be entitled to the benefits of Sections 3.9, 3.10 and 3.11 with
respect to facts and circumstances occurring prior to the effective date of
such
assignment). Upon request, the Borrower (at its expense) shall execute and
deliver a Note to the assignee Lender. Any assignment or transfer by a Lender
of
rights or obligations under this Credit Agreement that does not comply with
this
subsection shall be treated for purposes of this Credit Agreement as a sale
by
such Lender of a participation in such rights and obligations in accordance
with
Section 10.3(d).
(c) Register.
The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Administrative Agent’s Office a copy of each
Assignment and Assumption delivered to it and a register for the recordation
of
the names and addresses of the Lenders, and the Commitments of, and principal
amounts of the Loans and L/C Obligations owing to, each Lender 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
(including with regard to assignments of Loans and transfers of Notes). The
entries in the Register shall be conclusive, absent convincing evidence to
the
contrary, 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, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.
(d) Participations.
Any
Lender may at any time, without the consent of, or notice to, the Borrower
or
the Administrative Agent, sell participations to any Person (other than a
natural person or the Borrower or any of the Borrower’s Affiliates or
Subsidiaries) (each, a "Participant")
in all
or a portion of such Lender’s rights and/or obligations under this Credit
Agreement (including all or a portion of its Commitment and/or the Loans
(including such Lender’s participations in L/C Obligations and/or Swingline
Loans) owing to it); provided
that
(i) such Lender’s obligations under this Credit Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent, the Lenders and the L/C Issuer shall
continue to deal solely and directly with such Lender in connection with such
Lender’s rights and obligations under this Credit Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Credit Agreement
and to approve any amendment, modification or waiver of any provision of this
Credit Agreement; provided
that
such agreement or instrument may provide that such Lender will not, without
the
consent of the Participant, agree to any amendment, waiver or other modification
described in the first proviso to Section 10.6 that affects such Participant.
Subject to subsection (e) of this Section, the Borrower agrees that each
Participant shall be entitled to the benefits of Section 3.9, 3.10 and
3.11 to
the
same extent as if it were a Lender and had acquired its interest by assignment
pursuant to Section 10.3(b). To the extent permitted by law, each Participant
also shall be entitled to the benefits of Section 10.2 as
though
it were a Lender, provided such Participant agrees to be subject to Section
3.13
as though it were a Lender.
(e) Limitations
upon Participant Rights.
A
Participant shall not be entitled to receive any greater payment under Section
3.9, 3.10 and 3.11 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless
the
sale of the participation to such Participant is made with the Borrower’s prior
written consent. A Participant that would be a Foreign Lender if it were a
Lender shall not be entitled to the benefits of Section 3.10 unless the
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
3.10
as though it were a Lender.
(f) Electronic
Execution of Assignments.
The
words "execution," "signed," "signature," and words of like import in any
Assignment and Assumption shall be deemed to include electronic signatures
or
the keeping of records in electronic form, each of which shall be of the same
legal effect, validity or enforceability as a manually executed signature or
the
use of a paper-based recordkeeping system, as the case may be, to the extent
and
as provided for in any applicable law, including the Federal Electronic
Signatures in Global and National Commerce Act, the New York State Electronic
Signatures and Records Act, or any other similar state laws based on the Uniform
Electronic Transactions Act.
(g) Special
Purpose Funding Vehicles.
Notwithstanding anything to the contrary contained herein, any Lender (a
"Granting
Lender")
may
grant to a special purpose funding vehicle identified as such in writing from
time to time by the Granting Lender to the Administrative Agent and the Borrower
(an "SPV")
the
option to provide all or any part of any Loan that such Granting Lender would
otherwise be obligated to make pursuant to this Credit Agreement; provided
that (i)
nothing herein shall constitute a commitment by any SPV to fund any Loan, and
(ii) if an SPV elects not to exercise such option or otherwise fails to make
all
or any part of such Loan, the Granting Lender shall be obligated to make such
Loan pursuant to the terms hereof or, if it fails to do so, to make such payment
to the Administrative Agent as is required under Section 3.14. Each party hereto
hereby agrees that (i) neither the grant to any SPV nor the exercise by any
SPV
of such option shall increase the costs or expenses or otherwise increase or
change the obligations of the Borrower under this Credit Agreement (including
its obligations under Section 3.04), (ii) no SPV shall be liable for any
indemnity or similar payment obligation under this Credit Agreement for which
a
Lender would be liable, and (iii) the Granting Lender shall for all purposes,
including the approval of any amendment, waiver or other modification of any
provision of any Credit Document, remain the lender of record hereunder. The
making of a Loan by an SPV hereunder shall utilize the Commitment of the
Granting Lender to the same extent, and as if, such Loan were made by such
Granting Lender. 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 commercial paper or other senior debt 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 proceeding
under the laws of the United States or any State thereof. Notwithstanding
anything to the contrary contained herein, any SPV may (i) with notice to,
but
without prior consent of the Borrower and the Administrative Agent and with
the
payment of a processing fee in the amount of $2,500 (unless waived by the
Administrative Agent in its sole discretion), assign all or any portion of
its
right to receive payment with respect to any Loan to the Granting Lender and
(ii) disclose on a confidential basis any non-public information relating to
its
funding of Loans to any rating agency, commercial paper dealer or provider
of
any surety or Guarantee or credit or liquidity enhancement to such
SPV.
(h) Resignation
as L/C Issuer or Swingline Lender after Assignment.
Notwithstanding anything to the contrary contained herein, if at any time Bank
of America assigns all of its Revolving Credit Commitments and Revolving Credit
Loans pursuant to Section 10.3(b), Bank of America may, (i) upon 30 days’ notice
to the Borrower and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days’
notice to the Borrower, resign as Swingline Lender. In the event of any such
resignation as L/C Issuer or Swingline Lender, the Borrower shall be entitled
to
appoint from among the Lenders a successor L/C Issuer or Swingline Lender
hereunder; provided, however, that no failure by the Borrower to appoint any
such successor shall affect the resignation of Bank of America as L/C Issuer
or
Swingline Lender, as the case may be. If Bank of America resigns as L/C Issuer,
it shall retain all the rights, powers, privileges and duties of the L/C Issuer
hereunder with respect to all Letters of Credit outstanding as of the effective
date of its resignation as L/C Issuer and all L/C Obligations with respect
thereto (including the right to require the Lenders to make Base Rate Loans
or
fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)).
If Bank of America resigns as Swingline Lender, it shall retain all the rights
of the Swingline Lender provided for hereunder with respect to Swingline Loans
made by it and outstanding as of the effective date of such resignation,
including the right to require the Lenders to make Base Rate Loans or fund
risk
participations in outstanding Swingline Loans pursuant to Section 2.04(c).
Upon
the appointment of a successor L/C Issuer and/or Swingline Lender, (a) such
successor shall succeed to and become vested with all of the rights, powers,
privileges and duties of the retiring L/C Issuer or Swingline Lender, as the
case may be, and (b) the successor L/C Issuer shall issue letters of credit
in
substitution for the Letters of Credit, if any, outstanding at the time of
such
succession or make other arrangements satisfactory to Bank of America to
effectively assume the obligations of Bank of America with respect to such
Letters of Credit.
10.4 No
Waiver; Remedies Cumulative.
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 and the Arrangers (and their respective Affiliates)
in connection with the syndication of the credit facilities provided for herein,
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 any
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 (and their respective Affiliates)
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 the Administrative Agent, each
Lender, and their respective officers, directors, employees, representatives,
agents and Affiliates (each an "Indemnitee") 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
the Administrative Agent or 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 that (x) are determined by a court of competent jurisdiction by
final and nonappealable judgment to have resulted from the gross negligence
or
willful misconduct of such Indemnitee or (y) result from a claim brought by
the Borrower against an Indemnitee for breach in bad faith of such Indemnitee’s
obligations hereunder or under any other Credit Document, if the Borrower has
obtained a final and nonappealable judgment in its favor on such claim as
determined by a court of competent jurisdiction).
In no
event shall the Administrative Agent or any Lender be liable for any damages
arising from the use by others of any information or other materials obtained
through IntraLinks or other similar information transmission systems in
connection with this Credit Agreement, nor shall the Administrative Agent or
any
Lender have any liability for any indirect or consequential damages relating
to
this Credit Agreement or any other Credit Document or arising out of its
activities in connection herewith or therewith (whether before or after the
Closing Date).
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:
(a) no
such
amendment, change, waiver, discharge or termination shall, without the consent
of each Lender directly affected thereby, (i) reduce the rate or extend the
time
of payment of interest (other than as a result of (x) waiving the applicability
of any post-default increase in interest rates or (y) an amendment approved
by
the Required Lenders as set forth in the definition of "Applicable Percentage"
following the withdrawal by S&P and Moody’s of their ratings on the
Borrower’s senior unsecured (non-credit enhanced) long term debt) on any Loan or
fees hereunder, (ii) reduce the rate or extend the time of payment of any fees
owing hereunder, (iii) extend (A) the Commitments of the Lenders, or (B) the
final maturity of any Loan, or any portion thereof, or (iv) reduce the principal
amount on any Loan;
(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, such consent not to be unreasonably withheld;
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.
10.7 Counterparts.
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.
10.8 Headings.
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.
10.9 Survival.
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.
(a) THIS
CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY AND CONSTRUED
AND
INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Any legal
action or proceeding with respect to this Credit Agreement or any other Credit
Document may be brought in the courts of the State of New York in New York
County, or of the United States for the Southern District of New York, and,
by
execution and delivery of this Credit Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. The Borrower
further irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the address
set out for notices pursuant to Section 10.1, such service to become effective
three (3) days after such mailing. Nothing herein shall affect the right of
the
Administrative Agent to serve process in any other manner permitted by law
or to
commence legal proceedings or to otherwise proceed against the Borrower in
any
other jurisdiction.
(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.
10.11 Severability.
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.
10.12 Entirety.
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; Amendment and Restatement of Existing Five-Year Credit Agreement;
Termination.
(a) This
Credit Agreement shall become effective at such time on or after the Closing
Date when it shall have been executed by the Borrower and the Administrative
Agent, and the Administrative Agent shall have received copies hereof (telefaxed
or otherwise) which, when taken together, bear the signatures of each Lender,
and thereafter this Credit Agreement shall be binding upon and inure to the
benefit of the Borrower, the Administrative Agent and each Lender and their
respective successors and assigns. The
Borrower,
the Administrative Agent and the Lenders hereby agree that at such time as
this
Credit Agreement shall have become effective pursuant to the terms of the first
sentence of this Section 10.13(a), (i) the Existing Five-Year Credit Agreement
automatically shall be deemed amended and restated in its entirety by this
Credit Agreement and (ii) all of the promissory notes executed in connection
with the Existing Five-Year Credit Agreement automatically shall be substituted
and replaced by the promissory notes executed in connection with this Credit
Agreement, and the lenders
under the Existing Five-Year Credit Agreement holding such notes agree to
promptly return such prior notes to the Borrower marked
"cancelled".
(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.
10.14 Confidentiality.
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
actual or prospective assignee, participant or counterparty (or its advisors)
to
any swap, hedge, securitization or derivative transaction relating to any of
its
rights or obligations under this Agreement or relating to the Borrower and
its
obligations so long as such actual or prospective assignee, participant or
counterparty (or its advisor) first specifically agrees in a writing furnished
to and for the benefit of the Borrower to be bound by that 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.
10.15 Source
of Funds.
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
used by such Lender in connection with the financing hereunder:
(a) no
part
of such funds constitutes assets allocated to any separate account (as such
term
is defined in Section 3(17) of ERISA) maintained by such Lender in which any
employee benefit plan (or its related trust) has any interest;
(b) the
source is either (i) an insurance company pooled separate account, within
the meaning of Prohibited Transaction Class Exemption ("PTE") 90-1 (issued
by the United States Department of Labor January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of PTE 91-38 (issued
June 12, 1991 and amended by PTE 2002-13 (issued March 1, 2002)), the
requirements of Section III(b) of PTE 90-1 or Section III(b) of PTE 91-38 are
and will continue to be satisfied, and no employee benefit plan or group of
plans maintained by the same employer or employee organization beneficially
owns
more than 10% of all assets allocated to such pooled separate account or
collective investment fund;
(c) the
source is an "insurance company general account" within the meaning of PTE
95-60
(issued July 12, 1995 and amended by PTE 2002-13 (issued March 1,
2002)) and there is no employee benefit plan, treating as a single plan all
plans maintained by the same employer or employee organization, with respect
to
which the amount of the general account reserves and liabilities for all
contracts held by or on behalf of such plan, exceeds ten percent (10%) of the
total reserves and liabilities of such general account (exclusive of separate
account liabilities) plus surplus, as set forth in the NAIC Annual Statement
for
such Lender most recently filed with such Lender's state of
domicile;
(d) the
source constitutes assets of an "investment fund" (within the meaning of Part
V
of PTE 84-14 issued March 13, 1984 and amended by PTE 2002-13 (issued March
1,
2002) (the "QPAM Exemption")) managed by a "qualified professional asset
manager" or "QPAM" (within the meaning of Part V of the QPAM Exemption),
and the applicable conditions of the QPAM Exemption are satisfied;
or
(e) such
funds constitute assets of one or more employee benefit plans which such Lender
has identified in writing to the Borrower.
As
used
in this Section 10.15, the term "employee benefit plan" shall have the
meaning assigned to such term in Section 3(3) of ERISA.
10.16 Conflict.
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.
10.17 USA
PATRIOT Act Notice.
Each
Lender that is subject to the Act (as hereinafter defined) and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies the Borrower that pursuant to the requirements of the USA Patriot
Act
(Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
"Act"),
it is
required to obtain, verify and record information that identifies the Borrower,
which information includes the name and address of the Borrower and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify the Borrower in accordance with the Act.
10.18 No
Advisory or Fiduciary Responsibility.
In
connection with all aspects of each transaction contemplated hereby, the
Borrower acknowledges and agrees that: (i) the credit facility provided
for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other
modification hereof or of any other Credit Document) are an arm’s-length
commercial transaction between the Borrower and its Affiliates,
on the one hand, and the Administrative Agent and the Arrangers, on the other
hand, and the Borrower is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Credit Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, the Administrative Agent and each Arranger
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary, for the Borrower or any of its Affiliates,
stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor either Arranger has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of the Borrower with respect to
any
of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof
or
of any other Credit Document (irrespective of whether the Administrative Agent
or either
Arranger has advised or is currently advising the Borrower or any of
its Affiliates
on other matters) and neither the Administrative Agent nor either Arranger
has
any obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Credit Documents; (iv) the Administrative Agent
and the
Arrangers and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower
and
its Affiliates, and neither the Administrative Agent nor either Arranger has
any
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship arising out of the transactions contemplated hereby;
and (v) the Administrative Agent and Arrangers have not provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any
of
the transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Credit Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate. The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty arising out of the transactions contemplated
hereby.
[Signature
Pages to Follow]
AUTOZONE,
INC.
By:
/s/
James A. Cook III
Name:
James A. Cook III
Title:
Vice President and Treasurer
By:
/s/
Harry L. Goldsmith
Name:
Harry L. Goldsmith
Title:
Executive Vice President, Secretary &
General
Counsel
ADMINISTRATIVE
AGENT: BANK
OF AMERICA, N.A.,
as
Administrative Agent
By:
/s/
Mollie S. Camp
Name:
Mollie S. Camp
Title:
Vice President
LENDERS:
BANK
OF AMERICA,
N.A.,
as
a
Lender
By:
/s/
Dan Killian
Name:
Dan
M. Killian
Title:
Senior Vice President
CITICORP
USA, INC.
By:
/s/
P. Nesbit
Name:
P.
Nesbit
Title:
Director
JPMorgan
Chase Bank, N.A.
By:
/s/
Barry Bergman
Name:
Barry Bergman
Title:
Managing Director
SunTrust
Bank
By:
/s/
Bryan W. Ford
Name:
Bryan
W. Ford
Title:
Director
Wachovia
Bank, National Association
By:
/s/
Anthony D. Braxton
Name:
Anthony D. Braxton
Title:
Director
MERRILL
LYNCH BANK USA
By:
/s/
David Millett
Name:
David Millett
Title:
Vice President
PARIBAS
By:
/s/
Brad Ellis
Name:
Brad Ellis
Title:
Vice President
By:
/s/
Aurora Abella
Name:
Aurora Abella
Title:
Vice
President
KeyBank
National Association
By:
/s/
Marianne T. Meil
Name:
Marianne T. Meil
Title:
Senior Vice president
National
City Bank
By:
/s/
Michael J. Durbin
Name:
Michael J. Durbin
Title:
Senior Vice President
Union
Bank of California, N.A.
By:
/s/
Theresa L. Rocha
Name:
Theresa L. Rocha
Title:
Vice President
[US
Bank National Association]
By:
/s/
Heather Hinkelman
Name:
Heather Hinkelman
Title:
Banking Officer
The
Bank of Tokyo-Mitsubishi UFJ, Ltd.
Houston
Agency
By:
/s/
Douglas M. Barnell
Name:
Douglas M. Barnell
Title:
Vice President & Manager
Calyon
New York Branch
By:
/s/
David P. Cagle
Name:
David P. Cagle
Title:
Managing Director
By:
/s/
Brian Myers
Name:
Brian Myers
Title:
Managing
Director
Fifth
Third Bank
By:
/s/
John K. Perez
Name:
John K. Perez
Title:
Vice President
FORTIS
CAPITAL CORP
By:
/s/
R.L.A. Rutgers van Rozenburg
Name:
R.L.A. Rutgers van Rozenburg
Title:
By:
/s/
Daniel M. Jaffe
Name:
Daniel M. Jaffe
Title:
Vice President
Wells
Fargo Bank, N.A.
By:
/s/
Zach Johnson
Name:
Zach Johnson
Title:
Senior Vice President
Comerica
Bank
By:
/s/
Heather Whiting
Name:
Heather Whiting
Title:
Assistant Vice President
Mizuho
Corporate Bank, Ltd.
By:
/s/
Bertram Tang
Name:
Bertram Tang
Title:
Senior Vice President & Team Leader
AmSouth
Bank
By:
/s/
Elizabeth H. Vaughn
Name:
Elizabeth H. Vaughn
Title:
Vice President
The
Bank of New York
By:
/s/
Scott DeTraglia
Name:
Scott DeTraglia
Title:
Vice President
FIRST
TENNESSEE BANK NATIONAL ASSOCIATION
By:
/s/
Michael S. Roseman
Name:
Michael S. Roseman
Title:
Vice President
The
Northern Trust Company
By:
/s/
Thomas R. Hasenauer
Name:
Thomas R. Hasenauer
Title:
Vice President
BRANCH
BANKING AND TRUST COMPANY
By:
/s/
Roberts A. Bass
Name:
Roberts A. Bass
Title:
Senior Vice President
Capital
One, N.A.
By:
/s/
Julie Nosser
Name:
Julie Nosser
Title:
Assistant Vice President
Computation
of Ratio of Earnings to Fixed Charges
|
|
(unaudited)
|
|
(in
thousands, except ratios)
|
|
|
|
Thirty-six
Weeks Ended
|
|
|
|
May
6,
|
|
May
7,
|
|
|
|
2006
|
|
2005
|
|
Earnings
|
|
|
|
|
|
Income
before income taxes
|
|
$
|
563,813
|
|
$
|
554,835
|
|
Fixed
charges
|
|
|
106,264
|
|
|
99,097
|
|
Less:
Capitalized interest
|
|
|
(1,382
|
)
|
|
(626
|
)
|
Adjusted
earnings
|
|
$
|
668,695
|
|
$
|
653,306
|
|
|
|
|
|
|
|
|
|
Fixed
charges
|
|
|
|
|
|
|
|
Gross
interest expense
|
|
$
|
74,851
|
|
$
|
69,243
|
|
Amortization
of debt expense
|
|
|
1,047
|
|
|
1,829
|
|
Interest
portion of rent expense
|
|
|
30,366
|
|
|
28,025
|
|
Total
fixed charges
|
|
$
|
106,264
|
|
$
|
99,097
|
|
|
|
|
|
|
|
|
|
Ratio
of earnings to fixed charges
|
|
|
6.3
|
|
|
6.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal
Year Ended August
|
|
|
|
2005
|
|
2004
|
|
2003
|
|
2002
|
|
2001*
|
|
|
|
(52
weeks)
|
|
(52
weeks)
|
|
(52
weeks)
|
|
(53
weeks)
|
|
(52
weeks)
|
|
Earnings
|
|
|
|
|
|
|
|
|
|
|
|
Income
before income taxes
|
|
$
|
873,221
|
|
$
|
905,902
|
|
$
|
833,007
|
|
$
|
691,148
|
|
$
|
287,026
|
|
Fixed
charges
|
|
|
144,930
|
|
|
130,278
|
|
|
121,129
|
|
|
98,688
|
|
|
121,141
|
|
Less:
Capitalized interest
|
|
|
(1,079
|
)
|
|
(813
|
)
|
|
(791
|
)
|
|
(437
|
)
|
|
(1,380
|
)
|
Adjusted
earnings
|
|
$
|
1,017,072
|
|
$
|
1,035,367
|
|
$
|
953,345
|
|
$
|
789,399
|
|
$
|
406,787
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fixed
charges
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross
interest expense
|
|
$
|
102,341
|
|
$
|
89,600
|
|
$
|
79,301
|
|
$
|
78,183
|
|
$
|
100,291
|
|
Amortization
of debt expense
|
|
|
2,343
|
|
|
4,230
|
|
|
7,334
|
|
|
2,283
|
|
|
2,377
|
|
Interest
portion of rent expense
|
|
|
40,246
|
|
|
36,448
|
|
|
34,494
|
|
|
18,222
|
|
|
18,473
|
|
Total
fixed charges
|
|
$
|
144,930
|
|
$
|
130,278
|
|
$
|
121,129
|
|
$
|
98,688
|
|
$
|
121,141
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ratio
of earnings to fixed charges
|
|
|
7.0
|
|
|
7.9
|
|
|
7.9
|
|
|
8.0
|
|
|
3.4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*Fiscal
2001 includes the impact of the pre-tax restructuring and impairment
charges of $156.8 million.
|
Exhibit
15.1
The
Board
of Directors and Stockholders
AutoZone,
Inc.
We
are
aware of the incorporation by reference in the following Registration Statements
of AutoZone, Inc. and in the related Prospectuses of our report dated June
6,
2006, related to the unaudited condensed consolidated financial statements
of
AutoZone, Inc. that are included in its Form 10-Q for the quarter ended May
6,
2006:
Registration
Statement (Form S-8 No. 333-19561) pertaining to the AutoZone, Inc. 1996 Stock
Option Plan
Registration
Statement (Form S-8 No. 333-42797) pertaining to the AutoZone, Inc. Amended
and
Restated Employee Stock Purchase Plan
Registration
Statement (Form S-8 No. 333-48981) pertaining to the AutoZone, Inc. 1998
Director Stock Option Plan
Registration
Statement (Form S-8 No. 333-48979) pertaining to the AutoZone, Inc. 1998
Director Compensation Plan
Registration
Statement (Form S-3 No. 333-58565) pertaining to the registration to sell $200
million of debt securities
Registration
Statement (Form S-8 No. 333-88245) pertaining to the AutoZone, Inc. Second
Amended and Restated 1996 Stock Option Plan
Registration
Statement (Form S-8 No. 333-88243) pertaining to the AutoZone, Inc. Amended
and
Restated 1998 Director Stock Option Plan
Registration
Statement (Form S-8 No. 333-88241) pertaining to the AutoZone, Inc. Amended
and
Restated Director Compensation Plan
Registration
Statement (Form S-8 No. 333-75142) pertaining to the AutoZone, Inc. Third
Amended and Restated 1998 Director Stock Option Plan
Registration
Statement (Form S-8 No. 333-75140) pertaining to the AutoZone, Inc. Executive
Stock Purchase Plan
Registration
Statement (Form S-3 No. 333-83436) pertaining to a shelf registration to sell
15,000,000 shares of common stock owned by certain selling
stockholders
Registration
Statement (Form S-3 No. 333-100205) pertaining to a registration to sell $500
million of debt securities
Registration
Statement (Form S-8 No. 333-103665) pertaining to the AutoZone, Inc. 2003
Director Compensation Plan
Registration
Statement (Form S-8 No. 333-103666) pertaining to the AutoZone, Inc. 2003
Director Stock Option Plan
Registration
Statement (Form S-3 No. 333-107828) pertaining to a registration to sell $500
million of debt securities
Registration
Statement (Form S-3 No. 333-118308) pertaining to the shelf registration to
sell
$300 million of debt securities
/s/
Ernst
& Young LLP
Memphis,
Tennessee
June
6,
2006
Exhibit
31.1
CERTIFICATION
PURSUANT TO
RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF
1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002
I,
William C. Rhodes, III, certify that:
1.
|
I
have reviewed this Quarterly Report on Form 10-Q of AutoZone, Inc.
(“registrant”);
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4.
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case
of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based
on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information; and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
June 7, 2006 |
|
|
|
|
|
|
|
/s/
WILLIAM C. RHODES, III |
|
|
William C. Rhodes, III |
|
|
President and Chief Executive
Officer |
|
|
(Principal Executive
Officer) |
|
|
|
Exhibit
31.2
CERTIFICATION
PURSUANT TO
RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF
1934,
AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF
2002
I,
William T. Giles, certify that:
1.
|
I
have reviewed this Quarterly Report on Form 10-Q of AutoZone, Inc.
(“registrant”);
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement
of a
material fact or omit to state a material fact necessary to make
the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects
the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
|
4.
|
The
registrant's other certifying officer(s) and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
(a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is
being
prepared;
|
|
(b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision,
to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness
of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case
of an
annual report) that has materially affected, or is reasonably likely
to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer(s) and I have disclosed, based
on
our most recent evaluation of internal control over financial reporting,
to the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent functions):
|
|
(a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record,
process, summarize and report financial information; and
|
|
(b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control
over financial reporting.
|
June 7, 2006 |
|
|
|
|
|
|
|
/s/ WILLIAM T. GILES |
|
|
William T. Giles |
|
|
Executive Vice President
and Chief Financial Officer |
|
|
(Principal Financial
Officer) |
|
|
|
Exhibit
32.1
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of AutoZone, Inc. (the “Company”) on Form
10-Q for the period ended May 6, 2006, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, William C. Rhodes, III,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
906
of the Sarbanes-Oxley Act of 2002, that:
|
(i)
|
the
Report fully complies with the requirements of Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934;
and
|
|
(ii)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
June 7, 2006 |
|
|
|
|
|
|
|
/s/
WILLIAM C. RHODES, III |
|
|
William C. Rhodes, III |
|
|
President and Chief Executive
Officer |
|
|
(Principal Executive
Officer) |
|
|
|
Exhibit
32.2
CERTIFICATION
PURSUANT TO
18
U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO
SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002
In
connection with the Quarterly Report of AutoZone, Inc. (the “Company”) on Form
10-Q for the period ended May 6, 2006, as filed with the Securities and Exchange
Commission on the date hereof (the “Report”), I, William T. Giles, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that:
|
(i)
|
the
Report fully complies with the requirements of Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934;
and
|
|
(ii)
|
the
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
Company.
|
June 7, 2006 |
|
|
|
|
|
|
|
/s/ WILLIAM T. GILES |
|
|
William T. Giles |
|
|
Executive Vice President
and Chief Financial Officer |
|
|
(Principal Financial
Officer) |
|
|
|