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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended June 30, 2002
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 0-21318
O'REILLY AUTOMOTIVE, INC.
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(Exact name of registrant as specified in its charter)
Missouri 44-0618012
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(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or
organization)
233 South Patterson
Springfield, Missouri 65802
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(Address of principal executive offices, Zip code)
(417) 862-6708
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(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
Common stock, $0.01 par value - 53,139,484 shares outstanding as of June 30,
2002.
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
FORM 10-Q
Quarter Ended June 30, 2002
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
------
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION 7
ITEM 3 - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK 10
PART II - OTHER INFORMATION
ITEM 5 - OTHER INFORMATION 10
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURE PAGE 11
EXHIBIT INDEX 12
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PART I Financial Information
- ------------------------------
ITEM 1. Financial Statements
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O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, December 31,
2002 2001
------------ ------------
(Unaudited) (Note)
(In thousands)
Assets
Current assets:
Cash $ 27,352 $ 15,041
Short-term investments 500 500
Accounts receivable, net 52,777 41,486
Amounts receivable from vendors 42,990 38,440
Inventory 479,546 447,793
Refundable income taxes 7 168
Deferred income taxes 1,303 3,908
Other current assets 3,745 3,327
------------ ------------
Total current assets 608,220 550,663
Property and equipment, at cost 436,569 392,365
Accumulated depreciation
and amortization 119,692 103,361
------------ ------------
Net property and equipment 316,877 289,004
Notes receivable 2,065 2,557
Other assets 17,283 14,635
------------ ------------
Total assets $ 944,445 $ 856,859
============ ============
Liabilities and shareholders' equity
Current liabilities:
Note payable to bank $ -- $ 5,000
Income taxes payable 11,470 --
Accounts payable 84,305 61,875
Accrued payroll 13,430 12,866
Accrued benefits & withholdings 19,567 14,038
Other current liabilities 22,730 15,514
Current portion of long-tem debt 4,515 11,843
------------ ------------
Total current liabilities 156,017 121,136
Long-term debt, less current portion 170,560 165,618
Deferred income taxes 9,789 9,141
Other liabilities 5,293 4,673
Shareholders' equity:
Common stock, $0.01 par value:
Authorized shares-90,000,000
Issued and outstanding shares-
53,139,484 shares at June 30, 2002,
and 52,850,713 at December 31, 2001 531 528
Additional paid-in capital 264,098 256,795
Retained earnings 338,157 298,968
------------ ------------
Total shareholders' equity 602,786 556,291
------------ ------------
Total liabilities and
shareholders' equity $ 944,445 $ 856,859
============ ============
NOTE: The balance sheet at December 31, 2001, has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
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O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- -----------------------
2002 2001 2002 2001
------- ------- ------ ------
(In thousands, except per share data)
Product sales $ 343,181 $ 280,676 $ 638,670 $ 519,739
Cost of goods sold, including warehouse
and distribution expenses 198,995 162,887 368,456 299,524
---------- ---------- ---------- ----------
Gross profit 144,186 117,789 270,214 220,215
Operating, selling, general and
administrative expenses 106,417 87,031 203,807 167,725
---------- ---------- ---------- ----------
Operating income 37,769 30,758 66,407 52,490
Other expense, net (1,527) (1,756) (3,398) (3,598)
---------- ---------- ---------- ----------
Income before income taxes 36,242 29,002 63,009 48,892
Provision for income taxes 13,695 11,015 23,820 18,588
---------- ---------- ---------- ----------
Net income $ 22,547 $ 17,987 $ 39,189 $ 30,304
========== ========== ========= ==========
Net income per common share $ 0.42 $ 0.35 $ 0.74 $ 0.59
========== ========== ========= ==========
Weighted-average common
shares outstanding 53,058 51,823 52,971 51,708
========== ========== ========= ==========
Net income per common share
- assuming dilution $ 0.42 $ 0.34 $ 0.73 $ 0.58
========== ========== ========= ==========
Adjusted weighted-average common shares
outstanding - assuming dilution 53,698 52,427 53,653 52,237
========== ========== ========= ==========
NOTE: The income statement at June 30, 2001, has been derived from the quarterly
results section of the Form 10-K for the year ended December 31, 2001, but does
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements.
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O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30, June 30,
2002 2001
------------ ------------
(In thousands)
Net cash provided by operating activities $ 60,820 $ 41,726
Investing activities:
Purchases of property and equipment (45,343) (28,552)
Proceeds from sale of property and equipment 1,294 901
Payments received on notes receivable 351 320
Investments in other assets (118) (1,180)
------------ ------------
Net cash used in investing activities (43,816) (28,511)
Financing activities:
Payments on notes payable to banks (5,000) (35,000)
Proceeds from issuance of long-term debt 76,125 191,542
Payments on long-term debt (79,323) (169,465)
Proceeds from issuance of common stock 3,505 7,305
------------ ------------
Net cash used in financing activities (4,693) (5,618)
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Net increase in cash 12,311 7,597
Cash at beginning of period 15,041 9,204
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Cash at end of period $ 27,352 $ 16,801
============ ============
See notes to condensed consolidated financial statements.
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O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 2002
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of
O'Reilly Automotive, Inc. and Subsidiaries (the "Company") have been prepared in
accordance with accounting principles generally accepted in the United States
for interim financial information and the 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 accounting principles generally accepted in the United
States 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 three months and
six months ended June 30, 2002, are not necessarily indicative of the results
that may be expected for the year ended December 31, 2002. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year ended
December 31, 2001.
2. Reclassifications
Certain reclassifications have been made to the 2001 condensed consolidated
financial results in order to conform to the 2002 presentation.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
Unless otherwise indicated, "we," "us," "our" and similar terms, as well as
references to the "Company" or "O'Reilly" refer to O'Reilly Automotive, Inc. and
its subsidiaries.
The fundamental objective of financial reporting is to provide useful
information that allows a reader to comprehend the business activities of our
company. To aid in that understanding, management has identified our "critical
accounting policies." These policies have the potential to have a significant
impact on our financial statements, either because of the significance of the
financial statement item to which they relate, or because they require judgments
and/or estimates of management in their application due to the uncertainty
involved in measuring, at a specific point in time, events that are continuous
in nature. A summary of these critical accounting policies can be found in the
section entitled "Management's Discussion and Analysis of Financial Condition
and Results of Operations" of our 2001 Annual Report on Form 10-K. In
particular, the accounting for, and analysis with respect to, areas such as
costs of goods sold, operating, selling, general and administrative expenses and
credit operations are discussed.
Results of Operations
Product sales for the second quarter of 2002 increased by $62.5 million, or
22.3%, over product sales for the second quarter of 2001. Product sales for the
first six months of 2002 increased by $118.9 million, or 22.9% over product
sales for the first six months of 2001. These increases were primarily due to
the opening of 30 net, new stores during the second quarter of 2002 and 54 net,
new stores during the first six months of 2002, in addition to a 2.9% and 3.2%
increase in comparable store product sales for the second quarter and first six
months of 2002, respectively. At June 30, 2002, we operated 929 stores compared
to 732 stores at June 30, 2001.
Gross profit increased 22.4% from $117.8 million (or 42.0% of product sales) in
the second quarter of 2001 to $144.2 million (or 42.0% of product sales) in the
second quarter of 2002. Gross profit for the first six months increased 22.7%
from $220.2 million (or 42.4% of product sales) in 2001 to $270.2 million (or
42.3% of product sales) in 2002. The increase in gross profit dollars was
primarily a result of the increase in the number of stores open during the
second quarter and first six months of 2002 compared to the same period of 2001,
and increased sales levels at existing stores.
Operating, selling, general and administrative expenses ("OSG&A expenses")
increased $19.4 million from $87.0 million (or 31.0% of product sales) in the
second quarter of 2001 to $106.4 million (or 31.0% of product sales) in the
second quarter of 2002. OSG&A expenses increased $36.1 million from $167.7
million (or 32.3% of product sales) in the first six months of 2001 to $203.8
million (or 31.9% of product sales) in the first six months of 2002. The dollar
increase in OSG&A expenses resulted from the addition of team members and
resources in order to support the increased level of our operations and the
continuing conversion of the 82 net and newly acquired stores from Mid-State
Automotive Distributors, Inc. ("Mid-State") during the fourth quarter of 2001.
Other expense decreased by $229,000 in the second quarter of 2002 compared to
the second quarter of 2001 and decreased by $200,000 for the first six months of
2002 compared to the first six months of 2001. The overall decrease in other
expense in the second quarter of 2002 compared to 2001, is primarily due to a
reduction in interest expense.
Our estimated provision for income taxes increased $2.7 million and $5.2 million
for the second quarter and first six months of 2002 compared to 2001, as a
result of our increased taxable income. Our effective tax rate was 37.8% of
income before income taxes for the second quarter of 2002 and the first six
months of 2002, compared with 38.0% for the same periods of 2001.
Principally, as a result of the foregoing, net income increased from $18.0
million or 6.4% of product sales in the second quarter of 2001 to $22.5 million
or 6.6% of product sales in the second quarter of 2002. Net income increased
from $30.3 million or 5.8% of product sales in the first six months of 2001 to
$39.2 million or 6.1% of product sales in the first six months of 2002.
Liquidity and Capital Resources
Net cash provided by operating activities increased from $41.7 million for the
first six months in 2001 to $60.8 million for the first six months of 2002. This
increase was principally the result of increased net income and an increase in
accounts payable, partially offset by increases in accounts receivable and
inventory. The increase in accounts payable was primarily attributable to the
timing of payments. The increase in inventory and accounts receivable is
primarily due to our continuing store growth.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONT.)
Net cash used in investing activities increased from $28.5 million during the
first six months in 2001 to $43.8 million for the comparable period in 2002,
primarily due to the increased purchases of property and equipment resulting
from new store growth.
Net cash used in financing activities was $4.7 million in the first six months
of 2002, compared to $5.6 million in the first six months of 2001.
We maintain an unsecured, five-year syndicated credit facility, currently
comprised of a revolving credit facility of $125 million and a term loan of $15
million. The credit facility is guaranteed by all of our subsidiaries. At June
30, 2002, $66.0 million of the revolving credit facility and $7.5 million of the
term loan was outstanding. Accordingly, we have aggregate availability of $59.0
million under the credit facility for additional borrowings. The credit
facility, which bears interest at LIBOR plus 0.50% (2.34% at June 30, 2002),
expires in January 2003. On July 29, 2002, we completed an unsecured, three-year
syndicated credit facility in the amount of $150 million lead by Wells Fargo
Bank as the Administrative Agent replacing the five-year syndicated credit
facility. The new credit facility is guaranteed by all of our subsidiaries and
may be increased to a total of $200 million at any time prior to January 29,
2004, subject to availability of such additional credit from either existing
banks within the facility or other banks. The new credit facility currently
bears interest at LIBOR plus 1% and expires in July 2005. The credit agreement
is filed herewith as Exhibit 10.28.
On May 16, 2001, we completed a $100 million private placement of two series of
unsecured senior notes ("Senior Notes"). The Series 2001-A Senior Notes were
issued for $75 million, are due May 16, 2006, and bear interest at 7.72% per
year. The Series 2001-B Senior Notes were issued for $25 million, are due May
16, 2008, and bears interest at 7.92% per year. The private placement agreement
allows for a total of $200 million of Senior Notes issuable in series. Proceeds
from the transaction were used to reduce outstanding borrowings under our
revolving credit facility.
In August 2001, we completed a sale-leaseback with O'Reilly-Wooten 2000 LLC (an
entity owned by certain shareholders of the Company). The transaction closed on
September 1, 2001, with a purchase price of approximately $5.6 million for nine
O'Reilly Auto Parts stores and did not result in a material gain or loss. The
lease, which has been accounted for as an operating lease, calls for an initial
term of 15 years with three five-year renewal options.
Our continuing store expansion program requires significant capital expenditures
and working capital principally for inventory requirements. The costs associated
with the opening of a new store (including the cost of land acquisition,
improvements, fixtures, inventory and computer equipment) are estimated to
average approximately $900,000 to $1.1 million; however, such costs may be
significantly reduced where we lease, rather than purchase, the store site.
Although the cost to acquire the business of an independently owned parts store
varies, depending primarily upon the amount of inventory and the amount, if any,
of real estate being acquired, we estimate that the average cost to acquire such
a business and convert it to one of our stores is approximately $400,000. We
plan to finance our expansion program through cash expected to be provided from
operating activities and available borrowings under our existing credit
facilities.
For the first six months of 2002, 54 net, new stores were opened. The Company
plans to open 46 additional stores during the remainder of 2002. The funds
required for such planned expansions are expected to be provided by operating
activities and the existing and available bank credit facilities.
We believe that our existing cash, short-term investments, cash expected to be
provided by operating activities, available bank credit facilities and trade
credit will be sufficient to fund both our short-term and long-term capital and
liquidity needs for the foreseeable future.
Inflation and Seasonality
We have been successful, in many cases, in reducing the effects of merchandise
cost increases principally by taking advantage of vendor incentive programs,
economies of scale resulting from increased volume of purchases and selective
forward buying. As a result, we do not believe our operations have been
materially affected by inflation.
-8-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONT.)
Our business is seasonal to some extent primarily as a result of the impact of
weather conditions on store sales. Store sales and profits have historically
been higher in the second and third quarters (April through September) of each
year than in the first and fourth quarters.
Forward-Looking Statements
Certain statements contained in the "Management's Discussion and Analysis of
Results of Operations and Financial Condition" section of this report are
forward-looking statements, as such term is defined under the Private Securities
Litigation Reform Act of 1995. These statements discuss, among other things,
expected growth, store development and expansion strategy, business strategies,
future revenues and future performance. These forward-looking statements are
based on estimates, projections, beliefs and assumptions and are not guarantees
of future events and results. Such statements are subject to risks,
uncertainties and assumptions, including, but not limited to, competition,
product demand, the market for auto parts, the economy in general, inflation,
consumer debt levels, governmental approvals, our ability to hire and retain
qualified employees, risks associated with the integration of acquired
businesses, weather, terrorist activities, war and the threat of war. Actual
results may materially differ from anticipated results described in these
forward-looking statements. Please refer to the Risk Factors sections of the
company's Form 10-K for the year ended December 31, 2001, for more details and
the risk factors set forth as exhibit 99.1 of this report.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
On March 22, 2002, the Company entered into a receive-fixed, pay-float interest
rate swap agreement ("Reverse Swap") to effectively convert a portion of its
fixed rate long-term debt to a floating rate basis, thereby taking advantage of
historically low floating interest rates. Pursuant to this Reverse Swap
agreement, the Company agreed to exchange, at specified intervals, the
difference between the fixed and the floating interest amounts calculated on the
notional amount of the Reverse Swap agreement, which totaled $37.5 million. The
Company's floating interest rate under the Reverse Swap agreement was 2.06% and
the counterparty's fixed interest rate was 5.07% at June 14, 2002. The Company
has determined that the Reverse Swap is a perfectly matched derivative under the
guidelines of the Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 133, "Accounting for Derivative Instruments and Hedging
Activities." On June 14, 2002, the Company terminated the Reverse Swap and
received a settlement payment in the amount of $1 million dollars. The
settlement payment is being amortized against interest expense through May 15,
2006, which is the expiration of the underlying (matched) debt.
PART II - OTHER INFORMATION
Item 2. Change in Securities and Use of Proceeds
On May 7, 2002, the Board of Directors of the Company declared a dividend
distribution of one Right for each outstanding share of Company Common Stock to
stockholders of record at the close of business on May 31, 2002. Each Right
entitles the registered holder to purchase from the Company a Unit consisting of
one one-hundredth of a share of Series A Junior Participating Preferred Stock,
par value $.01 per share at a Purchase Price of $160 per Unit, subject to
adjustment. The description and terms of the Rights are set forth in a Rights
Agreement between the Company and UMB Bank, N.A., as Rights Agent, filed as
Exhibit 4.2 to the Company's Form 8-K dated May 31, 2002, and filed June 3,
2002.
Item 5. Other Information
On July 29, 2002, we completed an unsecured, three-year syndicated credit
facility in the amount of $150 million lead by Wells Fargo Bank as the
Administrative Agent replacing the above mentioned revolving credit facility.
The credit facility is guaranteed by all of our subsidiaries. The facility may
be increased to a total of $200 million at any time prior to January 29, 2004,
subject to availability of such additional credit from either existing banks
within the facility or new banks. The credit facility currently bears interest
at LIBOR plus 1% and expires in July 2005. The credit agreement is filed
herewith as Exhibit 10.28.
On January 1, 2002, the Company adopted SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets." This new standard supersedes both
SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for the
Long-Lived Assets to Be Disposed Of," and sections of Accounting Principles
Board Opinion 30, providing one accounting model with which to review for asset
impairment.
SFAS 144 retains much of the recognition and measurement provision of SFAS 121,
but removes goodwill from its scope. It also alters the criteria of classifying
long-lived assets to be disposed of by sale and changes the method for
accounting for the disposal of long-lived assets if other than through sale.
Finally, while this statement retains the basic presentation provisions for the
disposal of a segment of a business or discontinued operation, it broadens the
definition of a discontinued operation to include a component of an entity.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: See Exhibit Index on page 12 hereof.
(b) A Current Report on Form 8-K dated May 28, 2002, attaching a press release
that announced the Company's Board of Directors was adopting a Stockholder
Rights Plan in which rights would be distributed as a dividend at the rate
of one Right for each share of common stock, par value $.01 per share, of
the Company held by stockholders of record as of the close of business on
May 31, 2002.
(c) A Current Report on Form 8-K dated May 31, 2002, attaching as exhibit 4.2
thereto, the Rights Agreement, dated as of May 7, 2002, between O'Reilly
Automotive, Inc. and UMB Bank, N.A., as Rights Agent, including the form of
Certificate of Designation, Preferences and Rights as Exhibit A, the form
of Rights Certificates as Exhibit B and the Summary of Rights as Exhibit C.
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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.
O'REILLY AUTOMOTIVE, INC.
August 12, 2002 /s/ David E. O'Reilly
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Date David E. O'Reilly, Co-Chairman of the
Board and Chief Executive Officer
August 12, 2002 /s/ James R. Batten
- --------------- -------------------------------------------
Date James R. Batten, Vice-President of
Finance and Chief Financial Officer
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EXHIBIT INDEX
Number Description Page
- ------ ----------- ----
99.1 Certain Risk Factors, filed herewith. 13
99.2 Certificate of the Chief Executive Officer
pursuant to 18 U.S.C. Section 1350,as
adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith. 14
99.3 Certificate of the Chief Executive Officer
pursuant to 18 U.S.C. Section 1350,as
adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002, filed herewith. 15
10.28 Credit Aggreement, filed herewith. 16
-12-
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
Exhibit 99.1 - Certain Risk Factors
The following factors could affect our actual results, including revenues,
expenses and net income, and could cause them to differ from any forward-looking
statements made by or on behalf of us.
Competition
We compete with a large number of retail and wholesale automotive aftermarket
product suppliers. The distribution of automotive aftermarket products is a
highly competitive industry, particularly in the more densely populated market
areas served by us. Competitors include national and regional automotive parts
chains, independently owned parts stores (some of which are associated with
national auto parts distributors or associations), automobile dealerships, mass
or general merchandise, discount and convenience chains that carry automotive
products, independent warehouse distributors and parts stores and national
warehouse distributors and associations. Some of our competitors are larger and
have greater financial resources than us.
No Assurance of Future Growth
We believe that our ability to open additional stores at an accelerated rate
will be a significant factor in achieving our growth objectives for the future.
Our ability to accomplish this growth is dependent, in part, on matters beyond
our control, such as weather conditions, zoning and other issues related to new
store site development, the availability of qualified management personnel and
general business and economic conditions. No assurance can be given that our
current growth rate can be maintained.
Dependence Upon Key and Other Personnel
The success of our company has been largely dependent on the efforts of certain
key personnel, including David E. O'Reilly, Lawrence P. O'Reilly, Charles H.
O'Reilly, Jr., Rosalie O'Reilly Wooten, Ted F. Wise, and Greg Henslee. Two of
our key personnel, Charles H. O'Reilly, Jr. and Rosalie O'Reilly-Wooten have
retired from their operational duties, but both will continue to serve on the
Board of Directors. The loss of the services of one or more of these individuals
could have a material adverse effect on the business and results of operations.
Additionally, in order to successfully implement and manage our growth strategy,
we will be dependent upon our ability to continue to attract and retain
qualified personnel. There can be no assurance that we will be able to continue
to attract such personnel.
Concentration of Ownership by Management
Our executive officers and directors as a group beneficially own a substantial
percentage of the outstanding shares of our common stock. These officers and
directors have the ability to exercise effective voting control of the company,
including the election of all of our directors, and to effectively determine the
vote on any matter being voted on by our shareholders, including any merger,
sale of assets or other change in control of the company.
-13-
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
Exhibit 99.2 - CEO Certification
O'REILLY AUTOMOTIVE, INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of O'Reilly Automotive, Inc. (the
"Company") on Form 10-Q for the period ending June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, David
E. O'Reilly, Chief Executive Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ David E. O'Reilly
- ----------------------------------------------
David E. O'Reilly
Chief Executive Officer
August 12, 2002
This certification is made solely for purposes of 18 U.S.C. Section 1350, and
not for any other purpose.
-14-
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
Exhibit 99.3 - CFO Certification
O'REILLY AUTOMOTIVE, INC.
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of O'Reilly Automotive, Inc. (the
"Company") on Form 10-Q for the period ending June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, James
R. Batten, Chief Financial Officer of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d)
of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.
/s/ James R. Batten
- -----------------------------------
James R. Batten
Chief Financial Officer
August 12, 2002
This certification is made solely for purposes of 18 U.S.C. Section 1350, and
not for any other purpose.
-15-
O'REILLY AUTOMOTIVE, INC. AND SUBSIDIARIES
Exhibit 10.28 - Credit Agreement
================================================================================
CREDIT AGREEMENT
Dated as of July 29, 2002
by and among
O'Reilly Automotive, Inc., as Borrower
The Banks Party Hereto
Wells Fargo Bank, National Association
as Administrative Agent
U.S. Bank National Association
as Syndication Agent
LaSalle Bank National Association
as Documentation Agent
and
Wells Fargo Bank, National Association,
as Sole Lead Arranger
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Table of Contents Page
ARTICLE I DEFINITIONS...................................................1
Section 1.01 Definitions...................................................1
Section 1.02 Accounting Terms and Determinations..........................13
Section 1.03 Types of Borrowings..........................................13
ARTICLE II THE CREDITS..................................................13
Section 2.01 Revolving Credit Commitments.................................13
Section 2.02 Swing Line Commitment........................................13
Section 2.03 Notice of Borrowings.........................................15
Section 2.04 Notice to Banks; Funding of Loans............................16
Section 2.05 Notes........................................................17
Section 2.06 Maturity of Loans............................................17
Section 2.07 Interest Rates...............................................17
Section 2.08 Loan Fees....................................................18
Section 2.09 Optional Termination or Reduction of, or Increase in,
the Revolving Credit Commitments......................18
Section 2.10 Mandatory Termination of Commitments.........................19
Section 2.11 Prepayments..................................................20
Section 2.12 General Provisions as to Payments............................20
Section 2.13 Funding Losses...............................................20
Section 2.14 Computation of Interest and Fees.............................21
Section 2.15 Withholding Tax Exemption....................................21
Section 2.16 Letters of Credit............................................21
Section 2.16.1 Issuance of Letters of Credit................................21
Section 2.16.2 Participating Interests......................................22
Section 2.16.3 Letter of Credit Reimbursement Obligations...................22
Section 2.16.4 Procedure for Issuance.......................................23
Section 2.16.5 Nature of the Banks' Obligations.............................24
Section 2.16.6 Letter of Credit Fees........................................24
Section 2.16.7 Conflict with Reimbursement Agreement........................24
ARTICLE III CONDITIONS...................................................24
Section 3.01 Effectiveness................................................24
Section 3.02 Revolving Credit Loan........................................25
Section 3.03 Swing Line Loans.............................................26
Section 3.04 Letters of Credit............................................26
ARTICLE IV REPRESENTATIONS AND WARRANTIES...............................26
Section 4.01 Corporate Existence and Power................................26
Section 4.02 Corporate and Governmental Authorization;
No Contravention.........................................27
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Section 4.03 Binding Effect...............................................27
Section 4.04 Financial Information........................................27
Section 4.05 Litigation...................................................27
Section 4.06 Compliance with ERISA........................................27
Section 4.07 Environmental Matters........................................28
Section 4.08 Taxes........................................................28
Section 4.09 Subsidiaries.................................................28
Section 4.10 Full Disclosure..............................................28
Section 4.11 Compliance With Laws.........................................28
Section 4.12 Title to Property............................................29
Section 4.13 Regulation U.................................................29
Section 4.14 Investment Company Act of 1940; Public Utility
Holding Company Act of 1935..............................29
Section 4.15 No Default...................................................29
ARTICLE V COVENANTS....................................................29
Section 5.01 Information..................................................29
Section 5.02 Maintenance of Property; Insurance...........................30
Section 5.03 Conduct of Business and Maintenance of Existence.............31
Section 5.04 Compliance with Laws.........................................31
Section 5.05 Maximum Consolidated Leverage Ratio..........................31
Section 5.06 Minimum Consolidated Fixed Charge Coverage Ratio.............31
Section 5.07 Minimum Consolidated Tangible Net Worth......................31
Section 5.08 Maximum Consolidated Synthetic Lease Obligations.............31
Section 5.09 Limitation on Debt...........................................31
Section 5.10 Negative Pledge..............................................32
Section 5.11 Consolidations, Mergers and Sales of Assets..................32
Section 5.12 Transactions with Affiliates.................................33
Section 5.13 Use of Proceeds..............................................33
Section 5.14 Limitation on Certain Covenants and Restrictions............33
Section 5.15 Acquisitions.................................................33
Section 5.16 Subsidiaries.................................................33
ARTICLE VI DEFAULTS.....................................................33
Section 6.01 Events of Default............................................33
Section 6.02 Notice of Default............................................35
ARTICLE VII THE ADMINISTRATIVE AGENT AND LETTER OF CREDIT ISSUER.........35
Section 7.01 Appointment..................................................35
Section 7.02 Nature of Duties.............................................35
Section 7.03 Exculpation Rights, Etc......................................35
Section 7.04 Reliance.....................................................36
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Section 7.05 Indemnification..............................................36
Section 7.06 Administrative Agent In Its Individual Capacity..............36
Section 7.07 Notice of Default............................................36
Section 7.08 Holders of Obligations.......................................36
Section 7.09 Resignation by the Administrative Agent......................37
Section 7.10 Application of Article VII to Swing Line Lender
and Letter of Credit Issuer..............................37
Section 7.11 Other Agents.................................................37
ARTICLE VIII CHANGE IN CIRCUMSTANCES......................................37
Section 8.01 Basis for Determining Interest Rate Inadequate or Unfair.....37
Section 8.02 Illegality...................................................38
Section 8.03 Increased Cost and Reduced Return............................38
Section 8.04 Base Rate Loans Substituted for Affected LIBOR Loans.........39
ARTICLE IX MISCELLANEOUS................................................39
Section 9.01 Notices......................................................39
Section 9.02 No Waivers...................................................39
Section 9.03 Expenses; Documentary Taxes; Indemnification.................40
Section 9.04 Sharing of Set-Offs..........................................40
Section 9.05 Amendments and Waivers.......................................40
Section 9.06 Successors and Assigns.......................................41
Section 9.07 Collateral...................................................43
Section 9.08 Governing Law................................................43
Section 9.09 Counterparts.................................................43
Section 9.10 NO ORAL AGREEMENTS; ENTIRE AGREEMENT.........................43
Section 9.11 Confidentiality..............................................43
Section 9.12 Consent to Jurisdiction; Waiver of Jury Trial................43
Section 9.13 Independence of Covenants....................................44
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Table of Contents
Schedule 1.01 - Commitments
Schedule 4.05 - Ltigation
Schedule 4.06 - ERISA
Schedule 4.09 - Subsidiaries
Schedule 5.09 - Existing Debt
Schedule 5.10 - Existing Liens
Schedule 9.01 - Notice Information
Exhibit A - Notice of Revolving Credit Borrowing
Exhibit B - Notice of Swing Line Borrowing
Exhibit C - Revolving Credit Note
Exhibit D - Swing Line Note
Exhibit E - Opinion of Borrower's Counsel
Exhibit F - Assignment and Assumption Agreement
Exhibit G - Compliance Certificate
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of July 29, 2002, is by and among O'REILLY
AUTOMOTIVE, INC., a Missouri corporation ("Borrower"), the Banks from time to
time party hereto, WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative
Agent and as Sole Lead Arranger for the Banks, U.S. BANK NATIONAL ASSOCIATION,
as Syndication Agent for the Banks and LASALLE BANK NATIONAL ASSOCIATION, as
Documentation Agent for the Banks.
W I T N E S S E T H:
WHEREAS, the Borrower has requested that the Banks provide a revolving
credit facility to the Borrower consisting of revolving credit loans and letters
of credit in the aggregate amount of up to $150,000,000 at any one time
outstanding (including a swing line subfacility thereunder from the Swing Line
Lender in the principal amount of up to $20,000,000);
WHEREAS, the proceeds of the revolving credit facility will be used by the
Borrower to refinance certain existing indebtedness of the Borrower, to finance
Permitted Acquisitions and for ongoing working capital and general corporate
purposes, including, without limitation, to pay fees, costs and expenses
incurred in connection with the transactions contemplated hereby; and
WHEREAS, the Banks are willing to extend commitments to make Revolving
Credit Loans to the Borrower hereunder, the Swing Line Lender is willing to
extend a commitment to make Swing Line Loans to the Borrower hereunder and the
Letter of Credit Issuer is willing to extend a commitment to issue Letters of
Credit for the account of the Borrower hereunder, in each case, for the
respective purposes provided herein and only on the terms and subject to the
conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01......Definitions. The following terms, as used herein, have
the following meanings:
"Acquisition" means any transaction or series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
Subsidiary directly or indirectly (a) acquires all or substantially all of the
assets comprising one or more business units of any other Person, whether
through purchase of assets, merger or otherwise or (b) acquires (in one
transaction or as the most recent transaction in a series of transactions) at
least (i) a majority (in number of votes) of the stock and/or other securities
of a corporation having ordinary voting power for the election of directors
(other than stock and/or other securities having such power only by reason of
the happening of a contingency), (ii) a majority (by percentage of voting power)
of the outstanding partnership interests of a partnership, (iii) a majority (by
percentage of voting power) of the outstanding membership interests of a limited
liability company or (iv) a majority of the ownership interests in any
organization or entity other than a corporation, partnership or limited
liability company.
"Adjusted Base Rate" means the Base Rate plus the Applicable Base Rate
Margin. The Adjusted Base Rate shall be adjusted automatically on and as of the
effective date of any change in the Base Rate and/or the Applicable Base Rate
Margin.
"Administrative Agent" means Wells Fargo in its capacity as Administrative
Agent for the Banks hereunder, and its successors in such capacity.
"Administrative Agent-Related Persons" means the Administrative Agent
(including any successor Administrative Agent), together with its Affiliates,
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Administrative Questionnaire" means, with respect to each Bank, an
administrative questionnaire in the form prepared by the Administrative Agent
and submitted to the Administrative Agent duly completed by such Bank.
"Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly through one or more intermediaries, controls, is
controlled by or is under common control with such Person. As used herein, the
term "control" means possession, directly or indirectly, of the power to direct
or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise; provided
that any Person which does not own, directly or indirectly, more than 10% of any
class of voting securities (or other ownership interests) of such other Person
shall not be deemed to "control" such Person.
"Agent Fee Letter" means the letter agreement between the Borrower and the
Administrative Agent, dated May 9, 2002, relating to certain agency and other
fees, as amended, supplemented or otherwise modified from time to time.
"Agreement" means this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Applicable Lending Office" means, with respect to any Bank, (i) in the
case of its Base Rate Loans, its Base Rate Lending Office and (ii) in the case
of its LIBOR Loans, its LIBOR Lending Office.
"Applicable LIBOR Margin", "Applicable Base Rate Margin" and "Applicable
Commitment Fee Rate" mean the per annum rate shown in the applicable column
below based on the applicable Consolidated Leverage Ratio:
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If the Consolidated Applicable LIBOR Applicable Base Applicable Commitment
Leverage Ratio is, then Margin is Rate Margin is Fee Rate is
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=> 2.0 to 1.0 (Pricing
Level I) 1.375% 0.250% 0.250%
=> 1.5 to 1.0 but
< 2.0 to 1.0 (Pricing
Level II) 1.125% 0.000% 0.200%
=> 1.0 to 1.0 but
< 1.50 to 1.0 (Pricing
Level III) 1.000% 0.000% 0.175%
< 1.0 to 1.0 (Pricing
Level IV) 0.875% 0.000% 0.150%
The determination of the Applicable LIBOR Margin, the Applicable Base Rate
Margin and the Applicable Commitment Fee Rate as of any date shall be based on
the Consolidated Leverage Ratio as of the last day of the most recently ended
Fiscal Quarter for which financial statements of Borrower and its Subsidiaries
(and the related Compliance Certificate) have been delivered to the
Administrative Agent pursuant to Section 5.01 (which determination shall be made
and be effective from and after the fifth (5th) Business Day after the
Administrative Agent receives the applicable financial statements and Compliance
Certificate from the Borrower); provided, however, that if the applicable
financial statements and related Compliance Certificate for any Fiscal Quarter
or Fiscal Year are not delivered to the Administrative Agent when due in
accordance with Section 5.01, then Pricing Level I shall apply during the period
commencing on the date such financial statements and Compliance Certificate were
due and ending on the date five (5) Business Days after such financial
statements and Compliance Certificate are delivered to the Administrative Agent.
Notwithstanding the foregoing, Pricing Level III shall apply during the period
commencing on the date of this Agreement and ending five (5) Business Days after
the Administrative Agent receives the Borrower's financial statements for its
Fiscal Quarter ended June 30, 2002.
"Assignee" has the meaning set forth in Section 9.06(c).
"Assignment and Assumption Agreement" has the meaning set forth in
Section 9.06(c).
"Bank" means each bank listed on the signature pages hereof, each Assignee
which becomes a Bank pursuant to Section 9.06(c), and their respective
successors and assigns.
"Base Rate" means, for any day, a rate of interest per annum equal to the
higher of (i) the Prime Rate for such day and (ii) the sum of the Federal Funds
Effective Rate for such day plus 1/2% per annum.
"Base Rate Lending Office" means, as to each Bank, its office located at
its address set forth in its Administrative Questionnaire (or identified in its
Administrative Questionnaire as its Base Rate Lending Office) or such other
office as such Bank may hereafter designate as its Base Rate Lending Office by
notice to the Borrower and the Administrative Agent.
"Base Rate Loan" means each Revolving Credit Loan to be made by a Bank as a
Base Rate Loan in accordance with the applicable Notice of Revolving Credit
Borrowing or pursuant to Article VIII and each Loan continued as a, or converted
into, a Base Rate Loan pursuant to Section 2.03(c).
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"Benefit Arrangement" means at any time an employee benefit plan within the
meaning of Section 3(3) of ERISA which is not a Plan or a Multiemployer Plan and
which is maintained or otherwise contributed to by any member of the ERISA
Group.
"Borrower" means, O'Reilly Automotive, Inc., a Missouri corporation, and
its successors.
"Borrowing" has the meaning set forth in Section 1.03.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Loans, a day (other than a Saturday on Sunday) on which banks
generally are open in Denver, Colorado and New York, New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and
(ii) for all other purposes, a day (other than a Saturday or Sunday) on which
banks generally are open in Denver, Colorado and New York, New York for the
conduct of substantially all of their commercial lending activities.
"Capitalized Lease" means any lease of (or other indebtedness arrangements
conveying the right to use) real and/or personal property, by a Person as lessee
which in accordance with GAAP is required to be capitalized on the balance sheet
of such Person.
"Capitalized Lease Obligations" of any Person means, as of the date of any
determination thereof, the amount at which the aggregate rental and other
payment obligations due and to become due under all Capitalized Leases under
which such Person is a lessee would be reflected as a liability on a balance
sheet of such Person in accordance with GAAP.
"Compliance Certificate" means a certificate in the form of Exhibit G
attached hereto delivered in accordance with Section 5.01(c).
"Consolidated Debt" means, as of the date of any determination thereof, all
Debt of the Borrower and its Subsidiaries as of such date, determined on a
consolidated basis and in accordance with GAAP.
"Consolidated EBITDA" means, for the period in question, the sum of
(i) Consolidated Net Income during such period plus (ii) to the extent deducted
in determining such Consolidated Net Income, the sum of (A) Consolidated
Interest Expense during such period, plus (B) all provisions for any Federal,
state, local and/or foreign income taxes made by the Borrower and its
Subsidiaries during such period (whether paid or deferred), plus (C) all
depreciation and amortization expenses of the Borrower and its Subsidiaries
during such period, plus (D) any extraordinary losses during such period minus
(iii) to the extent added in determining such Consolidated Net Income, any
extraordinary gains during such period, all determined on a consolidated basis
and in accordance with GAAP; provided, however, that for the purposes of
determining Consolidated EBITDA for any period during which an Acquisition
permitted under this Agreement is consummated, Consolidated EBITDA shall be
adjusted to give effect to the consummation of such Acquisition on a pro forma
basis in accordance with GAAP, as if such Acquisition occurred on the first day
of such period, such adjustments to be calculated in a manner reasonably
satisfactory to the Administrative Agent.
"Consolidated EBITDAR" means, for the period in question, the sum of
(i) Consolidated EBITDA during such period plus (ii) to the extent deducted in
determining such Consolidated EBITDA, Consolidated Rent Expense during such
period, all determined on a consolidated basis and in accordance with GAAP.
"Consolidated Fixed Charge Coverage Ratio" means, for the period in
question, the ratio of (i) Consolidated EBITDAR during such period to
(ii) Consolidated Fixed Charges during such period, all determined on a
consolidated basis and in accordance with GAAP.
"Consolidated Fixed Charges" means, for the period in question, the sum of
(i) Consolidated Interest Expense during such period plus (ii) Consolidated Rent
Expense during such period, all determined on a consolidated basis and in
accordance with GAAP.
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"Consolidated Interest Expense" means, for the period in question, without
duplication, all gross interest expense of the Borrower and its Subsidiaries
(including, without limitation, all commissions, discounts and/or related
amortization and other fees and charges owed by the Borrower and its
Subsidiaries with respect to letters of credit, the net costs associated with
interest swap obligations of the Borrower and its Subsidiaries, capitalized
interest expense, the interest portion of Capitalized Lease Obligations and the
interest portion of any deferred payment obligation) during such period, all
determined on a consolidated basis and in accordance with GAAP; provided,
however, that for the purposes of determining Consolidated Interest Expense for
any period during which an Acquisition permitted under this Agreement is
consummated, Consolidated Interest Expense shall be adjusted to give effect to
the consummation of such Acquisition on a pro forma basis in accordance with
GAAP, as if such Acquisition occurred on the first day of such period, such
adjustments to be calculated in a manner reasonably satisfactory to the
Administrative Agent.
"Consolidated Leverage Ratio" means, as of the last day of any Fiscal
Quarter of the Borrower, the ratio of (i) Consolidated Debt as of such day to
(ii) Consolidated EBITDA for the four (4) consecutive Fiscal Quarter period of
the Borrower ending on such day.
"Consolidated Net Income" means, for the period in question, the after-tax
net income (or loss) of Borrower and its Subsidiaries during such period,
determined on a consolidated basis and in accordance with GAAP.
"Consolidated Net Worth" means, as of the date of any determination
thereof, the consolidated stockholders' equity of the Borrower and its
Subsidiaries as of such date, determined on a consolidated basis and in
accordance with GAAP.
"Consolidated Rent Expense" shall mean, for the period in question, the
aggregate amount of all Rent Expense of the Borrower and its Subsidiaries during
such period, all determined on a consolidated basis and in accordance with GAAP;
provided, however, that for the purposes of determining Consolidated Rent
Expense for any period during which an Acquisition permitted under this
Agreement is consummated, Consolidated Rent Expense shall be adjusted to give
effect to the consummation of such Acquisition on a pro forma basis in
accordance with GAAP, as if such Acquisition occurred on the first day of such
period, such adjustments to be calculated in a manner reasonably satisfactory to
the Administrative Agent.
"Consolidated Synthetic Lease Obligations" means, as of the date of any
determination thereof, the consolidated Synthetic Lease Obligations of the
Borrower and its Subsidiaries as of such date, determined on a consolidated
basis and in accordance with GAAP .
"Consolidated Tangible Net Worth" shall mean, as of the date of any
determination thereof, the sum of (i) Consolidated Net Worth as of such date
minus (ii) the book value of all Intangible Assets of the Borrower and its
Subsidiaries as of such date, all determined on a consolidated basis and in
accordance with GAAP.
"Conversion/Continuation Notice" has the meaning set forth in
Section 2.03(c).
"Credit Availability Period" means the period from and including the
Effective Date to but not including the Termination Date.
"Debt" of any Person shall mean, as of the date of determination thereof,
the sum of, without duplication, (i) all obligations of such Person for borrowed
money, (ii) all obligations of such Person evidenced by bonds, debentures, notes
or other similar instruments, (iii) all fixed or contingent reimbursement
obligations of such Person with respect to letters of credit and/or surety
bonds, (iv) all obligations of such Person to pay the deferred purchase price of
property or services (other than unsecured trade accounts payable, deferred
compensation items and like expense accruals arising in the ordinary course of
business), (v) all Capitalized Lease Obligations of such Person, (vi) the
aggregate amount of uncollected accounts receivable of such Person subject at
such time to a sale of receivables (or similar transaction) regardless of
whether such transaction is effected without recourse to such Person or in a
manner that would not be reflected on the balance sheet of such Person in
accordance with GAAP, (vii) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed or Guaranteed by such Person
and (viii) all Debt of others Guaranteed by such Person; provided, however, that
the term "Debt shall
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not include any obligation, contingent or otherwise, under the Synthetic Lease
Obligations. The amount of any Debt secured by a Lien pursuant to clause (vii)
above which has not been assumed or Guaranteed by such Person shall be deemed to
be an amount equal to the lesser of (x) the aggregate outstanding amount of Debt
secured by such Lien and (y) the greater of the aggregate book value and the
aggregate fair market value of the assets subject to such Lien. The amount of
any Debt Guaranteed by a Person pursuant to clause (viii) above shall be deemed
to be an amount equal to the lesser of (x) the stated or determinable amount
(inclusive of principal, interest, fees and other charges) of the primary
obligation in respect of which such Guarantee is made, or (y) the maximum amount
for which such guaranteeing Person may be liable pursuant to the terms of the
instrument embodying such Guarantee, unless such primary obligation and the
maximum amount for which such guaranteeing Person may be liable are not stated
or determinable, in which case the amount of Debt subject to such Guarantee
shall be such guaranteeing Person's maximum reasonably anticipated liability in
respect thereof as mutually determined by Borrower's Board of Directors and the
Administrative Agent.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time, or both, would,
unless cured or waived, become an Event of Default.
"Effective Date" means the date this Agreement becomes effective in
accordance with Section 3.01.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules or other governmental
restrictions to which the Borrower or any Subsidiary is subject relating to the
environment or to emissions, discharges or releases of pollutants, contaminants,
petroleum or petroleum products, chemicals or toxic or hazardous substances or
wastes into the environment including, without limitation, ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, petroleum or petroleum products, chemicals
or toxic or hazardous substances or wastes or the clean-up or other remediation
thereof and any and all judgments, orders, decrees, permits, grants, franchises,
licenses or agreements relating to the foregoing to which the Borrower or any
Subsidiary is a party or which is otherwise applicable to the Borrower or any
Subsidiary.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, or any successor statute.
"ERISA Group" means the Borrower and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated, on or after the
Effective Date, as a single employer under Section 414 of the Internal Revenue
Code.
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" means that certain Credit Agreement dated
January 27, 1998 by and among Borrower, NationsBank, N.A., as Administrative
Agent, Nationsbanc Montgomery Securities, LLC, as Syndication Agent and the
Lenders named therein.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 9:00 a.m. (Central
Standard Time) on such day on such transactions received by the Administrative
Agent from three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"Financial Officer" means either the chief financial officer or the
treasurer of the Borrower, acting individually, or either the financial
reporting and budgeting manager or the director of finance of the Borrower,
acting in concert with the chief financial officer or the treasurer.
"Fiscal Quarter" means a fiscal quarter of the Borrower.
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"Fiscal Year" means a fiscal year of the Borrower.
"GAAP" means, at any time, generally accepted accounting principles at such
time in the United States.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any central bank (or similar monetary or
regulatory authority) thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government,
and any corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guarantee" by any Person means any obligation, contingent or otherwise, of
such Person directly or indirectly guaranteeing any Debt of any other Person
and, without limiting the generality of the foregoing, any obligation, direct or
indirect, contingent or otherwise, of such Person (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Debt or other
obligation (whether arising by virtue of partnership arrangements, by agreement
to keep-well, to purchase assets, goods, securities or services, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt of the
payment thereof or to protect such obligee against loss in respect thereof (in
whole or in part); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of business or any
obligation under any indemnity and/or performance or completion bond, guarantee
or similar instrument now or hereafter issued by Borrower and/or any Subsidiary
in connection with the acquisition, lease, construction and/or improvement of
any real estate which is, will be or is intended to be used by Borrower and/or
any Subsidiary in the ordinary course of its or their respective businesses. The
term "Guarantee" used as a verb has a corresponding meaning.
"Guarantor Subsidiary" means each of Ozark Automotive Distributors, Inc., a
Missouri corporation, Greene County Realty Co., a Missouri corporation, O'Reilly
II Aviation Corporation, a Missouri corporation, Mid-State Automotive
Distributors, Inc., a Tennessee corporation, Ozark Services, Inc., a Missouri
corporation, Hi-Lo Automotive, Inc., a Delaware corporation, Hi-Lo Investment
Company, a Delaware corporation, Hi-Lo Management Company, a Delaware
corporation, Hi-Lo Auto Supply, L.P., a Texas limited partnership, Ozark
Purchasing, LLC, a Missouri limited liability company, First Call Management
Company, a Delaware corporation, and First Call Auto Supply, L.P., a Texas
limited partnership, each of which is a Subsidiary of the Borrower, and any
other Subsidiary which hereafter Guarantees the payment of the Obligations.
"Guaranty" means that certain Continuing Guaranty dated as of the date
hereof and executed by each Guarantor Subsidiary in favor of the Administrative
Agent, the Banks, the Swing Line Lender and the Letter of Credit Issuer with
respect to the Obligations, as the same may be amended, supplemented or
otherwise modified from time to time.
"Intangible Assets" means all patents, trademarks, service marks,
copyrights, trade names, goodwill (including any amounts, however designated,
representing the cost of acquisition of business and investments in excess of
the book value thereof), unamortized debt discount and expense, unamortized
deferred charges, deferred research and development costs, any write-up of asset
value after the date of this Agreement, non-competition covenants and any other
assets treated as intangible assets under GAAP.
"Intercreditor Agreement" means that certain Intercreditor Agreement dated
as of May 1, 2001, by and among Bank of America, N.A., as Administrative Agent
and as a Bank, UMB Bank, n.a., Commerce Bank, N.A., Firstar Bank, N.A., Bank
One, N.A., Union Planters Bank, N.A., Suntrust Bank, Bank of Montreal, Hibernia
National Bank and LaSalle Bank National Association, as Banks, and The
Northwestern Mutual Life Insurance Company, The Northwestern Mutual Life
Insurance Company for its Group Annuity Separate Account, MONY Life Insurance
Company, Connecticut General Life Insurance Company, New York Life Insurance
Company, New York Life Insurance and Annuity Corporation, Jefferson-Pilot
LifeAmerica Insurance Company, Jefferson-Pilot Life Insurance Company, The
Canada Life Assurance Company, Ameritas Life Insurance Company, Acacia National
Life Insurance Company, Acacia Life Insurance Company and Security Financial
Life Insurance Company, as Purchasers, as the same may from time to time be
amended.
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"Interest Period" means, with respect to each LIBOR Loan, the period
commencing on the date of such Borrowing and ending 14 days or 1, 2, 3 or 6
months thereafter, as the Borrower may elect in the applicable Notice of
Revolving Credit Borrowing or Conversion/Continuation Notice, as the case may
be; provided that:
(i) any Interest Period which would otherwise end on a day which is not a
Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in another calendar month, in which case such Interest Period
shall end on the next preceding Business Day;
(ii) any Interest Period which begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall, subject to
clause (iii) below, end on the last Business Day of a calendar month; and
(iii) any Interest Period which would otherwise end after the Termination
Date shall end on the Termination Date.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"Investment" shall mean any investment (including, without limitation, any
loan or advance) by any Person in or to any other Person, whether payment
therefor is made in cash or capital stock or other equity interests, and whether
such investment is by acquisition of stock or other equity interests or
indebtedness, or by loan, advance, transfer of property or assets out of the
ordinary course of business, capital contribution, equity or profit sharing
interest, extension of credit on terms other than those normal in the ordinary
course of business or otherwise.
"Issuance Request" shall have the meaning set forth in Section 2.16.4.
"Letter of Credit" means a Letter of Credit issued pursuant to
Section 2.16.
"Letter of Credit Expiry Date" means, with respect to any Letter of Credit,
the date which is the earlier of (i) one (1) year after the date of issuance
therefor or (ii) (8) Business Days prior to the Termination Date.
"Letter of Credit Issuer" means Wells Fargo, as the issuer of the Letters
of Credit.
"Letter of Credit Issuer-Related Persons" means the Letter of Credit Issuer
(including any successor Letter of Credit Issuer), together with its Affiliates,
and the officers, directors, employees, agents and attorneys-in-fact of such
Persons and Affiliates.
"Letter of Credit Obligations" means, as at the time of determination
thereof, the sum of (i) the Reimbursement Obligations then outstanding plus
(ii) the aggregate undrawn face amount of the then outstanding Letters of
Credit.
"Letter of Credit Sublimit" means the lesser of (i) $20,000,000.00 and
(ii) the total Revolving Credit Commitments at such time.
"LIBOR Base Rate" means, with respect to LIBOR Loans for the relevant
Interest Period, the rate determined by the Administrative Agent to be the rate
at which Wells Fargo offers to place deposits in U.S. dollars with first-class
banks in the London interbank market at approximately 11:00 a.m. (London time)
two Business Days prior to the first day of such Interest Period, in the
approximate amount of Wells Fargo's relevant LIBOR Loan and having a maturity
equal to such Interest Period.
"LIBOR Lending Office" means, as to each Bank, its office, branch or
affiliate located at its address set forth in its Administrative Questionnaire
(or identified in its Administrative Questionnaire as its LIBOR Lending Office)
or such other office, branch or affiliate of such Bank as it may hereafter
designate as its LIBOR Lending Office by notice to the Borrower and the
Administrative Agent.
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"LIBOR Loan" means each Revolving Credit Loan to be made as a LIBOR Loan in
accordance with the applicable Notice of Revolving Credit Borrowing.
"LIBOR Rate" means, with respect to LIBOR Loans for the relevant Interest
Period, the sum of (i) the quotient of (A) the LIBOR Base Rate applicable to
such Interest Period, divided by (B) one minus the Reserve Requirement
(expressed as a decimal) applicable to such Interest Period, plus (ii) the
Applicable LIBOR Margin. The LIBOR Rate shall be rounded to the next higher
multiple of 1/16 of 1% if the rate is not such a multiple.
"Lien" shall mean any interest in property securing an obligation owed to,
or a claim by, a Person other than the owner of the property, whether such
interest is based on common law, statute or contract, including, without
limitation, any security interest, mortgage, deed of trust, pledge,
hypothecation, judgment lien or other lien or encumbrance of any kind or nature
whatsoever, any conditional sale or trust receipt, any lease, consignment or
bailment for security purposes and any Capitalized Lease.
"Loan" means a Revolving Credit Loan or a Swing Line Loan.
"Loan Document" means this Agreement, each Note, each Reimbursement
Agreement, the Guaranty, the Agent Fee Letter and the Upfront Fee Letter, in
each case as the same may be amended, supplemented or otherwise modified from
time to time.
"Material Adverse Effect" means (a) a material adverse effect on the
properties, assets, liabilities, business, operations, income or condition
(financial or otherwise) of the Borrower and its Subsidiaries taken as a whole,
(b) material impairment of the ability of the Borrower to perform its
obligations under the Loan Documents or of the ability of the Borrower and the
Guarantor Subsidiaries, taken as whole, to perform their respective obligations
under the Loan Documents or (c) material impairment of the enforceability of the
rights of, or benefits available to, the Administrative Agent, any Bank, the
Swing Line Lender and/or the Letter of Credit Issuer under this Agreement, any
Note, the Guaranty or any other Loan Document.
"Material Debt" means any Debt (other than the Obligations) of the Borrower
and/or one or more of its Subsidiaries, arising in one or more related or
unrelated transactions, in an aggregate principal amount exceeding $10,000,000.
"Material Plan" means at any time a Plan or Plans having aggregate Unfunded
Liabilities in excess of $10,000,000.
"Material Synthetic Lease Obligation" means any Synthetic Lease Obligation
of the Borrower and/or one or more of its Subsidiaries, arising in one or more
related or unrelated transactions, in an aggregate amount exceeding $10,000,000.
"Multiemployer Plan" means at any time an employee pension benefit plan
within the meaning of Section 4001(a)(3) of ERISA to which any member of the
ERISA Group is then making or accruing an obligation to make contributions or
has within the preceding five (5) plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five (5) year period.
"Notes" means the Revolving Credit Notes and the Swing Line Note, and
"Note" means any one of such promissory notes, in each case as the same may be
amended, supplemented or otherwise modified from time to time.
"Notice of Revolving Credit Borrowing" means a Notice of Revolving Credit
Borrowing (as defined in Section 2.03(a)).
"Notice of Swing Line Borrowing" means a Notice of Swing Line Borrowing (as
defined in Section 2.03(b)).
"Obligations" means all unpaid principal of and accrued and unpaid interest
on the Loans, all Letter of Credit Obligations and all accrued and unpaid fees,
expenses, reimbursements, indemnities and other obligations of
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the Borrower to any one or more of the Banks, the Administrative Agent, the
Swing Line Lender, the Letter of Credit Issuer and/or any indemnified party
evidenced by or arising under or in respect of any of the Loan Documents.
"Operating Lease" means any lease of real and/or personal property by a
Person as lessee which is not a Capitalized Lease.
"Parent" means, with respect to any Bank, any Person controlling such Bank.
"Participant" has the meaning set forth in Section 9.06(b).
"Payment Office" means the main office of the Administrative Agent located
in Denver, Colorado.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Permitted Acquisition" shall mean any Acquisition by the Borrower or any
wholly-owned Subsidiary of an ongoing business in the same line of business of
the Borrower and its Subsidiaries on the date of this Agreement so long as (a)
except for Permitted Acquisitions with a total purchase price (as determined
consistent with the provisions of clause (d) below) of less than $15,000,000 (to
which this clause (a) shall not apply), the Borrower has given the
Administrative Agent at least ten (10) Business Days prior written notice of
such Acquisition (or such lesser notice as the Required Banks may agree to in
writing) and has provided the Administrative Agent with such financial and other
information concerning such Acquisition as the Administrative Agent or the
Required Banks may reasonably request (and the Administrative Agent hereby
agrees to promptly forward such notices and such financial and other information
to each of the Banks), (b) the assets or entity being acquired are located in
the United States, (c) if such Acquisition involves a merger or consolidation of
the Borrower or any Subsidiary and another entity, the Borrower or such
Subsidiary, as the case may be, is the surviving entity, (d) the total purchase
price (including fees and expenses) for such Acquisition (whether payable at
closing or at any time or times after closing of the applicable Acquisition, and
if payable after closing and not determinable prior to closing, as reasonably
estimated by the Borrower, and in any event including the amount of any
indebtedness assumed by the Borrower or any Subsidiary as a part of such
Acquisition) does not exceed the sum of $75,000,000, (e) the total purchase
price (including fees and expenses) for all Acquisitions consummated by the
Borrower and/or any Subsidiary during the one (1) year period preceding the date
of consummation of the Acquisition in question (including the Acquisition in
question) (whether payable at closing or at any time or times after closing of
the applicable Acquisition, and if payable after closing and not determinable
prior to closing, as reasonably estimated by the Borrower, and in any event
including the amount of any indebtedness assumed by Borrower or any Subsidiary
as a part of the applicable Acquisition) does not exceed the sum of
$100,000,000, (f) both immediately before and immediately after giving effect to
such Acquisition, the Borrower is in compliance with all of the terms,
provisions, covenants and conditions contained in this Agreement and the other
Loan Documents, (g) if such Acquisition had been consummated on the last day of
the Fiscal Quarter immediately preceding the actual date of such Acquisition
(the "Assumed Acquisition Date"), on a pro forma basis the Borrower would have
been in compliance with all of the terms, provisions, covenants and conditions
contained in this Agreement and the other Loan Documents at all times from and
after the Assumed Acquisition Date, which pro forma compliance shall be
demonstrated by the Borrower to the Administrative Agent and each Bank pursuant
to such financial and other information concerning such Acquisition as the
Administrative Agent or the Required Banks may reasonably request and (h) both
immediately before and immediately after giving effect to such Acquisition, no
Default or Event of Default shall exist.
"Person" means an individual, a corporation, a partnership, a limited
liability company, an association, a trust or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Plan" means at any time an employee pension benefit plan (other than a
Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five (5) years been maintained, or
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contributed to, by any Person which was at such time a member of the ERISA Group
for employees of any Person which was at such time a member of the ERISA Group.
"Prime Rate" means at any time the rate of interest per annum most recently
announced within Wells Fargo at its principal office in San Francisco,
California as its Prime Rate, with the understanding that Wells Fargo's Prime
Rate is one of its base rates and serves as the basis upon which effective rates
of interest are calculated for those loans making reference thereto and is
evidenced by the recording thereof after its announcement in such internal
publication or publications as Wells Fargo may designate. Each change in the
Prime Rate shall be effective on the day the change is announced within Wells
Fargo.
"Register" has the meaning set forth in Section 9.06(f).
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time and any successor thereto or
other regulation or official interpretation of said Board of Governors relating
to the extension of credit by banks for the purpose of purchasing or carrying
margin stocks applicable to member banks of the Federal Reserve System.
"Reimbursement Agreement" means each application and/or agreement for
irrevocable standby letter of credit executed by Borrower or any Subsidiary in
connection with any Letter of Credit, each as the same may be amended,
supplemented or otherwise modified from time to time.
"Reimbursement Obligations" means, at any time, the aggregate (without
duplication) of the Obligations of the Borrower to the Banks, the Letter of
Credit Issuer and/or the Administrative Agent in respect of all unreimbursed
payments or disbursements made by the Banks, the Letter of Credit Issuer and/or
the Administrative Agent under or in respect of draws made under the Letters of
Credit.
"Rent Expense" means with respect to any Person, for the period in
question, the aggregate amount of rental and other expenses incurred by such
Person in respect of Operating Leases during such period, all determined in
accordance with GAAP.
"Required Banks" means at any time Banks having at least 51% of the
aggregate amount of the Revolving Credit Commitments or, if the Revolving Credit
Commitments shall have been terminated, holding Revolving Credit Notes
evidencing at least 51% of the aggregate unpaid principal amount of the
Revolving Credit Loans.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum, aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on eurocurrency
liabilities.
"Revolving Credit Commitment" means, with respect to any Bank, the
principal amount set forth opposite the name of such Bank on Schedule 1.01
hereto or in any Assignment and Assumption Agreement under the caption "Amount
of Revolving Credit Commitment"; and "Revolving Credit Commitments" means such
commitments collectively, which commitments equal $150,000,000.00 in the
aggregate as of the Effective Date, as such amount may be changed from time to
time pursuant to Section 2.09.
"Revolving Credit Commitment Percentage" means, with respect to each Bank,
the percentage equal to a fraction the numerator of which is the amount of such
Bank's Revolving Credit Commitment and the denominator of which is the aggregate
amount of the Revolving Credit Commitments.
"Revolving Credit Loan" means a loan made by a Bank pursuant to
Section 2.01, which may be a Base Rate Loan or a LIBOR Loan.
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"Revolving Credit Notes" means revolving credit notes of the Borrower,
substantially in the form of Exhibit C hereto, evidencing the obligation of the
Borrower to repay the Revolving Credit Loans, and "Revolving Credit Note" means
any one of such revolving credit notes issued hereunder, in each case as the
same may be amended, supplemented or otherwise modified from time to time.
"Sale and Leaseback Transaction" of any Person means an arrangement with
any lender or investor or to which such lender or investor is a party providing
for the leasing by such Person of any property that has been or is being sold,
conveyed, transferred or otherwise disposed of by such Person to such lender or
investor or to any Person to whom funds have been or are to be advanced by such
lender or investor on the security of such property.
"Subsidiary" of a Person means any corporation, association, partnership,
limited liability company, joint venture or other business entity of which more
than fifty percent (50%) of the voting stock, membership interests or other
equity interests (in the case of Persons other than corporations), is owned or
controlled directly or indirectly by the Person, or one or more of the
Subsidiaries of the Person, or a combination thereof. Unless the context
otherwise clearly requires, references herein to a "Subsidiary" refer to a
Subsidiary of the Borrower or one of the Subsidiaries.
"Synthetic Lease Obligation" of any Person means the obligation to pay rent
or other payment amounts under a lease of (or other indebtedness arrangements
conveying the right to use) real or personal property of such Person which may
be classified and accounted for as an operating lease or off-balance sheet
liability for accounting purposes but as a secured or unsecured loan for tax
purposes under the Internal Revenue Code.
"Swing Line Commitment" means the lesser of (i) $20,000,000.00 and (ii) the
total Revolving Credit Commitments at such time.
"Swing Line Lender" means Wells Fargo.
"Swing Line Lender-Related Persons" means the Swing Line Lender (including
any successor Swing Line Lender), together with its Affiliates, and the
officers, directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
"Swing Line Loan" means a loan made by the Swing Line Lender pursuant to
Section 2.02.
"Swing Line Note" means the swing line note of the Borrower, substantially
in the form of Exhibit D hereto, evidencing the obligation of the Borrower to
repay the Swing Line Loans, as the same may be amended, supplemented or
otherwise modified from time to time.
"Termination Date" means July 29, 2005.
"Total Outstandings" shall mean, as of any date, the sum of (a) the
aggregate principal amount of all Revolving Credit Loans outstanding as of such
date, plus (b) the aggregate principal amount of all Swing Line Loans
outstanding as of such date plus (c) the aggregate Letter of Credit Obligations
outstanding as of such date.
"Unfunded Liabilities" means, with respect to any Plan at any time, the
amount (if any) by which (i) the present value of all benefits under such Plan
exceeds (ii) the fair market value of all Plan assets allocable to such benefits
(excluding any accrued but unpaid contributions), all determined as of the then
most recent valuation date for such Plan, but only to the extent that such
excess represents a potential liability of a member of the ERISA Group to the
PBGC or any other Person under Title IV of ERISA.
"Upfront Fee Letter" means the letter agreement among the Borrower, the
Administrative Agent and the Banks, dated as of the date of this Agreement,
relating to the upfront fees payable to the Banks, as amended, supplemented or
otherwise modified from time to time.
"Voting Stock" means capital stock of any class or classes (however
designated) having ordinary voting power for the election of directors of the
Borrower, other than stock having such power only by reason of the happening of
a contingency.
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"Wells Fargo" means Wells Fargo Bank, National Association, in its
individual capacity.
Section 1.02 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
accounting determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared in accordance with GAAP as
in effect from time to time, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants) with the most
recent audited consolidated financial statements of the Borrower and its
Subsidiaries delivered to the Banks; provided that, if the Borrower notifies the
Administrative Agent that the Borrower wishes to amend any covenant in Article V
to eliminate the effect of any change in GAAP on the operation of such covenant
(or if the Administrative Agent notifies the Borrower that the Required Banks
wish to amend any covenant in Article V for such purpose), then the Borrower's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Borrower and the Required Banks.
Section 1.03 Types of Borrowings. The term "Borrowing" denotes the
aggregation of Revolving Credit Loans of one or more Banks to be made to the
Borrower pursuant to Article II on a single date and, in the case of LIBOR
Loans, for a single Interest Period. Borrowings may be classified for purposes
of this Agreement by reference to the pricing of Revolving Credit Loans
comprising such Borrowing (e.g., a "LIBOR Borrowing" is a Borrowing comprised of
LIBOR Loans).
ARTICLE II
THE CREDITS
Section 2.01 Revolving Credit Commitments. During the Credit Availability
Period, each Bank severally agrees, on the terms and conditions set forth in
this Agreement, to make loans to the Borrower pursuant to this Section 2.01 from
time to time in amounts such that the aggregate outstanding principal amount of
Revolving Credit Loans by such Bank shall not exceed the amount of its Revolving
Credit Commitment less the sum of (i) such Bank's Revolving Credit Commitment
Percentage of Letter of Credit Obligations at such time plus (ii) such Bank's
Revolving Credit Commitment Percentage of aggregate principal amount of Swing
Line Loans outstanding at such time. Each Borrowing under this Section 2.01
which is a Base Rate Borrowing shall be in an aggregate principal amount of
$1,000,000 or any larger multiple of $500,000. Each Borrowing under this Section
2.01 which is a LIBOR Borrowing shall be in an aggregate principal amount of
$1,000,000 or any larger multiple of $500,000. Each Borrowing under this Section
2.01 shall be made from the several Banks ratably in proportion to their
respective Revolving Credit Commitments. Within the foregoing limits, the
Borrower may borrow under this Section 2.01, repay, or to the extent permitted
by Section 2.11, prepay Revolving Credit Loans and reborrow at any time during
the Credit Availability Period under this Section 2.01.
Section 2.02 Swing Line Commitment.
(a) During the Credit Availability Period, the Swing Line Lender agrees, on
the terms and conditions set forth in this Agreement, to make loans to the
Borrower pursuant to this Section 2.02 from time to time in amounts such that
the aggregate outstanding principal amount of Swing Line Loans shall not exceed
the lesser of (i) the amount of the Swing Line Commitment or (ii) the sum of (A)
the total Revolving Credit Commitments at such time minus (B) the aggregate
principal amount of Revolving Credit Loans outstanding at such time minus (C)
the aggregate amount of Letter of Credit Obligations at such time. Each Swing
Line Loan under this Section 2.02 shall be in an aggregate principal amount of
$250,000 or any larger multiple of $50,000. No Swing Line Loan may be
outstanding for more than seven (7) days. The Swing Line Lender shall not make
any Swing Line Loan to refinance any outstanding Swing Line Loan. Immediately
upon the making of a Swing Line Loan, each Bank shall be deemed to, and hereby
irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a
risk participation in such Swing Line Loan in an amount equal to the product of
such Bank's Revolving Credit Commitment Percentage of the amount of such Swing
Line Loan. Within the foregoing limits, the Borrower may borrow under this
Section 2.02, repay or prepay Swing Line Loans and reborrow at any time during
the Credit Availability Period under this Section 2.02.
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(b) The Swing Line Lender may at any time in its sole and absolute
discretion request, on behalf of the Borrower (which hereby irrevocably requests
the Swing Line Lender to so request on its behalf), that each Bank make a
Revolving Credit Loan which is a Base Rate Loan in an amount equal to such
Bank's Revolving Credit Commitment Percentage of the amount of Swing Line Loans
then outstanding. Such request shall be made in accordance with the requirements
of Section 2.03, without regard to the minimum and multiples specified therein
for the principal amount of Base Rate Loans, but subject to the conditions set
forth in Article III. The Swing Line Lender shall furnish the Borrower with a
copy of the applicable Notice of Revolving Credit Borrowing promptly after
delivering such notice to the Administrative Agent. Not later than 2:00 p.m.
(Central Standard Time) on the date of such Revolving Credit Loan, each Bank
shall make an amount equal to its Revolving Credit Commitment Percentage of the
amount specified in such Notice of Revolving Credit Borrowing available, in
Federal or other funds immediately available in Denver, Colorado, to the
Administrative Agent at its Payment Office. Unless the Administrative Agent
determines that any applicable condition specified in Article III has not been
satisfied, the Administrative Agent will make the funds so received from the
Banks available to the Swing Line Lender at the Administrative Agent's aforesaid
address to pay the then outstanding Swing Line Loans, whereupon, subject to
Section 2.02(c) below, each Bank that so makes funds available shall be deemed
to have made a Revolving Credit Loan which is a Base Rate Loan to the Borrower
in such amount.
(c) If for any reason any Revolving Credit Loan cannot be requested in
accordance with Section 2.02(b) above or any Swing Line Loan cannot be
refinanced by such a Revolving Credit Loan, the Notice of Revolving Credit
Borrowing submitted by the Swing Line Lender shall be deemed to be a request by
the Swing Line Lender that each of the Bank's fund its risk participation in the
relevant Swing Line Loan and each Bank's payment to the Administrative Agent for
the account of the Swing Line Lender pursuant to Section 2.02(b) above shall be
deemed payment in respect of such participation.
(d) If any Bank fails to make available to the Administrative Agent for the
account of the Swing Line Lender any amount required to be paid by such Bank
pursuant to the foregoing provisions of Section 2.02(b) by the time specified in
Section 2.02(b), the Swing Line Lender shall be entitled to recover from such
Bank (acting through the Administrative Agent), on demand, such amount with
interest thereon for the period from the date such payment is required to the
date on which such payment is immediately available to the Swing Line Lender at
a rate per annum equal to the Federal Funds Effective Rate from time to time in
effect. A certificate of the Swing Line Lender submitted to any Bank (through
the Administrative Agent) with respect to any amounts owing under Section 2.02
shall be conclusive absent manifest error.
(e) Each Bank's obligation to make Revolving Loans or to purchase and fund
risk participations in Swing Line Loans pursuant to this Section 2.02 shall be
absolute and unconditional and shall not be affected by any circumstance,
including (i) any set-off, counterclaim, recoupment, defense or other right
which such Bank may have against the Swing Line Lender, the Borrower or any
other Person for any reason whatsoever, (ii) the occurrence or continuance of a
Default or Event of Default or (iii) any other occurrence, event or condition,
whether or not similar to any of the foregoing; provided, however, that each
Bank's obligation to make Revolving Credit Loans pursuant to Section 2.02(b) is
subject to the conditions set forth in Article III. Any such purchase of
participations shall not relieve or otherwise impair the obligation of the
Borrower to repay Swing Line Loans, together with interest as provided herein.
(f) At any time after any Bank has purchased and funded a participation in
a Swing Line Loan, if the Swing Line Lender receives any payment on account of
such Swing Line Loan, the Swing Line Lender will distribute to such Bank its pro
rata share of such payment (appropriately adjusted, in the case of interest
payments, to reflect the period of time during which such Bank's participation
was outstanding and funded) in the same funds as those received by the Swing
Line Lender.
(g) If any payment received by the Swing Line Lender in respect of
principal or interest on any Swing Line Loan is required to be returned by the
Swing Line Lender, each Bank shall pay to the Swing Line Lender its pro rata
share thereof on demand of the Administrative Agent, plus interest thereon from
the date of such demand to the date such amount is returned, at a rate per annum
equal to the Federal Funds Effective Rate. The Administrative Agent will make
such demand upon the request of the Swing Line Lender.
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(h) Until each Bank funds its Revolving Credit Loan or participation
pursuant to this Section 2.02 to refinance such Bank's Revolving Credit
Commitment Percentage of any Swing Line Loan, interest in respect of such pro
rata share shall be solely for the account of the Swing Line Lender.
Section 2.03 Notice of Borrowings.
(a) Notice of Revolving Credit Borrowings. Except with respect to the
initial Revolving Credit Loan for which notice must be given no later than 12:00
noon (Central Standard Time) on the date of such Borrowing, the Borrower shall
give the Administrative Agent notice in the form of Exhibit A attached hereto (a
"Notice of Revolving Credit Borrowing") not later than (x) 12:00 noon (Central
Standard Time) on the Business Day before each Base Rate Borrowing and (y) 12:00
noon (Central Standard Time) on the third Business Day before each LIBOR
Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Business Day,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Revolving Credit Loans comprising such Borrowing are
to be Base Rate Loans or LIBOR Loans, and
(iv) in the case of a LIBOR Borrowing, the duration of the Interest
Period applicable thereto, subject to the provisions of the definition of
Interest Period.
(b) Notice of Swing Line Borrowings. The Borrower shall give the
Administrative Agent notice in the form of Exhibit B attached hereto (a "Notice
of Swing Line Borrowing") not later than (x) 12:00 noon (Central Standard Time)
on the date of each Swing Line Loan, specifying:
(i) the date of such Swing Line Loan, which shall be a Business Day,
and
(ii) the aggregate amount of such Swing Line Loan.
(c) Conversion and Continuation of Outstanding Advances. Base Rate
Borrowings shall continue as Base Rate Borrowings unless and until such Base
Rate Borrowings are converted into LIBOR Loans pursuant to this Section 2.03 or
are repaid in accordance with this Article II. Each LIBOR Borrowing shall
continue as a LIBOR Borrowing until the end of the then applicable Interest
Period therefor, at which time such LIBOR Borrowing shall be automatically
converted into a Base Rate Borrowing unless (x) such LIBOR Borrowing is or was
repaid in accordance with this Article II or (y) the Borrower shall have given
the Administrative Agent a Conversion/Continuation Notice (as defined below)
requesting that, at the end of such Interest Period, such LIBOR Borrowing
continue as a LIBOR Borrowing for the same or another Interest Period. The
Borrower may elect from time to time to convert all or any part of a Base Rate
Borrowing into a LIBOR Borrowing, provided that the resulting Borrowings shall
be in a minimum amount of $1,000,000. The Borrower shall give the Administrative
Agent irrevocable notice (a "Conversion/Continuation Notice") of each conversion
of a Base Rate Borrowing into a LIBOR Borrowing or continuation of a LIBOR
Borrowing not later than 12:00 noon (Central Standard Time) at least three
Business Days prior to the date of the requested conversion or continuation,
specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation,
(ii) the aggregate amount of the Borrowing which is to be converted or
continued and whether such Borrowing is a Base Rate Borrowing or a LIBOR
Borrowing, and
(iii) the amount of such Borrowing which is to be converted into or
continued as a LIBOR Borrowing and the duration of the Interest Period
applicable thereto.
In no event shall Borrower be permitted more than seven (7) Interest Periods
outstanding at any one time under this Agreement. Notwithstanding the foregoing,
so long as any Default or Event of Default has occurred and is continuing,
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the Borrower shall not be permitted to continue any LIBOR Borrowing as a LIBOR
Borrowing or to convert any Base Rate Borrowing into a LIBOR Borrowing.
Section 2.04 Notice to Banks; Funding of Loans.
(a) Upon receipt of a Notice of Revolving Credit Borrowing, the
Administrative Agent shall promptly notify each Bank of the contents thereof and
of such Bank's share of such Borrowing and such Notice of Revolving Credit
Borrowing shall not thereafter be revocable by the Borrower.
(b) Upon receipt of a Notice of Swing Line Borrowing, the Administrative
Agent shall promptly notify the Swing Line Lender of the contents thereof and
such Notice of Swing Line Borrowing shall not thereafter be revocable by the
Borrower.
(c) Not later than 2:00 p.m. (Central Standard Time) on the date of each
Borrowing, each Bank therein shall (except as provided in subsection (e) of this
Section) make available its share of such Borrowing, in Federal or other funds
immediately available in Denver, Colorado, to the Administrative Agent at its
Payment Office. Unless the Administrative Agent determines that any applicable
condition specified in Article III has not been satisfied, the Administrative
Agent will make the funds so received from the Banks available to the Borrower
at the Administrative Agent's aforesaid address.
(d) Not later than 2:00 p.m. (Central Standard Time) on the date of each
Swing Line Loan, the Swing Line Lender shall make available the principal amount
of such Swing Line Loan, in Federal or other funds immediately available in
Denver, Colorado, to the Administrative Agent at its Payment Office. Unless the
Administrative Agent determines that any applicable condition specified in
Article III has not been satisfied, the Administrative Agent will make the funds
so received from the Swing Line Lender available to the Borrower at the
Administrative Agent's aforesaid address.
(e) If new Revolving Credit Loans are to be made hereunder on a day on
which the Borrower is to prepay or repay all or any part of outstanding
Revolving Credit Loans, the Banks shall apply the proceeds of the new Revolving
Credit Loans to make such repayment and only an amount equal to the difference
(if any) between the amount being borrowed and the amount being prepaid or
repaid shall be made available by the Banks to the Administrative Agent as
provided in subsection (c) above, or remitted by the Borrower to the
Administrative Agent as provided in Section 2.12, as the case may be. In such
case, the incurrence of such new Revolving Credit Loans and the prepayment or
repayment of such outstanding Revolving Credit Loans shall be deemed to have
occurred simultaneously.
(f) Unless the Administrative Agent shall have received notice from a Bank
prior to the date of any Borrowing that such Bank will not make available to the
Administrative Agent such Bank's share of such Borrowing, the Administrative
Agent may assume that such Bank has made such share available to the
Administrative Agent on the date of such Borrowing in accordance with
subsections (c) and (e) of this Section 2.04 and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Bank shall not have so made
such share available to the Administrative Agent, such Bank and the Borrower
severally agree to repay to the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
such amount is made available to the Borrower until the date such amount is
repaid to the Administrative Agent, at (i) in the case of the Borrower, a rate
per annum equal to the higher of the Federal Funds Effective Rate and the
interest rate applicable thereto pursuant to Section 2.07 and (ii) in the case
of such Bank, the Federal Funds Effective Rate. If such Bank shall repay to the
Administrative Agent such corresponding amount, such amount so repaid shall
constitute such Bank's Revolving Credit Loan included in such Borrowing for
purposes of this Agreement.
(g) Unless the Administrative Agent shall have received notice from the
Swing Line Lender prior to the date of any Swing Line Loan that the Swing Line
Lender will not make available to the Administrative Agent such Swing Line Loan,
the Administrative Agent may assume that the Swing Line Lender has made such
share available to the Administrative Agent on the date of such Swing Line Loan
in accordance with subsection (c) of this Section 2.04 and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower
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on such date a corresponding amount. If and to the extent that the Swing Line
Lender shall not have so made such share available to the Administrative Agent,
the Swing Line Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, a rate per annum equal to the higher of the
Federal Funds Effective Rate and the interest rate applicable thereto pursuant
to Section 2.07 and (ii) in the case of the Swing Line Lender, the Federal Funds
Effective Rate. If the Swing Line Lender shall repay to the Administrative Agent
such corresponding amount, such amount so repaid shall constitute a Swing Line
Loan for purposes of this Agreement.
Section 2.05 Notes.
(a) The Revolving Credit Loans of each Bank shall be evidenced by a single
Revolving Credit Note substantially in the form of Exhibit C hereto payable to
the order of such Bank for the account of its Applicable Lending Office in an
amount equal to the amount of such Bank's Revolving Credit Commitment.
(b) The Swing Line Loans shall be evidenced by a single Swing Line Note
substantially in the form of Exhibit D hereto payable to the order of the Swing
Line Lender for the account of its Applicable Lending Office in an amount equal
to the amount of the Swing Line Commitment.
(c) Upon receipt of each Bank's Revolving Credit Note pursuant to Section
3.01(b), the Administrative Agent shall deliver such Revolving Credit Note to
such Bank. Each Bank shall record in its books and records the date, amount,
type and Interest Period (if any) of each Revolving Credit Loan made by it and
the date and amount of each payment of principal and/or interest made by the
Borrower with respect thereto; provided that the obligation of the Borrower to
repay each Revolving Credit Loan shall be absolute and unconditional,
notwithstanding any failure of such Bank to make any such recordation or any
mistake by such Bank in connection with any such recordation. The books and
records of each Bank showing the account between such Bank and the Borrower
shall be prima facie evidence of the items set forth therein in the absence of
manifest error.
(d) Upon receipt of the Swing Line Note pursuant to Section 3.01(c), the
Administrative Agent shall deliver such Swing Line Note to the Swing Line
Lender. The Swing Line Lender shall record in its books and records the date and
amount of each Swing Line Loan made by it and the date and amount of each
payment of principal and/or interest made by the Borrower with respect thereto;
provided that the obligation of the Borrower to repay each Swing Line Loan shall
be absolute and unconditional, notwithstanding any failure of the Swing Line
Lender to make any such recordation or any mistake by the Swing Line Lender in
connection with any such recordation. The books and records of the Swing Line
Lender showing the account between the Swing Line Lender and the Borrower shall
be prima facie evidence of the items set forth therein in the absence of
manifest error.
Section 2.06 Maturity of Loans.
(a) Each Revolving Credit Loan shall mature, and the principal amount
thereof shall be due and payable, on the Termination Date.
(b) Each Swing Line Loan shall mature, and the principal amount thereof
shall be due and payable, on the earlier of (i) the date which is seven (7) days
after the date of such Swing Line Loan or (ii) the Termination Date.
Section 2.07 Interest Rates.
(a) So long as no Event of Default has occurred and is continuing, each
Base Rate Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until it becomes due, at a rate per
annum equal to the Adjusted Base Rate for such day. So long as any Event of
Default has occurred and is continuing, each Base Rate Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the sum of 2%
plus the Adjusted Base Rate for such day. Such interest shall be payable
quarterly in arrears on the last Business Day of each calendar quarter. Any
overdue principal of or interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the Adjusted Base Rate for such day.
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(b) So long as no Event of Default has occurred and is continuing, each
LIBOR Loan shall bear interest on the outstanding principal amount thereof, for
each Interest Period applicable thereto, at a rate per annum equal to the
applicable LIBOR Rate. So long as any Event of Default has occurred and is
continuing, each LIBOR Loan shall bear interest on the outstanding principal
amount thereof, for each Interest Period applicable thereto, at a rate per annum
equal to the sum of 2% plus the higher of (i) the Adjusted Base Rate for such
day and (ii) the applicable LIBOR Rate. Such interest shall be payable for each
Interest Period on the last day thereof and, if such Interest Period is longer
than three months, at intervals of three months after the first day thereof. Any
overdue principal of or interest on any LIBOR Loan shall bear interest, payable
on demand, for each day from and including the date payment thereof was due to
but excluding the date of actual payment, at a rate per annum equal to the sum
of 2% plus the higher of (i) the Adjusted Base Rate for such day and (ii) the
applicable LIBOR Rate.
(c) So long as no Event of Default has occurred and is continuing, each
Swing Line Loan shall bear interest on the outstanding principal amount thereof,
for each day from the date such Loan is made until it becomes due, at a rate per
annum equal to the overnight LIBOR rate for such day, as determined by the
Administrative Agent, plus the Applicable LIBOR Margin. So long as any Event of
Default has occurred and is continuing, each Swing Line Loan shall bear interest
on the outstanding principal amount thereof, for each day from the date such
Loan is made until it becomes due, at a rate per annum equal to the sum of 2%
plus the Adjusted Base Rate for such day. Such interest shall be payable
quarterly in arrears on the last Business Day of each calendar quarter. Any
overdue principal of or interest on any Swing Line Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the sum
of 2% plus the Adjusted Base Rate for such day.
(d) The Administrative Agent shall determine each interest rate applicable
to the Loans hereunder. The Administrative Agent shall give prompt notice to the
Borrower, the Banks and the Swing Line Lender by telex or facsimile of each rate
of interest so determined, and its determination thereof shall be conclusive in
the absence of manifest error.
Section 2.08 Loan Fees.
(a) Commitment Fee. From and including the Effective Date to but excluding
the Termination Date, the Borrower shall pay to the Administrative Agent for the
account of each Bank a nonrefundable commitment fee on the unused portion of the
Revolving Credit Commitment of such Bank (determined for each Bank by
subtracting such Bank's Revolving Credit Loans and such Bank's Revolving Credit
Commitment Percentage of the Letter of Credit Outstandings from such Bank's
Revolving Credit Commitment) at the Applicable Commitment Fee Rate. Said
commitment fee shall be (i) calculated on a daily basis and (ii) payable
quarterly in arrears on the last Business Day of each calendar quarter during
the Credit Availability Period and on the Termination Date.
(b) Administrative Agent's Fees. The Borrower shall pay to the
Administrative Agent, for its own account, as and when due the agent and other
fees set forth in the Agent Fee Letter.
(c) Upfront Fees. The Borrower shall pay to the Administrative Agent, for
the account of the Banks, as and when due the upfront fees set forth in the
Upfront Fee Letter.
Section 2.09 Optional Termination or Reduction of, or Increase in, the
Revolving Credit Commitments.
(a) The Borrower may, upon at least ten (10) Business Days' notice to the
Administrative Agent, terminate the Revolving Credit Commitments at any time, if
no Loans or Letter of Credit Obligations are outstanding at such time. Any such
termination shall be permanent and shall also automatically terminate the Swing
Line Commitment.
(b) The Borrower may, upon at least ten (10) Business Days' notice to the
Administrative Agent, ratably reduce from time to time by an aggregate amount of
$10,000,000 or any larger multiple of $1,000,000, the aggregate amount of the
Revolving Credit Commitments in excess of the aggregate outstanding principal
amount of the Loans and Letter of Credit Obligations. Each such reduction shall
be permanent.
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(c) So long as no Default or Event of Default shall have occurred and be
continuing, at any time prior to January 29, 2004, the Borrower shall have the
right from time to time upon not less than thirty (30) days' prior written
notice to the Administrative Agent to increase the Revolving Credit Commitments;
provided that (i) no Bank shall have any obligation to increase its Revolving
Credit Commitment, (ii) the Borrower shall only be permitted to request such an
increase on three (3) separate occasions, (iii) each such requested increase
shall be in a minimum principal amount of $10,000,000, (iv) in no event shall
the Revolving Credit Commitments be increased to an aggregate amount greater
than $200,000,000 and (v) contemporaneously with requesting each such increase,
the Borrower certifies to the Administrative Agent and each Bank in writing that
immediately before and immediately after giving effect to such increase, (A) the
Borrower is in compliance with all of the terms, provisions, covenants and
conditions contained in this Agreement and the other Loan Documents and (B) no
Default or Event of Default has occurred and is continuing; and provided further
that:
(A) any increase in the Revolving Credit Commitments which is accomplished
by increasing the Revolving Credit Commitment of any Bank or Banks who are at
the time of such increase party to this Agreement (which Bank or Banks shall
consent to such increase in their sole and absolute discretion) shall be
accomplished as follows: (1) this Agreement will be amended by the Borrower, the
Administrative Agent and those Bank(s) whose Revolving Credit Commitment(s) is
or are being increased (but without any requirement that the consent of the
Swing Line Lender, the Letter of Credit Issuer or any other Banks be obtained)
to reflect the revised Revolving Credit Commitments of each of the Banks, (2)
the Administrative Agent will deliver an updated Schedule 1.01 to the Borrower,
the Swing Line Lender, the Letter of Credit Issuer and each of the Banks
reflecting the revised Revolving Credit Commitments and Revolving Credit
Commitment Percentages of each of the Banks, (3) the outstanding Revolving
Credit Loans and Revolving Credit Commitment Percentages of Letter of Credit
Obligations will be reallocated on the effective date of such increase among the
Banks in accordance with their revised Revolving Credit Commitment Percentages
(and the Banks agree to make all payments and adjustments necessary to effect
the reallocation and the Borrower shall pay any and all costs required pursuant
to Section 2.13 in connection with such reallocation as if such reallocation
were a repayment) and (4) the Borrower will deliver new Revolving Credit Note(s)
to the Bank or Banks whose Revolving Credit Commitment(s) is or are being
increased reflecting the revised Revolving Credit Commitments of such Bank(s);
(B) any increase in the Revolving Credit Commitments which is accomplished
by addition of a new Bank under this Agreement shall be accomplished as follows:
(1) such new Bank shall be subject to the consent of the Administrative Agent
and the Borrower, which consent shall not be unreasonably withheld, (2) this
Agreement will be amended by the Borrower, the Administrative Agent and such new
Bank (but without any requirement that the consent of the Swing Line Lender, the
Letter of Credit Issuer or any other Banks be obtained) to reflect the addition
of such new Bank as a Bank hereunder, (3) the Administrative Agent will deliver
an updated Schedule 1.01 to the Borrower, the Swing Line Lender, the Letter of
Credit Issuer and each of the Banks reflecting the revised Revolving Credit
Commitments and Revolving Credit Commitment Percentages of each of the Banks,
(4) the outstanding Revolving Credit Loans and Revolving Credit Commitment
Percentages of Letter of Credit Obligations will be reallocated on the effective
date of such increase among the Banks in accordance with their revised Revolving
Credit Commitment Percentages (and the Banks agree to make all payments and
adjustments necessary to effect the reallocation and the Borrower shall pay any
and all costs required pursuant to Section 2.13 in connection with such
reallocation as if such reallocation were a repayment), (5) the Borrower will
deliver a Revolving Credit Note to such new Bank and (6) the new Bank will
execute a joinder to the Intercreditor Agreement in form and substance
reasonably satisfactory to the Administrative Agent; and
(C) notwithstanding anything to the contrary contained in this Agreement,
upon any voluntary termination of the Revolving Credit Commitments pursuant to
Section 2.09(a) or any voluntary reduction of the Revolving Credit Commitments
pursuant to Section 2.09(b), the Borrower shall no longer have the option to
request an increase in the Revolving Credit Commitments pursuant to this Section
2.09(c).
Section 2.10 Mandatory Termination of Commitments. The Revolving
Credit Commitments and the Swing Line Commitment shall terminate on the
Termination Date, and any Loans then outstanding (together with accrued interest
thereon) and all accrued and unpaid fees under this Agreement shall be due and
payable on such date.
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Section 2.11 Prepayments.
(a) The Borrower may, (i) upon at least one (1) Business Day's notice to
the Administrative Agent, prepay any Base Rate Borrowing and (ii) upon at least
three (3) Business Days notice to the Administrative Agent, prepay, subject to
Section 2.13, any LIBOR Borrowing, in whole at any time, or from time to time in
part in amounts aggregating (i) in the case of Base Rate Borrowings, $1,000,000
or any larger multiple of $500,000 and (ii) in the case of LIBOR Borrowings,
$1,000,000 or any larger multiple of $500,000, by paying the principal amount to
be prepaid together with accrued interest thereon to the date of prepayment.
Each such optional prepayment shall be applied to prepay ratably the Revolving
Credit Loans of the several Banks included in such Borrowing. Upon receipt of a
notice of prepayment pursuant to this Section, the Administrative Agent shall
promptly notify each Bank of the contents thereof and of such Bank's ratable
share (if any) of such prepayment and such notice shall not thereafter be
revocable by the Borrower.
(b) The Borrower may prepay any Swing Line Loans in whole at any time, or
from time to time in part in amounts aggregating $250,000 or any larger multiple
of $50,000 by paying the principal amount to be prepaid together with accrued
interest thereon to the date of prepayment.
Section 2.12 General Provisions as to Payments.
(a) The Borrower shall make each payment of principal of, and interest on,
the Loans and of fees hereunder, not later than 12:00 noon (Central Standard
Time) on the date when due, in Federal or other funds immediately available in
Denver, Colorado, to the Administrative Agent at its Payment Office and without
setoff or counterclaim and free and clear of and without deduction for any
taxes, levies, impost, duties, charges, fees, deductions, withholding,
compulsory loans, restrictions or conditions of any nature now or hereafter
imposed or levied by any jurisdiction or any political subdivision thereof or
taxing or other authority therein unless the Borrower is required by law to make
such deduction or withholding. The Administrative Agent will promptly
distribute to each Bank and the Swing Line Lender its ratable share (if any) of
each such payment received by the Administrative Agent for the account of the
Banks and/or the Swing Line Lender. Whenever any payment of principal of, or
interest on, the Base Rate Loans or the Swing Line Loans or of fees shall be due
on a day which is not a Business Day, the date for payment thereof shall be
extended to the next succeeding Business Day. Whenever any payment of principal
of, or interest on, the LIBOR Loans shall be due on a day which is not a
Business Day, the date for payment thereof shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case the date for payment thereof shall be the next preceding
Business Day. If the date for any payment of principal is extended by operation
of law or otherwise, interest thereon shall be payable for such extended time.
(b) Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any of the Banks
and/or the Swing Line Lender hereunder that the Borrower will not make such
payment in full, the Administrative Agent may assume that the Borrower has made
such payment in full to the Administrative Agent on such date and the
Administrative Agent may, in reliance upon such assumption, cause to be
distributed to each Bank and the Swing Line Lender on such due date an amount
equal to the amount then due such Bank or the Swing Line Lender, as the case may
be. If and to the extent that the Borrower shall not have so made such payment,
each Bank and/or the Swing Line Lender, as the case may be, shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Bank or
the Swing Line Lender, as the case may be, together with interest thereon, for
each day from the date such amount is distributed to such Bank or the Swing Line
Lender, as the case may be, until the date such Bank or the Swing Line Lender,
as the case may be, repays such amount to the Administrative Agent, at the
Federal Funds Effective Rate.
Section 2.13 Funding Losses. If the Borrower makes any payment of
principal with respect to any LIBOR Loan or any LIBOR Loan is converted to a
different type of Loan (pursuant to Article II, VI or VIII or otherwise) on any
day other than the last day of the Interest Period applicable thereto, or the
end of an applicable period fixed pursuant to Section 2.07(b), or if the
Borrower fails to borrow any LIBOR Loans after notice has been given to any Bank
in accordance with Section 2.04(a), or fails to borrow, prepay, convert or
continue any LIBOR Loan after notice has been given to any Bank in accordance
with Section 2.03, 2.04(a) or 2.11(a), or Article VIII, the
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Borrower shall reimburse each Bank within fifteen (15) days after demand for any
resulting loss or expense incurred by it (or by an existing or prospective
Participant in the related Loan), including (without limitation) any loss
incurred in obtaining, liquidating or employing deposits from third parties and
any loss of margin for the period after any such payment, conversion or failure
to borrow; provided that such Bank shall have delivered to the Borrower a
certificate explaining in reasonable detail the amount of such loss or expense,
which certificate shall be conclusive in the absence of manifest error.
Section 2.14 Computation of Interest and Fees. All interest and fees
hereunder shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day).
Section 2.15 Withholding Tax Exemption.
(a) At least five (5) Business Days prior to the first date on which
interest or fees are payable hereunder for the account of any Bank, each Bank
that is not incorporated under the laws of the United States of America or a
state thereof agrees that it will deliver to each of the Borrower and the
Administrative Agent two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224 (or successor forms), certifying in either case that
such Bank is entitled to receive payments under this Agreement and the Notes
without deduction or withholding of any United States federal income taxes. Each
Bank which so delivers a Form 1001 or 4224 (or successor forms) further
undertakes to deliver to each of the Borrower and the Administrative Agent two
additional copies of such forms (or successor forms) on or before the date that
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Bank is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such form with respect
to it and such Bank advises the Borrower and the Administrative Agent that it is
not capable of receiving payments without any deduction or withholding of United
States federal income tax.
(b) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any political subdivision
thereof asserts a claim that the Administrative Agent did not properly withhold
tax from amounts paid to or for the account of any Bank (because the appropriate
form was not delivered or properly completed, because such Bank failed to notify
the Administrative Agent of a change in circumstances which rendered its
exemption from withholding ineffective or for any other reason), such Bank shall
indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax, withholding thereof, or
otherwise, including penalties and interest, and including taxes imposed by any
jurisdiction on amounts payable to the Administrative Agent under this
subsection, together with all costs and expenses related thereto (including
attorneys fees and time charges of attorneys for the Administrative Agent, which
attorneys may be employees of the Administrative Agent). The obligations of the
Banks under this Section 2.15(b) shall survive the payment of the Obligations
and termination of this Agreement.
Section 2.16 Letters of Credit.
Section 2.16.1 Issuance of Letters of Credit. From and after the Effective
Date to but excluding the Termination Date, the Letter of Credit Issuer agrees,
upon the terms and conditions set forth in this Agreement, to issue at the
request and for the account of the Borrower, one or more standby letters of
credit ("Letters of Credit"); provided, however, that the Letter of Credit
Issuer shall not be under any obligation to issue, and shall not issue, any
Letter of Credit if: (a) any order, judgment or decree of any Governmental
Authority with jurisdiction over the Letter of Credit Issuer shall purport by
its terms to enjoin or restrain such Letter of Credit Issuer from issuing such
Letter of Credit, or any law or governmental rule, regulation, policy, guideline
or directive (whether or not having the force of law) from any Governmental
Authority with jurisdiction over the Letter of Credit Issuer shall prohibit, or
request that the Letter of Credit Issuer refrain from, the issuance of Letters
of Credit in particular or shall impose upon the Letter of Credit Issuer with
respect to any Letter of Credit any restriction or reserve or capital
requirement (for which the
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Letter of Credit Issuer is not otherwise compensated) or any unreimbursed loss,
cost or expense which was not applicable, in effect and known to the Letter of
Credit Issuer as of the date of this Agreement and which the Letter of Credit
Issuer in good faith deems material to it (the Letter of Credit Issuer shall
promptly notify the Borrower of any event which, in the judgment of the Letter
of Credit Issuer, would preclude the issuance of a Letter of Credit pursuant to
this clause (a)); (b) one or more of the conditions to such issuance contained
in Section 3.04 is not then satisfied; or (c) after giving effect to such
issuance, the aggregate outstanding amount of the Letter of Credit Obligations
would exceed the Letter of Credit Sublimit.
In no event shall:
(a) the aggregate amount of the Letter of Credit Obligations at any time
exceed the Letter of Credit Sublimit at such time;
(b) the Total Outstandings at any time exceed the aggregate amount of the
Revolving Credit Commitments at such time; or
(c) the expiration date of any Letter of Credit (including, without
limitation, Letters of Credit issued with an automatic "evergreen" provision
providing for renewal absent advance notice by the Borrower or the Letter of
Credit Issuer), or the date for payment of any draft presented thereunder and
accepted by the Letter of Credit Issuer, be later than the Letter of Credit
Expiry Date.
Section 2.16.2 Participating Interests. Immediately upon the issuance by
the Letter of Credit Issuer of a Letter of Credit in accordance with Section
2.16.4, each Bank shall be deemed to have irrevocably and unconditionally
purchased and received from the Letter of Credit Issuer, without recourse,
representation or warranty, an undivided participation interest equal to its
Revolving Credit Commitment Percentage of the face amount of such Letter of
Credit and each draw paid by the Letter of Credit Issuer thereunder. Each Bank's
obligation to pay its proportionate share of all draws under the Letters of
Credit, absent gross negligence or willful misconduct by the Letter of Credit
Issuer in honoring any such draw, shall be absolute, unconditional and
irrevocable and in each case shall be made without counterclaim or set-off by
such Bank.
Section 2.16.3 Letter of Credit Reimbursement Obligations.
(a) The Borrower agrees to pay to the Letter of Credit Issuer (i) on each
date that any amount is drawn under each Letter of Credit a sum (and interest on
such sum as provided in clause (ii) below) equal to the amount so drawn plus all
other charges and expenses with respect thereto specified in Section 2.16.6 or
in the applicable Reimbursement Agreement and (ii) interest on any and all
amounts remaining unpaid under this Section 2.16.3 until payment in full at the
Adjusted Base Rate plus 2.00% per annum. The Borrower agrees to pay to the
Letter of Credit Issuer the amount of all Reimbursement Obligations owing in
respect of any Letter of Credit immediately when due, under all circumstances,
including, without limitation, any of the following circumstances: (A) any lack
of validity or enforceability of this Agreement or any agreement, document or
instrument executed pursuant hereto; (B) the existence of any claim, set-off,
defense or other right which the Borrower may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), any Bank or any
other Person, whether in connection with this Agreement, any Letter of Credit,
the transactions contemplated herein or any unrelated transactions (including
any underlying transaction between the Borrower and the beneficiary named in any
Letter of Credit); (C) the validity, sufficiency or genuineness of any document
which the Letter of Credit Issuer has determined in good faith and in accordance
with its customary business practices complies on its face with the terms of the
applicable Letter of Credit, even if such document should later prove to have
been forged, fraudulent, invalid or insufficient in any respect or any statement
therein shall have been untrue or inaccurate in any respect; or (D) the
surrender or material impairment of any security for the performance or
observance of any of the terms hereof.
(b)......Notwithstanding any provisions to the contrary in any
Reimbursement Agreement, the Borrower agrees to reimburse the Letter of Credit
Issuer for amounts which the Letter of Credit Issuer pays under such Letter of
Credit no later than the time specified in this Agreement. If the Borrower does
not pay any such Reimbursement Obligations when due, the Borrower shall be
deemed to have immediately requested that the Banks make a
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Revolving Credit Loan which is Base Rate Loan under this Agreement in a
principal amount equal to such unreimbursed Reimbursement Obligations. The
Administrative Agent shall promptly notify the Banks of such deemed request and,
without the necessity of compliance with the requirements of Sections 2.03 or
2.04, each Bank shall make available to the Administrative Agent its Revolving
Credit Loan in the manner prescribed for Revolving Credit Loans. The proceeds of
such Revolving Credit Loans shall be paid over by the Administrative Agent to
the Letter of Credit Issuer for the account of the Borrower in satisfaction of
such unreimbursed Reimbursement Obligations, which shall thereupon be deemed
satisfied by the proceeds of, and replaced by, such Revolving Credit Loan.
(c) If the Letter of Credit Issuer makes a payment on account of any Letter
of Credit and is not concurrently reimbursed therefore by the Borrower and if
for any reason a Revolving Credit Loan may not be made pursuant to subsection
2.16.3(b), then as promptly as practical during normal banking hours on the date
of its receipt of such notice or, if not practicable on such date, not later
than 2:00 p.m. (Central Standard Time) on the Business Day immediately
succeeding such date of notification, each Bank shall deliver to the
Administrative Agent for the account of the Letter of Credit Issuer, in
immediately available funds, the purchase price for such Bank's interest in such
unreimbursed Reimbursement Obligations, which shall be an amount equal to such
Bank's Revolving Credit Commitment Percentage of such payment. Each Bank shall,
upon demand by the Letter of Credit Issuer, pay the Letter of Credit Issuer
interest on such Bank's pro-rata share of such draw from the date of payment by
the Letter of Credit Issuer on account of such Letter of Credit until the date
of delivery of such funds to the Letter of Credit Issuer by such Bank at a rate
per annum, computed for actual days elapsed based on a 360-day year, equal to
the Federal Funds Rate for such period; provided, that such payments shall be
made by the Banks only in the event and to the extent that the Letter of Credit
Issuer is not reimbursed in full by the Borrower for interest on the amount of
any draw on the Letters of Credit.
(d) At any time after the Letter of Credit Issuer has made a payment on
account of any Letter of Credit and has received from any other Bank such Bank's
pro-rata share of such payment, such Letter of Credit Issuer shall, forthwith
upon its receipt of any reimbursement (in whole or in part) by the Borrower for
such payment, or of any other amount from the Borrower or any other Person in
respect of such payment (including, without limitation, any payment of interest
or penalty fees and any payment under any collateral account agreement of the
Borrower but excluding any transfer of funds from any other Bank pursuant to
subsection 2.16.3(b)), transfer to such other Bank such other Bank's ratable
share of such reimbursement or other amount; provided, that interest shall
accrue for the benefit of such Bank from the time such Letter of Credit Issuer
has made a payment on account of any Letter of Credit; provided, further, that
in the event that the receipt by the Letter of Credit Issuer of such
reimbursement or other amount is found to have been a transfer in fraud of
creditors or a preferential payment under the United States Bankruptcy Code or
is otherwise required to be returned, such Bank shall promptly return to the
Letter of Credit Issuer any portion thereof previously transferred by the Letter
of Credit Issuer to such Bank, but without interest to the extent that interest
is not payable by the Letter of Credit Issuer in connection therewith.
Section 2.16.4 Procedure for Issuance. Prior to the issuance of each Letter
of Credit, and as a condition of such issuance, the Borrower shall deliver to
the Letter of Credit Issuer (with a copy to the Administrative Agent) a
Reimbursement Agreement signed by the Borrower, together with such other
documents or items as may be required pursuant to the terms thereof, and the
proposed form and content of such Letter of Credit shall be reasonably
satisfactory to the Letter of Credit Issuer. Each Letter of Credit shall be
issued no earlier than two (2) Business Days after delivery of the foregoing
documents, which delivery may be by the Borrower to the Letter of Credit Issuer
by facsimile transmission, telex or other electronic means followed by delivery
of executed originals within five (5) days thereafter. The documents so
delivered shall be in compliance with the requirements set forth in subsection
2.16.1(b), and shall specify therein (i) the stated amount of the Letter of
Credit requested, (ii) the effective date of issuance of such requested Letter
of Credit, which shall be a Business Day, (iii) the date on which such requested
Letter of Credit is to expire, (iv) the entity for whose benefit the requested
Letter of Credit is to be issued, which shall be either Borrower or a Subsidiary
and (v) the aggregate amount of Letter of Credit Obligations which are
outstanding and which will be outstanding after giving effect to the requested
Letter of Credit issuance. The delivery of the foregoing documents and
information shall constitute an "Issuance Request" for purposes of this
Agreement. Subject to the terms and conditions of Section 2.16.1 and provided
that the applicable conditions set forth in Section 3.04 hereof have been
satisfied, the Letter of Credit Issuer shall, on the requested date, issue a
Letter of Credit on behalf of the Borrower in accordance with the Letter of
Credit Issuer's usual
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and customary business practices. In addition, any amendment of an existing
Letter of Credit shall be deemed to be an issuance of a new Letter of Credit and
shall be subject to the requirements set forth above. The Letter of Credit
Issuer shall give the Administrative Agent prompt written notice of the issuance
of any Letter of Credit.
Section 2.16.5 Nature of the Banks' Obligations.
(a) As between the Borrower and the Banks, the Borrower assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of the Letters of Credit. In furtherance and not in
limitation of the foregoing, the Banks shall not be responsible for (i) the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
issuance of a Letter of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) the failure of the beneficiary of a
Letter of Credit to comply fully with conditions required to be satisfied by any
Person other than the Letter of Credit Issuer in order to draw upon such Letter
of Credit (other than a failure to satisfy documentary conditions to drawing
where payment of the Letter of Credit despite such failure would constitute
gross negligence or willful misconduct of the Letter of Credit Issuer); (iv)
errors, omissions, interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, facsimile transmission, telex or otherwise;
(v) the misapplication by the beneficiary of a Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (vi) any consequences arising
from causes beyond control of the Letter of Credit Issuer.
(b) In furtherance and extension and not in limitation of the specific
provisions hereinabove set forth (including in subsection 2.16.3(a)), any action
taken or omitted by the Letter of Credit Issuer under or in connection with the
Letters of Credit or any related certificates, if taken or omitted in good
faith, shall not put the Administrative Agent or any Bank under any resulting
liability to the Borrower or relieve the Borrower of any of its obligations
hereunder to the Letter of Credit Issuer or any such Person.
Section 2.16.6 Letter of Credit Fees. The Borrower hereby agrees to pay
letter of credit fees with respect to each Letter of Credit from and including
the date of issuance thereof until the date such Letter of Credit is fully
drawn, canceled or expired, (a) for the account of the Letter of Credit Issuer,
an issuance fee equal to the lesser of (i) 1/8 of 1% of the initial face amount
of such Letter of Credit or (ii) $2,000, payable on the date of issuance and on
each anniversary date of the date of issuance, and (b) for the ratable account
of the Banks, a per annum percentage of the aggregate amount from time to time
available to be drawn on such Letter of Credit equal to (i) so long as no Event
of Default has occurred and is continuing, the Applicable LIBOR Margin from time
to time in effect and (ii) so long as any Event of Default has occurred and is
continuing, 2% over and above the Applicable LIBOR Margin from time to time in
effect, payable quarterly in arrears on the last Business Day of each calendar
quarter during the term of such Letter of Credit and upon the expiration,
cancellation or utilization in full of such Letter of Credit. In addition to the
foregoing, the Borrower agrees to pay the Letter of Credit Issuer any other
administrative fees customarily charged by it in respect of Letters of Credit
issued by it to the extent such administrative fees are previously disclosed to
the Borrower by the Letter of Credit Issuer prior to the issuance of a Letter of
Credit.
Section 2.16.7 Conflict with Reimbursement Agreement. In the event of any
conflict between the terms of this Agreement and the terms of any Reimbursement
Agreement, the terms of this Agreement shall govern and control.
ARTICLE III
CONDITIONS
Section 3.01 Effectiveness. This Agreement shall become effective on the
date that each of the following conditions shall have been satisfied (or waived
in accordance with Section 9.05):
(a) receipt by the Administrative Agent of counterparts hereof signed in
number sufficient for each party by each of the parties hereto (or, in the case
of any party as to which an executed counterpart shall not have
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been received, receipt by the Administrative Agent in form satisfactory to it of
telegraphic, telex or other written confirmation from such party of execution of
a counterpart hereof by such party);
(b) receipt by the Administrative Agent for the account of each Bank of a
duly executed Revolving Credit Note dated on or before the Effective Date
complying with the provisions of Section 2.05;
(c) receipt by the Administrative Agent for the account of the Swing Line
Lender of the duly executed Swing Line Note dated on or before the Effective
Date complying with the provisions of Section 2.05;
(d) receipt by the Administrative Agent of the duly executed Guaranty
(which must be in form and substance satisfactory to the Administrative Agent)
dated on or before the Effective Date;
(e) receipt by the Administrative Agent of an opinion of Greensfelder,
Hemker & Gale, P.C., counsel for the Borrower and the Guarantor Subsidiaries,
substantially in the form of Exhibit E hereto and covering such additional
matters relating to the transactions contemplated hereby as the Administrative
Agent or the Required Banks may reasonably request;
(f) receipt by the Administrative Agent of all fees payable on or prior to
the Effective Date;
(g) receipt by the Administrative Agent of all documents it may reasonably
request relating to the corporate, partnership or other existence of the
Borrower and each Subsidiary and the corporate, partnership or other, as the
case may be, authority for and the validity of this Agreement, the Notes and the
Guaranty, all in form and substance satisfactory to the Administrative Agent;
(h) a letter of direction from Borrower with respect to the disbursement of
the proceeds of the initial Loan(s) under this Agreement;
(i) evidence satisfactory to the Administrative Agent that the Existing
Credit Agreement has been paid in full (or will be paid in full with the
proceeds of the initial Loan(s) under this Agreement) and terminated;
(j) evidence satisfactory to the Administrative Agent that since December
31, 2001, there has been no change or event that has caused a Material Adverse
Effect; and
(k) receipt by the Administrative Agent of a joinder to the Intercreditor
Agreement (which must be in form and substance satisfactory to the
Administrative Agent) duly executed by each Bank;
provided that this Agreement shall not become effective or be binding on any
party hereto unless all of the foregoing conditions are satisfied not later than
August 31, 2002. The Administrative Agent shall promptly notify the Borrower and
the Banks of the Effective Date, and such notice shall be conclusive and binding
on all parties hereto.
Section 3.02 Revolving Credit Loan. The obligation of any Bank to make a
Revolving Credit Loan on the occasion of any Borrowing is subject to the
satisfaction of the following conditions:
(a) the fact that, immediately after giving effect to such Revolving Credit
Loan, the Total Outstandings will not exceed the aggregate amount of the
Revolving Credit Commitments;
(b) the fact that, immediately before and immediately after giving effect
to such Revolving Credit Loan, no Default or Event of Default shall have
occurred and be continuing;
(c) the fact that each of the representations and warranties made by the
Borrower and/or Subsidiary in this Agreement and/or in any other Loan Document
shall be true and correct in all material respects on and as of the date of such
Borrowing; and
(d) the fact that since December 31, 2001, there has been no change or
event that has caused a Material Adverse Effect.
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The acceptance of the proceeds of each Revolving Credit Loan hereunder
shall be deemed to be a representation and warranty by the Borrower on the date
of such Revolving Credit Loan as to the facts specified in clauses (a), (b), (c)
and (d) of this Section 3.02.
Section 3.03 Swing Line Loans. The obligation of the Swing Line Lender to
make a Swing Line Loan is subject to the satisfaction of the following
conditions:
(a) the fact that, immediately after giving effect to such Swing Line Loan,
(i) the Total Outstandings will not exceed the aggregate amount of the Revolving
Credit Commitments and (ii) the aggregate principal amount of all outstanding
Swing Line Loans will not exceed the amount of the Swing Line Commitment;
(b) the fact that, immediately before and immediately after giving effect
to such Swing Line Loan, no Default or Event of Default shall have occurred and
be continuing; and
(c) the fact that each of the representations and warranties made by the
Borrower and/or any Subsidiary in this Agreement and/or in any other Loan
Document shall be true in all material respects on and as of the date of such
Swing Line Loan; and
(d) the fact that since December 31, 2001, there has been no change or
event that has caused a Material Adverse Effect.
The acceptance of the proceeds of each Swing Line Loan hereunder shall be
deemed to be a representation and warranty by the Borrower on the date of such
Swing Line Loan as to the facts specified in clauses (a), (b), (c) and (d) of
this Section 3.03.
Section 3.04 Letters of Credit. The obligation of the Letter of Credit
Issuer to issue, amend or extend a Letter of Credit is subject to the
satisfaction of the following conditions:
(a) the fact that, immediately after giving effect to such Letter of
Credit, (i) the Total Outstandings will not exceed the aggregate amount of the
Revolving Credit Commitments and (ii) the Letter of Credit Outstandings will not
exceed the amount of the Letter of Credit Sublimit;
(b) the fact that, immediately before and immediately after giving effect
to such Letter of Credit, no Default or Event of Default shall have occurred and
be continuing;
(c) the fact that each of the representations and warranties made by the
Borrower and/or any Subsidiary in this Agreement and/or in any other Loan
Document shall be true and correct in all material respects on and as of the
date of the issuance of such Letter of Credit; and
(d) the fact that since December 31, 2001, there has been no change or
event that has caused a Material Adverse Effect.
The issuance of an Issuance Request by the Borrower shall be deemed to be a
representation and warranty by the Borrower on the date of the issuance of the
applicable Letter of Credit as to the facts specified in clauses (a), (b), (c)
and (d) of this Section 3.04.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants that:
Section 4.01......Corporate Existence and Power. The Borrower (i) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Missouri, (ii) has all corporate powers required to carry
on its business as now conducted and (iii) has all governmental licenses,
authorizations, consents and approvals
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required to carry on its business as now conducted, except where the failure to
have such governmental licenses, authorizations, consents or approvals could not
reasonably be expected to have a Material Adverse Effect.
Section 4.02 Corporate and Governmental Authorization; No Contravention.
The execution, delivery and performance by the Borrower of this Agreement, the
Notes and the Reimbursement Agreements are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate action, require no
action by or in respect of, or filing with, any governmental body, agency or
official, except for such filings, if any, required to be filed with the
Securities and Exchange Commission or any state securities regulatory authority
as a result of the execution of this Agreement, and do not contravene, or
constitute a default under, any provision of applicable law or regulation or of
the articles of incorporation or by-laws of the Borrower or of any judgment,
injunction, order or decree, or of any material agreement or other material
instrument binding upon the Borrower or result in the creation or imposition of
any Lien on any material asset of the Borrower or any of its Subsidiaries.
Section 4.03 Binding Effect. This Agreement constitutes a valid and binding
agreement of the Borrower, and the Notes and Reimbursement Agreements, when
executed and delivered in accordance with this Agreement, will constitute valid
and binding obligations of the Borrower, enforceable against the Borrower in
accordance with their respective terms.
Section 4.04 Financial Information.
(a) The audited consolidated balance sheets of the Borrower and its
Subsidiaries as of December 31, 2001, and the related consolidated statements of
earnings, cash flows and shareholders' equity for the Fiscal Year then ended,
set forth in the Borrower's annual report on Form 10-K, a copy of which annual
report has been delivered to each of the Banks, fairly present, in conformity
with GAAP, the consolidated financial position of the Borrower and its
Subsidiaries as of such date and their consolidated results of operations and
cash flows for such Fiscal Year.
(b) The unaudited consolidated balance sheets of the Borrower and its
Subsidiaries as of March 31, 2002, and the related consolidated statements of
earnings, cash flows and shareholders' equity for the Fiscal Quarter then ended,
set forth in the Borrower's quarterly report on Form 10-Q, a copy of which
annual report has been delivered to each of the Banks, fairly present, in
conformity with GAAP, the consolidated financial position of the Borrower and
its Subsidiaries as of such date and their consolidated results of operations
and cash flows for such Fiscal Quarter.
(c) Since December 31, 2001, there has been no material adverse change in
the business, financial position or results of operations of the Borrower and
its Subsidiaries, considered as a whole.
Section 4.05 Litigation. Except as described on Schedule 4.05 attached
hereto, there is no action, suit or proceeding pending against, or to the
knowledge of a Financial Officer of the Borrower threatened against or
affecting, the Borrower or any of its Subsidiaries before any court or
arbitrator or any governmental body, agency or official in which there is a
reasonable possibility of an adverse decision which could have a Material
Adverse Effect or which in any manner draws into question the validity of this
Agreement or any of the other Loan Documents.
Section 4.06 Compliance with ERISA. Each member of the ERISA Group has
fulfilled its obligations under the minimum funding standards of ERISA and the
Internal Revenue Code with respect to each Plan and is in compliance in all
material respects with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan. Except as described on Schedule
4.06 attached hereto, no member of the ERISA Group has (i) sought a waiver of
the minimum funding standard under Section 412 of the Internal Revenue Code in
respect of any Plan, (ii) failed to make any contribution or payment to any Plan
or Multiemployer Plan or in respect of any Benefit Arrangement, or made any
amendment to any Plan or Benefit Arrangement, which has resulted or could result
in the imposition of a Lien or the posting of a bond or other security under
ERISA or the Internal Revenue Code or (iii) incurred any liability under Title
IV of ERISA other than a liability to the PBGC for premiums under Section 4007
of ERISA.
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Section 4.07 Environmental Matters. In the ordinary course of its business,
the Borrower conducts a review at such times as it deems prudent of the effect
of Environmental Laws on the properties of the Borrower and its Subsidiaries, in
the course of which it identifies and evaluates associated liabilities and costs
(including, without limitation, any capital or operating expenditures required
for clean-up or closure of properties presently or previously owned, any capital
or operating expenditures required to achieve or maintain compliance with
environmental protection standards imposed by law or as a condition of any
license, permit or contract, any related constraints on operating activities,
including any periodic or permanent shutdown of any facility or reduction in the
level of or change in the nature of operations conducted thereat and any actual
or potential liabilities to third parties, including employees, and any related
costs and expenses). On the basis of this review, the Borrower has reasonably
concluded that Environmental Laws are unlikely to have a Material Adverse
Effect.
Section 4.08 Taxes. The Borrower and its Subsidiaries have filed all United
States Federal income tax returns and all other material income tax returns
which are required to be filed by them, taking into account any filing
extensions for any such returns, and have paid all taxes due pursuant to such
returns or pursuant to any assessment received by the Borrower or any of its
Subsidiaries except such taxes or assessments, if any, as are being contested in
good faith by appropriate proceedings being diligently conducted for which
adequate reserves have been established as required by GAAP. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of taxes or other governmental charges are, in the opinion of the
Borrower, adequate.
Section 4.09 Subsidiaries. Schedule 4.09 attached hereto contains an
accurate list of all of the Borrower's Subsidiaries, setting forth their
respective jurisdictions of incorporation or organization and the percentage of
their capital stock or other ownership interests owned by the Borrower or other
Subsidiaries. Each of the Borrower's Subsidiaries is a corporation, partnership,
limited liability company or other entity duly incorporated or organized,
validly existing and in good standing under the laws of its jurisdiction of
incorporation or organization, and has all corporate, partnership or other
powers and all governmental licenses, authorizations, consents and approvals
required to carry on its business as now conducted, except where the failure to
have such governmental licenses, authorizations, consents and approvals could
not reasonably be expected to have a Material Adverse Effect. The execution,
delivery and performance by the Guarantor Subsidiaries of the Guaranty are
within each Guarantor Subsidiary's corporate, partnership or limited liability
company, as the case may be, powers, have been duly authorized by all necessary
corporate, partnership or limited liability company, as the case may be, action,
require no action by or in respect of, or filing with, any governmental body,
agency or official and do not contravene, or constitute a default under, any
provision of applicable law or regulation or of the certificate or articles of
incorporation, by-laws, partnership agreement, certificate or articles of
organization, operating agreement or other organizational documents, as
applicable, of any Guarantor Subsidiary or of any judgment, injunction, order or
decree, or of any material agreement or other material instrument binding upon
any Guarantor Subsidiary or result in the creation or imposition of any Lien on
any material asset of any Guarantor Subsidiary.
Section 4.10 Full Disclosure. All information heretofore furnished in
writing by the Borrower to the Administrative Agent or any Bank for purposes of
or in connection with this Agreement or any transaction contemplated hereby is,
and all such information hereafter furnished in writing by the Borrower to the
Administrative Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is stated or certified. The
Borrower has disclosed to the Banks in writing any and all facts which have or
could reasonably be expected to have a Material Adverse Effect.
Section 4.11 Compliance With Laws. Neither the Borrower nor any Subsidiary
is in violation of any applicable law, rule, regulation or ordinance of any
Governmental Authority, a violation of which could reasonably be expected to
have a Material Adverse Effect. The Borrower and its Subsidiaries have and are
in full compliance with and in good standing with respect to all governmental
and/or regulatory permits, licenses, certificates, consents and franchises
necessary to continue to conduct their respective businesses as previously
conducted by them and to own or lease and operate their respective properties
and assets as now owned or leased by them, the failure to have or noncompliance
with which could reasonably be expected to have a Material Adverse Effect. No
order, consent, approval, license, authorization or validation of, or filing,
recording or registration with, or exemption by, any governmental, regulatory,
administrative or public body or authority, or any subdivision thereof, or any
other Person is required to authorize, or is required in connection with, the
execution, delivery or performance of, or the legality, validity, binding effect
or enforceability of, any of the Loan Documents.
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Section 4.12 Title to Property. Except as disclosed on Schedule 5.10
attached hereto, the Borrower and its Subsidiaries are the sole owners of, or
have the legal right to use and occupy, all property and assets which they claim
to own or which is necessary for them to conduct their respective businesses,
and all of such property and assets are free and clear of all Liens other than
Liens permitted by Section 5.10. The Borrower and its Subsidiaries enjoy
peaceful and undisturbed possession in all material respects under all leases
under which they are operating as a lessee.
Section 4.13 Regulation U. The Borrower is not engaged principally, or as
one of its important activities, in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U of The Board of Governors of the Federal Reserve System, as amended) and no
part of the proceeds of any Loan will be used, whether directly or indirectly,
and whether immediately, incidentally or ultimately (a) to purchase or carry
margin stock or to extend credit to others for the purpose of purchasing or
carrying margin stock, or to refund or repay indebtedness originally incurred
for such purpose or (b) for any purpose which entails a violation of, or which
is inconsistent with, the provisions of any of the Regulations of The Board of
Governors of the Federal Reserve System, including, without limitation,
Regulations U, T or X thereof, as amended. If requested by the Administrative
Agent, the Borrower shall furnish to the Administrative Agent a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in
Regulation U.
Section 4.14 Investment Company Act of 1940; Public Utility Holding Company
Act of 1935. The Borrower is not an "investment company" as that term is defined
in, and is not otherwise subject to regulation under, the Investment Company Act
of 1940, as amended. The Borrower is not a "holding company" as that term is
defined in, and is not otherwise subject to regulation under, the Public Utility
Holding Company Act of 1935, as amended.
Section 4.15 No Default. No Default or Event of Default under this
Agreement has occurred and is continuing. There is no existing default or event
of default under or with respect to any indenture, contract, agreement, lease or
other instrument to which the Borrower or any Subsidiary is a party or by which
any property or assets of the Borrower or any Subsidiary is bound or affected, a
default under which could reasonably be expected to have a Material Adverse
Effect.
ARTICLE V
COVENANTS
The Borrower agrees that, so long as any Revolving Credit Commitment, Swing
Line Commitment, Loan or Letter of Credit remains outstanding hereunder or any
amount payable under any of the Loan Documents remains unpaid, unless the prior
written consent of the Required Banks is obtained:
Section 5.01 Information. The Borrower will deliver to each of the Banks:
(a) as soon as available and in any event within one hundred twenty (120)
days after the end of each Fiscal Year, audited consolidated balance sheets of
the Borrower and its Subsidiaries as of the end of such Fiscal Year and the
related consolidated statements of earnings, cash flows and shareholders' equity
for such Fiscal Year, setting forth in each case in comparative form the figures
for the previous Fiscal Year (or in lieu thereof the Form 10-K of the Borrower
filed with the Securities and Exchange Commission for such Fiscal Year), all
reported on by independent public accountants of nationally recognized standing
in a manner acceptable to the Securities and Exchange Commission;
(b) as soon as available and in any event within 45 days after the end of
each Fiscal Quarter (other than the last Fiscal Quarter of each Fiscal Year),
consolidated balance sheets of the Borrower and its Subsidiaries as of the end
of such Fiscal Quarter and the related consolidated statements of earnings, cash
flows and shareholders' equity for such Fiscal Quarter and for the portion of
the Fiscal Year ended at the end of such Fiscal Quarter, setting forth in each
case in comparative form the figures for the corresponding Fiscal Quarter and
the corresponding portion of the previous Fiscal Year (or in lieu thereof the
Form 10-Q of the Borrower filed with the Securities and Exchange Commission for
such Fiscal Quarter), all certified (subject to normal year-end adjustments and
without footnotes) as to fairness of presentation, GAAP and consistency by a
Financial Officer of the Borrower;
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(c) simultaneously with the delivery of each set of financial statements
referred to in clauses (a) and (b) above, a certificate in the form of Exhibit G
attached hereto ("Compliance Certificate") executed by a Financial Officer of
the Borrower (i) setting forth in reasonable detail the calculations required to
establish whether the Borrower was in compliance with the requirements of
Sections 5.05, 5.06, 5.07 and 5.08 on the date of such financial statements and
(ii) stating whether any Default or Event of Default exists on the date of such
certificate and, if any Default or Event of Default then exists, setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(d) within five (5) days after any officer of the Borrower obtains
knowledge of any Default or Event of Default, if such Default or Event of
Default is then continuing, a certificate of a Financial Officer setting forth
the details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(e) promptly upon the mailing thereof to the shareholders of the Borrower
generally, copies of all financial statements, reports and proxy statements so
mailed;
(f) promptly upon the filing thereof, copies of all registration statements
(other than the exhibits thereto and any registration statements on Form S-8 or
its equivalent) and reports on Forms 10-K, 10-Q and 8-K (or their equivalents)
which the Borrower shall have filed with the Securities and Exchange Commission;
(g) if and when any member of the ERISA Group (i) gives or is required to
give notice to the PBGC of any "reportable event" (as defined in Section 4043 of
ERISA) with respect to any Plan which would constitute grounds for a termination
of such Plan under Title IV of ERISA, or knows that the plan administrator of
any Plan has given or is required to give notice of any such reportable event, a
copy of the notice of such reportable event given or required to be given to the
PBGC; (ii) receives notice of complete or partial withdrawal liability under
Title IV of ERISA or notice that any Multiemployer Plan is in reorganization, is
insolvent or has been terminated, a copy of such notice; (iii) receives notice
from the PBGC under Title IV of ERISA of an intent to terminate, impose
liability (other than for premiums under Section 4007 of ERISA) in respect of,
or appoint a trustee to administer any Plan, a copy of such notice; (iv) applies
for a waiver of the minimum funding standard under Section 412 of the Internal
Revenue Code, a copy of such application; (v) gives notice of intent to
terminate any Plan under Section 4041(c) of ERISA, a copy of such notice and
other information filed with the PBGC; (vi) gives notice of withdrawal from any
Plan pursuant to Section 4063 of ERISA, a copy of such notice; or (vii) fails to
make any payment or contribution to any Plan or Multiemployer Plan or makes any
amendment to any Plan which has resulted or could result in the imposition of a
Lien or the posting of a bond or other security, a certificate of the Financial
Officer of the Borrower setting forth details as to such occurrence and action,
if any, which the Borrower or applicable member of the ERISA Group is required
or proposes to take;
(h) from time to time such additional information regarding the financial
position or business of the Borrower and its Subsidiaries as the Administrative
Agent, at the request of any Bank, may reasonably request; provided, however,
that if such additional information is non-public proprietary and confidential
information of the Borrower or any Subsidiary, the Borrower may require a
confidentiality agreement reasonably acceptable to the Borrower from such Bank
prior to providing such information to such Bank; and
(i) prior to or contemporaneously with the creation, formation or
acquisition thereof, written notice of the creation, formation or acquisition of
any Subsidiary.
Section 5.02 Maintenance of Property; Insurance.
(a) The Borrower will cause all property used or useful in the conduct of
its business or the business of any Subsidiary to be maintained and kept in good
condition, repair and working order in all material respects and supplied with
all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrower may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this Section shall prevent the Borrower from
discontinuing the operation or maintenance of any of
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such properties if such discontinuance is, in the judgment of the Borrower,
desirable in the conduct of its business or the business of any Subsidiary and
not disadvantageous in any material respect to the Banks.
(b) The Borrower will, and will cause each of its Subsidiaries to, maintain
(either in the name of the Borrower or in such Subsidiary's own name) insurance
on such of their respective properties in such amounts and against such risks
(and with such risk retention) as the Borrower, in the exercise of its
reasonable judgment, deems necessary or appropriate.
Section 5.03 Conduct of Business and Maintenance of Existence. The Borrower
will, and will cause each Subsidiary to, substantially continue to engage in the
same lines of business as the Borrower and its Subsidiaries are engaged in on
the date of this Agreement or businesses ancillary thereto, and will preserve,
renew and keep in full force and effect, and will cause each Subsidiary to
preserve, renew and keep in full force and effect their respective corporate,
partnership, limited liability company or other entity existence and their
respective rights, privileges and franchises necessary or desirable in the
normal conduct of business, provided, however, that the Borrower shall not be
required to preserve any such right or franchise if the Board of Directors shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Borrower and that the loss thereof is not disadvantageous in
any material respect to the Banks.
Section 5.04 Compliance with Laws. The Borrower will comply, and cause each
Subsidiary to comply, with all applicable laws, ordinances, rules, regulations,
and requirements of Governmental Authorities (including, without limitation,
Environmental Laws and ERISA and the rules and regulations thereunder) except
where the necessity of compliance therewith is contested in good faith by
appropriate proceedings being diligently conducted and except where the failure
to comply will not have a Material Adverse Effect.
Section 5.05 Maximum Consolidated Leverage Ratio. The Borrower will have a
Consolidated Leverage Ratio of not more than 2.5 to 1.0 as of the last day of
each Fiscal Quarter commencing with the Fiscal Quarter ended June 30, 2002.
Section 5.06 Minimum Consolidated Fixed Charge Coverage Ratio. The Borrower
will have a Consolidated Fixed Charge Coverage Ratio of at least 2.75 to 1.0 for
each four (4) consecutive Fiscal Quarter period commencing with the four (4)
consecutive Fiscal Quarter period ended June 30, 2002.
Section 5.07 Minimum Consolidated Tangible Net Worth. The Borrower will all
times have a Consolidated Tangible Net Worth of not less than the sum of (A)
$500,186,351 plus (B) 50% of Consolidated Net Income (with no deductions for
losses) during each Fiscal Quarter ending on or after the date of this
Agreement, such required increases to be cumulative for each such Fiscal Quarter
plus (C) one hundred percent (100%) of the net proceeds received by the Borrower
on or after Effective Date from the issuance of any capital stock of other
equity interests of the Borrower.
Section 5.08 Maximum Consolidated Synthetic Lease Obligations. The Borrower
will not cause or permit the aggregate amount of Consolidated Synthetic Lease
Obligations to exceed the sum of $60,000,000 at any one time outstanding.
Section 5.09 Limitation on Debt. The Borrower will not, nor will it permit
any of its Subsidiaries to, incur or at any time be liable with respect to any
Debt except:
(a) Debt outstanding on the on the Effective Date and described on Schedule
5.09 attached hereto;
(b) the Borrower may incur Debt after the Effective Date if, after giving
effect thereto (assuming such Debt was incurred on the last day of the
immediately preceding Fiscal Quarter), the Consolidated Leverage Ratio would not
be more than 2.5 to 1.00;
(c) .Debt of any Subsidiary incurred after the Effective Date and owing to
the Borrower or any wholly-owned Subsidiary;
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(d) Debt of the Borrower or any Subsidiary incurred after the Effective
Date which is secured by a Lien permitted by Sections 5.10(a) through 5.10(d),
inclusive, and
(e) the Subsidiaries may incur Debt hereafter not otherwise permitted by
the foregoing clauses if, (i) after giving effect thereto, the aggregate amount
of Debt under this clause (e) does not exceed 5% of Consolidated Net Worth
determined as of the most recently-ended Fiscal Quarter and (ii) after giving
effect thereto (assuming such Debt was incurred on the last day of the
immediately preceding Fiscal Quarter), the Consolidated Leverage Ratio would not
be more than 2.5 to 1.00.
Section 5.10 Negative Pledge. Neither the Borrower nor any Subsidiary shall
incur or suffer to exist any Lien, except:
(a) Liens existing on the Effective Date and described on Schedule 5.10
attached hereto;
(b) Liens to secure Debt incurred to extend, renew, refinance or refund (or
successive extensions, renewals, refinancing or refundings), in whole or in
part, Debt secured by any Lien referred to in the foregoing clause (a) as long
as such Lien does not extend to any other property and the original amount of
the Debt so secured is not increased;
(c) Liens (including, but not limited to, judgments and judicial attachment
liens the enforcement of which is effectively stayed) arising in the ordinary
course of its business which (i) do not secure Debt, (ii) do not secure any
contingent or fixed obligation in an amount exceeding $10,000,000 and (iii) do
not in the aggregate materially detract from the value of its assets or
materially impair the use thereof in the operation of its business;
(d) Liens (including Capitalized Leases) not otherwise permitted by the
foregoing clauses of this Section securing Debt incurred after the Effective
Date if, after giving effect thereto, the aggregate amount of Debt under this
clause (d) so secured does not exceed 10% of Consolidated Net Worth determined
as of the most recently-ended Fiscal Quarter; and
(e) Liens against leased equipment arising from precautionary UCC-1
financing statements regarding operating leases entered into by Borrower and/or
any Subsidiary in the ordinary course of business.
Section 5.11 Consolidations, Mergers and Sales of Assets.
(a) Neither the Borrower nor any Subsidiary will consolidate or merge with
or into any other Person unless (i) the Borrower is the corporation surviving
such merger or, in the case of any Subsidiary consolidating or merging with a
Person other than the Borrower, the surviving entity is a Subsidiary and (ii)
immediately after giving effect to such merger, no Default or Event of Default
shall have occurred and be continuing.
(b) Other than (i) sales of inventory and worn or obsolete equipment in the
ordinary course of business and (ii) Sale and Leaseback Transactions entered
into by the Borrower or a Subsidiary solely with respect to real property
acquired by the Borrower or the applicable Subsidiary from an unrelated third
party after the Effective Date, the Borrower will not, and will not permit any
Subsidiary to, sell, lease (as lessor) or otherwise transfer, directly or
indirectly, any property, unless the aggregate book value of such property as
shown by the accounting books and records of the Borrower, together with the
aggregate book value of all other property as shown by the accounting books and
records of the Borrower sold, leased or otherwise transferred pursuant to this
subsection (b) after the Effective Date, does not exceed 10% of Consolidated Net
Worth determined as of the most recently-ended Fiscal Quarter.
(c) The Borrower will not, and will not permit any Subsidiary to, sell,
transfer or otherwise dispose of the capital stock, partnership interests,
membership interests or other equity interests of any of its respective
Subsidiaries.
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Section 5.12 Transactions with Affiliates. The Borrower will not, and will
not permit any Subsidiary to, directly or indirectly, enter into any material
transaction with any Affiliate (other than a transaction between the Borrower
and any Subsidiary or a transaction between Subsidiaries) which transaction is
not on terms and conditions at least as favorable to the Borrower or such
Subsidiary as the terms and conditions which would apply in a similar
transaction with a Person not an Affiliate (an "Arm's-Length Transaction"). Any
material transaction with any Affiliate shall be deemed to be an Arm's-Length
Transaction if approved by (a) a majority of the Borrower's directors who are
unaffiliated with such Affiliate or (b) a majority of the members of any
committee of the Board of Directors of the Borrower who are unaffiliated with
such Affiliate.
Section 5.13 Use of Proceeds. The proceeds of the Loans shall be used
solely to refinance certain existing indebtedness of the Borrower, to finance
Permitted Acquisitions and for general corporate and working capital purposes.
The proceeds of the Loans made, and the Letters of Credit issued, will not be
used by the Borrower, directly or indirectly, in any manner in contravention of
Regulation U.
Section 5.14 Limitation on Certain Covenants and Restrictions. The Borrower
will not, and will not permit any Subsidiary to, enter into or permit to exist
any agreement with any Person which prohibits or limits the ability of any
Subsidiary to (a) declare or pay any dividend to Borrower or (b) make any loan
to or Investment in the Borrower or any other Subsidiary; provided that this
clause (b) shall not prohibit agreements between the Borrower or any Subsidiary
and any Person which require that transactions with any Affiliate (i) be on an
"arm's-length" basis, (ii) be approved by the disinterested directors of the
Board of Directors, or (iii) be subject to any substantive or procedural
requirements substantially similar to clause (i) or (ii) above.
Section 5.15 Acquisitions. The Borrower will not, and it will not cause or
permit any Subsidiary to, consummate any Acquisitions other than Permitted
Acquisitions.
Section 5.16 Subsidiaries. If Borrower or any Subsidiary creates, forms or
acquires any Subsidiary on or after the date of this Agreement, Borrower or such
Subsidiary, as the case may be, will, contemporaneously with the creation,
formation or acquisition of such Subsidiary, cause such Subsidiary to guaranty
the payment and performance of all of the Obligations pursuant to a Guarantee in
the form of the Guaranty.
ARTICLE VI
DEFAULTS
Section 6.01 Events of Default. If one or more of the following events
("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan or
Letter of Credit Obligation, or shall fail to pay within three (3) Business Days
of the due date thereof any interest on any Loan, any fees or any other amount
payable hereunder; or
(b) the Borrower shall fail to observe or perform any covenant contained in
Sections 5.05, 5.06, 5.07, 5.08, 5.09, 5.10, 5.11, 5.13, 5.14, 5.15 and/or 5.16;
or
(c) the Borrower shall fail to observe or perform any covenant or agreement
contained in this Agreement or any other Loan Document (other than those covered
by clause (a) or (b) above) for 30 days after the earlier of (i) a Financial
Officer of the Borrower has actual knowledge thereof or (ii) written notice
thereof has been given to the Borrower by the Administrative Agent at the
request of any Bank; or
(d) any representation, warranty, certification or statement made by the
Borrower or any Subsidiary in this Agreement or in any other Loan Document or in
any certificate, financial statement or other written document delivered
pursuant to this Agreement or any other Loan Document shall prove to have been
incorrect in any material respect when made (or deemed made); or
(e) the Borrower or any Subsidiary shall fail to make payment of any
Material Debt or any Material Synthetic Lease Obligation when due or within any
applicable grace period; or
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(f) any event or condition shall occur which results in the acceleration of
the maturity of any Material Debt or any Material Synthetic Lease Obligation or
enables any holder of any such Material Debt or Material Synthetic Lease
Obligation or any Person acting on such holder's behalf to accelerate the
maturity thereof; or
(g) the Borrower or any Subsidiary shall commence a voluntary case or other
proceeding seeking liquidation, reorganization or other relief with respect to
itself or its debts under any bankruptcy, insolvency or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any substantial part of
its property, or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it, or shall make a general assignment for the
benefit of creditors, or shall take any corporate action to authorize any of the
foregoing; or
(h) an involuntary case or other proceeding shall be commenced against the
Borrower or any Subsidiary seeking liquidation, reorganization or other relief
with respect to it or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or an order for
relief shall be entered against the Borrower or any Subsidiary under the federal
bankruptcy laws as now or hereafter in effect; or
(i) any member of the ERISA Group shall fail to pay when due an amount or
amounts aggregating in excess of $10,000,000 which it shall have become liable
to pay under Title IV of ERISA; or notice of intent to terminate a Material Plan
shall be filed under Title IV of ERISA by any member of the ERISA Group, any
plan administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate, to impose liability
(other than for premiums under Section 4007 of ERISA) in respect of, or to cause
a trustee to be appointed to administer any Material Plan; or a condition shall
exist by reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall occur a
complete or partial withdrawal from, or a default, within the meaning of Section
4219(c)(5) of ERISA, with respect to, one or more Multiemployer Plans which
could cause one or more members of the ERISA Group to incur a current payment
obligation in excess of $10,000,000; or
(j) a judgment or order (i) for the payment of money in excess of
$10,000,000 or (ii) that would otherwise result in a Material Adverse Effect
shall be rendered against the Borrower or any Subsidiary and such judgment or
order shall continue unsatisfied and unstayed for a period of 30 days; or
(k) any person or group of persons (within the meaning of Section 13 or 14
of the Securities Exchange Act of 1934, as amended) shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under said Act) of 30% or more in voting
power of the outstanding Voting Stock of the Borrower; or, during any period of
24 consecutive calendar months, a majority of the board of directors of the
Borrower does not consist of individuals who were (i) directors of the Borrower
on the first day of such period, (ii) directors who were selected or whose
nomination for election was approved by a vote of at least a majority of the
directors then still in office referred to in clause (i) above, or (iii)
directors who were selected or whose nomination for election was approved by a
vote of at least a majority of the board consisting of directors still in office
described in clauses (i) and (ii) above or this clause (iii); or
(l) the Borrower shall repudiate, or shall challenge the validity or
enforceability of its obligations under the Loan Documents or for any reason any
of the Loan Documents shall cease to be in full force and effect; or
(m) the Guaranty shall at any time for any reason cease to be in full force
and effect or shall be declared to be null and void by a court of competent
jurisdiction, or if the validity or enforceability of the Guaranty shall be
contested or denied by any Guarantor Subsidiary, or if any Guarantor Subsidiary
shall revoke, or deny that it has any further liability or obligation under, the
Guaranty or if any Guarantor Subsidiary shall fail to comply with or observe any
of the terms, provisions or conditions contained in the Guaranty;
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then, and in every such event, the Administrative Agent shall (i) if requested
by the Required Banks, by notice to the Borrower terminate the Revolving Credit
Commitments and the Swing Line Commitment and they shall thereupon terminate and
(ii) if requested by the Required Banks, by notice to the Borrower declare the
Notes (together with accrued interest thereon) to be, and the Notes shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; provided that in the case of any of the Events of Default specified in
clause (g) or (h) above with respect to the Borrower, without any notice to the
Borrower or any other act by the Administrative Agent or the Banks, the
Revolving Credit Commitments and the Swing Line Commitment shall thereupon
terminate and the Notes (together with accrued interest thereon) shall become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower. Upon the occurrence
of any of the foregoing, the Borrower shall immediately deposit with the
Administrative Agent as cash collateral to secure all Letter of Credit
Obligations an amount in immediately available funds equal to the undrawn
portion of all Letters of Credit then outstanding.
Section 6.02 Notice of Default. The Administrative Agent shall give notice
to the Borrower under Section 6.01(c) promptly upon being requested to do so by
any Bank and shall thereupon notify all the Banks thereof.
ARTICLE VII
THE ADMINISTRATIVE AGENT AND LETTER OF CREDIT ISSUER
Section 7.01 Appointment. The Banks hereby appoint the Administrative Agent
to act as specified herein and in the Loan Documents. Each Bank hereby
irrevocably authorizes and each holder of any Note by the acceptance of such
Note shall be deemed to irrevocably authorize the Administrative Agent to take
such action on its behalf under the provisions hereof, the Loan Documents
(including, without limitation, to give notices and take such actions on behalf
of the Required Banks as are consented to in writing by the Required Banks) and
any other instruments, documents and agreements referred to herein or therein
and to exercise such powers hereunder and thereunder as are specifically
delegated to the Administrative Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Administrative Agent may
perform any of its duties hereunder and under the Loan Documents, by or through
its officers, directors, agents, employees or affiliates.
Section 7.02 Nature of Duties. No Administrative Agent-Related Person shall
have duties or responsibilities except those expressly set forth in this
Agreement. The duties of the Administrative Agent shall be mechanical and
administrative in nature. EACH BANK HEREBY ACKNOWLEDGES AND AGREES THAT THE
ADMINISTRATIVE AGENT SHALL NOT HAVE, BY REASON OF THIS AGREEMENT OR ANY LOAN
DOCUMENTS, A FIDUCIARY RELATIONSHIP TO OR IN RESPECT OF ANY BANK. Nothing in
this Agreement or in any Loan Document, expressed or implied, is intended to or
shall be so construed as to impose upon any Administrative Agent-Related Person
any obligations in respect of the Agreement or any Loan Document except as
expressly set forth herein or therein. Each Bank shall make its own independent
investigation of the financial condition and affairs of the Borrower in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Borrower, and, except as
expressly set forth herein, no Administrative Agent-Related Person shall have
any duty or responsibility, either initially or on a continuing basis, to
provide any Bank with any credit or other information with respect thereto,
whether coming into its possession before making of the Loans or at any time or
times thereafter. The Administrative Agent will promptly notify each Bank at any
time that the Required Banks have instructed it to act or refrain from acting
pursuant to Article VI.
Section 7.03 Exculpation Rights, Etc. Neither the Administrative Agent nor
any of its officers, directors, Administrative Agents, employees, affiliates or
any Administrative Agent-Related Person shall be liable for any action taken or
omitted by them hereunder or under any Loan Document or in connection herewith
or therewith, unless caused by its or their gross negligence or willful
misconduct. No Administrative Agent-Related Person shall be responsible to any
Bank for any recitals, statements, representations or warranties herein or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of this Agreement or any Loan Document or any
other document or the financial condition of the Borrower. No Administrative
Agent-Related Person shall be required to make any inquiry concerning either the
performance or observance of any of the terms,
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provisions or conditions of this Agreement or any Loan Document or any other
document or the financial condition of the Borrower, or the existence or
possible existence of any Default or Event of Default, unless requested to do so
by the Required Banks. The Administrative Agent may at any time request
instructions from the Banks with respect to any actions or approvals (including
the failure to act or approve) which by the terms of this Agreement or the Loan
Documents, the Administrative Agent is permitted or required to take or to
grant, and if such instructions are requested, the Administrative Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any person for
refraining from any action or withholding any approval under this Agreement or
any Loan Document until it shall have received such instructions from the
Required Banks. Without limiting the foregoing, no Bank shall have any right of
action whatsoever against any Administrative Agent-Related Person as a result of
such Administrative Agent-Related Person acting, approving or refraining from
acting or approving under any of the Loan Documents in accordance with the
instructions of the Required Banks or, to the extent required by Section 9.05,
all of the Banks.
Section 7.04 Reliance. The Administrative Agent shall be entitled to rely,
and shall be fully protected in relying, upon any notice, writing, resolution
notice, statement, certificate, order or other document or any telephone, telex,
teletype or telecopier message believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person, and, with respect to all
matters pertaining herein or to any Loan Document and its duties hereunder to
thereunder, upon advice of counsel selected by the Administrative Agent.
Section 7.05 Indemnification. To the extent any Administrative
Agent-Related Person is not reimbursed and indemnified by the Borrower, the
Banks will reimburse and indemnify each Administrative Agent-Related Person for
and against any and all liabilities, obligations, losses, damages, claims,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by, or asserted
against any Administrative Agent-Related Person in any way relating to or
arising out of this Agreement or any Loan Document or any action taken or
omitted by any Administrative Agent-Related Person under this Agreement or any
Loan Document, in proportion to each Bank's Revolving Credit Commitment
Percentage; provided, however, that no Bank shall be liable to an Agent-Related
Person for any portion of such liabilities, obligations, losses, damages,
claims, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from such Agent-Related Person's gross negligence or willful
misconduct. The obligations of the Banks under this Section 7.05 shall survive
the payment in full of the Notes and the termination of this Agreement.
Section 7.06 Administrative Agent In Its Individual Capacity. With respect
to its Loans, its Revolving Credit Commitment and its Swing Line Commitment (and
its Revolving Credit Commitment Percentage), the Administrative Agent shall have
and may exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and, to the extent set forth herein, for any
other Bank or holder of obligations hereunder. The terms "Banks", "holder of
obligations" or "Required Banks" or any similar term shall, unless the context
clearly otherwise indicates, include the Administrative Agent in its individual
capacity as a Bank, one of the Required Banks or a holder of obligations
hereunder. The Administrative Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with the
Borrower or any Subsidiary or Affiliate of the Borrower as if it were not acting
as the Administrative Agent hereunder or under the Loan Documents, including,
without limitation, the acceptance of fees or other consideration for services
without having to account for the same to any of the Banks.
Section 7.07 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless the Administrative Agent has received written notice
from a Bank or the Borrower referring to this Agreement describing such Default
or Event of Default and stating that such notice is a "notice of default." In
the event that the Administrative Agent receives such a notice, the
Administrative Agent shall give prompt notice thereof to the Banks.
Section 7.08 Holders of Obligations. The Administrative Agent may deem and
treat the payee of any obligation hereunder as reflected on the books and
records of the Administrative Agent as the owner thereof for all purposes hereof
unless and until a written notice of the assignment or transfer thereof shall
have been filed with the Administrative Agent pursuant to Section 9.06(c). Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any obligation
hereunder shall be
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conclusive and binding on any subsequent holder, transferee or assignee of such
obligation or of any obligation or obligations granted in exchange therefor.
Section 7.09 Resignation by the Administrative Agent.
(a) The Administrative Agent may resign from the performance of all its
functions and duties hereunder at any time by giving twenty (20) Business Days'
prior written notice to the Borrower and the Banks. Such resignation shall take
effect upon the acceptance by a successor the Administrative Agent of
appointment pursuant to clauses (b) and (c) below or as otherwise provided
below.
(b) Upon any such notice of resignation, the Required Banks shall appoint a
successor Administrative Agent who shall be reasonably satisfactory to the
Borrower and shall be an incorporated bank or trust company with combined
capital and surplus in excess of $250,000,000.
(c) If a successor Administrative Agent shall not have been so appointed
within said twenty (20) Business Day period, the Administrative Agent, with the
consent of the Borrower (which consent shall not be unreasonably withheld),
shall then appoint a successor Administrative Agent who shall serve as the
Administrative Agent until such time, if any, as the Required Banks, with the
consent of the Borrower (which consent shall not be unreasonably withheld),
appoint a successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) by the twenty-fifth (25th) Business Day after the date such
notice of resignation was given by Administrative Agent, Administrative Agent's
resignation shall become effective and the Required Banks shall thereafter
perform all the duties of Administrative Agent hereunder until such time, if
any, as the Required Banks, with the consent of Borrower (which consent shall
not be unreasonably withheld), appoint a successor Administrative Agent as
provided above.
(e) Notwithstanding the foregoing, no consent of the Borrower to any
successor Administrative Agent shall be required if any Event of Default has
occurred and is continuing.
Section 7.10 Application of Article VII to Swing Line Lender and Letter of
Credit Issuer. The provisions of this Article VII and the obligations of the
Banks thereunder shall be deemed equally to apply to, and be for the benefit of,
the Swing Line Lender, the Swing Line Lender-Related Persons, the Letter of
Credit Issuer and the Letter of Credit Issuer-Related Persons in connection with
their administration of the Swing Line Loans, the Letters of Credit, the Letter
of Credit Obligations and the terms and provisions of Sections 2.02 and 2.16, to
the same extent that such provisions apply to the Administrative Agent, the
Administrative Agent-Related Persons, the Loans and the Obligations, mutatis
mutandis.
Section 7.11 Other Agents. Nothing in this Agreement shall impose on the
Syndication Agent, the Documentation Agent or the Sole Lead Arranger, in such
capacities, any duties or obligations.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES
Section 8.01 Basis for Determining Interest Rate Inadequate or Unfair. If
on or prior to the first day of any Interest Period for any LIBOR Borrowing:
(a) the Administrative Agent is advised by Wells Fargo that deposits in
dollars (in the applicable amounts) are not being offered to Wells Fargo in the
relevant market for such Interest Period, or
(b) Required Banks advise the Administrative Agent that the LIBOR Rate as
determined by the Administrative Agent will not adequately and fairly reflect
the cost to such Banks of funding their LIBOR Loans for such Interest Period,
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the Administrative Agent shall forthwith give notice thereof to the Borrower and
the Banks, whereupon until the Administrative Agent notifies the Borrower that
the circumstances giving rise to such suspension no longer exist, the
obligations of the Banks to make LIBOR Loans shall be suspended. Unless the
Borrower notifies the Administrative Agent at least two (2) Business Days before
the date of any LIBOR Borrowing for which a Notice of Borrowing has previously
been given that it elects not to borrow on such date, any such LIBOR Borrowing
shall instead be made as a Base Rate Borrowing.
Section 8.02 Illegality. If on or after the Effective Date, the adoption of
any applicable law, rule or regulation, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Bank (or its LIBOR Lending Office)
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency shall make it unlawful or
impossible for any Bank (or its LIBOR Lending Office) to make, maintain or fund
its LIBOR Loans and such Bank shall so notify the Administrative Agent, the
Administrative Agent shall forthwith give notice thereof to the other Banks and
the Borrower, whereupon until such Bank notifies the Borrower and the
Administrative Agent that the circumstances giving rise to such suspension no
longer exist, the obligation of such Bank to make LIBOR Loans shall be
suspended. Before giving any notice to the Administrative Agent pursuant to this
Section, such Bank shall designate a different LIBOR Lending Office if such
designation will avoid the need for giving such notice and will not, in the
judgment of such Bank, be otherwise disadvantageous to such Bank. If such Bank
shall determine that it may not lawfully continue to maintain and fund any of
its outstanding LIBOR Loans to maturity and shall so specify in such notice, the
Borrower shall immediately prepay in full the then outstanding principal amount
of each such LIBOR Loan, together with accrued interest thereon. Concurrently
with prepaying each such LIBOR Loan, the Borrower shall borrow a Base Rate Loan
in an equal principal amount from such Bank (on which interest and principal
shall be payable contemporaneously with the related LIBOR Loans of the other
Banks), and such Bank shall make such a Base Rate Loan.
Section 8.03 Increased Cost and Reduced Return.
(a) If on or after the Effective Date, the adoption of any applicable law,
rule or regulation, or any change therein, or any change in the interpretation
or administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Bank (or its Applicable Lending Office) with any request or
directive (whether or not having the force of law) of any such authority,
central bank or comparable agency:
(i) shall subject any Bank (or its Applicable Lending office) to any
tax, duty or other charge with respect to its LIBOR Loans, its Note(s), its
obligation to make LIBOR Loans or its Letter of Credit Obligations
(collectively, its "Covered Credits"), or shall change the basis of
taxation of payments to any Bank (or its Applicable Lending Office) of the
principal of or interest on its LIBOR Loans or any other amounts due under
this Agreement in respect of its Covered Credits (except for changes in the
rate of franchise taxes or tax on the overall net income of such Bank or
its Applicable Lending Office imposed by the jurisdiction in which such
Bank's principal executive office or Applicable Lending Office is located);
or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any such requirement imposed by the Board of Governors
of the Federal Reserve System, but excluding with respect to any LIBOR Loan
any such requirement included in an applicable LIBOR Reserve Percentage),
special deposit, insurance assessment or similar requirement against assets
of, deposits with or for the account of, or credit extended by, any Bank
(or its Applicable Lending Office) or shall impose on any Bank (or its
Applicable Lending Office) or on the United States market for the London
interbank market any other condition affecting its Covered Credits;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Applicable Lending Office) of making or maintaining any Covered Credits, or
to reduce the amount of any sum received or receivable by such Bank (or its
Applicable Lending Office) under this Agreement or under its Note(s) with
respect thereto, by an amount deemed by such Bank to be material, then, within
fifteen (15) days after demand by such Bank (with a copy to the Administrative
Agent), the Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank for such increased cost or reduction.
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(b) If any Bank shall have determined that, after the Effective Date, the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof by any governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or any request or directive
regarding capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on capital of such Bank (or its Parent) as a
consequence of such Bank's obligations hereunder to a level below that which
such Bank (or its Parent) could have achieved but for such adoption, change,
request or directive (taking into consideration its policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within fifteen (15) days after demand by such Bank (with a copy to
the Administrative Agent), the Borrower shall pay to such Bank such additional
amount or amounts as will compensate such Bank (or its Parent) for such
reduction.
(c) Each Bank will promptly notify the Borrower and the Administrative
Agent of any event of which it has knowledge, occurring after the Effective
Date, which will entitle such Bank to compensation pursuant to this Section and
will designate a different Applicable Lending Office if such designation will
avoid the need for, or reduce the amount of, such compensation and will not, in
the judgment of such Bank, be otherwise disadvantageous to such Bank. A
certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
Section 8.04 Base Rate Loans Substituted for Affected LIBOR Loans. If (i)
the obligation of any Bank to make LIBOR Loans has been suspended pursuant to
Section 8.02 or (ii) any Bank has demanded compensation under Section 8.03(a)
and the Borrower shall, by at least five (5) Business Days' prior notice to such
Bank through the Administrative Agent, have elected that the provisions of this
Section shall apply to such Bank, then, unless and until such Bank notifies the
Borrower that the circumstances giving rise to such suspension or demand for
compensation no longer apply:
(a) all Revolving Credit Loans which would otherwise be made by such Bank
as LIBOR Loans shall be made instead as Base Rate Loans (on which interest and
principal shall be payable contemporaneously with the related LIBOR Loans of the
other Banks), and
(b) after each of its LIBOR Loans has been repaid, all payments of
principal which would otherwise be applied to repay such LIBOR Loans shall be
applied to repay its Base Rate Loans instead.
ARTICLE IX
MISCELLANEOUS
Section 9.01 Notices. All notices, requests and other communications to any
party hereunder shall be in writing (including bank wire, telex, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address or telex number
set forth on Schedule 9.01 hereto, (y) in the case of any Bank, at its address
or telex number set forth in its Administrative Questionnaire or (z) in the case
of any party, such other address or telex number as such party may hereafter
specify for the purpose by notice to the Administrative Agent and the Borrower.
Each such notice, request or other communication shall be affective (i) if given
by telex or facsimile transmission, when such telex or facsimile transmission is
transmitted to the telex or facsimile number specified in this Section and the
appropriate answerback or receipt of transmission is received, (ii) if given by
mail, 72 hours after such communication is deposited in the mail with first
class postage prepaid, addressed as aforesaid or (iii) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Administrative Agent under Article II or Article VIII shall not
be effective until received.
Section 9.02 No Waivers. No failure or delay by the Administrative Agent or
any Bank in exercising any right, power or privilege hereunder, under any Note
or under any other Loan Document shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of
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any other right, power or privilege. The rights and remedies herein provided
shall be cumulative and not exclusive of any rights or remedies provided by law.
Section 9.03 Expenses; Documentary Taxes; Indemnification.
(a) The Borrower shall pay (i) all reasonable out-of-pocket expenses of the
Administrative Agent, including fees and disbursements of counsel for the
Administrative Agent, in connection with the preparation of this Agreement, (ii)
all reasonable out-of-pocket expenses of the Administrative Agent, including
fees and disbursements of counsel to the Administrative Agent, in connection
with any waiver or consent hereunder or any amendment hereof or any Default or
alleged Default hereunder and (iii) if an Event of Default occurs, all
out-of-pocket expenses incurred by the Administrative Agent and each Bank,
including fees and disbursements of outside counsel, in connection with such
Event of Default and collection, bankruptcy, insolvency and other enforcement
proceedings resulting therefrom. The Borrower shall indemnify each Bank against
any transfer taxes, documentary taxes, assessments or charges made by any
governmental authority by reason of the execution and delivery of this Agreement
or the Notes.
(b) The Borrower agrees to indemnify each Bank and hold each Bank harmless
from and against any and all liabilities, losses, damages, costs and expenses of
any kind, including, without limitation, the reasonable fees and disbursements
of counsel, which may be incurred by any Bank (or by the Administrative Agent in
connection with its actions as Administrative Agent hereunder, by the Swing Line
Lender in connection with its actions as Swing Line Lender hereunder or by the
Letter of Credit Issuer in connection with its actions as Letter of Credit
Issuer hereunder) in connection with any investigative, administrative or
judicial proceeding (whether or not such Bank shall be designated a party
thereto) relating to or arising out of this Agreement or any actual or proposed
use of proceeds of Loans hereunder or any actual or proposed use of any Letter
of Credit; provided that no Bank shall have the right to be indemnified
hereunder for its own gross negligence or willful misconduct.
Section 9.04 Sharing of Set-Offs. Each Bank agrees that if it shall, by
exercising any right of set-off or counterclaim or otherwise, receive payment of
a proportion of the aggregate amount of principal and interest due with respect
to any Note held by it which is greater than the proportion received by any
other Bank in respect of the aggregate amount of principal and interest due with
respect to any Note held by such other Bank, the Bank receiving such
proportionate greater payment shall purchase such participations in the Notes
held by the other Banks, and such other adjustments shall be made, as may be
required so that all such payments of principal and interest with respect to the
Notes held by the Banks shall be shared by the Banks pro rata; provided that
nothing in this Section shall impair the right of any Bank to exercise any right
of set-off or counterclaim it may have and to apply the amount subject to such
exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes. The Banks further agree among themselves that if
any such excess payment to a Bank shall be rescinded or must otherwise be
restored, the other Bank(s) which shall have shared the benefit of such payment
shall, by repurchase of participation theretofore sold, or otherwise, return its
share of that benefit to the Bank(s) whose payment shall have been rescinded or
otherwise restored. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of set-off or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
Section 9.05 Amendments and Waivers. Any provision of this Agreement or the
Notes may be amended or waived if, but only if, such amendment or waiver is in
writing and is signed by the Borrower and the Required Banks (and, if the rights
or duties of the Administrative Agent, the Swing Line Lender or the Letter of
Credit Issuer are affected thereby, by the Administrative Agent, the Swing Line
Lender or the Letter of Credit Issuer, as the case may be); provided, however,
(a) any amendment to this Agreement which solely increases the total Revolving
Credit Commitments to up to, but not in excess of, $200,000,000 either through
the addition of one or more new Banks or an increase in the Revolving Credit
Commitments of one or more of the existing Banks and makes no other changes to
this Agreement or any other Loan Document (other than the issuance of conforming
Revolving Credit Notes), need only be signed by the Administrative Agent, the
Borrower and the Bank(s) whose Revolving Credit Commitments are increased and
(b) no such amendment or waiver shall, unless signed by each Bank (i) increase
the Revolving Credit Commitment of such Bank, (ii) decrease the Revolving Credit
Commitment of any Bank (except for a ratable decrease in the Revolving Credit
Commitments of all Banks), (iii) increase the total
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Revolving Credit Commitments above $200,000,000, (iv) reduce the principal of or
rate of interest on any Loan, Letter of Credit Obligation or any fees hereunder,
(v) postpone the date fixed for any payment of principal of or interest on any
Loan, Letter of Credit Obligation or any fees hereunder or for any reduction or
termination of any Revolving Credit Commitment or the Swing Line Commitment,
(vi) change the definition of "Required Banks", (vii) voluntarily release any
Guarantor Subsidiary from its obligations under the Guaranty, (viii) amend
Section 9.04, (ix) amend this Section 9.05 or (x) change the percentage of the
Revolving Credit Commitments or of the aggregate unpaid principal amount of the
Revolving Credit Notes or the Letter of Credit Obligations, or the number of
Banks, which shall be required for the Banks or any of them to take any action
under this Section or any other provision of this Agreement.
Section 9.06 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns,
except that the Borrower may not assign or otherwise transfer any of its rights
under this Agreement without the prior written consent of all of the Banks.
(b) Any Bank may, with the prior written consent of the Borrower and the
Administrative Agent, such consents not to be unreasonably withheld, provided,
that if a Participant is an Affiliate of the granting Bank neither the
Borrower's nor the Administrative Agent's consent shall be required and provided
further that if an Event of Default has occurred and is continuing, the
Borrower's consent shall not be required, at any time grant to one or more banks
or other financial institutions (each, a "Participant") participating interests
in its Revolving Credit Commitment or any or all of its Loans and Letter of
Credit Obligations. In the event of any such grant by a Bank of a participating
interest to a Participant, such Bank shall remain responsible for the
performance of its obligations hereunder, and the Borrower and the
Administrative Agent shall continue to deal solely and directly with such Bank
in connection with such Bank's rights and obligations under this Agreement. Any
agreement pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including, without limitation,
the right to approve any amendment, modification or waiver of any provision of
this Agreement; provided that such participation agreement may provide that such
Bank will not agree to any modification, amendment or waiver of this Agreement
described in sub-clauses (i), (ii), (iii), (iv) or (v) of clause (b) of Section
9.05 without the consent of the Participant. The Borrower agrees that each
Participant shall, to the extent provided in its participation agreement, be
entitled to the benefits of Article VIII with respect to its participating
interest. An assignment or other transfer which is not permitted by subsection
(c) or (d) below shall be given effect for purposes of this Agreement only to
the extent of a participating interest granted in accordance with this
subsection (b).
(c) (i) Any Bank may at any time assign to one or more banks or other
financial institutions (each, an "Assignee") all, or a proportionate part (such
portion to be in an amount equal to or greater than $5,000,000) of all, of its
rights and obligations under this Agreement, the Notes and the Letter of Credit
Obligations, and such Assignee shall assume such rights and obligations,
pursuant to an assignment and assumption agreement in substantially the form of
Exhibit F hereto (an "Assignment and Assumption Agreement") executed by such
Assignee and such transferor Bank, with (and subject to) the subscribed consent
of the Borrower and the Administrative Agent, such consents not to be
unreasonably withheld; provided, that an Assignee not an Affiliate of such
transferor Bank or another Bank must be a financial institution with combined
capital and surplus in excess of $250,000,000; provided further that if an
Assignee is an Affiliate of such transferor Bank (including a trust established
to administer loans sold by such Bank or its Affiliates to such trust, which
trust is and shall continue to be administered by such Bank or an Affiliate
thereof) neither the Borrower's nor the Administrative Agent's consent shall be
required, provided that such transferor Bank shall remain fully obligated under
this Agreement for all funding and payment obligations; and provided further
that if an Event of Default has occurred and is continuing, the Borrower's
consent shall not be required.
(ii) Upon execution of an Assignment and Assumption Agreement and the
payment of a nonrefundable assignment fee of $3,500 in immediately available
funds to the Administrative Agent at its Payment Office in connection with each
such assignment written notice thereof by such transferor Bank to the
Administrative Agent and the recording by the Administrative Agent of such
assignment in the Register and the resulting effect upon the Loans and Letter of
Credit Obligations of the assigning Bank and the Assignee, the Assignee shall
have, to the
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extent of such assignment, the same rights and benefits as it would have if it
were a Bank hereunder and the holder of a Note and Letter of Credit Obligations
(provided that the Borrower and the Administrative Agent shall be entitled to
continue to deal solely and directly with the assignor Bank in connection with
the interests so assigned to the Assignee until written notice of such
assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Borrower
and the Administrative Agent by the assignor Bank and the Assignee) and, if the
Assignee has expressly assumed, for the benefit of the Borrower, some or all of
the transferor Bank's obligations hereunder, such transferor Bank shall be
relieved of its obligations hereunder to the extent of such assignment and
assumption, and except as described above, no further consent or action by the
Borrower, the Banks or the Administrative Agent shall be required.
(iii) If the Assignee is not incorporated under the laws of the United
States of America or a state thereof, it shall, prior to the first date on which
interest or fees are payable hereunder for its account, deliver to the Borrower
and the Administrative Agent certification as to exemption from deduction or
withholding of any United States federal income taxes in accordance with Section
2.15.
(iv) Each Assignee shall take such Loans, Letter of Credit Obligations and
Revolving Credit Commitment subject to the provisions of this Agreement and to
any request made, waiver or consent given or other action taken hereunder, prior
to the receipt by the Administrative Agent and the Borrower of written notice of
such transfer, by each previous holder of such Loans, Letter of Credit
Obligations and Revolving Credit Commitment. Such Assignment and Assumption
Agreement shall be deemed to amend this Agreement and Schedule 1.01 hereto, to
the extent, and only to the extent, necessary to reflect the addition of such
Assignee as a Bank and the resulting adjustment of all or a portion of the
rights and obligations of such transferor Bank under this Agreement, the
determination of its Revolving Credit Commitment Percentage (in each case,
rounded to twelve decimal places), the Loans, the Letter of Credit Obligations
and any new Notes to be issued, at the Borrower's expense, to such Assignee, and
no further consent or action by the Borrower or the Banks shall be required to
effect such amendments.
(d) Notwithstanding any other provision set forth in this Agreement, any
Bank may at any time pledge or assign all or any portion of its rights under
this Agreement and the other documents executed and delivered in connection
herewith (including, without limitation, the Note held by it) to any Federal
Reserve Bank in accordance with Regulation A of the Federal Reserve Board
without notice to, or the consent of, the Borrower or the Administrative Agent
and with the consent of the Borrower and the Administrative Agent, any Bank
which is a fund may pledge all or any portion of its Notes or Loans to its
trustee in support of its obligations to its trustee. No such pledge or
assignment shall release the transferor Bank from its obligations hereunder.
(e) No Assignee, Participant or other transferee of any Bank's rights shall
be entitled to receive any greater payment under Section 8.03 than such Bank
would have been entitled to receive with respect to the rights transferred,
unless such transfer is made with the Borrower's prior written consent or by
reason of the provisions of Section 8.02 or 8.03 requiring such Bank to
designate a different Applicable Lending Office under certain circumstances or
at a time when the circumstances giving rise to such greater payment did not
exist.
(f) The Borrower hereby designates the Administrative Agent to serve as the
Borrower's Administrative Agent, solely for purposes of this Section 9.06 to
maintain a register (the "Register") on which it will record the Loans made and
Letter of Credit Obligations held by each of the Banks and each repayment in
respect of the principal amount of the Loans and Letter of Credit Obligations of
each Bank. Failure to make any such recordation, or any error in such
recordation shall not affect the Borrower's obligations in respect of such
Loans. With respect to any Bank, the transfer of the rights to the principal of,
and interest on, any Loan or Letter of Credit Obligation shall not be effective
until the transfer is recorded on the Register maintained by the Administrative
Agent with respect to ownership of such Loan or Letter of Credit Obligation and
prior to such recordation all amounts owing to the transferor with respect to
such Loan or Letter of Credit Obligation shall remain owing to the transferor.
The registration of assignment or transfer of all or part of any Loans or Letter
of Credit Obligations shall be recorded by the Administrative Agent on the
Register only upon the acceptance by the Administrative Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
9.06(c). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Administrative Agent for acceptance and registration of
assignment or transfer of all or part of a Loan or Letter of Credit Obligation,
or as soon thereafter as practicable, the assigning or transferor Bank shall
surrender the Note evidencing such Loan or Letter of Credit
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Obligation, and thereupon one or more new Notes in the same aggregate principal
amount then owing to such assignor or transferor Bank shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Administrative Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Administrative Agent in performing its duties under
this Section 9.06(f); provided that the Administrative Agent shall not have the
right to be indemnified under this Section 9.06(f) for its own gross negligence
or willful misconduct.
Section 9.07 Collateral. Each of the Banks represents to the Administrative
Agent and each of the other Banks that in good faith is not relying upon any
"margin stock" (as defined in Regulation U) as collateral in the extension or
maintenance of the credit provided for in this Agreement.
Section 9.08 Governing Law. This Agreement and each Note shall be governed
by and construed in accordance with the substantive laws of the state of
Missouri, without giving effect to the application of choice of law principles.
Section 9.09 Counterparts. This Agreement may be signed in any number of
counterparts (including facsimile counterparts), each of which shall be an
original, with the same effect as if the signatures thereto and hereto were upon
the same instrument.
Section 9.10 NO ORAL AGREEMENTS; ENTIRE AGREEMENT. ORAL AGREEMENTS OR
COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR TO FORBEAR FROM ENFORCING REPAYMENT
OF A DEBT, INCLUDING PROMISES TO EXTEND OR RENEW SUCH DEBT, ARE NOT ENFORCEABLE.
TO PROTECT THE BORROWER, THE BANKS, THE SWING LINE LENDER, THE LETTER OF CREDIT
ISSUER AND THE ADMINISTRATIVE AGENT FROM MISUNDERSTANDING OR DISAPPOINTMENT, ANY
AGREEMENTS REACHED BY THE BORROWER, THE BANKS, THE SWING LINE LENDER, THE LETTER
OF CREDIT ISSUER AND THE ADMINISTRATIVE AGENT COVERING SUCH MATTERS ARE
CONTAINED IN THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, WHICH AGREEMENT AND
OTHER LOAN DOCUMENTS ARE A COMPLETE AND EXCLUSIVE STATEMENT OF THE AGREEMENTS
AMONG THE BORROWER, THE BANKS, THE SWING LINE LENDER, THE LETTER OF CREDIT
ISSUER AND THE ADMINISTRATIVE AGENT, EXCEPT AS THE BORROWER, THE BANKS, THE
SWING LINE LENDER, THE LETTER OF CREDIT ISSUER AND THE ADMINISTRATIVE AGENT MAY
LATER AGREE IN WRITING TO MODIFY THEM. This Agreement embodies the entire
agreement and understanding between the parties hereto and supersedes all prior
agreements and understandings (oral or written) relating to the subject matter
hereof.
Section 9.11 Confidentiality. The Administrative Agent and each Bank
represent that they will maintain the confidentiality of any written or oral
information provided under this Agreement by or on behalf of the Borrower
(hereinafter collectively called "Confidential Information"), subject to the
Administrative Agent's and each Bank's (a) obligation to disclose any such
Confidential Information pursuant to a request or order under applicable laws
and regulations or pursuant to a subpoena or other legal process, (b) right to
disclose any such Confidential Information to its bank examiners, auditors,
counsel and other professional advisors and to other Banks, (c) right to
disclose any such Confidential Information in connection with any litigation or
dispute involving the Banks and the Borrower or any of its Subsidiaries and
Affiliates and (d) right to provide such information to Participants,
prospective Participants to which sales of participating interests are permitted
pursuant to Section 9.06(b) and prospective Assignees to which assignments of
interests are permitted pursuant to Section 9.06(c) if such Participant,
prospective Participant or prospective Assignee agrees in writing to maintain
the confidentiality of such information on terms substantially similar to those
of this Section as if it were a "Bank" party hereto. Notwithstanding the
foregoing, any such information supplied to a Bank, Participant, prospective
Participant or prospective Assignee under this Agreement shall cease to be
Confidential Information if it is or becomes known to such Person by other than
unauthorized disclosure, or if it becomes a matter of public knowledge.
Section 9.12 Consent to Jurisdiction; Waiver of Jury Trial. THE BORROWER
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY MISSOURI STATE
COURT SITTING IN THE CITY OR COUNTY OF ST. LOUIS, MISSOURI AND/OR ANY UNITED
STATES OF AMERICA COURT SITTING IN THE EASTERN DISTRICT OF MISSOURI, EASTERN
DIVISION, AS THE ADMINISTRATIVE
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AGENT MAY ELECT, IN ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT. THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT TO SUCH SUIT, ACTION OR PROCEEDING MAY BE HELD
AND DETERMINED IN ANY OF SUCH COURTS. THE BORROWER IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH THE BORROWER MAY NOW OR
HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN ANY SUCH COURT, AND THE BORROWER FURTHER IRREVOCABLY WAIVES ANY CLAIM
THAT SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM. THE BORROWER AUTHORIZES THE SERVICE OF PROCESS UPON
BORROWER BY REGISTERED MAIL SENT TO BORROWER AT ITS ADDRESS DETERMINED PURSUANT
TO SECTION 9.01. EACH OF THE BORROWER, THE ADMINISTRATIVE AGENT, THE SWING LINE
LENDER, THE LETTER OF CREDIT ISSUER AND EACH BANKS HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
Section 9.13 .Independence of Covenants. All of the covenants contained in
this Agreement and the other Loan Documents shall be given independent effect so
that if a particular action, event or condition is prohibited by any one of such
covenants, the fact that it would be permitted by an exception to, or otherwise
be in compliance within the provisions of, another covenant shall not avoid the
occurrence of a Default or Event of Default if such action is taken, such event
occurs or such condition exists.
[Signature pages to follow]
-44-
IN WITNESS WHEREOF, the parties hereto have caused this Credit Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
O'REILLY AUTOMOTIVE, INC.
By____________________________
Name:_________________________
Title:________________________
WELLS FARGO BANK, NATIONAL
ASSOCIATION, in its individual capacity
and as Swing Line Lender, Letter of Credit
Issuer, Administrative Agent and
Sole Lead Arranger
By____________________________
Name:_________________________
Title:________________________
U.S. BANK NATIONAL ASSOCIATION,
in its individual capacity and as
Syndication Agent
By____________________________
Name:_________________________
Title:________________________
LASALLE BANK NATIONAL ASSOCIATION,
in its individual capacity and
as Documentation Agent
By____________________________
Name:_________________________
Title:________________________
COMMERCE BANK, N.A.
By____________________________
Name:_________________________
Title:________________________
-45-
NATIONAL CITY BANK
By____________________________
Name:_________________________
Title:________________________
THE NORTHERN TRUST COMPANY
By____________________________
Name:_________________________
Title:________________________
BANK OF OKLAHOMA, NA
By____________________________
Name:_________________________
Title:________________________
HIBERNIA NATIONAL BANK
By____________________________
Name:_________________________
Title:________________________
SUNTRUST BANK
By____________________________
Name:_________________________
Title:________________________
UMB BANK, N.A.
By____________________________
Name:_________________________
Title:________________________
-46-
UNION PLANTERS BANK, N.A.
By____________________________
Name:_________________________
Title:________________________
-47-
SCHEDULE 1.01
REVOLVING CREDIT COMMITMENTS
Bank Revolving Credit Commitment
- ---- ---------------------------
Wells Fargo Bank, National Association $25,000,000
U.S. Bank National Association $17,500,000
LaSalle Bank National Association $17,500,000
Commerce Bank, N.A. $17,500,000
National City Bank $12,500,000
The Northern Trust Company $12,500,000
Bank of Oklahoma, NA $9,500,000
Hibernia National Bank $9,500,000
SunTrust Bank $9,500,000
UMB Bank, n.a. $9,500,000
Union Planters Bank, N.A. $9,500,000
-------------
TOTAL $150,000,000
-1- Schedule 1.01
SCHEDULE 4.05
LITIGATION
----------
[TO BE PROVIDED]
-1- Schedule 4.05
SCHEDULE 4.06
ERISA
[TO BE PROVIDED]
- 1 - Schedule 4.06
SCHEDULE 4.09
SUBSIDIARIES
[TO BE PROVIDED]
- 1 - Schedule 4.09
SCHEDULE 5.09
EXISTING DEBT
[TO BE PROVIDED]
- 1 - Schedule 5.09
SCHEDULE 5.10
EXISTING LIENS
[TO BE PROVIDED]
- 1 - Schedule 5.10
SCHEDULE 9.01
NOTICE INFORMATION
------------------
O'Reilly Automotive, Inc.
233 S. Patterson
Springfield, Missouri 65802
Attention: Jim Batten
Telephone: Vice President of Finance and CFO
Facsimile: (417) 874-7145
Wells Fargo Bank, National Association
120 South Central
MAC N2650-140
St. Louis, Missouri 63105
Attention: David Wilsdorf
Telephone: (314) 290-5074
Facsimile: (314) 726-3173
-1-
EXHIBIT A
[Date]
Wells Fargo Bank, National Association,
as Administrative Agent
1740 Broadway
MAC C7300-034
Denver, Colorado 80274
Attention: Agency Syndication Group - Kevin Rapp
Re: Notice of Revolving Credit Borrowing
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of July
29, 2001, by and among O'Reilly Automotive, Inc., (the "Borrower"), the Banks
from time to time party thereto, Wells Fargo Bank, National Association, as
Administrative Agent for the Banks, U.S. Bank National Association, as
Syndication Agent for the Banks, LaSalle Bank National Association, as
Documentation Agent for the Banks and Wells Fargo Bank, National Association, as
Sole Lead Arranger, as amended, supplemented or otherwise modified from time to
time (the "Credit Agreement"). All capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to them in the Credit
Agreement.
The Borrower hereby requests that the Banks make a Revolving Credit Loan in
the aggregate principal amount of $ to Borrower under the terms of the Credit
Agreement on (which is a Business Day). Of the requested Revolving Credit Loan,
$_______ is to be a Base Rate Loan and $ is to be a LIBOR Loan. The Interest
Period for the portion of the requested Revolving Credit Loan that is a LIBOR
Loan is .
The undersigned hereby certifies that all of the conditions precedent under
Section 3.02 of the Credit Agreement have been satisfied.
Executed this _________day of___________, 20_____.
O'REILLY AUTOMOTIVE, INC.
By________________________
Name:_____________________
Title:____________________
-1-
EXHIBIT B
[Date]
Wells Fargo Bank, National Association,
as Administrative Agent
1740 Broadway
MAC C7300-034
Denver, Colorado 80274
Attention: Agency Syndication Group - Kevin Rapp
Re: Notice of Swing Line Borrowing
Ladies and Gentlemen:
Reference is hereby made to that certain Credit Agreement dated as of July
29, 2001, by and among O'Reilly Automotive, Inc., (the "Borrower"), the Banks
from time to time party thereto, Wells Fargo Bank, National Association, as
Administrative Agent for the Banks, U.S. Bank National Association, as
Syndication Agent for the Banks, LaSalle Bank National Association, as
Documentation Agent for the Banks and Wells Fargo Bank, National Association, as
Sole Lead Arranger, as amended, supplemented or otherwise modified from time to
time (the "Credit Agreement"). All capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to them in the Credit
Agreement.
The Borrower hereby requests that the Swing Line Lender make a Swing Line
Loan in the aggregate principal amount of $________ to Borrower under the terms
of the Credit Agreement on_______________ (which is a Business Day).
The undersigned hereby certifies that all of the conditions precedent under
Section 3.03 of the Credit Agreement have been satisfied.
Executed this_________day of____________, 20_____.
O'REILLY AUTOMOTIVE, INC.
By________________________
Name:_____________________
Title:____________________
-1-
EXHIBIT C
REVOLVING CREDIT NOTE
$_______________ __________, 20___
FOR VALUE RECEIVED, the undersigned, O'REILLY AUTOMOTIVE, INC., a Missouri
corporation (the "Borrower"), hereby promises to pay to the order of
_____________ _______________ (the "Bank"), the principal sum of
__________________________________ Dollars ($__________), or, if less, the
aggregate unpaid principal amount of the Revolving Credit Loans (as defined in
the Credit Agreement which is hereinafter defined; capitalized terms used herein
and not otherwise defined herein shall have the meaning ascribed thereto in the
Credit Agreement) made by the Bank to the Borrower pursuant to the Credit
Agreement, on the Termination Date, together with interest on any and all
principal amounts remaining unpaid hereunder from time to time outstanding. The
unpaid principal amount hereof shall bear interest at a fluctuating rate per
annum equal to the appropriate fluctuating rate per annum for the Revolving
Credit Loans evidenced hereby, as determined from time to time in accordance
with the provisions of the Credit Agreement. Prior to maturity, whether by
acceleration or otherwise, accrued interest shall be payable at such times as
set forth in the Credit Agreement. After maturity, whether by acceleration or
otherwise, accrued interest shall be payable upon demand. Interest shall be
computed as provided in the Credit Agreement. Both principal and interest are
payable in lawful money of the United States of America to the Administrative
Agent at the Payment Office, in immediately available funds. Amounts advanced
hereunder may be repaid and reborrowed from time to time as provided for in the
Credit Agreement.
This Note is a Revolving Credit Note referred to in, and is entitled to the
benefits of, the Credit Agreement, dated as of July 29, 2002 (as amended,
supplemented, restated, or otherwise modified from time to time, the "Credit
Agreement") by and among the Borrower, the financial institutions signatory
thereto (the "Banks"), Wells Fargo Bank, National Association as Administrative
Agent (the "Administrative Agent") for the Banks, U.S. Bank National
Association, as Syndication Agent for the Banks, LaSalle Bank National
Association, as Documentation Agent for the Banks and Wells Fargo Bank, National
Association, as Sole Lead Arranger, the terms, covenants, conditions,
provisions, stipulations and agreements of which are made a part hereof to the
same extent and with the same effect as if fully set forth herein. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
THE BORROWER HEREBY WAIVES PRESENTMENT, DEMAND, PROTEST OR NOTICE OF ANY
KIND IN CONNECTION WITH THIS NOTE.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE STATE OF MISSOURI WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAW.
-1-
IN WITNESS WHEREOF, the Borrower has duly executed and delivered this
Revolving Credit Note as of the date first written above.
O'REILLY AUTOMOTIVE, INC.
By________________________________
Name:_____________________________
Title:____________________________
-2-
EXHIBIT D
SWING LINE NOTE
$20,000,000 July 29, 2002
FOR VALUE RECEIVED, the undersigned, O'REILLY AUTOMOTIVE, INC., a Missouri
corporation (the "Borrower"), hereby promises to pay to the order of WELLS FARGO
BANK, NATIONAL ASSOCIATION (the "Bank"), the principal sum of Twenty Million
Dollars ($20,000,000), or, if less, the aggregate unpaid principal amount of the
Swing Line Loans (as defined in the Credit Agreement which is hereinafter
defined; capitalized terms used herein and not otherwise defined herein shall
have the meaning ascribed thereto in the Credit Agreement) made by the Bank to
the Borrower pursuant to the Credit Agreement, on the due dates set forth in the
Credit Agreement, together with interest on any and all principal amounts
remaining unpaid hereunder from time to time outstanding. The unpaid principal
amount hereof shall bear interest at a fluctuating rate per annum equal to the
appropriate fluctuating rate per annum for the Swing Line Loans evidenced
hereby, as determined from time to time in accordance with the provisions of the
Credit Agreement. Prior to maturity, whether by acceleration or otherwise,
accrued interest shall be payable at such times as set forth in the Credit
Agreement. After maturity, whether by acceleration or otherwise, accrued
interest shall be payable upon demand. Interest shall be computed as provided in
the Credit Agreement. Both principal and interest are payable in lawful money of
the United States of America to the Administrative Agent at the Payment Office,
in immediately available funds. Amounts advanced hereunder may be repaid and
reborrowed from time to time as provided for in the Credit Agreement.
This Note is the Swing Line Note referred to in, and is entitled to the
benefits of, the Credit Agreement, dated as of July 29, 2002 (as amended,
supplemented, restated, or otherwise modified from time to time, the "Credit
Agreement) by and among the Borrower, the financial institutions signatory
thereto (the "Banks"), Wells Fargo Bank, National Association as Administrative
Agent (the "Administrative Agent") for the Banks, U.S. Bank National
Association, as Syndication Agent for the Banks, LaSalle Bank National
Association, as Documentation Agent for the Banks and Wells Fargo Bank, National
Association, as Sole Lead Arranger, the terms, covenants, conditions,
provisions, stipulations and agreements of which are made a part hereof to the
same extent and with the same effect as if fully set forth herein. The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity hereof upon the
terms and conditions therein specified.
THE BORROWER HEREBY WAIVES PRESENTMENT, DEMAND, PROTEST OR NOTICE OF ANY
KIND IN CONNECTION WITH THIS NOTE.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
SUBSTANTIVE LAWS OF THE STATE OF MISSOURI WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAW.
-1-
IN WITNESS WHEREOF, the Borrower has duly executed and delivered this Swing
Line Note as of the date first written above.
O'REILLY AUTOMOTIVE, INC.
By___________________________
Name:________________________
Title:_______________________
-2-
EXHIBIT E
July 29, 2002
Wells Fargo Bank, National Association,
as Administrative Agent and Sole Lead Arranger
________________________
________________________
U.S. Bank National Association,
as Syndication Agent
________________________
________________________
LaSalle Bank National Association,
as Documentation Agent
________________________
________________________
and to each of the other Banks
set forth on attached Schedule 1
Re: Credit Agreement dated as of July 29, 2002
Ladies and Gentlemen:
We have acted as special counsel for O'Reilly Automotive, Inc., a Missouri
corporation (the "Borrower") and each of Ozark Automotive Distributors, Inc., a
Missouri corporation, Greene County Realty Co., a Missouri corporation, O'Reilly
II Aviation Corporation, a Missouri corporation, Mid-State Automotive
Distributors, Inc., a Tennessee corporation, Ozark Services, Inc., a Missouri
corporation, Hi-Lo Automotive, Inc., a Delaware corporation, Hi-Lo Investment
Company, a Delaware corporation, Hi-Lo Management Company, a Delaware
corporation, Hi-Lo Auto Supply, L.P., a Texas limited partnership, Ozark
Purchasing, LLC, a Missouri limited liability company, First Call Management
Company, a Delaware corporation and First Call Auto Supply, L.P., a Texas
limited partnership (individually, a "Guarantor Subsidiary" and collectively,
the "Guarantor Subsidiaries") in connection with that certain Credit Agreement
(the "Credit Agreement") dated as of July 29, 2002, by and among the Borrower,
the banks listed on the signature pages thereof (collectively, the "Banks"),
Wells Fargo Bank, National Association, as Administrative Agent for the Banks,
U.S. Bank National Association, as Syndication Agent for the Banks, LaSalle Bank
National Association, as Documentation Agent for the Banks and Wells Fargo Bank,
National Association, as Sole Lead Arranger. Capitalized terms used herein and
not otherwise defined shall have the meanings assigned thereto in the Credit
Agreement. This opinion is being rendered to you at the request of our client
pursuant to Section 3.01(e) of the Credit Agreement.
In connection with the foregoing, we have examined executed copies of
(a) the certificate or articles of incorporation and by-laws, limited
partnership agreement, certificate or articles of organization and operating
agreement or other organizational documents, as applicable, of the Borrower and
each Guarantor Subsidiary, (b) the Credit Agreement and the Exhibits and
Schedules thereto, (c) the Notes issued pursuant to the Credit Agreement and
(d) the Guaranty (the Credit Agreement, the Notes and the Guaranty are sometimes
hereinafter collectively referred to as the "Loan Documents").
In rendering the opinions set forth herein, we have also examined originals
or copies, certified to our satisfaction, of such (i) certificates of public
officials, including, without limitation, a certificate of good standing for the
Borrower issued by the Secretary of State of the State of Missouri on July ___,
2002, a certificate of good standing for Ozark Automotive Distributors, Inc.
issued by the Secretary of State of the State of Missouri on July ___, 2002, a
certificate of good standing for Greene County Realty Co. issued by the
Secretary of State of the State of Missouri on July ___, 2002, a certificate of
good standing for O'Reilly II Aviation Corporation issued by the
-3-
July 29, 2002
Page 4
Secretary of State of the State of Missouri on July ___, 2002, a certificate of
good standing for Mid-State Automotive Distributors, Inc. issued by the
Secretary of State of the State of Tennessee on July ___, 2002, a certificate of
good standing for Ozark Services, Inc. issued by the Secretary of State of the
State of Missouri on July ___, 2002, a certificate of good standing for Hi-Lo
Automotive, Inc. issued by the Secretary of State of the State of Delaware on
July ___, 2002, a certificate of good standing for Hi-Lo Investment Company
issued by the Secretary of State of the State of Delaware on July ___, 2002, a
certificate of good standing for Hi-Lo Management Company issued by the
Secretary of State of the State of Delaware on July ___, 2002, a certificate of
existence for Hi-Lo Auto Supply, L.P. issued by the Secretary of State of the
State of Texas on July ___, 2002, a certificate of good standing for Ozark
Purchasing, LLC issued by the Secretary of State of the State of Missouri on
July ___, 2002, a certificate of good standing for First Call Management Company
issued by the Secretary of State of the State of Delaware on July ___, 2002 and
a certificate of existence for First Call Auto Supply, L.P. issued by the
Secretary of State of the State of Texas on July ___, 2002 (individually, a
"Good Standing Certificate" and collectively, the "Good Standing Certificates"),
(ii) certificates of officers and representatives of the Borrower and of each of
the Guarantor Subsidiaries, including, without limitation, a Certificate of the
Treasurer of the Borrower, a Certificate of the Chief Financial Officer of Ozark
Automotive Distributors, Inc., a Certificate of the Chief Financial Officer of
Greene County Realty Co., a Certificate of the Chief Financial Officer of
O'Reilly II Aviation Corporation, a Certificate of the President of Mid-State
Automotive Distributors, Inc., a Certificate of the Treasurer of Ozark Services,
Inc., a Certificate of the Executive Vice President of Hi-Lo Automotive, Inc., a
Certificate of the Executive Vice President of Hi-Lo Investment Company, a
Certificate of the Executive Vice President of Hi-Lo Management Company, a
Certificate of the Executive Vice President of the General Partner of Hi-Lo Auto
Supply, L.P., a Certificate of the Treasurer and the Executive Vice President of
the Members of Ozark Purchasing, LLC, a Certificate of the Executive Vice
President of First Call Management Company and a Certificate of the Executive
Vice President of the General Partner of First Call Auto Supply, L.P.
(individually an "Officer's Certificate" and collectively, the "Officers'
Certificates") and (iii) such other documents and records as we have deemed
relevant or necessary for such opinions.
We are opining herein as to the effect on the subject transaction only of,
as in effect on the date of this letter, (i) the Federal laws of the United
States, (ii) the laws of the State of Missouri and (iii) the General Corporation
Law of the State of Delaware. We express no opinion with respect to (i) the
applicability to such transactions, or the effect on such transactions, of any
other laws, or (ii) any matters of municipal law or the laws of any local
agencies, wherever located. We express no opinion as to the enforceability of
the choice of law provisions contained in the Loan Documents, provided, however,
we believe a court located in the State of Missouri would apply Missouri law in
a proceeding concerning the Loan Documents.
As to various questions of fact relevant to such opinions, we have, with
your permission, relied upon and assumed the accuracy, completeness and veracity
of the various officers certificates, (including, without limitation, the
Officer's Certificates), the certificates of public officials (including,
without limitation, the Good Standing Certificates), and the representations and
warranties of the Borrower, the Guarantor Subsidiaries, the Banks and any other
persons a party thereto in the Loan Documents and in the other certificates and
documents delivered in connection with the transactions contemplated by the Loan
Documents, and we have no actual knowledge that any such factual information is
not true. We have further assumed, without independent investigation but with
your permission, that the members of the Boards of Directors and the officers of
the Borrower and each Guarantor Subsidiary that is a corporation, each corporate
general partner of each limited partnership which is a Guarantor Subsidiary and
each individual or corporate manager of each limited liability company which is
a Guarantor Subsidiary have been duly and properly elected or appointed prior to
the date hereof, and that no director, officer or manager has resigned, been
removed or otherwise ceases to serve in such capacity prior to the date hereof.
In rendering the opinions set forth herein, we have further assumed,
without independent investigation but with your permission, that (i) all parties
to the Loan Documents (other than the Borrower and the Guarantor Subsidiaries)
are duly organized, validly existing and in good standing under the laws of
their respective jurisdictions of organization and have full right, power and
authority to enter into the Loan Documents; (ii) the execution and delivery of
the Loan Documents have been duly authorized by all necessary action and
proceedings on the part of all parties thereto (other than the Borrower and
Guarantor Subsidiaries), and the Loan Documents have been duly
-4-
July 29, 2002
Page 5
executed and delivered by all parties thereto (other than the Borrower and
Guarantor Subsidiaries) and constitute the legal, valid and binding obligations
of such parties (other than the Borrower and Guarantor Subsidiaries),
enforceable against such parties in accordance with their respective terms;
(iii) the legal capacity of all natural persons; and (iv) all parties to the
Loan Documents (other than the Borrower and Guarantor Subsidiaries) have
obtained any and all consents, permits and approvals required by or from any and
all Federal, state, local and foreign governmental and regulatory agencies and
authorities in connection with the transactions contemplated thereby, to the
extent necessary for the legality, validity, binding effect or enforceability of
the Loan Documents.
In rendering our opinions set forth herein, we have further assumed,
without independent investigation but with your permission, (i) the genuineness
of all signatures (other than the signatures of representatives of the Borrower
and the Guarantor Subsidiaries on the Loan Documents which were signed in our
presence), (ii) the authenticity of all documents submitted to us as originals,
the conformity with the originals of all documents submitted to us as certified,
conformed, photographic or telecopied copies and the authenticity of the
originals of such latter documents, and (iii) that all certificates and
telecopied and telephonic confirmations given by public officials have been
properly given and are accurate as of the date hereof.
In addition, we have further assumed that (i) except for the Loan
Documents, there are no agreements or undertakings among the parties to the Loan
Documents which would modify, amend or supersede any of the provisions of the
Loan Documents; (ii) there has not been any mutual mistake of fact or
misunderstanding, fraud, duress or undue influence in connection with the
negotiation or execution of the Loan Documents; (iii) the conduct of the parties
to the Loan Documents has complied with any requirement of good faith, fair
dealing and conscionability; and (iv) the funds to be delivered to the Borrower
pursuant to the Loan Documents will be delivered to, or for the benefit of, the
Borrower in accordance with the terms of the Loan Documents.
Whenever our opinion herein is indicated to be based on our knowledge, it
is limited to the actual current knowledge of the attorneys of our firm who have
devoted substantive attention to legal matters referred to us by the Borrower
and its Subsidiaries during the last twelve (12) months. Except to the extent
expressly set forth herein, however, we have not undertaken any independent
investigation as to such matters, and no inference as to our knowledge of such
matters should be drawn from our representation of the Borrower or the Guarantor
Subsidiaries.
Whenever we have stated that we have assumed any matter, it is intended to
indicate that we have assumed such matter without making any factual, legal or
other inquiry, investigation or verification, and without expressing any opinion
or conclusion of any kind concerning any such matters, but we have no actual
knowledge that any such assumption is not true.
Based on the foregoing, and subject to the qualifications, limitations,
conditions and assumptions set forth herein, we are of the opinion that, under
existing law as of the date hereof:
1. The Borrower is a corporation incorporated, validly existing and in good
standing under the laws of the State of Missouri and has all corporate
powers required to carry on its business as now conducted.
2. Each Guarantor Subsidiary is a corporation, limited partnership or limited
liability company (as the case may be) incorporated or organized, validly
existing and in good standing under the laws of its jurisdiction of
incorporation or organization and has all corporate, partnership or limited
liability powers (as the case may be) required to carry on its business as
now conducted.
3. The execution, delivery and performance by the Borrower of the Credit
Agreement and the Notes are within the Borrower's corporate powers, have
been duly authorized by all necessary corporate action, require no action
by or in respect of, or filing with, any Missouri or Federal Governmental
Authority, except for those already obtained or made and other than filings
that may be required pursuant to applicable Federal or Missouri securities
laws, and do not contravene or constitute a default, or result in the
creation or imposition of any Lien on any asset of the Borrower or any of
its Subsidiaries, under any provision of applicable Missouri or Federal law
or regulation or of the articles of incorporation or by-laws of the
Borrower or, to our knowledge based solely on the Officer's Certificate of
the
-5-
July 29, 2002
Page 6
Borrower, of any agreement, judgment, injunction, order, decree or other
instrument material to and binding upon the Borrower.
4. The execution, delivery and performance by each Guarantor Subsidiary of the
Guaranty are within such Guarantor Subsidiary's corporate, partnership or
limited liability company powers (as the case may be), have been duly
authorized by all necessary corporate, limited partnership or limited
liability company action, require no action by or in respect of, or filing
with, any Missouri or Federal Governmental Authority, except for those
already obtained or made and other than filings that may be required
pursuant to Federal or Missouri securities laws, and do not contravene or
constitute a default, or result in the creation or imposition of any Lien
on any asset of the Borrower or any of its Subsidiaries, under any
provision of applicable Missouri or Federal law or regulation or of the
certificate or articles of incorporation or by-laws, limited partnership
agreement, certificate or articles of organization or operating agreement
or other organizational documents, as applicable, of such Guarantor
Subsidiary or, to our knowledge based solely on the Officers' Certificates
of each Guarantor Subsidiary, of any agreement, judgment, injunction,
order, decree or other instrument material to and binding upon such
Guarantor Subsidiary.
5. Each of the Credit Agreement and each Note has been duly executed and
delivered by a duly authorized officer of the Borrower and constitutes the
legal, valid and binding obligation of the Borrower, enforceable against
the Borrower in accordance with its terms, subject to all qualifications,
assumptions and limitations set forth in this letter.
6. The Guaranty has been duly executed and delivered by a duly authorized
officer of each Guarantor Subsidiary and constitutes the legal, valid and
binding obligation of each Guarantor Subsidiary, enforceable against each
Guarantor Subsidiary in accordance with its terms, subject to all
qualifications, assumptions and limitations set forth in this letter.
7. 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, or, to our knowledge, "controlled" by an "investment
company", as such terms are defined under the Investment Company Act of
1940, as amended.
8. Neither the Borrower nor any of its Subsidiaries is a "holding company" or
a "subsidiary company" of a "holding company" or an "affiliate" of a
"holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
9. Except as otherwise set forth in the Loan Documents, including, without
limitation, any schedules or exhibits thereto, and to our knowledge based
solely on the Officers' Certificates, (a) there are no actions, suits or
proceedings pending or threatened against Borrower or any of its
Subsidiaries before any court, arbitrator or Governmental Authority which
question the validity of any of the Loan Documents or any of the
transactions contemplated thereby, and (b) there are no actions, suits or
proceedings pending or threatened against Borrower or any of its
Subsidiaries before any court, arbitrator or Governmental Authority in
which there is a reasonable possibility of an adverse decision which could
have a Material Adverse Effect.
Notwithstanding anything to the contrary, expressly stated or implied, each
of the opinions hereinabove expressed are subject to the following further
qualifications, whether or not such opinions refer to such qualifications:
(a) Our opinions in paragraphs 5 and 6 above with respect to the
enforceability of the Loan Documents are subject to the effect of (i) applicable
bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, redemption,
moratorium, reorganization or similar laws affecting the enforcement of
creditors' rights generally, including, without limitation, (A) the United
States Bankruptcy Code of 1978, as amended, and thus comprehends, among others,
matters of turn-over, automatic stay, avoiding powers, fraudulent transfer,
preference, discharge, conversion of a non-recourse obligation
-6-
July 29, 2002
Page 7
into a recourse claim, limitations on ipso facto and anti-assignment clauses and
the coverage of pre-petition security agreements and other liens with respect to
property acquired after a petition is filed, (B) all other Federal, state and
foreign bankruptcy, insolvency, reorganization, receivership, moratorium,
arrangement and assignment for the benefit of creditors laws that affect the
rights and remedies of creditors generally, (C) state and foreign fraudulent
transfer and conveyance laws and (D) judicially developed doctrines relevant to
any of the foregoing laws, such as substantive consolidation of entities and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law), including, without limitation,
principles (A) governing the availability of specific performance, injunctive
relief or other equitable remedies, which generally place the award of such
remedies, subject to certain guidelines, in the discretion of the court to which
application for such relief is made, (B) affording equitable defenses (e.g.,
waiver, laches and estoppel) against a party seeking enforcement, (C) requiring
good faith and fair dealing in the performance and enforcement of a contract by
the party seeking its enforcement, (D) requiring reasonableness in the
performance and enforcement of an agreement by the party seeking enforcement of
the contract, (E) requiring consideration of the materiality of a breach and the
consequences of the breach to the party seeking enforcement, (F) requiring
consideration of the impracticability or impossibility of performance at the
time of attempted enforcement and (G) affording defenses based upon the
unconscionability of the enforcing party's conduct after the parties have
entered into the contract;
(b) Our opinions are also subject to the fact that certain covenants,
provisions, rights and remedies contained in the Loan Documents may be rendered
ineffective or limited by applicable laws or judicial decisions governing such
provisions, but such laws and judicial decisions do not in and of themselves, in
our opinion, make the Loan Documents inadequate for the practical realization of
the benefits intended to be provided by the Loan Documents. Notwithstanding the
foregoing, we express no opinion as to the applicability to the obligations of
the Borrower or the Guarantor Subsidiaries under the Loan Documents of Section
548 of the Federal Bankruptcy Code and/or any state or foreign laws on
fraudulent transfers or fraudulent conveyances;
(c) We express no opinion as to the effect of the compliance or
noncompliance of the Banks, the Administrative Agent, the Syndication Agent, the
Documentation Agent or the Sole Lead Arranger with any Federal, state, local or
foreign laws or regulations applicable to the Banks, the Administrative Agent,
the Syndication Agent, the Documentation Agent or the Sole Lead Arranger because
of the legal or regulatory status or the nature of the business of the Banks,
the Administrative Agent, the Syndication Agent, the Documentation Agent or the
Sole Lead Arranger;
(d) We express no opinion as to the effects of any Federal, state or local
(i) securities laws, rules or regulations, (ii) tax laws, rules or regulations,
(iii) antitrust or unfair competition laws, rules or regulations, (iv) pension
or employment benefit laws, rules or regulations, (v) construction,
environmental, subdivision, zoning, health, safety or land use laws, rules or
regulations or (vi) patent, trademark or copyright laws, rules or regulations;
(e) We express no opinion concerning the applicability to the Borrower or
the Guarantor Subsidiaries or the Loan Documents of any Federal, state and/or
local laws, rules or regulations relating to rights to set off or offset;
(f) Our opinions are also subject to the effect of generally applicable
rules of law and judicial decisions which:
-7-
(i) limit or affect the enforceability of provisions expressly or by
implication waiving the obligations of good faith, fair dealing,
diligence and reasonableness;
(ii) limit or affect the enforceability of provisions expressly or by
implication waiving (A) the benefits of statutory, regulatory or
constitutional rights, unless and to the extent the statute,
regulation or constitution explicitly allows waivers, (B) unknown
future rights or defenses, (C) right to a jury trial and (D) rights to
damages;
(iii)limit or affect the enforceability of forum selection clauses and
consent to jurisdiction clauses (both as to personal jurisdiction and
subject matter jurisdiction);
(iv) limit the availability of a remedy under certain circumstances where
another remedy has been elected;
(v) may, where less than all of a contract may be unenforceable, limit the
enforceability of the balance of such contract to circumstances in
which the unenforceable portion is not an essential part of the agreed
exchange;
(vi) limit or affect the enforceability of provisions regarding liquidated
damages, penalties, prepayment premiums, make-whole amounts, late
charges, minimum interest charges and default rates of interest to the
extent the same are determined to be a penalty or unreasonable;
(vii)limit or affect the enforceability of provisions releasing,
exculpating or exempting a party from, or requiring indemnification of
a party for, liability for its own action or inaction, to the extent
such action or inaction involves gross negligence, recklessness,
willful misconduct or unlawful conduct or to the extent such release,
exculpation, exemption or indemnification is against public policy or
prohibited by law;
(viii) limit or affect the enforceability of provisions to the effect that
failure to exercise or delay in exercising rights or remedies will not
operate as a waiver of the right or remedy;
(ix) govern and afford judicial discretion regarding the determination of
the amount of damages and entitlement to attorneys' fees or other
costs;
(x) limit or affect the enforceability of provisions that attempt to
change or waive statutes of limitation or rules of evidence or fix the
method or quantum of proof to be applied in litigation or similar
proceedings; and
(xi) limit the right of a creditor to use force or cause a breach of the
peace in enforcing its rights and by remedies.
With the consent of the Borrower and the Guarantor Subsidiaries, this
opinion is furnished by us solely to and for the benefit of the Banks, the
Administrative Agent, the Syndication Agent, the Documentation Agent and the
Sole Lead Arranger and their respective successors, assigns and participants in
connection with the transactions contemplated by the Loan Documents and may be
relied on by the Banks, the Administrative Agent, the Syndication Agent, the
Documentation Agent and the Sole Lead Arranger and their respective successors,
assigns and participants in connection therewith, but may not be relied upon for
any other purpose or by any other person or entity without our prior express
written consent. This opinion may not be published or quoted in any manner or
distributed or circulated to any person or entity (other than any Governmental
Authority or court having jurisdiction over and/or professional advisors of any
of the above-referenced parties) without obtaining our prior express written
consent. Our opinion is limited to the matters stated herein, and no opinion is
implied or may be inferred beyond the matters expressly stated herein. This
opinion is rendered as of the date hereof and we assume no, and hereby disclaim
any, responsibility to supplement this opinion with respect to matters occurring
after the date hereof. We
-8-
July 29, 2002
Page 9
hereby disclaim any responsibility to advise you of any changes in any law, rule
or regulation after the date hereof which may affect the opinions or conclusions
set forth herein, whether administrative, judicial or legislative.
Very truly yours,
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Schedule 1
----------
1. Wells Fargo Bank, National Association
2. U.S. Bank National Association
3. LaSalle Bank National Association
4. Commerce Bank, N.A.
5. National City Bank
6. The Northern Trust Company
7. Bank of Oklahoma, NA
8. Hibernia National Bank
9. SunTrust Bank, N.A.
10. UMB Bank, N.A.
11. Union Planters Bank, N.A.
-1-
EXHIBIT F
---------
ASSIGNMENT AND ASSUMPTION AGREEMENT
Reference is made to that certain Credit Agreement dated as of July 29,
2002, by and among O'Reilly Automotive, Inc., a Missouri corporation (the
"Borrower"), the financial institutions parties thereto in their capacities as
Banks thereunder, Wells Fargo Bank, National Association, as Administrative
Agent for the Banks (the "Administrative Agent"), U.S. Bank National
Association, as Syndication Agent for the Banks, LaSalle Bank National
Association, as Documentation Agent for the Banks and Wells Fargo Bank, National
Association, as Sole Lead Arranger (as the same may be amended, supplemented,
restated or otherwise modified from time to time in accordance with its terms
and in effect, the "Credit Agreement"). Capitalized terms used but not otherwise
defined herein shall have the respective meanings assigned to them in the Credit
Agreement.
NOW, THEREFORE, ____________________ (the "Transferor") and ______________
___________________ (the "Transferee") hereby agree as follows:
1. The Transferor hereby transfers and assigns to the Transferee, except
with respect to indemnities of the Borrower, if any, which have not been
satisfied and which shall have arisen prior to the Effective Date (as defined in
Section 11 hereof), that interest in and to all the Transferor's rights and
obligations under the Credit Agreement as of the date hereof which represents
the percentage interest specified in Item 2 of Schedule A to this Assignment and
Assumption Agreement ("Assigned Portion") and the Transferee hereby accepts said
assignment and, to the extent of its respective interests therein, assumes the
commitments and obligations established under the Credit Agreement with respect
to the Assigned Portion. The assignment affected hereby is without recourse
against or warranty (except as provided in Section 4 below) by the Transferor.
2. In connection with the assignment affected hereby by the Transferor to
the Transferee of the Assigned Portion with respect to the Credit Agreement:
(a) as of the Effective Date, the Transferee shall pay to the Transferor,
in immediately available funds, an amount equal to the outstanding indebtedness
owed to it by the Borrower under the Credit Agreement with respect to the
Assigned Portion;
(b) from and after the Effective Date: (i) the Transferee shall (A) be a
Bank party to the Credit Agreement for all purposes of the Credit Agreement and
the other Loan Documents, (B) be subject to the terms and conditions thereof and
(C) have all of the rights, interests, liabilities, duties and obligations of
the Transferor under the Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Obligations and the Guaranty to the extent of the Assigned
Portion; and (ii) the Transferor shall to the extent provided in this Assignment
and Assumption Agreement relinquish such rights and interest and be released
from such liabilities, duties and obligations under the Credit Agreement, the
Revolving Credit Notes, the Letter of Credit Obligations and the Guaranty as
shall have been assigned to the Transferee hereunder; and
(c) from and after the Effective Date, the Administrative Agent shall make
all payments under the Credit Agreement in respect of the Assigned Portion
(including, without limitation, all payments of principal, interest and fees, if
applicable, with respect thereto) to the Transferee. The Transferor and
Transferee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Effective Date between themselves.
3. Each of the parties to this Assignment and Assumption Agreement agrees
that at any time and from time to time upon the written request of any other
party, it will execute and deliver such further documents and perform such
further acts as such other party may reasonably request in order to effect the
purposes of this Assignment and Assumption Agreement, provided neither this
Assignment and Assumption Agreement nor any term hereof may be changed, waived,
discharged or terminated except by an instrument in writing signed by the party
(including, if applicable, any party required to evidence its consent to or
acceptance of this Assignment and Assumption Agreement) against whom enforcement
of such change, waiver, discharge or termination is sought.
-1-
July 29, 2002
Page 2
4. By executing and delivering this Assignment and Assumption Agreement,
the Transferor (a) represents and warrants that it is the legal and beneficial
owner of the interest being assigned hereby free and clear of any adverse claim;
(b) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement, any
Revolving Credit Note, any Letter of Credit Obligation or the Guaranty, or any
other instrument or document furnished pursuant thereto; (c) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any of its Subsidiaries, or the
performance or observance by the Borrower or any of its Subsidiaries of any of
its obligations under the Credit Agreement, any Revolving Credit Note, any
Letter of Credit Obligation or the Guaranty or any other instrument or document
furnished pursuant hereto.
5. By executing and delivering this Assignment and Assumption Agreement,
the Transferee: (a) confirms that it has received a copy of the Credit
Agreement, together with copies of the financial statements referred to therein
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Assumption Agreement; (b) will independently and without reliance upon the
Administrative Agent, the Letter of Credit Issuer, the Swing Line Lender, the
Transferor or any other Bank, 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 the Credit Agreement; (c) appoints and
authorizes the Administrative Agent to take such action as the Administrative
Agent, the Letter of Credit Issuer to take such action as Letter of Credit
Issuer and the Swing Line Lender to take such action as the Swing Line Lender,
on its behalf and to exercise such powers under the Credit Agreement, the
Revolving Credit Notes, the Letters of Credit and the Guaranty as are delegated
to the Administrative Agent, the Letter of Credit Issuer and the Swing Line
Lender by the terms thereof, together with such powers as are reasonably
incidental thereto; (d) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit Agreement, the
Revolving Credit Notes, the Letter of Credit Obligations and the Guaranty are
required to be performed by it as a Bank and (e) agrees to execute and deliver
to the Administrative Agent a joinder to the Intercreditor Agreement in form and
substance reasonably acceptable to the Administrative Agent.
6. Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served, telexed or sent by facsimile or United States mail or
courier service. For purposes hereof, the notice address of each party hereto
shall be as set forth on Schedule A hereto or, as to either party, such other
address as shall be designated by such party in writing.
7. Each of the Transferor and the Transferee represents and warrants to the
Borrower and the Administrative Agent that after giving effect to the assignment
of the Assigned Portion affected hereby, each of the Transferor and the
Transferee is in compliance with the provisions of Section 9.06 of the Credit
Agreement.
8. This Assignment and Assumption Agreement may be executed in any number
of counterparts (including facsimile counterparts) and by different parties
hereto in separate counterparts, each of which when so executed and delivered
shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument.
9. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE SUBSTANTIVE LAWS OF THE STATE OF MISSOURI
WITHOUT REFERENCE TO THE PROVISIONS THEREOF REGARDING CONFLICTS OF LAW.
10. No assignment effected pursuant to this Assignment and Assumption
Agreement shall constitute a novation of the obligations of the Borrower being
assigned.
-2-
July 29, 2002
Page 3
11. This Assignment and Assumption Agreement shall become effective on the
date (the "Effective Date") upon which all of the following conditions are
satisfied: (i) the execution of a counterpart hereof by each of the Transferor
and the Transferee; (ii) the execution of a counterpart hereof by the Borrower
and the Administrative Agent as evidence of its consent hereto to the extent
required under Section 9.06(c) of the Credit Agreement; (iii) the receipt by the
Administrative Agent of the processing and recordation fee referred to in
Section 9.06(c) of the Credit Agreement; (iv) in the event the Transferee is not
a United States person, the delivery by the Transferee to the Administrative
Agent of such forms, certificates or other evidence with respect to United
States federal income tax withholding matters as Transferee may be required to
deliver to the Administrative Agent pursuant to Sections 2.15 and/or 9.06(c) of
the Credit Agreement; and (v) the receipt by the Administrative Agent of
originals or facsimiles of the counterparts described above and authorization of
delivery thereof; provided, however, that for all purposes under this Assignment
and Assumption Agreement, the term "Settlement Date" shall mean the later of (a)
the date specified in Item 3 of Schedule A hereto and (b) the Effective Date.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Assumption Agreement to be executed and delivered by their respective officers
thereunto duly authorized, such execution being made as of the Effective Date in
the applicable spaces provided on Schedule A hereto.
-3-
SCHEDULE A
TO THE ASSIGNMENT AGREEMENT
---------------------------
1. Name and Date of Credit Agreement: Credit Agreement, dated as of July 29,
2002, by and among Borrower, the financial institutions parties thereto as
Banks, Wells Fargo Bank, National Association as Administrative Agent for
the Banks, U.S. Bank National Association, as Syndication Agent for the
Banks, LaSalle Bank National Association, as Documentation Agent for the
Banks and Wells Fargo Bank, National Association, as Sole Lead Arranger, as
the same may be amended, supplemented, restated or otherwise modified from
time to time.
2. Assigned Portions:
(a) Aggregate Revolving Credit
Commitments of all of the Banks $__________________
(b) Assigned Share __________________%
(c) Amount of Assigned Share $ __________________
3. Settlement Date: __________________, 20_____
4. Payment Instructions:
TRANSFEROR: TRANSFEREE:
Attn: Attn:
Ref: Ref:
5. Notice of Address:
TRANSFEROR: TRANSFEREE:
Attn: Attn:
Ref: Ref:
-1-
July 29, 2002
Page 2
6. SIGNATURES:
[NAME OF TRANSFEROR]
By ______________________
Title:
[NAME OF TRANSFEREE]
By: _____________________
Title:
Consented to in accordance
with Section 9.06(c) of the
Credit Agreement
O'REILLY AUTOMOTIVE, INC.
By: _____________________
Title:
Accepted in accordance with
Section 9.06(c) of the Credit
Agreement
WELLS FARGO BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By: _____________________
Title:
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July 29, 2002
Page 3
EXHIBIT G
---------
Compliance Certificate
----------------------
To: Wells Fargo Bank, National Association, as Administrative Agent
Date: _____________, 20___
Subject: O'Reilly Automotive, Inc.
Financial Statements
- --------------------
In accordance with our Credit Agreement dated as of July 29, 2002 (the "Credit
Agreement"), attached are the financial statements of O'Reilly Automotive, Inc.
(the "Borrower") and its Subsidiaries of and for the [Fiscal Year] [Fiscal
Quarter] ended __________, 20___ (the "Reporting Date") and the year-to-date
period then ended (the "Current Financials"). All terms used in this certificate
have the meanings given in the Credit Agreement.
The Borrower certifies that the Current Financials have been prepared in
accordance with GAAP, [subject to year-end audit adjustments and absence of
footnotes,] and fairly present the consolidated financial condition of the
Borrower and its Subsidiaries as of the date thereof and in a manner consistent
with prior periods.
Events of Default. (Check one):
- -----------------
_ Except as previously reported in writing to the Administrative Agent,
the Borrower does not have knowledge of (i) the occurrence of any
Default or Event of Default under the Credit Agreement or (ii) any
condition, act or event which with the giving of notice or the passage
of time or both would constitute a Default or Event of Default .
_ The Borrower does not have knowledge of the occurrence of a Default or
Event of Default under the Credit Agreement not previously reported in
writing to the Administrative Agent and attached hereto is a statement
of the facts with respect to thereto and the action which the Borrower
is taking or purposes to take with respect thereto.
Financial Covenants. The Borrower further hereby certifies as follows:
- -------------------
1. Maximum Consolidated Leverage Ratio. Pursuant to Section 5.05 of the
Credit Agreement, as of the Reporting Date, the ratio of the
Borrower's Consolidated Debt to Consolidated EBITDA was _____ to 1.00
which ? satisfies ? does not satisfy the requirement that such ratio
be no more than 2.5 to 1.00 on the Reporting Date.
-3-
July 29, 2002
Page 4
A. Consolidated Debt
(i) Borrowed money ________________________
(ii) Letter of Credit Obligations ________________________
(iii) Capitalized Lease Obligations ________________________
(iv) All other Debt (attach schedule) ________________________
(v) Consolidated Debt = sum of (i) ________________________
through (iv)
B. Consolidated EBITDA (for preceding
four Fiscal Quarters): ________________________
i) Consolidated Net Income ________________________
(ii) Consolidated Interest Expense ________________________
(iii) Provisions for taxes ________________________
(iv) Depreciation ________________________
(v) Amortization ________________________
(vi) Extraordinary losses ________________________
(vii) xtraordinary gains ________________________
(viii) Consolidated EBITDA = sum of (i)
through (vi) less (vii) ________________________
C. Consolidated Leverage Ratio = A
(v) divided by B (viii) ________________________
2. Minium Consolidated Fixed Charge Coverage Ratio. Pursuant to Section 5.06
of the Credit Agreement, as of the Reporting Date, the ratio of the
Borrower's Consolidated EBITDAR to Consolidated Fixed Charges was _____ to
1.00 which ? satisfies ? does not satisfy the requirement that such ratio
be no less than 2.75 to 1.00 on the Reporting Date.
-4-
July 29, 2002
Page 5
A. Consolidated EBITDAR (for preceding
four Fiscal Quarters)
(i) Consolidated EBITDA per item 1(B)
(viii) above ________________________
(ii) Consolidated Rent Expense ________________________
(iii) Consolidated EBITDAR = sum
of (i) and (ii) _______________________
B. Consolidated Fixed Charges
(i) Consolidated Interest ________________________
(ii) Consolidated Rent Expense ________________________
(iii) Consolidated Fixed Charges = sum
of (i) and (ii) ________________________
C. Consolidated Fixed Charge Coverage
Ratio = A(iii) divided by B(iii) ________________________
3. Minimum Consolidated Tangible Net Worth. Pursuant to Section 5.07 of the
Credit Agreement, as of the Reporting Date, the Borrower's Consolidated
Tangible Net Worth was $____________ which ? satisfies ? does not satisfy
the requirement that such amount be not less than $_________________.
A. Actual Net Worth ________________________
B. Required Net Worth: $500,186,351
plus (i) an aggregate amount equal
to 50% of Consolidated Net Income
(with no deductions for losses) for
each Fiscal Quarter beginning with
the Fiscal Quarter ended September
30, 2002, plus (ii)100% of the net
proceeds from any issuance of equity ________________________
4. Maximum Consolidated Synthetic Lease Obligations. Pursuant to Section 5.08
of the Credit Agreement, as of the Reporting Date, the Borrower's
Consolidated Synthetic Lease Obligations were $___________________ which
satisfies does not satisfy the requirements that such amount be not greater
than $60,000,000.
Attached hereto are all relevant facts in reasonable detail to evidence, and the
computations of the financial covenants referred to above. These computations
were made in accordance with GAAP.
O'REILLY AUTOMOTIVE, INC.
By________________________
Name:_____________________
Title:____________________
-5-