FIRST AMENDMENT TO CREDIT AGREEMENT
Exhibit
10.3
FIRST
AMENDMENT TO CREDIT AGREEMENT
THIS
FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”)
dated
as of May 5, 2006 is by and among AUTOZONE, INC., a
Nevada
corporation (the “Borrower”),
the
Lenders party hereto, BANK OF AMERICA, N.A., as
Administrative Agent, and WACHOVIA BANK, NATIONAL ASSOCIATION, as Syndication
Agent.
W
I T N E
S S E T H
WHEREAS,
a $300,000,000 term loan has been established pursuant to the terms of that
certain Credit Agreement dated as of December 23, 2004 (as amended, restated,
modified or supplemented from time to time, the “Credit
Agreement”)
among
the Borrower, the Lenders from time to time party thereto, the Administrative
Agent and the Syndication Lender;
WHEREAS,
the Borrower has requested that the Lenders amend the Credit Agreement to modify
certain provisions contained therein; and
WHEREAS,
the Required Lenders have agreed to amend the Credit Agreement on the terms
and
subject to the conditions set forth herein.
NOW,
THEREFORE, IN CONSIDERATION of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the
parties hereto agree as follows:
1. Defined
Terms.
Capitalized terms used herein but not otherwise defined herein shall have the
meanings provided to such terms in the Credit Agreement.
2. Amendments.
Effective upon the satisfaction of the conditions precedent set forth in Section
3 hereof, the Credit Agreement is hereby amended as follows:
(a) The
Credit Agreement is hereby amended by replacing each reference to “Fleet
National Bank” and “Fleet” therein with a reference to “Bank of America, N.A.”
and “Bank of America”.
(b) Section
1.1 of the Credit Agreement is hereby amended by amending the definition of
“Applicable Percentage” to delete the next to the last sentence thereof and
replace it with the following:
“Such
determinations by the Administrative Agent shall be conclusive, absent
convincing evidence to the contrary.”
(c) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Consolidated EBITDA” to insert the following phrase at the end of the first
sentence thereof, immediately prior to the reference to “.”:
“or
otherwise defined herein”
(d) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Consolidated Net Income” to insert the following phrase immediately
following the word “excluding”:
“(i)
share-based expenses and all other non-cash charges (other than any such charges
that would result in an accrual or a reserve for cash charges in the future),
and (ii)”
(e) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Consolidated Rents” to insert the following phrase at the end of the first
sentence thereof, immediately prior to the reference to “.”:
“,
but
excluding rental expense related to any operating lease that has been converted
to a Capital Lease”
(f) Section
1.1 of the Credit Agreement is hereby further amended by deleting the definition
of “Funded Indebtedness” in its entirety and replacing it with the
following:
“Funded
Indebtedness”
means,
with respect to any Person (for purposes of this sentence only, the
"Debtor"),
without duplication and on a consolidated basis, (i) all Indebtedness of such
Debtor for borrowed money; (ii) all purchase money Indebtedness of such Debtor,
including without limitation the principal portion of all obligations of such
Debtor under Capital Leases; (iii) all Guaranty Obligations of such Debtor
with
respect to Funded Indebtedness of another Person; (iv) the maximum amount of
all
(x) drawn and unreimbursed documentary letters of credit, (y) standby letters
of
credit and (z) bankers acceptances, in each case issued or created for the
account of such Debtor and, without duplication, all drafts drawn thereunder
(to
the extent unreimbursed); and (v) all Funded Indebtedness of another Person
secured by a Lien on any Property of such Debtor, whether or not such Funded
Indebtedness has been assumed. The Funded Indebtedness of any Person shall
include the Funded Indebtedness of any partnership or joint venture in which
such Person is a general partner or joint venturer.
(g) Section
1.1 of the Credit Agreement is hereby further amended by deleting the definition
of “Indebtedness” in its entirety and replacing it with the
following:
“Indebtedness”
of
any
Person means (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (iii) all
obligations of such Person under conditional sale or other title retention
agreements relating to Property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered
into
in the ordinary course of business), (iv) all obligations of such Person issued
or assumed as the deferred purchase price of Property or services purchased
by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (v) all obligations of such
Person under take-or-pay or similar arrangements or under commodities
agreements, (vi) all Indebtedness of others secured by (or for which the holder
of such Indebtedness has an existing right, contingent or otherwise, to be
secured by) any Lien on, or payable out of the proceeds of production from,
Property owned or acquired by such Person, whether or not the obligations
secured thereby have been assumed, (vii) all Guaranty Obligations of such
Person, (viii) the principal portion of all obligations of such Person under
Capital Leases, (ix) all obligations of such Person in respect of interest
rate
protection agreements, foreign currency exchange agreements, commodity purchase
or option agreements or other interest or exchange rate or commodity price
hedging agreements, (x) subject to the proviso below, the maximum amount of
all
letters of credit issued or bankers’ acceptances created for the account of such
Person and, without duplication, all drafts drawn thereunder (to the extent
unreimbursed), (xi) all preferred stock issued by such Person and required
by
the terms thereof to be redeemed, or for which mandatory sinking fund payments
are due, by a fixed date and (xii) the principal balance outstanding under
any
synthetic lease, tax retention operating lease, off-balance sheet loan or
similar off-balance sheet financing product to which such Person is a party,
where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP;
provided
that
Indebtedness shall not include (i) any documentary letters of credit or other
letters of credit used by such Person for the financing of inventory in the
ordinary course of business, except to the extent such letters of credit have
been drawn upon and unreimbursed or (ii) any amounts received by such Person
pursuant to a Commercial Credit Business Arrangement. The Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer.
(h) Section
1.1 of the Credit Agreement is hereby further amended by amending the definition
of “Mexican Subsidiaries” to insert the following phrase immediately prior to
the first reference to “and”:
“Controladora
AutoZone, S. de X.X. de C.V.,”
(i) Section
1.1 of the Credit Agreement is hereby further amended to insert the following
definition in the appropriate alphabetical order:
"Arrangers"
means
Banc of America Securities LLC and Wachovia Capital Markets, LLC, together
with
any successors or assigns.
“Bank
of America”
means
Bank of America, N.A. and its successors, as successor to Fleet National
Bank.
(j) Section
3.2 of the Credit Agreement is hereby amended by deleting the reference to
“2:00
P.M.” and replacing it with a reference to “11:00 A.M.”.
(k) Section
3.2 of the Credit Agreement is hereby further amended by deleting the second
sentence thereof in its entirety and replacing it with the
following:
“Each
such extension or conversion shall be effected by a Financial Officer of the
Borrower giving a Notice of Extension/Conversion (or telephone notice promptly
confirmed in writing) to the Administrative Agent prior to 11:00 A.M. on the
third Business Day prior to, in the case of the extension of a Eurodollar Loan
as, or conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the
proposed extension or conversion, specifying the date of the proposed extension
or conversion, the Loans to be so extended or converted, the types of Loans
into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto.”
(l) Section
3.15(c) of the Credit Agreement is hereby amended by deleting the phrase “prima
facie, but not conclusive” and replacing it with the phrase “conclusive, absent
convincing evidence to the contrary”.
(m) Section
5.11(b) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
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“(b) Neither
the Borrower nor any of its Subsidiaries is subject to regulation under the
Federal Power Act or the Investment Company Act of 1940, each as amended. In
addition, neither the Borrower nor any of its Subsidiaries is an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, and is not controlled by such a company.”
(n) Section
6.1(a) of the Credit Agreement is hereby amended by deleting the phrase “a
consolidated balance sheet and income statement of the Borrower and its
Subsidiaries, as of the end of such fiscal year, together with related
consolidated statements of operations and retained earnings and of cash flows”
and replacing it with the following:
“as
of
the end of such fiscal year, a consolidated balance sheet, consolidated
statement of income, consolidated statement of stockholders’ equity and
consolidated statement of cash flows of the Borrower and its
Subsidiaries”
(o) Section
6.1(b) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
(p) Section
6.1(e) of the Credit Agreement is hereby deleted in its entirety and replaced
with the following:
“(e) Notices.
The
Borrower will give written notice to the Administrative Agent (a) immediately
upon obtaining knowledge thereof, of the occurrence of an event or condition
consisting of a Default or Event of Default, specifying the nature and existence
thereof and what action the Borrower proposes to take with respect thereto
and
(b) upon occurrence of any of the following with respect to the Borrower or
any
of its Subsidiaries: (i) promptly upon the Borrower’s determination thereof, the
pendency or commencement of any litigation, arbitral or governmental proceeding
against such Person which is reasonably likely to have a Material Adverse
Effect, (ii) promptly upon the Borrower’s determination thereof, the institution
of any proceedings against such Person with respect to, or the receipt of notice
by such Person of potential liability or responsibility for violation, or
alleged violation of any federal, state or local law, rule or regulation,
including but not limited to, Environmental Laws, the violation of which would
likely have a Material Adverse Effect, or (iii) immediately upon obtaining
knowledge thereof, of any notice or determination concerning the imposition
of
any withdrawal liability by a Multiemployer Plan against such Person or any
ERISA Affiliate, the determination that a Multiemployer Plan is, or is expected
to be, in reorganization within the meaning of Title IV of ERISA or the
termination of any Plan.”
(q) Section
7.5(c) of the Credit Agreement is hereby amended by deleting the reference
to
“$50,000,000” therein and replacing it with a reference to
“$100,000,000”.
(r) Section
10.1(a)(ii) of the Credit Agreement is hereby deleted in its entirety and
replaced with the following:
“(ii) if
to the
Administrative Agent (for payments and requests for Credit
Extensions):
Bank
of
America, N.A.
0000
Xxxxxxx Xxxx, Xxxxxxxx X
Mail
Code: CA4-702-02-25
Xxxxxxx,
XX 00000-0000
Attention:
Xxxxxx Xxxxxxxx
Telephone:
000-000-0000
Facsimile:
000-000-0000
Electronic
Mail: xxxxxx.xxxxxxxx@xxxxxxxxxxxxx.xxx
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Payment
Instructions:
Bank
of
America, N.A.
New
York,
NY
ABA
# 026
009 593
Account
No.: 3750836479
Account
Name: Credit Services #5596
Ref:
AutoZone
Other
notices to the Administrative Agent:
Bank
of
America, N.A.
Agency
Management
000
Xxxxx
Xxxxx Xxxxxx, 00xx
Xxxxx
Mail
Code: NC1-001-15-14
Xxxxxxxxx,
XX 00000
Attention:
Xxxxxxxx Xxxxx
Telephone:
000-000-0000
Facsimile:
704-409-0901
Electronic
Mail: xxxxxxxx.xxxxx@xxxxxxxxxxxxx.xxx.”
(s) Section
10.3(b) of the Credit Agreement is hereby amended by deleting the phrase “of
$3,500” and replacing it with the phrase “in accordance with Schedule
10.3(c)”.
(t) Section
10 of the Credit Agreement is hereby further amended by inserting the following
as a new Section 10.18:
“10.18 No
Advisory or Fiduciary Responsibility.
In
connection with all aspects of each transaction contemplated hereby, the
Borrower acknowledges and agrees that: (i) the credit facility provided
for hereunder and any related arranging or other services in connection
therewith (including in connection with any amendment, waiver or other
modification hereof or of any other Credit Document) are an arm’s-length
commercial transaction between the Borrower and its Affiliates,
on the one hand, and the Administrative Agent and the Arrangers, on the other
hand, and the Borrower is capable of evaluating and understanding and
understands and accepts the terms, risks and conditions of the transactions
contemplated hereby and by the other Credit Documents (including any amendment,
waiver or other modification hereof or thereof); (ii) in connection with the
process leading to such transaction, the Administrative Agent and each Arranger
is and has been acting solely as a principal and is not the financial advisor,
agent or fiduciary, for the Borrower or any of its Affiliates,
stockholders, creditors or employees or any other Person; (iii) neither the
Administrative Agent nor either Arranger has assumed or will assume an advisory,
agency or fiduciary responsibility in favor of the Borrower with respect to
any
of the transactions contemplated hereby or the process leading thereto,
including with respect to any amendment, waiver or other modification hereof
or
of any other Credit Document (irrespective of whether the Administrative Agent
or either
Arranger has advised or is currently advising the Borrower or any of
its Affiliates
on other matters) and neither the Administrative Agent nor either Arranger
has
any obligation to the Borrower or any of its Affiliates with respect to the
transactions contemplated hereby except those obligations expressly set forth
herein and in the other Credit Documents; (iv) the Administrative Agent
and the
Arrangers and their respective Affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Borrower
and
its Affiliates, and neither the Administrative Agent nor either Arranger has
any
obligation to disclose any of such interests by virtue of any advisory, agency
or fiduciary relationship arising out of the transactions contemplated hereby;
and (v) the Administrative Agent and Arrangers have not provided and will not
provide any legal, accounting, regulatory or tax advice with respect to any
of
the transactions contemplated hereby (including any amendment, waiver or other
modification hereof or of any other Credit Document) and the Borrower has
consulted its own legal, accounting, regulatory and tax advisors to the extent
it has deemed appropriate. The Borrower hereby waives and releases, to the
fullest extent permitted by law, any claims that it may have against the
Administrative Agent and the Arrangers with respect to any breach or alleged
breach of agency or fiduciary duty arising out of the transactions contemplated
hereby.”
(u) The
Schedules to the Credit Agreement are hereby amended by (i) inserting Schedule
10.3(c) and (ii) deleting Schedules 5.5 and 7.5 in their entirety and replacing
them with Schedules 5.5 and 7.5 attached hereto as Exhibit A.
3. Condition
Precedent.
This
Amendment shall become effective as of the date hereof upon receipt by the
Administrative Agent of the following:
(a) counterparts
of this Amendment duly executed by the Borrower and the Required
Lenders;
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(b) evidence
that the “Closing Date” as defined in each of (i) that certain Four-Year Credit
Agreement, dated as of the date hereof, by and among the Borrower, the Lenders
from time to time party thereto and the Administrative Agent and (ii) that
certain Second Amended and Restated Five-Year Credit Agreement, dated as of
the
date hereof, by and among the Borrower, the Lenders from time to time party
thereto and the Administrative Agent have been has occurred, and such agreements
have become effective;
(c) Fees.
Any
fees required to be paid on or before the First Amendment Effective Date shall
have been paid.
(d) Attorney
Costs.
Unless
waived by the Administrative Agent, the Borrower shall have paid all costs
and
expenses of Xxxxx & Xxx Xxxxx PLLC, outside counsel to the Administrative
Agent, to the extent invoiced prior to or on the First Amendment Effective
Date,
plus
such
additional amounts as shall constitute its reasonable estimate of such costs
and
expenses incurred or to be incurred by it through the closing proceedings
(provided that such estimate shall not thereafter preclude a final settling
of
accounts between the Borrower and the Administrative Agent).
(e) Accuracy
of Representations and Warranties.
The
representations and warranties of the Borrower and each other Loan Party
contained in Section 4 hereof shall be true and correct on and as of the First
Amendment Effective Date.
(f) No
Default.
No
Default shall exist and be continuing as of the First Amendment Effective
Date.
4. Representations
and Warranties.
The
Borrower hereby
represents and warrants that (a) it has the requisite organizational power
and
authority to execute, deliver and perform this Amendment, (b) it is duly
authorized to, and has been authorized by all necessary organizational action
to, execute, deliver and perform this Amendment, (c) no
consent, approval, authorization or order of, or filing, registration or
qualification with, any court or governmental authority or third party is
required in connection with the execution, delivery or performance by it of
this
Amendment, (d) the execution, delivery and performance by it of this Amendment
do not and will not conflict with, result in a breach of or constitute a default
under the articles of incorporation, bylaws or other organizational documents
of
any Borrower or any of their Subsidiaries or any indenture or other material
agreement or instrument to which any such Person is a party or by which any
of
its properties may be bound or the approval of any Governmental Authority
relating to such Person except as could not reasonably be expected to have
a
Material Adverse Effect, (e)
the
representations and warranties contained in Article V of the Credit Agreement
are true and correct in all material respects on and as of the date hereof
as
though made on and as of such date (except for those which expressly relate
to
an earlier date) and (f) after giving effect to this Amendment, no Default
or
Event of Default exists under the Credit Agreement on and as of the date hereof
or will occur as a result of the transactions contemplated hereby.
5. No
Other Changes; Ratification.
Except
as expressly modified hereby, all of the terms and provisions of the Credit
Agreement (including schedules and exhibits thereto) and the other Credit
Documents shall remain in full force and effect. The term “this Agreement” or
“Credit Agreement” and all similar references as used in each of the Credit
Documents shall hereafter mean the Credit Agreement as amended by this
Amendment. Except as herein specifically agreed, the Credit Agreement is hereby
ratified and confirmed and shall remain in full force and effect according
to
its terms.
6. Costs
and Expenses.
The
Borrower agrees to pay all reasonable costs and expenses of the Administrative
Agent in connection with the preparation, execution and delivery of this
Amendment, including without limitation the reasonable fees and expenses of
Xxxxx & Xxx Xxxxx, PLLC.
7. Counterparts;
Facsimile.
This
Amendment may be executed in any number of counterparts, each of which when
so
executed and delivered shall be deemed an original and it shall not be necessary
in making proof of this Amendment to produce or account for more than one such
counterpart. Delivery of an executed counterpart of this Amendment by telecopy
or electronic mail by any party hereto shall be effective as such party’s
original executed counterpart.
8. Governing
Law.
This
Amendment shall be deemed to be a contract made under, and for all purposes
shall be construed in accordance with, the laws of the State of New
York.
9. Entirety.
This
Amendment and the other Credit Documents embody the entire agreement between
the
parties and supersede all prior agreements and understandings, if any, relating
to the subject matter hereof. This Amendment and the other Credit Documents
represent the final agreement between the parties and may not be contradicted
by
evidence of prior, contemporaneous or subsequent oral agreements of the parties.
There are no oral agreements between the parties.
[SIGNATURE
PAGES FOLLOW]
5
IN
WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Amendment to be duly executed and delivered as of the date first above
written.
BORROWER: AUTOZONE,
INC.
By:
/s/
Xxxxx X. Xxxx III
Name:
Xxxxx X. Xxxx III
Title:
Vice President and Treasurer
By:
/s/
Xxxxx X. Xxxxxxxxx
Name:
Xxxxx X. Xxxxxxxxx
Title:
Executive Vice President, Secretary &
General
Counsel
6
ADMINISTRATIVE
AGENT: BANK
OF AMERICA, N.A.,
as
Administrative Agent
By:/s/
Xxxxxx X. Xxxx
Name:
Xxxxxx X. Xxxx
Title:
Vice President
LENDERS:
BANK
OF AMERICA, N.A.,
as
a
Lender
By:
/s/
Xxx Xxxxxxx
Name:
Xxx
X. Xxxxxxx
Title:
Senior Vice President
Wachovia
Bank, National Association
By:
/s/
Xxxxxxx X. Xxxxxxx
Name:
Xxxxxxx X. Xxxxxxx
Title:
Director
BNP
PARIBAS
By:
/s/
Xxxx Xxxxx
Name:
Xxxx Xxxxx
Title:
Vice President
By:
/s/
Xxxxxx Xxxxxx
Name:
Xxxxxx Xxxxxx
Title:
Vice
President
[LENDER]
Regions
Bank
By:
/s/
Xxxxx Xxxxxxx
Name:
Title:
Vice President
Calyon
New York Branch
By:
/s/
Xxxxx X. Xxxxx
Name:
Xxxxx X. Xxxxx
Title:
Managing Director
By:
/s/
Xxxxx Xxxxx
Name:
Xxxxx Xxxxx
Title:
Managing
Director
Union
Bank of California N.A.
By:
/s/
Xxxxxxx X. Xxxxx
Name:
Xxxxxxx X. Xxxxx
Title:
Vice President
Fifth
Third Bank
By:
/s/
Xxxx X. Xxxxx
Name:
Xxxx X. Xxxxx
Title:
Vice President
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[US
Bank National Association]
By:
/s/
Xxxxxxx Xxxxxxxxx
Name:
Xxxxxxx Xxxxxxxxx
Title:
Banking Officer
The
Bank of New York
By:
/s/
Xxxxx XxXxxxxxx
Name:
Xxxxx XxXxxxxxx
Title:
Vice President
The
Chiba Bank, Ltd.
By:
/s/
Morio Tsumita
Name:
Morio Tsumita
Title:
General Manager
Comerica
Bank
By:
/s/
Xxxxxxx Xxxxxxx
Name:
Xxxxxxx Xxxxxxx
Title:
Assistant Vice President
