FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended November 21, 1998, or
[ ] 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
(not applicable)
Former name, former address and former fiscal year, if changed since last
report.
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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date.
Common Stock, $.01 Par Value - 149,995,940 shares as of December 31, 1998.
<PAGE>
PART I. ITEM 1.
AUTOZONE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
Nov. 21, Aug. 29,
1998 1998
-------- --------
(Unaudited)
(in thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 7,060 $ 6,631
Accounts receivable 39,735 42,252
Merchandise inventories 1,004,976 966,560
Prepaid expenses 33,161 37,532
Deferred income taxes 53,089 61,964
Income taxes receivable 2,151
--------- ---------
Total current assets 1,138,021 1,117,090
Property and equipment:
Property and equipment 1,941,230 1,778,485
Less accumulated depreciation and amortization 366,693 350,979
--------- ---------
1,574,537 1,427,506
Other assets:
Cost in excess of net assets acquired 180,245 181,315
Deferred income taxes 22,084 3,510
Other assets 25,360 18,692
------- ------
227,689 203,517
------- -------
$ 2,940,247 $ 2,748,113
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 659,926 $ 683,372
Accrued expenses 159,347 176,457
Income taxes payable 35,110
------- -------
Total current liabilities 854,383 859,829
Long-term debt 745,091 545,067
Other liabilities 37,170 41,160
Stockholders' equity 1,303,603 1,302,057
--------- -----------
$ 2,940,247 $ 2,748,113
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Twelve Weeks Ended
--------------------------------
Nov. 21, Nov. 22,
1998 1997
-------- --------
(in thousands, except per share amounts)
<S> <C> <C>
Net sales $ 900,949 $ 675,274
Cost of sales, including
warehouse and delivery expenses 524,467 394,833
Operating, selling, general and
administrative expenses 286,667 201,793
------- -------
Operating profit 89,815 78,648
Interest expense 8,515 2,502
------ ------
Income before income taxes 81,300 76,146
Income taxes 30,000 28,600
------ ------
Net income $ 51,300 $ 47,546
========== ========
Weighted average shares
for basic earnings per share 150,762 151,697
Effect of dilutive stock options 806 2,126
------ -------
Adjusted weighted average shares
for diluted earnings per share 151,568 153,823
======= =======
Basic earnings per share $ 0.34 $ 0.31
====== ======
Diluted earnings per share $ 0.34 $ 0.31
====== ======
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
AUTOZONE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Twelve Weeks Ended
---------------------------------
Nov. 21, Nov. 22,
1998 1997
-------- --------
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 51,300 $ 47,546
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 28,264 19,630
Net increase in merchandise inventories (38,416) (15,413)
Net increase in current liabilities 13,240 10,450
Other - net (13,486) (5,755)
-------- -------
Net cash provided by operating activities 40,902 56,458
Cash flows from investing activities:
Cash outflows for property
and equipment, net (190,743) (70,373)
Cash flows from financing activities:
Net proceeds from debt 200,024 4,600
Purchase of Treasury Stock (50,300)
Proceeds from sale of Common Stock, including
related tax benefit 546 9,012
------- ------
Net cash provided by financing activities 150,270 13,612
------- ------
Net increase (decrease) in cash and cash equivalents 429 (303)
Cash and cash equivalents at beginning of period 6,631 4,668
------- ------
Cash and cash equivalents at end of period $ 7,060 $ 4,365
=========== ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
<PAGE>
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 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 generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. Operating
results for the twelve weeks ended November 21, 1998, are not necessarily
indicative of the results that may be expected for the fiscal year ending
August 28, 1999. For further information, refer to the financial statements
and footnotes included in the Company's annual report on Form 10-K for the
year ended August 29, 1998.
NOTE B--INVENTORIES
Inventories are stated at the lower of cost or market using the last-
in, first-out (LIFO) method. An actual valuation of inventory under the
LIFO method can be made only at the end of each year based on the inventory
levels and costs at that time. Accordingly, interim LIFO calculations must
necessarily be based on management's estimates of expected year-end
inventory levels and costs.
NOTE C-FINANCING ARRANGEMENTS
The Company's long-term debt as of November 21, 1998 and August 29,
1998 consisted of the following:
NOV. 21, Aug. 29,
1998 1998
------ --------
6.5% Debentures due July 15, 2008 $200,000 $200,000
6% Notes due November 1, 2003 150,000
Commercial Paper, 5.7% weighted
average rate 10,868 305,000
Unsecured bank loan, floating
interest rate averaging 5.4%
at November 21, 1998 and 5.8%
at August 29, 1998 378,500 34,050
Other 5,723 6,017
------- ------
$745,091 $545,067
In October 1998, the Company sold $150 million of 6% Notes due
November 2003 at a discount. Interest on the Notes is payable semi-
annually on May 1 and November 1 each year, beginning May 1, 1999. In July
1998, the Company sold $200 million of 6.5% Debentures due July 2008 at a
discount. Interest on the Debentures is payable semi-annually on January
15 and July 15 of each year, beginning January 15, 1999. Proceeds from the
Notes and Debentures were used to repay portions of the Company's long-term
variable rate bank debt and for general corporate purposes.
The Company has a commercial paper program that allows borrowing up to
$500 million. In connection with the program, the Company has a credit
facility with a group of banks for up to $350 million which extends until
December 2001 and a 364-day $150 million credit facility with another group
of banks. The 364-day facility includes a renewal feature as well as an
option to extinguish the outstanding debt one year from the maturity date.
Borrowings under the commercial paper program reduce availability under the
credit facilities. Outstanding commercial paper and revolver borrowings at
November 21, 1998 are classified as long-term debt as it is the Company's
intention to refinance them on a long-term basis.
Additionally, the Company has a credit facility with a bank for up to
$150 million which extends until May 1999. The Company also has a
negotiated rate unsecured revolving credit agreement totaling $25 million
which extends until March 1999. There were no amounts outstanding under
these agreements at November 21, 1998.
The rate of interest payable under the revolving credit agreements is
a function of the London Interbank Offered Rate (LIBOR) or the lending
bank's base rate (as defined in the agreement) at the option of the
Company. In addition, the $350 million credit facility contains a
competitive bid rate option. All of the revolving credit facilities
contain a covenant limiting the amount of debt the Company may incur
relative to its total capitalization.
NOTE D-STOCKHOLDERS' EQUITY
The Company presents basic and diluted earnings per share (EPS) in
accordance with the Statement of Financial Accounting Standards No. 128,
"Earnings Per Share." Basic EPS is computed as net earnings divided by the
weighted-average number of common shares outstanding for the period.
Diluted EPS reflects the potential dilution that could occur from common
shares issuable through stock-based compensation including stock options.
In October 1998, the Company announced Board approval to repurchase up
to $150 million of common stock in the open market. This is in addition to
the $100 million repurchase approved in January 1998. Since January 1998,
approximately $79 million of common stock has been repurchased under the
plan.
NOTE E-COMPREHENSIVE INCOME
As of August 30, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income". This
statement establishes standards for reporting and display of comprehensive
income and its components. Comprehensive income is net income, plus
certain other items that are recorded directly to stockholders' equity,
bypassing net income. There are no such items currently applicable to the
Company and therefore comprehensive income for the periods presented equals
net income.
The adoption of this Statement had no effect on the Company's results
of operations or financial position.
NOTE F-CONTINGENCIES
Chief Auto Parts Inc., a wholly owned subsidiary of the Company, is a
defendant in a class action lawsuit entitled "Doug Winfrey, et al. on their
own behalf and on behalf of a class and all others similarly situated, v.
Chief Auto Parts Inc. et al.," filed in the Superior Court of California,
County of San Joaquin on August 22, 1995 and then transferred to The
Superior Court of California, County of San Francisco on October 26, 1995.
The Superior Court denied the plaintiff's motion for class certification on
December 7, 1996. On February 6, 1998, the Court of Appeals reversed the
Superior Court's order denying class certification and remanded the case to
the Superior Court for further proceedings. On November 16, 1998 the
Superior Court certified the class as all persons considered by Chief to be
non-exempt hourly employees who, from August 22, 1991 to the present,
either work or did work in one of Chief's California retail stores, in
excess of total work time of three and one-half (3.5) hours in any one work
day and who were denied an off-duty rest break.
In the complaint, the plaintiffs allege that Chief had a policy and
practice of denying hourly employees in California mandated rest periods
during their scheduled hours of work. The plaintiffs are seeking damages,
restitution, disgorgement of profits, statutory penalties, declaratory
relief, injunctive relief, prejudgment interest, and reasonable attorneys'
fees, expenses and costs. Management is unable to predict the outcome of
this lawsuit at this time. The Company believes that the potential damages
recoverable by any single plaintiff against Chief are minimal. However, if
the plaintiff class were to prevail on all their claims, the amount of
damages could be substantial. The Company is vigorously defending against
this action.
AutoZone, Inc., is a defendant in a lawsuit entitled "Melvin Quinnie
and Zachery P. Brown on behalf of all other similarly situated v. AutoZone,
Inc., and DOES 1 through 100, inclusive" filed in the Superior Court of
California, County of Los Angeles, on November 13, 1998. The plaintiffs
claim that the defendants failed to pay overtime to store managers as
required by California law and failed to pay terminated managers in a
timely manner as required by California law. The plaintiffs are seeking
injunctive relief, restitution, statutory penalties, prejudgment interest,
and reasonable attorneys' fees, expenses and costs. Management is unable to
predict the outcome of this lawsuit at this time. The Company is vigorously
defending against this action.
The Company currently, and from time to time, is involved in various
legal proceedings incidental to the conduct of its business. Although the
amount of liability that may result from these proceedings cannot be
ascertained, the Company does not currently believe that, in the aggregate,
they will result in liabilities material to the Company's financial
condition or results of operations.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
TWELVE WEEKS ENDED NOVEMBER 21, 1998, COMPARED TO
TWELVE WEEKS ENDED NOVEMBER 22, 1997
Net sales for the twelve weeks ended November 21, 1998 increased by
$225.7 million, or 33.4%, over net sales for the comparable period of
fiscal 1998. This increase was due to a comparable store sales increase of
3%, and increases in net sales for stores opened or acquired since the
beginning of fiscal 1998. At November 21, 1998 the Company had 2,623
stores in operation compared with 1,772 stores at November 22, 1997.
Gross profit for the twelve weeks ended November 21, 1998, was $376.5
million, or 41.8% of net sales, compared with $280.4 million, or 41.5% of
net sales, during the comparable period for fiscal 1998. The increase in
the gross profit percentage was due primarily to higher battery and
commodity gross margins.
Operating, selling, general and administrative expenses for the twelve
weeks ended November 21, 1998 increased by $84.9 million over such expenses
for the comparable period for fiscal 1998, and increased as a percentage of
net sales from 29.9% to 31.8%. The increase in the expense ratio was due
primarily to higher payroll and occupancy costs, primarily in recently
acquired stores, and acquisition integration activities.
Interest expense for the twelve weeks ended November 21, 1998 was $8.5
million compared with $2.5 million during the comparable period of 1998.
The increase in interest expense was primarily due to higher levels of
borrowings as a result of the acquisitions.
The Company's effective income tax rate was 36.9% of pre-tax income
for the twelve weeks ended November 21, 1998 and 37.6 % for the twelve
weeks ended November 22, 1997.
LIQUIDITY AND CAPITAL RESOURCES
For the twelve weeks ended November 21, 1998, net cash of $40.9
million was provided by the Company's operations versus $56.5 million for
the comparable period of fiscal year 1998. The comparative decrease in cash
provided by operations was due primarily to increased inventory
requirements for new store expansion in comparison to the twelve weeks
ended November 22, 1997.
Capital expenditures for the twelve weeks ended November 21, 1998 were
$190.7 million, including approximately $108 million for the acquisition of
real estate for 100 Express auto parts store locations from Pep Boys. Year-
to-date, the Company opened 63 net new auto parts stores including 3 stores
that replaced existing stores. Additionally, the Company closed 97 auto
parts stores in conjunction with its acquisition integration activities.
The Express locations were not open at the end of the quarter and therefore
not included in the store count. These stores will be remodeled and opened
during the second and third quarters of fiscal 1999. The Company expects
to operate between 2,800 and 2,850 auto parts stores at the end of the
fiscal year.
The Company anticipates that it will continue to generate significant
operating cash flow. The Company foresees no difficulty in obtaining long-
term financing in view of its credit rating and favorable experiences in
the debt market in the past.
In October 1998, the Company sold $150 million of 6% Notes due
November 2003 at a discount. Interest on the Notes is payable semi-
annually on May 1 and November 1 each year, beginning May 1, 1999. In July
1998, the Company sold $200 million of 6.5% Debentures due July 2008 at a
discount. Interest on the Debentures is payable semi-annually on January
15 and July 15 of each year, beginning January 15, 1999. Proceeds from the
Notes and Debentures were used to repay portions of the Company's long-term
variable rate bank debt and for general corporate purposes.
The Company has a commercial paper program that allows borrowing up to
$500 million. In connection with the program, the Company has a credit
facility with a group of banks for up to $350 million which extends until
December 2001 and a 364-day $150 million credit facility with another group
of banks. The 364-day facility includes a renewal feature as well as an
option to extinguish the outstanding debt one year from the maturity date.
Borrowings under the commercial paper program reduce availability under the
credit facilities. At November 21, 1998, the Company had total commercial
paper and revolving credit borrowings of $389.4 million. Outstanding
commercial paper and revolver borrowings at November 21, 1998 are
classified as long-term debt as it is the Company's intention to refinance
them on a long-term basis.
Additionally, the Company has a credit facility with a bank for up to
$150 million which extends until May 1999. The Company also has a
negotiated rate unsecured revolving credit agreement totaling $25 million
which extends until March 1999. At November 21, 1998, there were no amounts
outstanding under these agreements.
ACCOUNTING PRONOUNCEMENTS
In March 1998, the Accounting Standards Executive Committee (AcSEC)
issued Statement of Position (SOP) 98-1, "Accounting For the Costs of
Computer Software Developed For or Obtained For Internal-Use." The Company
adopted this SOP beginning August 30, 1998. The SOP will require the
capitalization of certain costs incurred in connection with developing or
obtaining software for internal-use. Currently, costs related to
developing internal-use software are expensed as incurred. The adoption of
SOP 98-1 is not anticipated to have a material impact on the Company's
results of operations or financial position.
YEAR 2000 READINESS DISCLOSURE
The Company began addressing the Year 2000 issue in June 1996 and
implemented a formal Year 2000 project office in May 1997. As of November
21, 1998 the Company anticipates completing the conversion and testing of
all known programs by July 31, 1999.
The total estimated cost of the Year 2000 project is $12 million,
which is being expensed as incurred. All of the related costs are being
funded through operating cash flows. These costs are less than 10% of the
overall information technology budget. No major information technology
projects or programs have been deferred.
In addition to internal activities, the Company is addressing Year
2000 issues which do not normally fall under information technology such as
embedded chip equipment and the compliance status of business partners.
Although the Company believes that the ongoing assessment and testing will
minimize the Company's risks, there is no guarantee that there will not be
an adverse effect on the Company if third parties, such as merchandise
vendors, service providers, or utility companies are not Year 2000
compliant.
Although the Company does not anticipate any major business
disruptions as a result of Year 2000 issues, it is possible that certain
disruptions may occur including loss of communications with stores,
distribution centers, or business partners; inability to process
transactions in a timely manner or loss of power. The Company is currently
developing contingency plans, which should be finalized by July 31, 1999.
Elements of the Company's contingency plans may include: switching vendors,
back-up systems, or manual processes, and the stockpiling of certain
products prior to the Year 2000.
The cost of conversion and the completion date are based on
management's best estimates and may be updated as additional information
becomes available.
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Quarterly Report on Form 10-Q are
forward-looking statements. These statements discuss, among other things,
expected growth, domestic and international development and expansion
strategy, and future performance. The forward-looking statements are
subject to risks, uncertainties and assumptions including, without
limitation, competition, product demand, the domestic and international
economies, government regulations and approvals, inflation, the ability to
hire and retain qualified employees, the ability to convert acquired stores
in a profitable and timely manner, consumer debt levels and the weather.
Actual results may materially differ from anticipated results. Please
refer to the Risk Factors section in the Annual Report on Form 10-K for
fiscal year ended August 29, 1998, for more details.
PART II. OTHER INFORMATION
Item 1. Legal Proceeding
Chief Auto Parts Inc., a wholly owned subsidiary of the Company, is a
defendant in a class action lawsuit entitled "Doug Winfrey, et al. on their
own behalf and on behalf of a class and all others similarly situated, v.
Chief Auto Parts Inc. et al.," filed in the Superior Court of California,
County of San Joaquin on August 22, 1995 and then transferred to The
Superior Court of California, County of San Francisco on October 26, 1995.
The Superior Court denied the plaintiff's motion for class certification on
December 7, 1996. On February 6, 1998, the Court of Appeals reversed the
Superior Court's order denying class certification and remanded the case to
the Superior Court for further proceedings. On November 16, 1998 the
Superior Court certified the class as all persons considered by Chief to be
non-exempt hourly employees who, from August 22, 1991 to the present,
either work or did work in one of Chief's California retail stores, in
excess of total work time of three and one-half (3.5) hours in any one work
day and who were denied an off-duty rest break.
In the complaint, t he plaintiffs allege that Chief had a policy and
practice of denying hourly employees in California mandated rest periods
during their scheduled hours of work. The plaintiffs are seeking damages,
restitution, disgorgement of profits, statutory penalties, declaratory
relief, injunctive relief, prejudgment interest, and reasonable attorneys'
fees, expenses and costs. Management is unable to predict the outcome of
this lawsuit at this time. The Company believes that the potential damages
recoverable by any single plaintiff against Chief are minimal. However, if
the plaintiff class were to prevail on all their claims, the amount of
damages could be substantial. The Company is vigorously defending against
this action.
AutoZone, Inc., is a defendant in a lawsuit entitled "Melvin Quinnie
and Zachery P. Brown on behalf of all other similarly situated v. AutoZone,
Inc., and DOES 1 through 100, inclusive" filed in the Superior Court of
California, County of Los Angeles, on November 13, 1998. The plaintiffs
claim that the defendants failed to pay overtime to store managers as
required by California law and failed to pay terminated managers in a
timely manner as required by California law. The plaintiffs are seeking
injunctive relief, restitution, statutory penalties, prejudgment interest,
and reasonable attorneys' fees, expenses and costs. Management is unable to
predict the outcome of this lawsuit at this time. The Company is vigorously
defending against this action.
The Company currently, and from time to time, is involved in various
legal proceedings incidental to the conduct of its business. Although the
amount of liability that may result from these proceedings cannot be
ascertained, the Company does not currently believe that, in the aggregate,
they will result in liabilities material to the Company's financial
condition or results of operations.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibits are filed as part of this report:
3.1 Articles of Incorporation of AutoZone, Inc. Incorporated by
reference to Exhibit 3.1 to the Form 10-K for the fiscal year
ended August 27, 1994.
3.2 Amendment to Articles of Incorporation of AutoZone, Inc., dated
December 16, 1993, to increase its authorized shares of common
stock to 200,000,000. Incorporated by reference to Exhibit 3.2 to
the Form 10-K for the fiscal year ended August 27, 1994.
3.3 Amended and Restated By-laws of AutoZone, Inc. Incorporated by
reference to Exhibit 3.3 to the Form 10-K for the fiscal year
ended August 29, 1998.
10.1 Credit Agreement among AutoZone, Inc., as Borrower, the several
lenders from time to time party thereto, NationsBank, N.A., as
Agent, and SunTrust Bank, Nashville, N.A. as Co-Agent, dated
December 20, 1996. Incorporated by reference to the Form 10-Q for
the quarter ended February 15, 1997.
10.2 Amendment No. 1, dated February 10, 1998, to Credit Agreement
among AutoZone, Inc., as Borrower, the several lenders from time
to time party thereto, NationsBank, N.A., as Agent, and SunTrust
Bank, Nashville, N.A. as Co-Agent, dated December 20, 1996.
Incorporated by reference to Exhibit 10.2 to the Form 10-Q for
the quarter ended February 14, 1998.
10.3 Amendment No. 2 to Credit Agreement among AutoZone, Inc., as
Borrower, the several lenders from time to time party thereto,
NationsBank, N.A., as Agent and SunTrust Bank, Nashville, N.A.,
as Co-Agent, dated November 13, 1998.
10.4 Credit Agreement, dated October 20, 1998, between AutoZone, Inc.,
as Borrower, the several lenders from time to time party thereto,
and NationsBank, N.A., as Agent.
10.5 Credit Agreement, dated November 13, 1998, between AutoZone,
Inc., as Borrower, the several lenders from time to time party
thereto, NationsBank, N.A., as Agent, and SunTrust Bank,
Nashville, N.A., as Documentation Agent.
27.1 Financial Data Schedule (SEC Use Only).
(b) On October 21, 1998, the Company filed a Current Report on Form 8-K
to (a) file its audited financial statements for the fiscal year ended
August 29, 1998, and (b) announce that its Board of Directors had approved
repurchasing an additional $150 million of the Company's common stock
<PAGE>
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/ ROBERT J. HUNT
----------------------
Robert J. Hunt
Executive Vice President and
Chief Financial Officer-Customer Satisfaction
(Principal Financial Officer)
By: /S/ MICHAEL E. BUTTERICK
------------------------
Michael E. Butterick
Vice President, Controller-Customer Satisfaction
(Principal Accounting Officer)
Dated: January 5, 1999
<PAGE>
EXHIBIT INDEX
3.1 Articles of Incorporation of AutoZone, Inc. Incorporated by reference
to Exhibit 3.1 to the Form 10-K for the fiscal year ended August 27,
1994.
3.2 Amendment to Articles of Incorporation of AutoZone, Inc., dated
December 16, 1993, to increase its authorized shares of common stock
to 200,000,000. Incorporated by reference to Exhibit 3.2 to the Form
10-K for the fiscal year ended August 27, 1994.
3.3 Amended and Restated By-laws of AutoZone, Inc. Incorporated by
reference to Exhibit 3.3 to the Form 10-K for the fiscal year ended
August 29, 1998.
10.1 Credit Agreement among AutoZone, Inc., as Borrower, the several
lenders from time to time party thereto, NationsBank, N.A., as Agent,
and SunTrust Bank, Nashville, N.A. as Co-Agent, dated December 20,
1996. Incorporated by reference to the Form 10-Q for the quarter ended
February 15, 1997.
10.2 Amendment No. 1, dated February 10, 1998, to Credit Agreement among
AutoZone, Inc., as Borrower, the several lenders from time to time
party thereto, NationsBank, N.A., as Agent, and SunTrust Bank,
Nashville, N.A. as Co-Agent, dated December 20, 1996. Incorporated by
reference to Exhibit 10.2 to the Form 10-Q for the quarter ended
February 14, 1998.
10.3 Amendment No. 2 to Credit Agreement among AutoZone, Inc., as Borrower,
the several lenders from time to time party thereto, NationsBank,
N.A., as Agent and SunTrust Bank, Nashville, N.A., as Co-Agent, dated
November 13, 1998.
10.4 Credit Agreement, dated October 20, 1998, between AutoZone, Inc., as
Borrower, the several lenders from time to time party thereto, and
NationsBank, N.A., as Agent.
10.5 Credit Agreement, dated November 13, 1998, between AutoZone, Inc., as
Borrower, the several lenders from time to time party thereto,
NationsBank, N.A., as Agent, and SunTrust Bank, Nashville, N.A., as
Documentation Agent.
27.1 Financial Data Schedule (SEC Use Only).
EXHIBIT 10.3
AMENDMENT NO. 2 TO CREDIT AGREEMENT
THIS AMENDMENT AGREEMENT (this "AMENDMENT NO. 2"), dated as of
November 13, 1998, among AUTOZONE, INC., a Nevada corporation (the
"BORROWER"), the various lending institutions parties hereto (each a
"Lender" and collectively, the "LENDERS"), and NATIONSBANK, N.A., a
national Lending association, as agent for the Lenders (in such capacity,
the "AGENT");
W I T N E S S E T H:
WHEREAS, the Borrower, the Lenders and the Agent are parties to that
certain Credit Agreement, dated as of December 20, 1996, as previously
amended as of February 10, 1998 (the "EXISTING CREDIT AGREEMENT"); and
WHEREAS, the Borrower, the Lenders and the Agent have agreed to
execute this Amendment No. 2 for the purposes set forth herein;
NOW, THEREFORE, in consideration of the agreements herein contained,
the parties hereby agree as follows:
PART I
DEFINITIONS
SUBPART 1.1. CERTAIN DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment No. 2,
including its preamble and recitals, have the following meanings (such
meanings to be equally applicable to the singular and plural forms
thereof):
"AMENDED CREDIT AGREEMENT" means the Existing Credit Agreement as
amended hereby.
"AMENDMENT NO. 2 EFFECTIVE DATE" is defined in SUBPART 2.1.
SUBPART 1.2. OTHER DEFINITIONS. Unless otherwise defined herein or
the context otherwise requires, terms used in this Amendment No. 2,
including its preamble and recitals, have the meanings provided in the
Amended Credit Agreement.
PART II
AMENDMENTS TO EXISTING CREDIT AGREEMENT
Effective on (and subject to the occurrence of) the Amendment No. 2
Effective Date, the Existing Credit Agreement is hereby amended in
accordance with this PART II. Except as so amended, the Existing Credit
Agreement, the Notes and the other Credit Documents shall continue in full
force and effect.
SUBPART 2.1 AMENDMENTS TO SECTION 1. Section 1 of the Existing
Credit Agreement is hereby amended by inserting, in the alphabetically
appropriate place, the following definitions:
"AMENDMENT NO. 2" means Amendment No. 2 to Credit Agreement,
dated as of November 13, 1998, among the Borrower, the Agent and
the Lenders, amending this Credit Agreement as then in effect.
SUBPART 2.2 AMENDMENTS TO SECTION 6.10. SECTION 6.10 is amended by
deleting the reference to "0.45:1.00" contained therein and replacing it
with a reference to "0.50:1.00".
PART III
CONDITIONS TO EFFECTIVENESS
SUBPART 3.1. AMENDMENT NO. 2 EFFECTIVE DATE. This Amendment shall be
and become effective on such date (the "AMENDMENT NO. 2 EFFECTIVE DATE") on
or prior to November 13, 1998, when all of the conditions set forth in this
SUBPART 3.1 shall have been satisfied, and thereafter, this Amendment No. 2
shall be known, and may be referred to, as "Amendment No. 2."
SUBPART 3.1.1. EXECUTION OF COUNTERPARTS. The Agent shall have
received counterparts of this Amendment No. 2, each of which shall have
been duly executed on behalf of the Borrower, the Agent and the Required
Lenders.
SUBPART 3.1.2. LEGAL DETAILS, ETC. All documents executed or submitted
pursuant hereto shall be reasonably satisfactory in form and substance to
the Agent and its counsel. The Agent and its counsel shall have received
all information, and such counterpart originals or such certified or other
copies of such originals, as the Agent or its counsel may reasonably
request, and all legal matters incident to the transactions contemplated by
this Amendment No. 2 shall be reasonably satisfactory to the Agent and its
counsel.
PART IV
MISCELLANEOUS
SUBPART 4.1 CROSS-REFERENCES. References in this Amendment No. 2 to
any Part or Subpart are, unless otherwise specified, to such Part or
Subpart of this Amendment No. 2.
SUBPART 4.2 INSTRUMENT PURSUANT TO EXISTING CREDIT AGREEMENT. This
Amendment No. 2 is a document executed pursuant to the Existing Credit
Agreement and shall (unless otherwise expressly indicated therein) be
construed, administered and applied in accordance with the terms and
provisions of the Existing Credit Agreement.
SUBPART 4.3 CREDIT DOCUMENTS. The Borrower hereby confirms and
agrees that the Credit Documents are, and shall continue to be, in full
force and effect, and hereby ratifies and confirms in all respects its
obligations thereunder, except that, upon the effectiveness of, and on and
after the date of, this Amendment No. 2, all references in each Credit
Document to the "Credit Agreement", "thereunder", "thereof" or words of
like import referring to the Existing Credit Agreement shall mean the
Amended Credit Agreement.
SUBPART 4.4 COUNTERPARTS, EFFECTIVENESS, ETC. This Amendment No. 2
may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SUBPART 4.5 GOVERNING LAW; ENTIRE AGREEMENT. THIS AMENDMENT NO. 2
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NORTH CAROLINA WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAW PRINCIPLES THEREOF.
SUBPART 4.6 SUCCESSORS AND ASSIGNS. This Amendment No. 2 shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SUBPART 4.7 REPRESENTATIONS AND WARRANTIES. The Borrower represents
and warrants to the Agent and the Lenders that (i) the representations and
warranties made in Section 5 of the Existing Credit Agreement are true and
correct on and as of the Amendment No. 2 Effective Date as though made on
such date and (ii) no Default or Event of Default has occurred and remains
uncured as of the Amendment No. 2 Effective Date.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No.
2 to be executed by their respective duly authorized officers as of the day
and year first above written.
AUTOZONE, INC.
By /s/ HARRY L. GOLDSMITH
------------------------
Title SENIOR VICE PRESIDENT
----------------------
By /s/ ROBERT J. HUNT
------------------------
Title EVP, CFO
----------------------
NATIONSBANK, N.A.,
in its capacity as Agent and
in its individual capacity
as a Lender
By /s/ JOHN E. BALL
-------------------------
Title SVP
-----------------------
SUNTRUST BANK, NASHVILLE, N.A.,
individually in its capacity as a Lender
and in its capacity as Co-Agent
By /s/ BRYAN W. FORD
---------------------------
Title VICE PRESIDENT
------------------------
BANK OF AMERICA ILLINOIS
By /s/ JOHN E. BALL
---------------------------
Title SVP
------------------------
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ JOHN D. RUNGER
---------------------------
John D. Runger
Title MANAGING DIRECTOR
------------------------
FIRST UNION NATIONAL BANK
By /s/ ORVILLE KRONK
---------------------------
Title VP
------------------------
FIRST TENNESSEE BANK NATIONAL
ASSOCIATION
By /s/ JAMES H. MOORE, JR.
---------------------------
Title VICE PRESIDENT
------------------------
UNION PLANTERS BANK, N.A.
By /s/ LEONARD MCKINNEY
---------------------------
Title SR. VICE PRESIDENT
------------------------
EXHIBIT 10.4
CREDIT AGREEMENT
Dated as of October 20, 1998
among
AUTOZONE, INC.,
as Borrower,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N.A.,
as Agent
<PAGE>
TABLE OF CONTENTS
SECTION 1 DEFINITIONS 1
1.1 Definitions. 1
1.2 Incorporated Definitions. 4
1.3 Computation of Time Periods. 5
1.4 Accounting Terms. 5
SECTION 2 CREDIT FACILITY 5
2.1 Loans. 5
2.2 [intentionally left blank] 7
2.3 [intentionally left blank] 7
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITY 7
3.1 Default Rate. 7
3.2 Extension and Conversion. 7
3.3 Prepayments. 8
3.4 Termination, Reduction and Increase of Committed Amount. 9
3.5 Facility Fee. 9
3.6 Capital Adequacy. 9
3.7 Inability To Determine Interest Rate. 10
3.8 Illegality. 10
3.9 Yield Protection. 11
3.10 Withholding Tax Exemption. 11
3.11 Indemnity. 13
3.12 Pro Rata Treatment. 13
3.13 Sharing of Payments. 14
3.14 Payments, Computations, Etc. 14
3.15 Evidence of Debt. 16
3.16 Replacement of Lenders. 17
SECTION 4 CONDITIONS 17
4.1 Closing Conditions. 17
4.2 Conditions to all Extensions of Credit. 18
SECTION 5 REPRESENTATIONS AND WARRANTIES 18
5.1 Organization; Existence; Compliance with Law. 18
5.2 Power; Authorization; Enforceable Obligations. 19
5.3 No Legal Bar. 19
5.4 Governmental Regulations. 20
5.5 Purpose of Loans. 20
5.6 Incorporated Representations and Warranties. 20
SECTION 6 COVENANTS 21
6.1 Use of Proceeds. 21
6.2 Incorporated Covenants. 21
SECTION 7 [intentionally left blank] 21
SECTION 8 EVENTS OF DEFAULT 22
8.1 Events of Default. 22
8.2 Acceleration; Remedies. 23
SECTION 9 AGENCY PROVISIONS 24
9.1 Appointment. 24
9.2 Delegation of Duties. 24
9.3 Exculpatory Provisions. 24
9.4 Reliance on Communications. 25
9.5 Notice of Default. 25
9.6 Non-Reliance on Agent and Other Lenders. 25
9.7 Indemnification. 26
9.8 Agent in its Individual Capacity. 27
9.9 Successor Agent. 27
SECTION 10 MISCELLANEOUS 27
10.1 Notices. 27
10.2 Right of Set-Off. 28
10.3 Benefit of Agreement. 29
10.4 No Waiver; Remedies Cumulative. 31
10.5 Payment of Expenses, etc. 31
10.6 Amendments, Waivers and Consents. 32
10.7 Counterparts. 33
10.8 Headings. 33
10.9 Survival. 33
10.10 Governing Law; Submission to Jurisdiction; Venue. 33
10.11 Severability. 34
10.12 Entirety. 34
10.13 Binding Effect; Termination. 35
10.14 Confidentiality. 35
10.15 Source of Funds. 36
10.16 Conflict. 36
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 Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 6.2 Form of Officer's Compliance Certificate
Schedule 10.3(b) Form of Assignment and Acceptance
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of October 20, 1998 (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"), and NATIONSBANK, N.A., as agent for the Lenders (in such
capacity, the "Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$150,000,000 credit facility (as such credit facility may be increased or
decreased pursuant to the terms hereof) for the purposes hereinafter set
forth;
WHEREAS, the Lenders have agreed to make the requested credit
facility available to the Borrower on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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:
"Agency Services Address" means NationsBank, N.A., NC1-001-15-04,
101 North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency
Services, or such other address as may be identified by written notice from
the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
"Applicable Percentage" means (i) for purposes of calculating the
applicable rate of the Facility Fee for any day for purposes of Section
3.5, a percentage equal to .125%; and (ii) for purposes of calculating the
applicable interest rate for any day for any Loan, a percentage equal to
.21%; provided, however, (A) if the average outstanding principal balance
of the Loans for any month is greater than $37,500,000 but equal to or less
than $75,000,000, the "Applicable Percentage" for such month shall be .26%,
(B) if the average outstanding principal balance of the Loans for any month
is greater than $75,000,000 but equal to or less than $112,500,000, the
"Applicable Percentage" for such month shall be .31% and (C) if the average
outstanding principal balance of the Loans for any month is greater than
$112,500,000, the "Applicable Percentage" for such month shall be .36%.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
"Closing Date" means the date hereof.
"Committed Amount" shall have the meaning assigned to such term in
Section 2.1(a).
"Commitment" means, with respect to each Lender, the commitment of
such Lender in an aggregate principal amount at any time outstanding not to
exceed the amount set forth opposite such Lender's name on Schedule 2.1(a)
(as such amount may be reduced or increased from time to time in accordance
with the provisions of this Credit Agreement), to make Loans in accordance
with the provisions of Section 2.1(a).
"Commitment Percentage" means, for any Lender, the percentage which
such Lender's Commitment then constitutes of the aggregate Committed
Amount.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, and all other related agreements and documents issued
or delivered hereunder or thereunder or pursuant hereto or thereto.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"Event of Default" means such term as defined in Section 8.1.
"Existing Credit Agreement" means that certain Credit Agreement,
dated as of December 20, 1996, as amended, by and among the Borrower, the
lenders parties thereto and NationsBank, NA, as agent for such lenders.
"Facility Fee" shall have the meaning assigned to such term in
Section 3.5.
"Facility Fee Calculation Period" shall have the meaning assigned
to such term in Section 3.5.
"Financial Officer" means, with respect to the Borrower, the
Treasurer, the Chief Accounting Officer, 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
Agent from at least two existing Financial Officers of the Borrower.
"Interest Payment Date" means (i) as to any Base Rate Loan, the
last day of each March, June, September and December, the date of repayment
of principal of such Loan and the Termination Date and (ii) as to any
Eurodollar Loan, 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 as to any Eurodollar Loan, a period of one,
two, three or six month's duration, as the Borrower may elect, or other
periods mutually agreed upon by the Borrower and the Agent, commencing in
each case, on the date of the borrowing (including conversions, extensions
and renewals); provided, however, (A) if any Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended to
the next succeeding Business Day (except that in the case of Eurodollar
Loans where the next succeeding Business Day falls in the next succeeding
calendar month, then on the next preceding Business Day), (B) no Interest
Period shall extend beyond the Termination Date, and (C) in the case of
Eurodollar Loans, where an Interest Period begins on a day for which there
is no numerically corresponding day in the calendar month in which the
Interest Period is to end, such Interest Period shall end on the last day
of such calendar month.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and each Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, subsidiary or affiliate of such Lender or the
Agent.
"Loans" shall have the meaning assigned to such term in Section
2.1(a).
"Master Account" means such account as may be identified from time
to time by written notice from at least two Financial Officers of the
Borrower to the Agent.
"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.
"NationsBank" means NationsBank, N.A. and its successors.
"Note" means a promissory note of the Borrower in favor of a Lender
delivered pursuant to Section 2.1(e) and evidencing the Loans of such
Lender, as such promissory note may be amended, modified, restated or
replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Schedule 3.2, as
required by Section 3.2.
"Participation Interest" means, the extension of credit by a Lender
by way of a purchase of a participation or in any Loans as provided in
Section 3.13.
"Register" shall have the meaning given such term in Section
10.3(c).
"Required Lenders" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 100% of (i) the Commitment
Percentages or (ii) if the Commitments have been terminated, the
outstanding Loans and Participation Interests.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Termination Date" means May 31, 1999.
1.2 Incorporated Definitions.
All capitalized terms not otherwise defined herein shall have the
respective meanings assigned to such terms in the Existing Credit
Agreement, as in effect as of the date hereof (the "Incorporated
Definitions"). The incorporation by reference to the Existing Credit
Agreement of the Incorporated Definitions pursuant to this Section 1.2
shall survive the termination of the Existing Credit Agreement. For
purposes of the incorporation of the Incorporated Definitions pursuant to
this Section 1.2, all references in the Incorporated Definitions to the
"Agent" shall be deemed to refer to the Agent hereunder, all references in
the Incorporated Definitions to a "Lender" or the "Lenders" shall be deemed
to refer to one or more of the Lenders hereunder, all references in the
Incorporated Definitions to the "Required Lenders" shall be deemed to refer
to the Required Lenders hereunder, all references in the Incorporated
Definitions to the "Credit Agreement," or any similar references, shall be
deemed to refer to this Credit Agreement, all references in the
Incorporated Definitions to a "Note" or the "Notes" shall be deemed to
refer to one or more of the Notes issued pursuant to Section 2.1(e) hereof
and all references in the Incorporated Definitions to a "Credit Document"
or the "Credit Documents," or any similar references, shall be deemed to
refer to one or more of the Credit Documents as defined in Section 1.1
hereof.
1.3 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."
1.4 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 of the Incorporated Covenants;
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 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.
SECTION 2
CREDIT FACILITY
2.1 Loans.
(a) 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 ("Loans") up to
such Lender's Commitment from time to time from the Closing Date until the
Termination Date, or such earlier date as the 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 Loans shall not exceed ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000.00) (as such aggregate maximum amount may be reduced or
increased from time to time as provided in Section 3.4, the "Committed
Amount"); provided, further, with regard to each Lender individually, such
Lender's outstanding Loans shall not exceed such Lender's Commitment.
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
15 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.
Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall
request a Loan borrowing by written notice (or telephone notice promptly
confirmed in writing) to the Agent not later than 11:30 A.M. (Charlotte,
North Carolina time) on the Business Day of the requested borrowing in the
case of Base Rate Loans, and not later than 2:00 P.M. (Charlotte, North
Carolina time) on the third Business Day prior to the date of the requested
borrowing in the case of Eurodollar Loans (or such later time as mutually
agreed upon by the Borrower and the Agent). Each such request for
borrowing shall be irrevocable, executed by a Financial Officer of the
Borrower and shall specify (A) that a 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 Loan requested, then such notice shall be deemed to be
a request for a Base Rate Loan hereunder. The 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 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 Committed Amount, if less).
(iii) Advances. Each Lender will make its
Commitment Percentage of each Loan borrowing available to the Agent for the
account of the Borrower as specified in Section 3.14(a), or in such other
manner as the Agent may specify in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of Borrowing
in Dollars and in funds immediately available to the Agent. Such borrowing
will then be made available to the Borrower by the Agent by crediting the
Master Account with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the Agent.
(c) Repayment. The principal amount of all Loans shall
be due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section
3.1,
(i) Base Rate Loans. During such periods as
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;
(ii) Eurodollar Loans. During such periods as
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 Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Notes. The 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 Commitment and in
substantially the form of Schedule 2.1(e).
2.2 [intentionally left blank]
2.3 [intentionally left blank]
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITY
3.1 Default Rate.
Upon the occurrence, and during the continuance, o f 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 2%
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 2%
greater than the Base Rate).
3.2 Extension and Conversion.
Subject to the terms of Section 4.2, the Borrower shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another
interest rate type; provided, however, that (a) except as provided in
Section 3.8, Eurodollar Loans may be converted into Base Rate Loans only on
the last day of the Interest Period applicable thereto, (b) Eurodollar
Loans may be extended, and Base Rate Loans may be converted into Eurodollar
Loans, only if no Default or Event of Default is in existence on the date
of extension or conversion, (c) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of
"Interest Period" set forth in Section 1.1 and shall be in such minimum
amounts as provided in Section 2.1(b)(ii), (d) no more than 15 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)
and (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. 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 Agent prior to 11:30 A.M. (Charlotte, North Carolina time) on the
Business Day of, in the case of the extension of a Base Rate Loan, and
prior to 2:00 P.M. (Charlotte, North Carolina time) on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each
request for extension or conversion shall be irrevocable and shall
constitute a representation and warranty by the Borrower of the matters
specified in subsections (b), (c), (d) and (e) of Section 4.2. In the
event the Borrower fails to request extension or conversion of any
Eurodollar Loan in accordance with this Section, or any such conversion or
extension is not permitted or required by this Section, then such
Eurodollar Loan shall be automatically converted into a Base Rate Loan at
the end of the Interest Period applicable thereto. The 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 in whole or in part from time to time, subject to
Section 3.11, but otherwise without premium or penalty; provided, however,
that (i) Eurodollar Loans may only be prepaid on three Business Days' prior
written notice to the Agent and specifying the applicable Loans to be
prepaid; (ii) any prepayment of Eurodollar Loans will be subject to Section
3.11; and (iii) each such partial prepayment of Loans shall be 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 Loan or 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. If at any time, the sum of
the aggregate principal amount of outstanding Loans shall exceed the
Committed Amount, the Borrower promises to prepay immediately the
outstanding principal balance on the Loans in an amount sufficient to
eliminate such excess.
(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. Amount prepaid on the Loans may be reborrowed in accordance
with the provisions hereof.
3.4 Termination, Reduction and Increase of Committed Amount.
(a) Voluntary Reductions. The Borrower may from time
to time permanently reduce or terminate the 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 Committed Amount)) upon five Business Days' prior
written notice to the Agent; provided, however, no such termination or
reduction shall be made which would cause the aggregate principal amount of
outstanding Loans to exceed the Committed Amount unless, concurrently with
such termination or reduction, the Loans are repaid to the extent necessary
to eliminate such excess. The Commitments of the Lenders shall
automatically terminate on the Termination Date. The Agent shall promptly
notify each affected Lender of receipt by the Agent of any notice from the
Borrower pursuant to this Section 3.4(a).
(b) Termination Date. The Commitments of the Lenders
shall automatically terminate on the Termination Date.
3.5 Facility Fee.
In consideration of the Commitments of the Lenders hereunder, the
Borrower agrees to pay to the Agent for the account of each Lender a fee
(the "Facility Fee") on the Committed Amount computed at a per annum rate
for each day during the applicable Facility Fee Calculation Period
(hereinafter defined) at a rate 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
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.
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, 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 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 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 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 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 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 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 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
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 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 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 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 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 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
reduction of the 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.
(b) Advances. Unless the 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 Agent, the Agent may assume that such Lender is
making such amount available to the Agent, and the Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Agent by such Lender
within the time period specified therefor hereunder, such Lender shall pay
to the 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 Agent. A certificate of the 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 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 Agent shall fail to remit to the Agent or any other Lender an amount
payable by such Lender or the Agent to the 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 Agent
or such other Lender at a rate per annum equal to the Federal Funds Rate.
If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this Section
3.13 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.13 to share in the benefits of
any recovery on such secured claim.
3.14 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein,
all payments hereunder shall be made to the Agent in dollars in immediately
available funds, without offset, deduction, counterclaim or withholding of
any kind, at the Agent's office specified in Schedule 2.1(a) not later than
4:00 P.M. (Charlotte, North Carolina time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The 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 Agent (with
notice to the Borrower). The Borrower shall, at the time it makes any
payment under this Credit Agreement, specify to the 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 Agent
shall distribute such payment to the Lenders in such manner as the 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 Agent
will distribute such payments to such Lenders, if any such payment is
received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business
Day in like funds as received prior to the end of such Business Day and
otherwise the Agent will distribute such payment to such Lenders on the
next succeeding Business Day. 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 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 Agent in connection with enforcing the rights of
the Lenders under the Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable
out-of-pocket costs and expenses (including without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with enforcing its
rights under the Credit Documents or otherwise with respect to amounts
owing to such Lender;
FOURTH, to the payment of accrued fees and
interest;
FIFTH, to the payment of the outstanding principal
amount of the Loans;
SIXTH, to all other amounts and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above;
and
SEVENTH, to the payment of the surplus, if any, to
whoever may be lawfully entitled to receive such surplus.
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.
3.15 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 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 Agent
hereunder from or for the account of the Borrower and each Lender's share
thereof. The 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 Agent, subsection (a)) shall be
prima facie, but not conclusive, evidence of the existence and amounts of
the obligations of the Borrower therein recorded; provided, however, that
the failure of any Lender or the 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.
3.16 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 agreements
substantially in the form of Schedule 10.3(b) pursuant to, and in
accordance with the terms of, Section 10.3(b) (and with all fees payable
pursuant to said Section 10.3(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the rights
and obligations of the Replaced Lender hereunder and, in connection
therewith, shall pay to the Replaced Lender in respect thereof an amount
equal to the sum of (a) the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, and (b) all accrued, but
theretofore unpaid, fees owing to the Replaced Lender pursuant to Section
3.5(a), and (B) all obligations of the Borrower owing to the Replaced
Lender (including all obligations, if any, owing pursuant to Section 3.6,
3.8 or 3.9, but excluding those obligations specifically described in
clause (A) above in respect of which the assignment purchase price has
been, or is concurrently being paid) shall be paid in full to such Replaced
Lender concurrently with such replacement.
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 Agent shall have received original counterparts
of this Credit Agreement executed by each of the parties hereto;
(b) The Agent shall have received an appropriate
original Note for each Lender, executed by the Borrower; and
(c) The 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 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) 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 Loan, 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 Loans shall not exceed the
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.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents to the Agent and each Lender that:
5.1 Organization; Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and is in good standing under the laws of the jurisdiction
of its incorporation or organization, (b) has the corporate or other
necessary power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except to the extent that the
failure to have such legal right would not be reasonably expected to have a
Material Adverse Effect, (c) is duly qualified as a foreign entity and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not be reasonably expected to have a
Material Adverse Effect, and (d) is in compliance with all material
Requirements of Law, except to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
5.2 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).
5.3 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.
5.4 Governmental Regulations.
No part of the proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any "margin stock" in
violation of Regulation G or Regulation U. If requested by any Lender or
the Agent, the Borrower will furnish to the 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 G, T, U
or X.
5.5 Purpose of Loans.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to (a) repurchase stock in the Borrower, (b) to finance
acquisitions to the extent permitted under this Credit Agreement and (c)
for the working capital, commercial paper back up, capital expenditures and
other lawful corporate purposes of the Borrower and its Subsidiaries.
5.6 Incorporated Representations and Warranties.
The Borrower hereby agrees that the representations and warranties
contained in Sections 5.1, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10, 5.11(b)-(e) and
5.12 of the Existing Credit Agreement, as in effect as of the date hereof
(the "Incorporated Representations"), are hereby incorporated by reference
and shall be as binding on the Borrower as if set forth fully herein;
provided, however, Schedule 5.12 of the Incorporated Representations shall
be deleted and replaced with Schedule 5.12 attached hereto. The
incorporation by reference to the Existing Credit Agreement of the
Incorporated Representations pursuant to this Section 5.6 shall survive the
termination of the Existing Credit Agreement. For purposes of the
incorporation of the Incorporated Representations pursuant to this Section
5.6, all references in the Incorporated Representations to the "Agent"
shall be deemed to refer to the Agent hereunder, all references in the
Incorporated Representations to a "Lender" or the "Lender" shall be deemed
to refer to one or more of the Lenders hereunder, all references in the
Incorporated Representations to the "Required Lenders" shall be deemed to
refer to the Required Lenders hereunder, all references in the Incorporated
Representations to the "Credit Agreement," or any similar references, shall
be deemed to refer to this Credit Agreement, all references in the
Incorporated Representations to a "Note" or the "Notes" shall be deemed to
refer to one or more of the Notes issued pursuant to Section 2.1(e) hereof
and all references in the Incorporated Representations to a "Credit
Document" or the "Credit Documents," or any similar references, shall be
deemed to refer to one or more of the Credit Documents as defined in
Section 1.1 hereof.
SECTION 6
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 Use of Proceeds.
The Borrower will use the proceeds of the Loans solely for the
purposes set forth in Section 5.5.
6.2 Incorporated Covenants.
The Borrower hereby agrees that the affirmative and negative
covenants contained in Sections 6.1-6.7, Section 6.9, Section 6.10 and
Section 7 of the Existing Credit Agreement, as in effect as of the date
hereof, as modified (if modified) pursuant to the terms of the amendment
thereto currently contemplated by the parties thereto (the "Incorporated
Covenants"), are hereby incorporated by reference and shall be as binding
on the Borrower as if set forth fully herein, except that, for purposes
hereof, Schedule 6.1(c) to the Existing Credit Agreement referred to in
Section 6.1(c) of the Existing Credit Agreement shall be deemed to refer to
Schedule 6.2 attached hereto. The incorporation by reference to the
Existing Credit Agreement of the Incorporated Covenants pursuant to this
Section 6.2 shall survive the termination of the Existing Credit Agreement.
For purposes of the incorporation of the Incorporated Covenants pursuant to
this Section 6.2, all references in the Incorporated Covenants to the
"Agent" shall be deemed to refer to the Agent hereunder, all references in
the Incorporated Covenants to a "Lender" or the "Lenders" shall be deemed
to refer to one or more of the Lenders hereunder, all references in the
Incorporated Covenants to the "Required Lenders" shall be deemed to refer
to the Required Lenders hereunder, all references in the Incorporated
Covenants to the "Credit Agreement," or any similar reference, shall be
deemed to refer to this Credit Agreement, all references in the
Incorporated Covenants to a "Note" or the "Notes" shall be deemed to refer
to one or more of the Notes issued pursuant to Section 2.1(e) hereof and
all references in the Incorporated Covenants to a "Credit Document" or the
"Credit Documents," or any similar reference, shall be deemed to refer to
one or more of the Credit Documents as defined in Section 1.1 hereof.
SECTION 7
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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 defaults shall continue
for five (5) or more Business Days, in the payment when due of any interest
on the Loans, or of any 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,
6.10 or 7.1 through 7.3, inclusive, of the Incorporated Covenants, or
(ii) default in the due performance or
observance by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) 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 Agent; or
(d) Incorporated Events of Default. The occurrence of
an "Event of Default" under and as defined in the Existing Credit
Agreement, as in effect as of the date hereof, which "Events of Default"
(the "Incorporated Events of Default"), are hereby incorporated herein by
reference and shall be as binding on the Borrower as if set forth fully
herein, such incorporation by reference to survive termination of the
Existing Credit Agreement. For purposes of the incorporation of the
Incorporated Events of Default pursuant to this Section 8.1(d), all
references in the Incorporated Events of Default to the "Agent" shall be
deemed to refer to the Agent hereunder, all references in the Incorporated
Events of Default to a "Lender" or the "Lenders" shall be deemed to refer
to one or more of the Lenders hereunder, all references in the Incorporated
Events of Default to the "Required Lenders" shall be deemed to refer to the
Required Lenders hereunder, all references in the Incorporated Events of
Default to the "Credit Agreement," or any similar references, shall be
deemed to refer to this Credit Agreement, all references in the
Incorporated Events of Default to a "Note" or the "Notes" shall be deemed
to refer to one or more of the Notes issued pursuant to Section 2.1(e)
hereof and all references in the Incorporated Events of Default to a
"Credit Document" or the "Credit Documents," or any similar references,
shall be deemed to refer to one or more of the Credit Documents as defined
in Section 1.1 hereof.
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 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 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) of the Incorporated Events of Default shall occur, then the
Commitments shall automatically terminate and all Loans, all accrued
interest in respect thereof and all and other indebtedness or obligations
owing to the Agent and/or any of the Lenders hereunder automatically shall
immediately become due and payable without the giving of any notice or
other action by the Agent or the Lenders.
SECTION 9
AGENCY PROVISIONS
9.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity as Agent hereunder, the "Agent") of
such Lender to act as specified herein and the other Credit Documents, and
each such Lender hereby authorizes the 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 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 Agent. The
provisions of this Section are solely for the benefit of the 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 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 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 Agent of its duties hereunder.
9.3 Exculpatory Provisions.
The 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 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 Agent shall not be responsible to any Lender
for the effectiveness, genuineness, validity, enforceability,
collectability 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 Agent to the Lenders or by or on behalf
of the Borrower to the 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 Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower, independent accountants and other experts selected by the Agent
with reasonable care). The 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 Agent in accordance with Section 10.3(b) hereof. The
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 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 Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the 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 Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders. The
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 Agent and Other Lenders.
Each Lender expressly acknowledges that each of the 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
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 Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without
reliance upon the 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 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 Agent hereunder, the 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 Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification.
The Lenders agree to indemnify the 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
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 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 Agent. If any indemnity furnished to the Agent for any
purpose shall, in the opinion of the Agent, be insufficient or become
impaired, the 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 Agent in its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower, its
Subsidiaries or their respective Affiliates as though the Agent were not
the Agent hereunder. With respect to the Loans made by and all obligations
of the Borrower hereunder and under the other Credit Documents, the Agent
shall have the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its individual
capacity.
9.9 Successor Agent.
The Agent may, at any time, resign upon 20 days' written notice to
the Lenders, and may be removed, upon show of cause, by the Required
Lenders upon 30 days' written notice to the Agent. Upon any such
resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent; provided that, so long as no Default or Event of
Default has occurred and is continuing, such successor Agent shall be
reasonably acceptable to the Borrower. If no successor Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the notice of resignation or notice of
removal, as appropriate, then the retiring Agent shall select a successor
Agent provided such successor is a Lender hereunder or a commercial bank
organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor,
such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations as
Agent, as appropriate, under this Credit Agreement and the other Credit
Documents and the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent
under this Credit Agreement.
SECTION 10
MISCELLANEOUS
10.1 Notices.
Except as otherwise expressly provided herein, all notices and
other communications shall have been duly given and shall be effective (i)
when delivered, (ii) when transmitted and received (by confirmation of
receipt) via telecopy (or other facsimile device) to the number set out
below, (iii) the day following the day on which the same has been delivered
prepaid to a reputable national overnight air courier service, or (iv) the
third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties
at the address, in the case of the Borrower and the Agent, set forth below,
and, in the case of the Lenders, set forth on Schedule 2.1(a), or at such
other address as such party may specify by written notice to the other
parties hereto:
if to the Borrower:
AutoZone, Inc.
123 South Front Street
Memphis, TN 38103
Attn: Chief Financial Officer
Telephone: (901) 495-7181
Telecopy: (901) 495-8317
with a copy to the Treasurer and to the General Counsel for
the Borrower at the same address;
if to the Agent:
NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
101 N. Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services
Telephone: (704) 388-3917
Telecopy: (704) 386-9923
with a copy to:
NationsBank, N.A.
NationsBank Corporate Center
NC1-007-8-7
100 N. Tryon Street
Attn: Mark Halmrast
Telephone: (704) 386-0649
Telecopy: (704) 386-1270
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 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that the Borrower
may not assign or transfer any of its interests without prior written
consent of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 10.3, provided
however that nothing herein shall prevent or prohibit any Lender from (i)
pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank, or (ii)
granting assignments or selling participations in such Lender's Loans
and/or Commitments hereunder to its parent company and/or to any Affiliate
or Subsidiary of such Lender.
(b) Assignments. Each Lender may assign all or a
portion of its rights and obligations hereunder, pursuant to an assignment
agreement substantially in the form of Schedule 10.3(b), to (i) any Lender
or any Affiliate or Subsidiary of a Lender, or (ii) any other commercial
bank, financial institution or "accredited investor" (as defined in
Regulation D of the Securities and Exchange Commission) that, so long as no
Default or Event of Default has occurred and is continuing, is reasonably
acceptable to the Borrower; provided that (i) any such assignment (other
than any assignment to an existing Lender) shall be in a minimum aggregate
amount of $5,000,000 (or, if less, the remaining amount of the Commitment
being assigned by such Lender) of the Commitments and in integral multiples
of $1,000,000 above such amount, (ii) so long as no Event of Default has
occurred and is continuing, no Lender shall assign more than 50% of such
Lender's original Commitment and (iii) each such assignment shall be of a
constant, not varying, percentage of all such Lender's rights and
obligations under this Credit Agreement. Any assignment hereunder shall be
effective upon delivery to the Agent of written notice of the assignment
together with a transfer fee of $3,500 payable to the Agent for its own
account from and after the later of (i) the effective date specified in the
applicable assignment agreement and (ii) the date of recording of such
assignment in the Register pursuant to the terms of subsection (c) below.
The assigning Lender will give prompt notice to the Agent and the Borrower
of any such assignment. Upon the effectiveness of any such assignment (and
after notice to, and (to the extent required pursuant to the terms hereof),
with the consent of, the Borrower as provided herein), the assignee shall
become a "Lender" for all purposes of this Credit Agreement and the other
Credit Documents and, to the extent of such assignment, the assigning
Lender shall be relieved of its obligations hereunder to the extent of the
Loans and Commitment components being assigned. Along such lines the
Borrower agrees that upon notice of any such assignment and surrender of
the appropriate Note or Notes, it will promptly provide to the assigning
Lender and to the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note (but
with notation thereon that it is given in substitution for and replacement
of the original Note or any replacement notes thereof). By executing and
delivering an assignment agreement in accordance with this Section 10.3(b),
the assigning Lender thereunder and the assignee thereunder shall be deemed
to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of
any adverse claim; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto or the financial condition of the
Borrower or any of its respective Affiliates or the performance or
observance by the Borrower of any of its obligations under this Credit
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
assignment agreement; (iv) such assignee confirms that it has received a
copy of this Credit Agreement, the other Credit Documents and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such assignment agreement; (v)
such assignee will independently and without reliance upon the Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement and the other Credit Documents; (vi) such assignee appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Credit Agreement or any other Credit Document as are
delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations
which by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Maintenance of Register. The Agent shall maintain
at one of its offices in Charlotte, North Carolina (i) a copy of each
Lender assignment agreement delivered to it in accordance with the terms of
subsection (b) above and (ii) a register for the recordation of the
identity of the principal amount, type and Interest Period of each Loan
outstanding hereunder, the names, addresses and the Commitments of the
Lenders pursuant to the terms hereof from time to time (the "Register").
The Agent will make reasonable efforts to maintain the accuracy of the
Register and to promptly update the Register from time to time, as
necessary. The Register shall be prima facie, but not conclusive,
evidence of the information contained therein and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and each Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer,
grant or assign participations in all or any part of such Lender's
interests and obligations hereunder; provided that (i) such selling Lender
shall remain a "Lender" for all purposes under this Credit Agreement (such
selling Lender's obligations under the Credit Documents remaining
unchanged) and the participant shall not constitute a Lender hereunder,
(ii) no such participant shall have, or be granted, rights to approve any
amendment or waiver relating to this Credit Agreement or the other Credit
Documents except to the extent any such amendment or waiver would (A)
reduce the principal of or rate of interest on or Fees in respect of any
Loans in which the participant is participating or (B) postpone the date
fixed for any payment of principal (including extension of the Termination
Date or the date of any mandatory prepayment), interest or Fees in which
the participant is participating, and (iii) sub-participations by the
participant (except to an affiliate, parent company or affiliate of a
parent company of the participant) shall be prohibited. In the case of any
such participation, the participant shall not have any rights under this
Credit Agreement or the other Credit Documents (the participant's rights
against the selling Lender in respect of such participation to be those set
forth in the participation agreement with such Lender creating such
participation) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation, provided,
however, that such participant shall be entitled to receive additional
amounts under Sections 3.6, 3.9 and 3.11 on the same basis as if it were a
Lender provided that it shall not be entitled to receive any more than the
selling Lender would have received had it not sold the participation.
10.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the 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 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 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 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 Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit
Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, subject to agreed upon limitations, the
reasonable fees and expenses of Moore & Van Allen, PLLC, special counsel to
the Agent) 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 Agent and the Lenders in connection with enforcement of the
Credit Documents and the documents and instruments referred to therein
(including, without limitation, in connection with any such enforcement,
the reasonable fees and disbursements of counsel (including allocated costs
of internal counsel) for the Agent and each of the Lenders); (b) pay and
hold each of the Lenders harmless from and against any and all future stamp
and other similar taxes with respect to the foregoing matters and save each
of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the
extent attributable to such Lender) to pay such taxes; and (c) indemnify
each Lender, its officers, directors, employees, representatives and agents
from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of (i)
any investigation, litigation or other proceeding (whether or not any
Lender is a party thereto, but excluding any investigation initiated by the
Person seeking indemnification hereunder) related to the entering into
and/or performance of any Credit Document or the use of proceeds of any
Loans (including other extensions of credit) hereunder or the consummation
of any other transactions contemplated in any Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel
(including allocated costs of internal counsel) incurred in connection with
any such investigation, litigation or other proceeding or (ii) the presence
or Release of any Materials of Environmental Concern at, under or from any
Property owned, operated or leased by the Borrower or any of its
Subsidiaries, or the failure by the Borrower or any of its Subsidiaries to
comply with any Environmental Law (but excluding, in the case of either of
clause (i) or (ii) above, any such losses, liabilities, claims, damages or
expenses to the extent (A) incurred by reason of gross negligence or
willful misconduct on the part of the Person to be indemnified, (B) owing
to the Borrower or (C) owing to another Person entitled to indemnification
hereunder).
10.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any
of the terms hereof or thereof may be amended, changed, waived, discharged
or terminated unless such amendment, change, waiver, discharge or
termination is in writing entered into by, or approved in writing by, the
Required Lenders and the Borrower, provided, however, that:
(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 waiving the applicability of any post-default
increase in interest rates) 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) 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 Agent; and
(d) designation of the Master Account or of any
Financial Officer may not be made without the written consent of at least
two Financial Officers of the Borrower.
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 NORTH CAROLINA. 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 North Carolina in
Mecklenburg County, or of the United States for the Western District of
North Carolina, 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 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 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 Agent, and the 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 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 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 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 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 Agent or such Lender on a
non-confidential basis from a source other than the Borrower or (C) was
available to the Agent or such Lender on a non-confidential basis prior to
its disclosure to the Agent or such Lender by the Borrower; (iv) to any
assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
specifically agrees in a writing furnished to and for the benefit of the
Borrower to be bound by the terms of this Section 10.14; or (v) 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
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 to be used by such Lender in connection with the
financing hereunder:
(a) no part of such funds constitutes assets allocated
to any separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds
constitutes assets allocated to any separate account maintained by such
Lender, such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total assets of
such account as of the date of such purchase (and, for purposes of this
subsection (b), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan);
(c) to the extent that any part of such funds
constitutes assets of an insurance company's general account, such
insurance company has complied with all of the requirements of the
regulations issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more
specific benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 10.15, the terms "employee benefit plan" and
"separate account" shall have the respective meanings assigned to such
terms in Section 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.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as
of the date first above written.
BORROWER: AUTOZONE, INC.
a Nevada corporation
By: /s/Tara Elliott
-----------------------
Name: Tara Elliott
----------------------
Title: VP, Treasurer
---------------------
By: /s/ Robert J. Hunt
------------------------
Name: Robert Hunt
----------------------
Title: EVP CFO
---------------------
LENDERS: NATIONSBANK, N.A.,
individually in its
capacity as a
Lender and in its
capacity as Agent
By: /s/ John E. Ball
------------------------
Name: John E. Ball
----------------------
Title: SVP
---------------------
<PAGE>
Schedule 2.1(a)
LENDERS
Lender Commitment Percentage Commitment
- ------ --------------------- ------------
NationsBank, N.A. 100% $150,000,000
NationsBank Corporate Center
NC1007-8-7
Charlotte, NC 28255
Attn: Jeb Ball
Tel: (704) 386-9718
Fax: (704) 388-0373
<PAGE>
Schedule 2.1(b)(i)
FORM OF NOTICE OF BORROWING
NationsBank, N.A.,
as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, AUTOZONE, INC. (the "Borrower"), refers to the
Credit Agreement dated as of October 20, 1998 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the Lenders, NationsBank, N.A., as Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement. The Borrower hereby gives notice
pursuant to Section 2.1 of the Credit Agreement that it requests a Loan
advance under the Credit Agreement, and in connection therewith sets forth
below the terms on which such Loan advance is requested to be made:
(A) Date of Borrowing
(which is a Business Day)
(B) Principal Amount of
Borrowing
(C) Interest rate basis
(D) Interest Period and the
last day thereof
In accordance with the requirements of Section 4.2, the Borrower
hereby reaffirms the representations and warranties set forth in the Credit
Agreement as provided in subsection (b) of such Section, and confirms that
the matters referenced in subsections (c), (d) and (e) of such Section, are
true and correct.
Very truly yours,
AUTOZONE, INC.
By:
Name:
Title:
<PAGE>
Schedule 2.1(e)
NOTE
$150,000,000 October 20, 1998
FOR VALUE RECEIVED, AUTOZONE, INC., a Nevada corporation
(the "Borrower"), hereby promises to pay to the order of NATIONSBANK, N.A.,
its successors and assigns (the "Lender"), at the office of NationsBank,
N.A., as Agent (the "Agent"), at 101 N. Tryon Street, Independence Center,
NC1-001-15-04, Charlotte, North Carolina 28255 (or at such other place or
places as the holder hereof may designate), at the times set forth in the
Credit Agreement, dated as of October 20, 1998, among the Borrower, the
Lenders and the Agent (as it may be amended, modified, extended or restated
from time to time, the "Credit Agreement"; all capitalized terms not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement), but in no event later than the Termination Date, in Dollars and
in immediately available funds, the principal amount of ONE HUNDRED FIFTY
MILLION DOLLARS ($150,000,000) or, if less than such principal amount, the
aggregate unpaid principal amount of all Loans made by the Lender to the
Borrower pursuant to the Credit Agreement, and to pay interest from the
date hereof on the unpaid principal amount hereof, in like money, at said
office, on the dates and at the rates selected in accordance with Section
2.1(d) of the Credit Agreement.
Upon the occurrence and during the continuance of an Event of
Default, the balance outstanding hereunder shall bear interest as provided
in Section 3.1 of the Credit Agreement. Further, in the event the payment
of all sums due hereunder is accelerated under the terms of the Credit
Agreement, this Note, and all other indebtedness of the Borrower to the
Lender shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by
the Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, the Borrower agrees to pay, in addition to the
principal and interest, all costs of collection, including reasonable
attorneys' fees.
All borrowings evidenced by this Note and all payments and
prepayments of the principal hereof and interest hereon and the respective
dates thereof shall be endorsed by the holder hereof on Schedule A attached
hereto and incorporated herein by reference, or on a continuation thereof
which shall be attached hereto and made a part hereof; provided, however,
that any failure to endorse such information on such schedule or
continuation thereof shall not in any manner affect the obligation of the
Borrower to make payments of principal and interest in accordance with the
terms of this Note.
This Note and the Loans evidenced hereby may be transferred in
whole or in part only by registration of such transfer on the Register
maintained by or on behalf of the Borrower as provided in Section 10.3(c)
of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed by its duly authorized officer as of the day and year first above
written.
AUTOZONE, INC.
By:
Name:
Title:
By:
Name:
Title:
<PAGE>
SCHEDULE A TO THE
NOTE
OF AUTOZONE, INC.
DATED OCTOBER 20, 1998
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
- ---- ---- ------- ---------- -------- ------- --------
<PAGE>
Schedule 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N.A.,
as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, AutoZone, Inc. (the "Borrower"), refers to the
Credit Agreement dated as of October 20, 1998 (as amended, modified,
extended or restated from time to time, the "Credit Agreement"), among the
Borrower, the Lenders, NationsBank, N.A., as Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings assigned to
such terms in the Credit Agreement. The Borrower hereby gives notice
pursuant to Section 3.2 of the Credit Agreement that it requests an
extension or conversion of a Loan outstanding under the Credit Agreement,
and in connection therewith sets forth below the terms on which such
extension or conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period)
(B) Principal Amount of
Extension or Conversion
(C) Interest rate basis
(D) Interest Period and the
last day thereof
In accordance with the requirements of Section 4.2, the Borrower
hereby reaffirms the representations and warranties set forth in the Credit
Agreement as provided in subsection (b) of such Section, and confirms that
the matters referenced in subsections (c), (d) and (e) of such Section, are
true and correct.
Very truly yours,
AUTOZONE, INC.
By:
Name:
Title:
<PAGE>
Schedule 5.12
LIST OF SUBSIDIARIES
[Chart of corporate structure appears here]
AutoZone, Inc.
AutoZone de Mexico
Service Zone de Mexico
Data Zone de Mexico
AutoZone Management, LP
ADAP, Inc.
Alldata Corporation
AutoZone Stores, Inc.
AutoZone Properties, Inc.
AutoZone Development Corporation
AutoZoners, Inc.
AutoZone Marketing Company
AutoZone Leadership, Inc.
AutoZone Texas, LP
<PAGE>
Schedule 6.2
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of AutoZone, Inc. (the
"Borrower") hereby certify that, to the best of my knowledge and belief,
with respect to that certain Credit Agreement dated as of October 20, 1998
(as amended, modified, extended or restated from time to time, the "Credit
Agreement"; all of the defined terms in the Credit Agreement are
incorporated herein by reference) among the Borrower, the Lenders party
thereto, NationsBank, N.A., as Agent:
a. The company-prepared financial statements which accompany
this certificate are true and correct in all material respects and have
been prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar
certification, or, if none, the Closing Date) no Default or Event of
Default has occurred under the Credit Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by
the Borrower with the financial covenant contained in Section 6.10 of the
Incorporated Covenants as of the end of the fiscal period referred to
above.
This ______ day of ___________, 19__.
AUTOZONE, INC.
By:
Name:
Title:
<PAGE>
Schedule 10.3(b)
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of _______________, 199_ is
entered into between ________________ ("Assignor") and ____________________
("Assignee").
Reference is made to the Credit Agreement dated as of October 20,
1998, as amended and modified from time to time thereafter (the "Credit
Agreement") among AutoZone, Inc., the Lenders party thereto, NationsBank,
N.A., as Agent. Terms defined in the Credit Agreement are used herein with
the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to
the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, effective as of the Effective Date set forth below, the interests
set forth below (the "Assigned Interest") in the Assignor's rights and
obligations under the Credit Agreement, including, without limitation, the
interests set forth below in the Commitments and outstanding Loans of the
Assignor on the effective date of the assignment designated below (the
"Effective Date"), together with unpaid Fees accrued on the assigned
Commitments to the Effective Date and unpaid interest accrued on the
assigned Loans to the Effective Date. Each of the Assignor and the
Assignee hereby makes and agrees to be bound by all the representations,
warranties and agreements set forth in Section 10.3(b) of the Credit
Agreement, a copy of which has been received by the Assignee. From and
after the Effective Date (i) the Assignee, if it is not already a Lender
under the Credit Agreement, shall be a party to and be bound by the
provisions of the Credit Agreement and, to the extent of the interests
purchased and assumed by the Assignee under this Assignment and Acceptance,
have the rights and obligations of a Lender thereunder and (ii) the
Assignor shall, to the extent of the interests sold and assigned by the
Assignor under this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement.
2. This Assignment and Acceptance shall be governed by and
construed in accordance with the laws of the State of North Carolina.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Commitment of Assignee
after giving effect to this
Assignment and Acceptance as
of the Effective Date $_________________
(f) Commitment of Assignor
after giving effect to this
Assignment and Acceptance as
of the Effective Date $_________________
(g) Commitment Percentage of Assignee
after giving effect to this
Assignment and Acceptance
as of the Effective Date
(set forth to at least 8 decimals) %
(h) Commitment Percentage of Assignor
after giving effect to this
Assignment and Acceptance
as of the Effective Date
(set forth to at least 8 decimals) %
4. This Assignment and Acceptance shall be effective only upon
consent of the Borrower and the Agent, if applicable, delivery to the Agent
of this Assignment and Acceptance together with the transfer fee payable
pursuant to Section 10.3(b) in connection herewith and recordation in the
Register pursuant to Section 10.3(c) of the terms hereof.
5. This Assignment and Acceptance may be executed in any
number of counterparts, each of which where so executed and delivered shall
be an original, but all of which shall constitute one and the same
instrument. It shall not be necessary in making proof of this Assignment
and Acceptance to produce or account for more than one such counterpart.
The terms set forth above
are hereby agreed to:
, as Assignor
By:
Name:
Title:
, as Assignee
By:
Name:
Title:
Notice address of Assignee:
<<Assignee>>
Attn:
Telephone: (___)
Telecopy: (___)
CONSENTED TO:
NATIONSBANK, N.A.,
as Agent
By:
Name:
Title:
AUTOZONE, INC.
By:
Name:
Title:
EXHIBIT 10.5
CREDIT AGREEMENT
Dated as of November 13, 1998
among
AUTOZONE, INC.,
as Borrower,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
NATIONSBANK, N.A.,
as Agent
and
SUNTRUST BANK, NASHVILLE, N.A.,
as Documentation Agent
<PAGE>
TABLE OF CONTENTS
SECTION 1 DEFINITIONS 1
1.1 Definitions. 1
1.2 Incorporated Definitions. 5
1.3 Computation of Time Periods. 5
1.4 Accounting Terms. 5
SECTION 2 CREDIT FACILITY 6
2.1 Loans. 6
2.2 [intentionally left blank] 8
2.3 [intentionally left blank] 8
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITY 8
3.1 Default Rate. 8
3.2 Extension and Conversion. 8
3.3 Prepayments. 9
3.4 Termination, Reduction and Increase of Committed Amount. 9
3.5 Facility Fee. 10
3.6 Capital Adequacy. 10
3.7 Inability To Determine Interest Rate. 11
3.8 Illegality. 11
3.9 Yield Protection. 11
3.10 Withholding Tax Exemption. 12
3.11 Indemnity. 13
3.12 Pro Rata Treatment. 14
3.13 Sharing of Payments. 14
3.14 Payments, Computations, Etc. 15
3.15 Evidence of Debt. 16
3.16 Replacement of Lenders. 17
SECTION 4 CONDITIONS 18
4.1 Closing Conditions. 18
4.2 Conditions to all Extensions of Credit. 18
SECTION 5 REPRESENTATIONS AND WARRANTIES 19
5.1 Organization; Existence; Compliance with Law. 19
5.2 Power; Authorization; Enforceable Obligations. 19
5.3 No Legal Bar. 20
5.4 Governmental Regulations. 20
5.5 Purpose of Loans. 20
5.6 Incorporated Representations and Warranties. 21
SECTION 6 COVENANTS 21
6.1 Use of Proceeds. 21
6.2 Incorporated Covenants. 21
SECTION 7 [intentionally left blank] 22
SECTION 8 EVENTS OF DEFAULT 22
8.1 Events of Default. 22
8.2 Acceleration; Remedies. 24
SECTION 9 AGENCY PROVISIONS 24
9.1 Appointment. 24
9.2 Delegation of Duties. 25
9.3 Exculpatory Provisions. 25
9.4 Reliance on Communications. 25
9.5 Notice of Default. 26
9.6 Non-Reliance on Agent and Other Lenders. 26
9.7 Indemnification. 27
9.8 Agent in its Individual Capacity. 27
9.9 Successor Agent. 27
9.10 Documentation Agent. 28
SECTION 10 MISCELLANEOUS 28
10.1 Notices. 28
10.2 Right of Set-Off. 29
10.3 Benefit of Agreement. 30
10.4 No Waiver; Remedies Cumulative. 32
10.5 Payment of Expenses, etc. 32
10.6 Amendments, Waivers and Consents. 33
10.7 Counterparts. 34
10.8 Headings. 34
10.9 Survival. 34
10.10 Governing Law; Submission to Jurisdiction; Venue. 34
10.11 Severability. 35
10.12 Entirety. 35
10.13 Binding Effect; Termination. 35
10.14 Confidentiality. 36
10.15 Source of Funds. 36
10.16 Conflict. 37
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 Note
Schedule 3.2 Form of Notice of Extension/Conversion
Schedule 6.2 Form of Officer's Compliance Certificate
Schedule 10.3(b) Form of Assignment and Acceptance
<PAGE>
CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of November 13, 1998 (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"), NATIONSBANK, N.A., as agent for the Lenders (in such capacity,
the "Agent"), and SUNTRUST BANK, NASHVILLE, N.A., as Documentation Agent
(in such capacity, the "Documentation Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$150,000,000 credit facility (as such credit facility may be increased or
decreased pursuant to the terms hereof) for the purposes hereinafter set
forth;
WHEREAS, the Lenders have agreed to make the requested credit
facility available to the Borrower on the terms and conditions hereinafter
set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
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:
"Agency Services Address" means NationsBank, N.A., NC1-001-15-04,
101 North Tryon Street, Charlotte, North Carolina 28255, Attn: Agency
Services, or such other address as may be identified by written notice from
the Agent to the Borrower.
"Agent" shall have the meaning assigned to such term in the heading
hereof, together with any successors or assigns.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Loan or the applicable rate of
the Facility Fee for any day for purposes of Section 3.5, 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 both S&P and Moody's, five
(5) Business Days after receipt of notice by the Agent of a change in any
such debt rating, based on such debt ratings;
(ii) where the Borrower previously had a senior
unsecured (non-credit enhanced) long term debt rating from both S&P and
Moody's, but either or both of S&P and Moody's withdraws its rating, five
(5) Business Days after receipt by the Agent of notice of the withdrawal of
such debt rating, based on the information contained in the most recent
annual or quarterly financial statements and related certificates provided
in accordance with Sections 6.1(a) and 6.1(b) of the Incorporated
Covenants; and
(iii) five (5) Business Days after the date by which the
Borrower is required to provide the officer's certificate in accordance
with the provisions of Section 6.1(c) of the Incorporated Covenants.
The Applicable Percentage shall be effective from a Calculation
Date until the next such Calculation Date. The 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 Agent shall be conclusive absent manifest error. The Applicable
Percentage from Closing Date shall be based on Pricing Level II, subject to
adjustment as provided herein.
"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.
"Calculation Date" has the meaning set forth in the definition of
Applicable Percentage.
"Closing Date" means the date hereof.
"Committed Amount" shall have the meaning assigned to such term in
Section 2.1(a).
"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 Loans in accordance
with the provisions of Section 2.1(a).
"Commitment Percentage" means, for any Lender, the percentage which
such Lender's Commitment then constitutes of the aggregate Committed
Amount.
"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, 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.
"Documentation Agent" shall have the meaning assigned to such term
in the heading hereof, together with any successors or assigns.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"Event of Default" means such term as defined in Section 8.1.
"Existing Credit Agreement" means that certain Credit Agreement,
dated as of December 20, 1996, as amended through the date hereof, by and
among the Borrower, the lenders parties thereto and NationsBank, NA, as
agent for such lenders.
"Facility Fee" shall have the meaning assigned to such term in
Section 3.5.
"Facility Fee Calculation Period" shall have the meaning assigned
to such term in Section 3.5.
"Financial Officer" means, with respect to the Borrower, the
Treasurer, the Chief Accounting Officer, 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
Agent from at least two existing Financial Officers of the Borrower.
"Interest Payment Date" means (i) as to any Base Rate Loan, the
last day of each March, June, September and December, the date of repayment
of principal of such Loan and the Termination Date and (ii) as to any
Eurodollar Loan, 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 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); provided, however, (A) if any Interest Period
would end on a day which is not a Business Day, such Interest Period shall
be extended to the next succeeding Business Day (except that in the case of
Eurodollar Loans where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (B) no
Interest Period shall extend beyond the Termination Date, and (C) in the
case of Eurodollar Loans, where an Interest Period begins on a day for
which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the
last day of such calendar month.
"Lenders" means each of the Persons identified as a "Lender" on the
signature pages hereto, and each Person which may become a Lender by way of
assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Lending Installation" means, with respect to a Lender or the
Agent, any office, branch, subsidiary or affiliate of such Lender or the
Agent.
"Loans" shall have the meaning assigned to such term in Section
2.1(a).
"Master Account" means such account as may be identified by written
notice from at least two Financial Officers of the Borrower to the Agent.
"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.
"NationsBank" means NationsBank, N.A. and its successors.
"Note" means a promissory note of the Borrower in favor of a Lender
delivered pursuant to Section 2.1(e) and evidencing the Loans of such
Lender, as such promissory note may be amended, modified, restated or
replaced from time to time.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Schedule 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Schedule 3.2, as
required by Section 3.2.
"Participation Interest" means, the extension of credit by a Lender
by way of a purchase of a participation or in any Loans as provided in
Section 3.13.
"Pricing Level" means the applicable pricing level for the
Applicable Percentage shown in Schedule 1.1.
"Register" shall have the meaning given such term in Section
10.3(c).
"Required Lenders" means, at any time, Lenders which are then in
compliance with their obligations hereunder (as determined by the Agent)
and holding in the aggregate at least 51% of (i) the Commitment Percentages
or (ii) if the Commitments have been terminated, the outstanding Loans and
Participation Interests.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such division
in the business of rating securities.
"Termination Date" means November 13, 1999; provided, however, such
date may be extended with the consent of each of the Lenders.
1.2 Incorporated Definitions.
All capitalized terms not otherwise defined herein shall have the
respective meanings assigned to such terms in the Existing Credit
Agreement, as in effect as of the date hereof (the "Incorporated
Definitions"). The incorporation by reference to the Existing Credit
Agreement of the Incorporated Definitions pursuant to this Section 1.2
shall survive the termination of the Existing Credit Agreement. For
purposes of the incorporation of the Incorporated Definitions pursuant to
this Section 1.2, all references in the Incorporated Definitions to the
"Agent" shall be deemed to refer to the Agent hereunder, all references in
the Incorporated Definitions to a "Lender" or the "Lenders" shall be deemed
to refer to one or more of the Lenders hereunder, all references in the
Incorporated Definitions to the "Required Lenders" shall be deemed to refer
to the Required Lenders hereunder, all references in the Incorporated
Definitions to the "Credit Agreement," or any similar references, shall be
deemed to refer to this Credit Agreement, all references in the
Incorporated Definitions to a "Note" or the "Notes" shall be deemed to
refer to one or more of the Notes issued pursuant to Section 2.1(e) hereof
and all references in the Incorporated Definitions to a "Credit Document"
or the "Credit Documents," or any similar references, shall be deemed to
refer to one or more of the Credit Documents as defined in Section 1.1
hereof.
1.3 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."
1.4 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 of the Incorporated Covenants;
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 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.
SECTION 2
CREDIT FACILITY
2.1 Loans.
(a) 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 ("Loans") up to
such Lender's Commitment from time to time from the Closing Date until the
Termination Date, or such earlier date as the 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 Loans shall not exceed ONE HUNDRED FIFTY MILLION DOLLARS
($150,000,000.00) (as such aggregate maximum amount may be reduced or
increased from time to time as provided in Section 3.4, the "Committed
Amount"); provided, further, with regard to each Lender individually, such
Lender's outstanding Loans shall not exceed such Lender's Commitment.
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
15 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.
Loans hereunder may be repaid and reborrowed in accordance with the
provisions hereof.
(b) Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall
request a Loan borrowing by written notice (or telephone notice promptly
confirmed in writing) to the Agent not later than 11:30 A.M. (Charlotte,
North Carolina time) on the Business Day of the requested borrowing in the
case of Base Rate Loans, and not later than 2:00 P.M. (Charlotte, North
Carolina time) on the third Business Day 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 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 Loan requested, then such notice shall be deemed to be
a request for a Base Rate Loan hereunder. The 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 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 Committed Amount, if less).
(iii) Advances. Each Lender will make its
Commitment Percentage of each Loan borrowing available to the Agent for the
account of the Borrower as specified in Section 3.14(a), or in such other
manner as the Agent may specify in writing, by 1:00 P.M. (Charlotte, North
Carolina time) on the date specified in the applicable Notice of Borrowing
in Dollars and in funds immediately available to the Agent. Such borrowing
will then be made available to the Borrower by the Agent by crediting the
Master Account with the aggregate of the amounts made available to the
Agent by the Lenders and in like funds as received by the Agent.
(c) Repayment. The principal amount of all Loans shall
be due and payable in full on the Termination Date; provided, however, so
long as no Default or Event of Default exists on the Termination Date, if
the Borrower so elects, the principal amount of all Loans as of the
Termination Date shall be paid on the date one year after the Termination
Date.
(d) Interest. Subject to the provisions of Section
3.1,
(i) Base Rate Loans. During such periods as
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;
(ii) Eurodollar Loans. During such periods as
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 Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Notes. The 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 Commitment and in
substantially the form of Schedule 2.1(e).
2.2 [intentionally left blank]
2.3 [intentionally left blank]
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITY
3.1 Default Rate.
Upon the occurrence, and during the continuance, o f 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 2%
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 2%
greater than the Base Rate).
3.2 Extension and Conversion.
Subject to the terms of Section 4.2, the Borrower shall have the
option, on any Business Day, to extend existing Loans into a subsequent
permissible Interest Period or to convert Loans into Loans of another
interest rate type; provided, however, that (a) except as provided in
Section 3.8, Eurodollar Loans may be converted into Base Rate Loans only on
the last day of the Interest Period applicable thereto, (b) Eurodollar
Loans may be extended, and Base Rate Loans may be converted into Eurodollar
Loans, only if no Default or Event of Default is in existence on the date
of extension or conversion, (c) Loans extended as, or converted into,
Eurodollar Loans shall be subject to the terms of the definition of
"Interest Period" set forth in Section 1.1 and shall be in such minimum
amounts as provided in Section 2.1(b)(ii), (d) no more than 15 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)
and (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. 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 Agent prior to 11:30 A.M. (Charlotte, North Carolina time) on the
Business Day of, in the case of the extension of a Base Rate Loan, and
prior to 2:00 P.M. (Charlotte, North Carolina time) on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the
proposed extension or conversion, specifying the date of the proposed
extension or conversion, the Loans to be so extended or converted, the
types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each
request for extension or conversion shall be irrevocable and shall
constitute a representation and warranty by the Borrower of the matters
specified in subsections (b), (c), (d) and (e) of Section 4.2. In the
event the Borrower fails to request extension or conversion of any
Eurodollar Loan in accordance with this Section, or any such conversion or
extension is not permitted or required by this Section, then such
Eurodollar Loan shall be automatically converted into a Base Rate Loan at
the end of the Interest Period applicable thereto. The 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 in whole or in part from time to time, subject to
Section 3.11, but otherwise without premium or penalty; provided, however,
that (i) Eurodollar Loans may only be prepaid on three Business Days' prior
written notice to the Agent and specifying the applicable Loans to be
prepaid; (ii) any prepayment of Eurodollar Loans will be subject to Section
3.11; and (iii) each such partial prepayment of Loans shall be 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 Loan or 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. If at any time, the sum of
the aggregate principal amount of outstanding Loans shall exceed the
Committed Amount, the Borrower promises to prepay immediately the
outstanding principal balance on the Loans in an amount sufficient to
eliminate such excess.
(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. Amount prepaid on the Loans may be reborrowed in accordance
with the provisions hereof.
3.4 Termination, Reduction and Increase of Committed Amount.
(a) Voluntary Reductions. The Borrower may from time
to time permanently reduce or terminate the 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 Committed Amount)) upon five Business Days' prior
written notice to the Agent; provided, however, no such termination or
reduction shall be made which would cause the aggregate principal amount of
outstanding Loans to exceed the Committed Amount unless, concurrently with
such termination or reduction, the Loans are repaid to the extent necessary
to eliminate such excess. The Commitments of the Lenders shall
automatically terminate on the Termination Date. The Agent shall promptly
notify each affected Lender of receipt by the Agent of any notice from the
Borrower pursuant to this Section 3.4(a).
(b) Termination Date. The Commitments of the Lenders
shall automatically terminate on the Termination Date.
3.5 Facility Fee.
In consideration of the Commitments of the Lenders hereunder, the
Borrower agrees to pay to the Agent for the account of each Lender a fee
(the "Facility Fee") on the Committed Amount computed at a per annum rate
for each day during the applicable Facility Fee Calculation Period
(hereinafter defined) at a rate 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
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.
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, 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 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 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 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 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 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 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 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
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 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 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 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 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 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
reduction of the 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.
(b) Advances. Unless the 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 Agent, the Agent may assume that such Lender is
making such amount available to the Agent, and the Agent may, in reliance
upon such assumption, make available to the Borrower a corresponding
amount. If such amount is not made available to the Agent by such Lender
within the time period specified therefor hereunder, such Lender shall pay
to the 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 Agent. A certificate of the 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 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 Agent shall fail to remit to the Agent or any other Lender an amount
payable by such Lender or the Agent to the 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 Agent
or such other Lender at a rate per annum equal to the Federal Funds Rate.
If under any applicable bankruptcy, insolvency or other similar law, any
Lender receives a secured claim in lieu of a setoff to which this Section
3.13 applies, such Lender shall, to the extent practicable, exercise its
rights in respect of such secured claim in a manner consistent with the
rights of the Lenders under this Section 3.13 to share in the benefits of
any recovery on such secured claim.
3.14 Payments, Computations, Etc.
(a) Except as otherwise specifically provided herein,
all payments hereunder shall be made to the Agent in dollars in immediately
available funds, without offset, deduction, counterclaim or withholding of
any kind, at the Agent's office specified in Schedule 2.1(a) not later than
4:00 P.M. (Charlotte, North Carolina time) on the date when due. Payments
received after such time shall be deemed to have been received on the next
succeeding Business Day. The 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 Agent (with
notice to the Borrower). The Borrower shall, at the time it makes any
payment under this Credit Agreement, specify to the 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 Agent
shall distribute such payment to the Lenders in such manner as the 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 Agent
will distribute such payments to such Lenders, if any such payment is
received prior to 12:00 Noon (Charlotte, North Carolina time) on a Business
Day in like funds as received prior to the end of such Business Day and
otherwise the Agent will distribute such payment to such Lenders on the
next succeeding Business Day. 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 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 Agent in connection with enforcing the rights of
the Lenders under the Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable
out-of-pocket costs and expenses (including without limitation, reasonable
attorneys' fees) of each of the Lenders in connection with enforcing its
rights under the Credit Documents or otherwise with respect to amounts
owing to such Lender;
FOURTH, to the payment of accrued fees and
interest;
FIFTH, to the payment of the outstanding principal
amount of the Loans;
SIXTH, to all other amounts and other obligations
which shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH" above;
and
SEVENTH, to the payment of the surplus, if any, to
whoever may be lawfully entitled to receive such surplus.
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.
3.15 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 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 Agent
hereunder from or for the account of the Borrower and each Lender's share
thereof. The 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 Agent, subsection (a)) shall be
prima facie, but not conclusive, evidence of the existence and amounts of
the obligations of the Borrower therein recorded; provided, however, that
the failure of any Lender or the 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.
3.16 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 agreements
substantially in the form of Schedule 10.3(b) pursuant to, and in
accordance with the terms of, Section 10.3(b) (and with all fees payable
pursuant to said Section 10.3(b) to be paid by the Replacement Lender)
pursuant to which the Replacement Lender shall acquire all of the rights
and obligations of the Replaced Lender hereunder and, in connection
therewith, shall pay to the Replaced Lender in respect thereof an amount
equal to the sum of (a) the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, and (b) all accrued, but
theretofore unpaid, fees owing to the Replaced Lender pursuant to Section
3.5(a), and (B) all obligations of the Borrower owing to the Replaced
Lender (including all obligations, if any, owing pursuant to Section 3.6,
3.8 or 3.9, but excluding those obligations specifically described in
clause (A) above in respect of which the assignment purchase price has
been, or is concurrently being paid) shall be paid in full to such Replaced
Lender concurrently with such replacement.
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 Agent shall have received original counterparts
of this Credit Agreement executed by each of the parties hereto;
(b) The Agent shall have received an appropriate
original Note for each Lender, executed by the Borrower; and
(c) The 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 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) 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 Loan, 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 Loans shall not exceed the
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.
SECTION 5
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents to the Agent and each Lender that:
5.1 Organization; Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and is in good standing under the laws of the jurisdiction
of its incorporation or organization, (b) has the corporate or other
necessary power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, except to the extent that the
failure to have such legal right would not be reasonably expected to have a
Material Adverse Effect, (c) is duly qualified as a foreign entity and in
good standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires such
qualification, other than in such jurisdictions where the failure to be so
qualified and in good standing would not be reasonably expected to have a
Material Adverse Effect, and (d) is in compliance with all material
Requirements of Law, except to the extent that the failure to comply
therewith would not, in the aggregate, be reasonably expected to have a
Material Adverse Effect.
5.2 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).
5.3 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.
5.4 Governmental Regulations.
No part of the proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any "margin stock" in
violation of Regulation G or Regulation U. If requested by any Lender or
the Agent, the Borrower will furnish to the 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 G, T, U
or X.
5.5 Purpose of Loans.
The proceeds of the Loans hereunder shall be used solely by the
Borrower to (a) repurchase stock in the Borrower, (b) to finance
acquisitions to the extent permitted under this Credit Agreement, (c) to
refinance existing indebtedness to the Lenders and (d) for the working
capital, commercial paper back up, capital expenditures and other lawful
corporate purposes of the Borrower and its Subsidiaries.
5.6 Incorporated Representations and Warranties.
The Borrower hereby agrees that the representations and warranties
contained in Sections 5.1, 5.5, 5.6, 5.7, 5.8, 5.9, 5.10, 5.11(b)-(e) and
5.12 of the Existing Credit Agreement, as in effect as of the date hereof
(the "Incorporated Representations"), are hereby incorporated by reference
and shall be as binding on the Borrower as if set forth fully herein;
provided, however, Schedule 5.12 of the Incorporated Representations shall
be deleted and replaced with Schedule 5.12 attached hereto. The
incorporation by reference to the Existing Credit Agreement of the
Incorporated Representations pursuant to this Section 5.6 shall survive the
termination of the Existing Credit Agreement. For purposes of the
incorporation of the Incorporated Representations pursuant to this Section
5.6, all references in the Incorporated Representations to the "Agent"
shall be deemed to refer to the Agent hereunder, all references in the
Incorporated Representations to a "Lender" or the "Lender" shall be deemed
to refer to one or more of the Lenders hereunder, all references in the
Incorporated Representations to the "Required Lenders" shall be deemed to
refer to the Required Lenders hereunder, all references in the Incorporated
Representations to the "Credit Agreement," or any similar references, shall
be deemed to refer to this Credit Agreement, all references in the
Incorporated Representations to a "Note" or the "Notes" shall be deemed to
refer to one or more of the Notes issued pursuant to Section 2.1(e) hereof
and all references in the Incorporated Representations to a "Credit
Document" or the "Credit Documents," or any similar references, shall be
deemed to refer to one or more of the Credit Documents as defined in
Section 1.1 hereof.
SECTION 6
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 Use of Proceeds.
The Borrower will use the proceeds of the Loans solely for the
purposes set forth in Section 5.5.
6.2 Incorporated Covenants.
The Borrower hereby agrees that the affirmative and negative
covenants contained in Sections 6.1-6.7, Section 6.9, Section 6.10 and
Section 7 of the Existing Credit Agreement, as in effect as of the date
hereof (the "Incorporated Covenants"), are hereby incorporated by reference
and shall be as binding on the Borrower as if set forth fully herein,
except that, for purposes hereof, Schedule 6.1(c) to the Existing Credit
Agreement referred to in Section 6.1(c) of the Existing Credit Agreement
shall be deemed to refer to Schedule 6.2 attached hereto. The
incorporation by reference to the Existing Credit Agreement of the
Incorporated Covenants pursuant to this Section 6.2 shall survive the
termination of the Existing Credit Agreement. For purposes of the
incorporation of the Incorporated Covenants pursuant to this Section 6.2,
all references in the Incorporated Covenants to the "Agent" shall be deemed
to refer to the Agent hereunder, all references in the Incorporated
Covenants to a "Lender" or the "Lenders" shall be deemed to refer to one or
more of the Lenders hereunder, all references in the Incorporated Covenants
to the "Required Lenders" shall be deemed to refer to the Required Lenders
hereunder, all references in the Incorporated Covenants to the "Credit
Agreement," or any similar reference, shall be deemed to refer to this
Credit Agreement, all references in the Incorporated Covenants to a "Note"
or the "Notes" shall be deemed to refer to one or more of the Notes issued
pursuant to Section 2.1(e) hereof and all references in the Incorporated
Covenants to a "Credit Document" or the "Credit Documents," or any similar
reference, shall be deemed to refer to one or more of the Credit Documents
as defined in Section 1.1 hereof.
SECTION 7
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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 defaults shall continue
for five (5) or more Business Days, in the payment when due of any interest
on the Loans, or of any 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,
6.10 or 7.1 through 7.3, inclusive, of the Incorporated Covenants, or
(ii) default in the due performance or
observance by it of any term, covenant or agreement (other than those
referred to in subsections (a), (b) or (c)(i) 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 Agent; or
(d) Incorporated Events of Default. The occurrence of
an "Event of Default" under and as defined in the Existing Credit
Agreement, as in effect as of the date hereof, which "Events of Default"
(the "Incorporated Events of Default"), are hereby incorporated herein by
reference and shall be as binding on the Borrower as if set forth fully
herein, such incorporation by reference to survive termination of the
Existing Credit Agreement. For purposes of the incorporation of the
Incorporated Events of Default pursuant to this Section 8.1(d), all
references in the Incorporated Events of Default to the "Agent" shall be
deemed to refer to the Agent hereunder, all references in the Incorporated
Events of Default to a "Lender" or the "Lenders" shall be deemed to refer
to one or more of the Lenders hereunder, all references in the Incorporated
Events of Default to the "Required Lenders" shall be deemed to refer to the
Required Lenders hereunder, all references in the Incorporated Events of
Default to the "Credit Agreement," or any similar references, shall be
deemed to refer to this Credit Agreement, all references in the
Incorporated Events of Default to a "Note" or the "Notes" shall be deemed
to refer to one or more of the Notes issued pursuant to Section 2.1(e)
hereof and all references in the Incorporated Events of Default to a
"Credit Document" or the "Credit Documents," or any similar references,
shall be deemed to refer to one or more of the Credit Documents as defined
in Section 1.1 hereof.
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 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 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) of the Incorporated Events of Default shall occur, then the
Commitments shall automatically terminate and all Loans, all accrued
interest in respect thereof and all and other indebtedness or obligations
owing to the Agent and/or any of the Lenders hereunder automatically shall
immediately become due and payable without the giving of any notice or
other action by the Agent or the Lenders.
SECTION 9
AGENCY PROVISIONS
9.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity as Agent hereunder, the "Agent") of
such Lender to act as specified herein and the other Credit Documents, and
each such Lender hereby authorizes the 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 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 Agent. The
provisions of this Section are solely for the benefit of the 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 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 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 Agent of its duties hereunder.
9.3 Exculpatory Provisions.
The 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 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 Agent shall not be responsible to any Lender
for the effectiveness, genuineness, validity, enforceability,
collectability 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 Agent to the Lenders or by or on behalf
of the Borrower to the 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 Agent shall be entitled to rely, and shall be fully protected
in relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation
reasonably believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including, without limitation, counsel to the
Borrower, independent accountants and other experts selected by the Agent
with reasonable care). The 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 Agent in accordance with Section 10.3(b) hereof. The
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 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 Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the 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 Agent receives such
a notice, the Agent shall give prompt notice thereof to the Lenders. The
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 Agent and Other Lenders.
Each Lender expressly acknowledges that each of the 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
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 Agent to any Lender. Each
Lender represents to the Agent that it has, independently and without
reliance upon the 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 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 Agent hereunder, the 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 Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 Indemnification.
The Lenders agree to indemnify the 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
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 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 Agent. If any indemnity furnished to the Agent for any
purpose shall, in the opinion of the Agent, be insufficient or become
impaired, the 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 Agent in its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Borrower, its
Subsidiaries or their respective Affiliates as though the Agent were not
the Agent hereunder. With respect to the Loans made by and all obligations
of the Borrower hereunder and under the other Credit Documents, the Agent
shall have the same rights and powers under this Credit Agreement as any
Lender and may exercise the same as though it were not the Agent, and the
terms "Lender" and "Lenders" shall include the Agent in its individual
capacity.
9.9 Successor Agent.
The Agent may, at any time, resign upon 20 days' written notice to
the Lenders, and may be removed, upon show of cause, by the Required
Lenders upon 30 days' written notice to the Agent. Upon any such
resignation or removal, the Required Lenders shall have the right to
appoint a successor Agent; provided that, so long as no Default or Event of
Default has occurred and is continuing, such successor Agent shall be
reasonably acceptable to the Borrower. If no successor Agent shall have
been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the notice of resignation or notice of
removal, as appropriate, then the retiring Agent shall select a successor
Agent provided such successor is a Lender hereunder or a commercial bank
organized under the laws of the United States of America or of any State
thereof and has a combined capital and surplus of at least $400,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor,
such successor Agent shall thereupon succeed to and become vested with all
the rights, powers, privileges and duties of the retiring Agent, and the
retiring Agent shall be discharged from its duties and obligations as
Agent, as appropriate, under this Credit Agreement and the other Credit
Documents and the provisions of this Section 9 shall inure to its benefit
as to any actions taken or omitted to be taken by it while it was Agent
under this Credit Agreement.
9.10 Documentation Agent.
The Documentation 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.
Except as otherwise expressly provided herein, all notices and
other communications shall have been duly given and shall be effective (i)
when delivered, (ii) when transmitted and received (by confirmation of
receipt) via telecopy (or other facsimile device) to the number set out
below, (iii) the day following the day on which the same has been delivered
prepaid to a reputable national overnight air courier service, or (iv) the
third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case to the respective parties
at the address, in the case of the Borrower and the Agent, set forth below,
and, in the case of the Lenders, set forth on Schedule 2.1(a), or at such
other address as such party may specify by written notice to the other
parties hereto:
if to the Borrower:
AutoZone, Inc.
123 South Front Street
Memphis, TN 38103
Attn: Chief Financial Officer
Telephone: (901) 495-7181
Telecopy: (901) 495-8317
with a copy to the Treasurer and to the General Counsel for
the Borrower at the same address;
if to the Agent:
NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
101 N. Tryon Street
Charlotte, North Carolina 28255
Attn: Agency Services
Telephone: (704) 388-3917
Telecopy: (704) 386-9923
with a copy to:
NationsBank, N.A.
NationsBank Corporate Center
NC1-007-8-7
100 N. Tryon Street
Attn: Jeb Ball
Telephone: (704) 386-9718
Telecopy: (704) 388-0373
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 Benefit of Agreement.
(a) Generally. This Credit Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided that the Borrower
may not assign or transfer any of its interests without prior written
consent of the Lenders; provided further that the rights of each Lender to
transfer, assign or grant participations in its rights and/or obligations
hereunder shall be limited as set forth in this Section 10.3, provided
however that nothing herein shall prevent or prohibit any Lender from (i)
pledging its Loans hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank, or (ii)
granting assignments or selling participations in such Lender's Loans
and/or Commitments hereunder to its parent company and/or to any Affiliate
or Subsidiary of such Lender.
(b) Assignments. Each Lender may assign all or a
portion of its rights and obligations hereunder, pursuant to an assignment
agreement substantially in the form of Schedule 10.3(b), to (i) any Lender
or any Affiliate or Subsidiary of a Lender, or (ii) any other commercial
bank, financial institution or "accredited investor" (as defined in
Regulation D of the Securities and Exchange Commission) that, so long as no
Default or Event of Default has occurred and is continuing, is reasonably
acceptable to the Borrower; provided that (i) any such assignment (other
than any assignment to an existing Lender) shall be in a minimum aggregate
amount of $5,000,000 (or, if less, the remaining amount of the Commitment
being assigned by such Lender) of the Commitments and in integral multiples
of $1,000,000 above such amount, (ii) so long as no Event of Default has
occurred and is continuing, no Lender shall assign more than 50% of such
Lender's original Commitment and (iii) each such assignment shall be of a
constant, not varying, percentage of all such Lender's rights and
obligations under this Credit Agreement. Any assignment hereunder shall be
effective upon delivery to the Agent of written notice of the assignment
together with a transfer fee of $3,500 payable to the Agent for its own
account from and after the later of (i) the effective date specified in the
applicable assignment agreement and (ii) the date of recording of such
assignment in the Register pursuant to the terms of subsection (c) below.
The assigning Lender will give prompt notice to the Agent and the Borrower
of any such assignment. Upon the effectiveness of any such assignment (and
after notice to, and (to the extent required pursuant to the terms hereof),
with the consent of, the Borrower as provided herein), the assignee shall
become a "Lender" for all purposes of this Credit Agreement and the other
Credit Documents and, to the extent of such assignment, the assigning
Lender shall be relieved of its obligations hereunder to the extent of the
Loans and Commitment components being assigned. Along such lines the
Borrower agrees that upon notice of any such assignment and surrender of
the appropriate Note or Notes, it will promptly provide to the assigning
Lender and to the assignee separate promissory notes in the amount of their
respective interests substantially in the form of the original Note (but
with notation thereon that it is given in substitution for and replacement
of the original Note or any replacement notes thereof). By executing and
delivering an assignment agreement in accordance with this Section 10.3(b),
the assigning Lender thereunder and the assignee thereunder shall be deemed
to confirm to and agree with each other and the other parties hereto as
follows: (i) such assigning Lender warrants that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of
any adverse claim; (ii) except as set forth in clause (i) above, such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement, any of
the other Credit Documents or any other instrument or document furnished
pursuant hereto or thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Credit Agreement,
any of the other Credit Documents or any other instrument or document
furnished pursuant hereto or thereto or the financial condition of the
Borrower or any of its respective Affiliates or the performance or
observance by the Borrower of any of its obligations under this Credit
Agreement, any of the other Credit Documents or any other instrument or
document furnished pursuant hereto or thereto; (iii) such assignee
represents and warrants that it is legally authorized to enter into such
assignment agreement; (iv) such assignee confirms that it has received a
copy of this Credit Agreement, the other Credit Documents and such other
documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such assignment agreement; (v)
such assignee will independently and without reliance upon the Agent, such
assigning Lender or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Credit
Agreement and the other Credit Documents; (vi) such assignee appoints and
authorizes the Agent to take such action on its behalf and to exercise such
powers under this Credit Agreement or any other Credit Document as are
delegated to the Agent by the terms hereof or thereof, together with such
powers as are reasonably incidental thereto; and (vii) such assignee agrees
that it will perform in accordance with their terms all the obligations
which by the terms of this Credit Agreement and the other Credit Documents
are required to be performed by it as a Lender.
(c) Maintenance of Register. The Agent shall maintain
at one of its offices in Charlotte, North Carolina (i) a copy of each
Lender assignment agreement delivered to it in accordance with the terms of
subsection (b) above and (ii) a register for the recordation of the
identity of the principal amount, type and Interest Period of each Loan
outstanding hereunder, the names, addresses and the Commitments of the
Lenders pursuant to the terms hereof from time to time (the "Register").
The Agent will make reasonable efforts to maintain the accuracy of the
Register and to promptly update the Register from time to time, as
necessary. The Register shall be prima facie, but not conclusive,
evidence of the information contained therein and the Borrower, the Agent
and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all
purposes of this Credit Agreement. The Register shall be available for
inspection by the Borrower and each Lender, at any reasonable time and from
time to time upon reasonable prior notice.
(d) Participations. Each Lender may sell, transfer,
grant or assign participations in all or any part of such Lender's
interests and obligations hereunder; provided that (i) such selling Lender
shall remain a "Lender" for all purposes under this Credit Agreement (such
selling Lender's obligations under the Credit Documents remaining
unchanged) and the participant shall not constitute a Lender hereunder,
(ii) no such participant shall have, or be granted, rights to approve any
amendment or waiver relating to this Credit Agreement or the other Credit
Documents except to the extent any such amendment or waiver would (A)
reduce the principal of or rate of interest on or Fees in respect of any
Loans in which the participant is participating or (B) postpone the date
fixed for any payment of principal (including extension of the Termination
Date or the date of any mandatory prepayment), interest or Fees in which
the participant is participating, and (iii) sub-participations by the
participant (except to an affiliate, parent company or affiliate of a
parent company of the participant) shall be prohibited. In the case of any
such participation, the participant shall not have any rights under this
Credit Agreement or the other Credit Documents (the participant's rights
against the selling Lender in respect of such participation to be those set
forth in the participation agreement with such Lender creating such
participation) and all amounts payable by the Borrower hereunder shall be
determined as if such Lender had not sold such participation, provided,
however, that such participant shall be entitled to receive additional
amounts under Sections 3.6, 3.9 and 3.11 on the same basis as if it were a
Lender provided that it shall not be entitled to receive any more than the
selling Lender would have received had it not sold the participation.
10.4 No Waiver; Remedies Cumulative.
No failure or delay on the part of the 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 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 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 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 Agent in connection with the negotiation,
preparation, execution and delivery and administration of this Credit
Agreement and the other Credit Documents and the documents and instruments
referred to therein (including, subject to agreed upon limitations, the
reasonable fees and expenses of Moore & Van Allen, PLLC, special counsel to
the Agent) 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 Agent and the Lenders in connection with enforcement of the
Credit Documents and the documents and instruments referred to therein
(including, without limitation, in connection with any such enforcement,
the reasonable fees and disbursements of counsel (including allocated costs
of internal counsel) for the Agent and each of the Lenders); (b) pay and
hold each of the Lenders harmless from and against any and all future stamp
and other similar taxes with respect to the foregoing matters and save each
of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the
extent attributable to such Lender) to pay such taxes; and (c) indemnify
each Lender, its officers, directors, employees, representatives and agents
from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them as a
result of, or arising out of, or in any way related to, or by reason of (i)
any investigation, litigation or other proceeding (whether or not any
Lender is a party thereto, but excluding any investigation initiated by the
Person seeking indemnification hereunder) related to the entering into
and/or performance of any Credit Document or the use of proceeds of any
Loans (including other extensions of credit) hereunder or the consummation
of any other transactions contemplated in any Credit Document, including,
without limitation, the reasonable fees and disbursements of counsel
(including allocated costs of internal counsel) incurred in connection with
any such investigation, litigation or other proceeding or (ii) the presence
or Release of any Materials of Environmental Concern at, under or from any
Property owned, operated or leased by the Borrower or any of its
Subsidiaries, or the failure by the Borrower or any of its Subsidiaries to
comply with any Environmental Law (but excluding, in the case of either of
clause (i) or (ii) above, any such losses, liabilities, claims, damages or
expenses to the extent (A) incurred by reason of gross negligence or
willful misconduct on the part of the Person to be indemnified, (B) owing
to the Borrower or (C) owing to another Person entitled to indemnification
hereunder).
10.6 Amendments, Waivers and Consents.
Neither this Credit Agreement nor any other Credit Document nor any
of the terms hereof or thereof may be amended, changed, waived, discharged
or terminated unless such amendment, change, waiver, discharge or
termination is in writing entered into by, or approved in writing by, the
Required Lenders and the Borrower, provided, however, that:
(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 waiving the applicability of any post-default
increase in interest rates) 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) 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 Agent; and
(d) designation of the Master Account or of any
Financial Officer may not be made without the written consent of at least
two Financial Officers of the Borrower.
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 NORTH CAROLINA. 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 North Carolina in
Mecklenburg County, or of the United States for the Western District of
North Carolina, 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 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 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 Agent, and the 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 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 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 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 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 Agent or such Lender on a
non-confidential basis from a source other than the Borrower or (C) was
available to the Agent or such Lender on a non-confidential basis prior to
its disclosure to the Agent or such Lender by the Borrower; (iv) to any
assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
specifically agrees in a writing furnished to and for the benefit of the
Borrower to be bound by the terms of this Section 10.14; or (v) 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
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 to be used by such Lender in connection with the
financing hereunder:
(a) no part of such funds constitutes assets allocated
to any separate account maintained by such Lender in which any employee
benefit plan (or its related trust) has any interest;
(b) to the extent that any part of such funds
constitutes assets allocated to any separate account maintained by such
Lender, such Lender has disclosed to the Borrower the name of each employee
benefit plan whose assets in such account exceed 10% of the total assets of
such account as of the date of such purchase (and, for purposes of this
subsection (b), all employee benefit plans maintained by the same employer
or employee organization are deemed to be a single plan);
(c) to the extent that any part of such funds
constitutes assets of an insurance company's general account, such
insurance company has complied with all of the requirements of the
regulations issued under Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more
specific benefit plans which such Lender has identified in writing to the
Borrower.
As used in this Section 10.15, the terms "employee benefit plan" and
"separate account" shall have the respective meanings assigned to such
terms in Section 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.
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered as
of the date first above written.
BORROWER: AUTOZONE, INC.
a Nevada corporation
By: /s/ Harry L. Goldsmith
---------------------------
Name: Harry L. Goldsmith
--------------------------
Title: Sr. Vice President
------------------------
By: /s/ Robert J. Hunt
----------------------------
Name: Robert J. Hunt
--------------------------
Title: EVP & CFO
------------------------
LENDERS: NATIONSBANK, N.A.,
individually in its capacity as a
Lender and in its capacity as Agent
By: /s/ John E. Ball
---------------------------
Name: John E. Ball
-------------------------
Title: SVP
------------------------
SUNTRUST BANK, NASHVILLE, N.A.,
individually in its capacity as a
Lender and in its capacity as
Documentation Agent
By: /s/ Bryan W. Ford
----------------------------
Name: Bryan W. Ford
-------------------------
Title: Vice President
-------------------------
FLEET BANK,
as a Lender
By: /s/ Thomas J. Bullard
--------------------------
Name: Thomas J. Bullard
--------------------------
Title: Vice President
------------------------
KEYBANK,
as a Lender
By: /s/ Thomas J. Purcell
---------------------------
Name: Thomas J. Purcell
-------------------------
Title: Vice President
------------------------
NORWEST BANK,
as a Lender
By: /s/ Brad A. Hardy
---------------------------
Name: Brad A. Hardy
--------------------------
Title: Vice-President
------------------------
THE FIRST NATIONAL BANK OF
CHICAGO,
as a Lender
By: /s/ John D. Runger
---------------------------
Name: John D. Runger
------------------------
Title: Managing Director
-----------------------
FIRST UNION NATIONAL BANK,
as a Lender
By: /s/ Orville Kronk
---------------------------
Name: Orville Kronk
-------------------------
Title: VP
------------------------
<PAGE>
SCHEDULE 1.1
APPLICABLE PERCENTAGE
<TABLE>
<CAPTION>
Applicable Percentage Applicable Percentage
Pricing S&P/Moody's Consolidated for for
Level Rating Leverage Ratio Eurodollar Loans Facility Fee
- ------- ----------- -------------- ---------------- ------------
<S> <C> <C> <C> <C>
Level I AA/Aa2 or above N.A. 12.5 bps. 6.25 bps
Level II A/A2 or above Less than or equal to 15.0 bps. 7.0 bps
0.25:1.00
Level III BBB+/Baa1 or above Greater than 0.25:1.00, 18.5 bps. 9.0 bps
but less than or equal to
0.35:1.00
Level IV BBB/Baa2 or above Greater than 0.35:1.00, 25.0 bps. 12.5 bps
but less than or equal to
0.40:1.00
Level V BBB-/Baa3 Greater than 0.40:1.00 35.0 bps. 15.0 bps
</TABLE>
If no Rating exists, the applicable Pricing Level shall be based on the
Consolidated Leverage Ratio. In the event of a Split Rating, the applicable
Pricing Level shall be based on the higher Rating. In the event of a Double
Split Rating, the applicable Pricing Level shall be based on the Pricing Level
which is one above that corresponding to the lower Rating. If the ratings and
the Consolidated Leverage Ratio indicate different Pricing Levels, the
applicable Pricing Level is the numerically lower of the two, except in the
instance of Pricing Level I where the Consolidated Leverage Ratio shall have no
effect.
As used herein:
"RATING" means the senior unsecured (non-credit enhanced) long term debt
rating of the Borrower, as published by S&P and/or Moody's.
"SPLIT RATING" means the ratings of S&P and Moody's would indicate
different Pricing Levels, but the Pricing Levels are not more than one Pricing
Level apart.
"DOUBLE SPLIT RATING" means the ratings of S&P and Moody's would indicate
different Pricing Levels, but the Pricing Levels are two or more Pricing Levels
apart.
<PAGE>
SCHEDULE 2.1(A)
LENDERS
<TABLE>
<CAPTION>
Commitment
Lender Percentage Commitment
- ------ ---------- ----------
<S> <C> <C>
NationsBank, N.A. 20.0000000% $30,000,000
NationsBank Corporate Center
NC1-007-8-7
Charlotte, NC 28255
Attn: Jeb Ball
Tel: (704) 386-9718
Fax: (704) 388-0373
SunTrust Bank, Nashville, N.A. 16.6666667% $25,000,000
6410 Poplar Avenue
Suite 320
Memphis, TN 38119
Attn: Bryan W. Ford
Tel: (901) 766-7561
Fax: (901) 766-7565
Fleet Bank 16.6666667% $25,000,000
One Federal Street
Mail Stop MA OF 0320
Boston, MA 02110-2010
Attn: Thomas J. Bullard
Tel: (617) 346-0146
Fax:
KeyBank 16.6666667% $25,000,000
525 Vine Street
Cincinnati, OH 45202
Attn: Wayne Guessford
Tel: (513) 762-8204
Fax: (513) 762-8222
Norwest Bank 13.3333333% $20,000,000
P.O. Box 2019
Austin, TX 78768-2019
Attn: Scott Bjelde
Tel: (512) 344-7345
Fax:
The First National Bank of Chicago 10.0000000% $15,000,000
One First National Plaza
Mail Suite 0086
Chicago, IL 60670-0324
Attn: John Runger
Tel: (312) 732-7634
Fax: (312) 732-1117
First Union National Bank 6.6666667% $10,000,000
150 4th Avenue
2nd Floor
Nashville, TN 37219
Attn: Orville Kronk
Tel: (615) 251-0857
Fax: (615) 251-4267
</TABLE>
<PAGE>
SCHEDULE 2.1(B)(I)
FORM OF NOTICE OF BORROWING
NationsBank, N.A.,
as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, AUTOZONE, INC. (the "BORROWER"), refers to the Credit
Agreement dated as of November 13, 1998 (as amended, modified, extended or
restated from time to time, the "CREDIT AGREEMENT"), among the Borrower, the
Lenders, NationsBank, N.A., as Agent, and SunTrust Bank, Nashville, N.A., as
Documentation Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Borrower hereby gives notice pursuant to Section 2.1 of the Credit
Agreement that it requests a Loan advance under the Credit Agreement, and in
connection therewith sets forth below the terms on which such Loan advance is
requested to be made:
(A) Date of Borrowing
(which is a Business Day)
(B) Principal Amount of
Borrowing
(C) Interest rate basis
(D) Interest Period and the
last day thereof
In accordance with the requirements of Section 4.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d) and (e) of such Section, are true and
correct.
Very truly yours,
AUTOZONE, INC.
By:
Name:
Title:
<PAGE>
SCHEDULE 2.1(E)
FORM OF NOTE
$_________________ November 13, 1998
FOR VALUE RECEIVED, AUTOZONE, INC., a Nevada corporation (the
"BORROWER"), hereby promises to pay to the order of __________________________,
its successors and assigns (the "LENDER"), at the office of NationsBank, N.A.,
as Agent (the "AGENT"), at 101 N. Tryon Street, Independence Center, NC1-001-
15-04, Charlotte, North Carolina 28255 (or at such other place or places as
the holder hereof may designate), at the times set forth in the Credit
Agreement, dated as of November 13, 1998, among the Borrower, the Lenders, the
Agent and the Documentation Agent (as it may be amended, modified, extended or
restated from time to time, the "CREDIT AGREEMENT"; all capitalized terms not
otherwise defined herein shall have the meanings set forth in the Credit
Agreement), but in no event later than the Termination Date, in Dollars and in
immediately available funds, the principal amount of ________________________
DOLLARS ($____________) or, if less than such principal amount, the aggregate
unpaid principal amount of all Loans made by the Lender to the Borrower
pursuant to the Credit Agreement, and to pay interest from the date hereof on
the unpaid principal amount hereof, in like money, at said office, on the dates
and at the rates selected in accordance with Section 2.1(d) of the Credit
Agreement.
Upon the occurrence and during the continuance of an Event of Default, the
balance outstanding hereunder shall bear interest as provided in Section 3.1 of
the Credit Agreement. Further, in the event the payment of all sums due
hereunder is accelerated under the terms of the Credit Agreement, this Note,
and all other indebtedness of the Borrower to the Lender shall become
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower.
In the event this Note is not paid when due at any stated or accelerated
maturity, the Borrower agrees to pay, in addition to the principal and
interest, all costs of collection, including reasonable attorneys' fees.
All borrowings evidenced by this Note and all payments and prepayments of
the principal hereof and interest hereon and the respective dates thereof shall
be endorsed by the holder hereof on SCHEDULE A attached hereto and incorporated
herein by reference, or on a continuation thereof which shall be attached
hereto and made a part hereof; PROVIDED, HOWEVER, that any failure to endorse
such information on such schedule or continuation thereof shall not in any
manner affect the obligation of the Borrower to make payments of principal and
interest in accordance with the terms of this Note.
<PAGE>
This Note and the Loans evidenced hereby may be transferred in whole or in
part only by registration of such transfer on the Register maintained by or on
behalf of the Borrower as provided in Section 10.3(c) of the Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly executed
by its duly authorized officer as of the day and year first above written.
AUTOZONE, INC.
By:
Name:
Title:
By:
Name:
Title:
<PAGE>
SCHEDULE A TO THE
NOTE
OF AUTOZONE, INC.
DATED NOVEMBER 13, 1998
Unpaid Name of
Type Principal Person
of Interest Payments Balance Making
Date Loan Period Principal Interest of Note Notation
- ---- ---- ------ --------- -------- -------- --------
<PAGE>
SCHEDULE 3.2
FORM OF NOTICE OF EXTENSION/CONVERSION
NationsBank, N.A.,
as Agent for the Lenders
101 N. Tryon Street
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attention: Agency Services
Ladies and Gentlemen:
The undersigned, AutoZone, Inc. (the "BORROWER"), refers to the Credit
Agreement dated as of November 13, 1998 (as amended, modified, extended or
restated from time to time, the "CREDIT AGREEMENT"), among the Borrower, the
Lenders, NationsBank, N.A., as Agent, and SunTrust Bank, Nashville, N.A., as
Documentation Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
The Borrower hereby gives notice pursuant to Section 3.2 of the Credit
Agreement that it requests an extension or conversion of a Loan outstanding
under the Credit Agreement, and in connection therewith sets forth below the
terms on which such extension or conversion is requested to be made:
(A) Date of Extension or Conversion
(which is the last day of the
the applicable Interest Period)
(B) Principal Amount of
Extension or Conversion
(C) Interest rate basis
(D) Interest Period and the
last day thereof
In accordance with the requirements of Section 4.2, the Borrower hereby
reaffirms the representations and warranties set forth in the Credit Agreement
as provided in subsection (b) of such Section, and confirms that the matters
referenced in subsections (c), (d) and (e) of such Section, are true and
correct.
Very truly yours,
AUTOZONE, INC.
By:
Name:
Title:
<PAGE>
SCHEDULE 5.12
LIST OF SUBSIDIARIES
[Chart of corporate structure appears here]
AutoZone, Inc.
AutoZone de Mexico
Service Zone de Mexico
Data Zone de Mexico
AutoZone Management, LP
ADAP, Inc.
Alldata Corporation
AutoZone Stores, Inc.
AutoZone Properties, Inc.
AutoZone Development Corporation
AutoZoners, Inc.
AutoZone Marketing Company
AutoZone Leadership, Inc.
AutoZone Texas, LP
<PAGE>
SCHEDULE 6.2
FORM OF OFFICER'S COMPLIANCE CERTIFICATE
For the fiscal quarter ended _________________, 19___.
I, ______________________, [Title] of AutoZone, Inc. (the "BORROWER")
hereby certify that, to the best of my knowledge and belief, with respect to
that certain Credit Agreement dated as of November 13, 1998 (as amended,
modified, extended or restated from time to time, the "CREDIT AGREEMENT"; all
of the defined terms in the Credit Agreement are incorporated herein by
reference) among the Borrower, the Lenders party thereto, NationsBank, N.A., as
Agent, and SunTrust Bank, Nashville, N.A., as Documentation Agent:
a. The company-prepared financial statements which accompany this
certificate are true and correct in all material respects and have
been prepared in accordance with GAAP applied on a consistent basis,
subject to changes resulting from normal year-end audit adjustments.
b. Since ___________ (the date of the last similar certification, or, if
none, the Closing Date) no Default or Event of Default has occurred
under the Credit Agreement; and
Delivered herewith are detailed calculations demonstrating compliance by the
Borrower with the financial covenant contained in Section 6.10 of the
Incorporated Covenants as of the end of the fiscal period referred to above.
This ______ day of ___________, 19__.
AUTOZONE, INC.
By:
Name:
Title:
<PAGE>
SCHEDULE 10.3(B)
FORM OF ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of _______________, 199_ is
entered into between ________________ ("ASSIGNOR") and ____________________
("ASSIGNEE").
Reference is made to the Credit Agreement dated as of November 13, 1998,
as amended and modified from time to time thereafter (the "CREDIT AGREEMENT")
among AutoZone, Inc., the Lenders party thereto, NationsBank, N.A., as Agent,
and SunTrust Bank, Nashville, N.A., as Documentation Agent. Terms defined in
the Credit Agreement are used herein with the same meanings.
1. The Assignor hereby sells and assigns, without recourse, to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor,
effective as of the Effective Date set forth below, the interests set forth
below (the "ASSIGNED INTEREST") in the Assignor's rights and obligations under
the Credit Agreement, including, without limitation, the interests set forth
below in the Commitments and outstanding Loans of the Assignor on the effective
date of the assignment designated below (the "EFFECTIVE DATE"), together with
unpaid Fees accrued on the assigned Commitments to the Effective Date and
unpaid interest accrued on the assigned Loans to the Effective Date. Each of
the Assignor and the Assignee hereby makes and agrees to be bound by all the
representations, warranties and agreements set forth in Section 10.3(b) of the
Credit Agreement, a copy of which has been received by the Assignee. From and
after the Effective Date (i) the Assignee, if it is not already a Lender under
the Credit Agreement, shall be a party to and be bound by the provisions of the
Credit Agreement and, to the extent of the interests purchased and assumed by
the Assignee under this Assignment and Acceptance, have the rights and
obligations of a Lender thereunder and (ii) the Assignor shall, to the extent
of the interests sold and assigned by the Assignor under this Assignment and
Acceptance, relinquish its rights and be released from its obligations under
the Credit Agreement.
2. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of North Carolina.
3. Terms of Assignment
(a) Date of Assignment:
(b) Legal Name of Assignor:
(c) Legal Name of Assignee:
(d) Effective Date of Assignment:
(e) Commitment of Assignee
after giving effect to this
Assignment and Acceptance as
of the Effective Date $_________________
(f) Commitment of Assignor
after giving effect to this
Assignment and Acceptance as
of the Effective Date $_________________
(g) Commitment Percentage of Assignee
after giving effect to this
Assignment and Acceptance
as of the Effective Date
(set forth to at least 8 decimals) %
(h) Commitment Percentage of Assignor
after giving effect to this
Assignment and Acceptance
as of the Effective Date
(set forth to at least 8 decimals) %
4. This Assignment and Acceptance shall be effective only upon consent
of the Borrower and the Agent, if applicable, delivery to the Agent of this
Assignment and Acceptance together with the transfer fee payable pursuant to
Section 10.3(b) in connection herewith and recordation in the Register pursuant
to Section 10.3(c) of the terms hereof.
5. This Assignment and Acceptance may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Assignment and Acceptance to
produce or account for more than one such counterpart.
The terms set forth above
are hereby agreed to:
, as Assignor
By:
Name:
Title:
, as Assignee
By:
Name:
Title:
Notice address of Assignee:
<<Assignee>>
Attn:
Telephone: (___)
Telecopy: (___)
CONSENTED TO:
NATIONSBANK, N.A.,
as Agent
By:
Name:
Title:
AUTOZONE, INC.
By:
Name:
Title:
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary consolidated financial information extracted from
the financial statements for the quarter ended November 21, 1998, and is
qualified in its entirety by reference to such consolidated financial
statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> AUG-28-1999
<PERIOD-END> NOV-21-1998
<CASH> 7,060
<SECURITIES> 0
<RECEIVABLES> 39,735
<ALLOWANCES> 0
<INVENTORY> 1,004,976
<CURRENT-ASSETS> 1,138,021
<PP&E> 1,941,230
<DEPRECIATION> 366,693
<TOTAL-ASSETS> 2,940,247
<CURRENT-LIABILITIES> 854,383
<BONDS> 350,000
0
0
<COMMON> 1,530
<OTHER-SE> 1,302,073
<TOTAL-LIABILITY-AND-EQUITY> 2,940,247
<SALES> 900,949
<TOTAL-REVENUES> 900,949
<CGS> 524,467
<TOTAL-COSTS> 524,467
<OTHER-EXPENSES> 286,667
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,515
<INCOME-PRETAX> 81,300
<INCOME-TAX> 30,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 51,300
<EPS-PRIMARY> 0.34
<EPS-DILUTED> 0.34
</TABLE>
