EXHIBIT 10.5
TWELFTH AMENDMENT TO AMENDED AND
RESTATED CREDIT AGREEMENT
TWELFTH AMENDMENT, dated as of February 11, 2004, to the
Amended and Restated Credit Agreement referred to below (this "Amendment") among
DICK'S SPORTING GOODS, INC., a Delaware corporation ("Borrower"), the lenders
party hereto ("Lenders"), and GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware
corporation, as agent for the Lenders (in such capacity, "Agent").
W I T N E S S E T H
WHEREAS, Borrower, Lenders and Agent are parties to that
certain Amended and Restated Credit Agreement, dated as of July 26, 2000 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"); and
WHEREAS, Borrower and Required Lenders have agreed to amend
the Credit Agreement in the manner, and on the terms and conditions, provided
for herein;
NOW THEREFORE, in consideration of the premises and for other
good and valuable consideration, the receipt, adequacy and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
1. Definitions. Capitalized terms not otherwise defined
herein (including in the recitals hereto) shall have the meanings ascribed to
them in the Credit Agreement.
2. Amendment to Section 6.1 of the Credit Agreement.
Section 6.1 of the Credit Agreement is hereby amended and restated as of the
Amendment Effective Date (as hereinafter defined) to read as follows:
"6.1 Mergers, Subsidiaries, Etc. No Loan Party shall, directly
or indirectly, by operation of law or otherwise, merge,
consolidate or otherwise combine with any Person or acquire or
hold all or substantially all of the assets or capital stock
of any Person or form, acquire or hold any Subsidiary, except
that Borrower may hold any portion of the stock of DSG
Holdings and/or all of the Stock of DAMC and so long as no
Default has occurred and is continuing DAMC may merge with and
into Borrower so long as Borrower is the surviving entity of
such merger."
3. Amendment to Section 6.2 of the Credit Agreement.
Section 6.2 of the Credit Agreement is hereby amended as of the Amendment
Effective Date by (a) deleting the "and" where it appears prior to clause (i)
thereof, and (b) inserting the following new clauses (n) and (o) at the end
thereof to read as follows:
"(n) Investments in Permitted Investments, provided that (i)
the aggregate outstanding principal amount of such Permitted
Investments shall not exceed $20,000,000 at any time, unless
the Borrower shall have Excess Availability at such time of at
least $50,000,000, and (ii) such Permitted
Investments are subject to a first priority perfected Lien of
Agent for the benefit of Lenders; and (o) Investments in the
Convertible Note Hedge."
4. Amendment to Section 6.3 of the Credit Agreement.
Section 6.3 of the Credit Agreement is hereby amended as of the Amendment
Effective Date by (a) deleting the "and" where it appears prior to clause (k)
thereof, and (b) inserting the following new clause (l) at the end thereof to
read as follows:
"and (l) Indebtedness evidenced by the Convertible Notes in an
aggregate principal amount at maturity not in excess of
$290,000,000, and the Convertible Note Warrant Transaction,
provided that the terms of the Convertible Note Documents are
substantially as described in the draft Offering Memorandum
for Senior Convertible Notes due 2024 dated February [__],
2004 and attached as Annex G hereto.
5. Amendment to the first paragraph of Section 6.5 of
the Credit Agreement. Clause (b) of the first paragraph of Section 6.5 of the
Credit Agreement is hereby amended and restated as of the Amendment Effective
Date to read as follows:
"(b) make any change in its capital structure, including the
issuance or sale of any shares of Stock, warrants or other
securities convertible into Stock or any revision of the terms
of its outstanding Stock; provided that Borrower may (i) issue
or sell shares of its Stock (which shall include any Permitted
Stock Issuance or any Stock issued in accordance with the
terms of the Preferred Stock Subordinated Notes, but shall not
include any other issuance or sale of any Stock of any class
which is preferred as to dividends or as to the distribution
of assets upon the voluntary or involuntary dissolution,
liquidation or winding up of any Loan Party) so long as no
Change of Control occurs after giving effect thereto, or make
any revision of the terms of its outstanding Stock or amend or
modify any partners, shareholders, voting or similar agreement
to which it is a party or enter into any such agreement, (ii)
enter into the DSG Holdings Limited Liability Company
Agreement, (iii) form a wholly-owned Subsidiary ("Newco") for
the sole purpose of acquiring any Stock held by Borrower in
DSG Holdings, (iv) repurchase the common stock of Borrower to
the extent contemplated by Section 1.3(c), (v) enter into that
certain Second Amended and Restated Stockholders' Agreement in
substantially the form of Exhibit H attached hereto, (vi)
enter into that certain Second Amended and Restated
Registration Rights Agreement in substantially the form of
Exhibit I attached hereto, (vii) relinquish the October 2000
Warrants as described in the Information Statement, (viii)
terminate the purchase agreements under which the Preferred
Stock was issued, including rights to purchase Stock as
provided in Section 4.21 of the Convertible Note Indenture,
(ix) enter into the transactions contemplated by the IPO
Transactions, (x) repurchase the common stock of Borrower to
the extent contemplated by Section 1.3(g), (xi) issue warrants
pursuant to the Convertible Note Warrant Transaction, (xii)
issue the Convertible Notes, (xiii) issue Stock upon
conversion of the Convertible Notes,
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(xiv) issue Stock upon exercise of the warrants issued
pursuant to the Convertible Note Warrant Transaction, (xv)
enter into the Convertible Note Hedge and receive or acquire
Stock thereunder, and (xvi) enter into the Registration Rights
Agreement;"
6. Amendment to Section 6.11 of the Credit Agreement.
Section 6.11 of the Credit Agreement is hereby amended as of the Amendment
Effective Date by (a) deleting the "and" where it appears prior to clause (l)
thereof, and (b) inserting the following new clause (m) at the end thereof to
read as follows:
"and (m) Borrower may make (i) regularly scheduled payments of
interest to holders of the Convertible Notes, (ii) payments in
cash or Stock upon conversion of any of the Convertible Notes
pursuant to Section 4.1 of the Convertible Note Indenture and
paragraph 9 of the Convertible Notes; (iii) payments in cash
on or after February 11, 2009 upon redemption of the
Convertible Notes pursuant to Section 3.8 of the Convertible
Note Indenture and paragraph 7 of the Convertible Notes, (iv)
payments in cash on or after February 11, 2009 upon redemption
of the Convertible Notes by the Borrower pursuant to Section
3.1 of the Convertible Note Indenture and paragraph 6 of the
Convertible Notes, provided that no Default or Event of
Default has occurred and is continuing both before and after
giving effect to any such payment, (v) payment in cash of the
aggregate principal amount of the Convertible Notes upon
maturity or upon acceleration, (vi) payment of liquidated
damages to the holders of Convertible Notes pursuant to
Section 3 of the Registration Rights Agreement, (vii) payments
in cash or Stock pursuant to the Convertible Notes Warrant
Transaction, (viii) any payments required for registration
expenses pursuant to Section 5 of the Registration Rights
Agreement, and (ix) payment of the Change in Control Purchase
Price (as defined in Section 3.9(c) of the Convertible Note
Indenture) of any Convertible Notes upon a Change in Control
(as defined in Section 3.9(a) of the Convertible Note
Indenture) pursuant to Section 3.9 of the Convertible Note
Indenture and paragraph 7 of the Convertible Notes."
7. Amendment to Section 6.21 of the Credit Agreement.
Section 6.21 of the Credit Agreement is hereby amended and restated as of the
Amendment Effective Date to read as follows:
"6.21 Limitations on Modifications of Subordinated Note,
Preferred Stock Subordinated Notes and Convertible Notes.
Borrower shall not amend, modify or change, or consent or
agree to any amendment, modification or change to, any of the
terms or provisions of the Subordinated Note, any Preferred
Stock Subordinated Note, any Convertible Note Document, or, in
each case, any documents relating thereto (other than any such
amendment, modification or change which would only extend the
maturity or reduce the amount of any payment of
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principal thereof or premium thereon or which would reduce the
rate or extend the date for payment of interest thereon).
Notwithstanding the foregoing, Borrower may amend, modify or
change, or consent or agree to any amendment, modification or
change to, any of the terms or provisions of any Convertible
Note Document, or any document relating thereto, unless such
amendment, modification or change would have an adverse effect
on the Lenders. The Lenders acknowledge that any amendment,
modification or change required by the Trust Indenture Act of
1939, or by the United States Securities and Exchange
Commission, shall not be deemed to have an adverse effect on
the Lenders."
8. Amendment to Section 6.16 of the Credit Agreement.
Section 6.16 of the Credit Agreement is hereby amended and restated as of the
Amendment Effective Date to read as follows:
"6.16 No Speculative Investments. No Loan Party shall engage
in any speculative investment or any investment involving
commodity options or futures contracts. For purposes of this
Section 6.16, neither the Convertible Note Hedge nor the
Convertible Note Warrant Transaction shall be deemed to be a
speculative investment."
9. Amendment to Section 8.1(m) of the Credit Agreement.
Section 8.1(m) of the Credit Agreement is hereby amended and restated as of the
Amendment Effective Date to read as follows:
"(m) There shall occur any default or event of default under
the Subordinated Note, any Preferred Stock Subordinated Note
or any Convertible Note Document. "
10. Amendment to Annex A. Annex A to the Credit Agreement
is hereby amended as of the Amendment Effective Date by inserting the following
new definitions on order therein to read as follows:
"'Convertible Note Documents' shall mean the Convertible Note
Indenture, the Convertible Notes, the Convertible Note Hedge,
the Convertible Note Warrants, any other agreement or
instrument now or hereafter executed pursuant thereto or in
connection therewith, in each case as such agreements and
instruments may be amended, supplemented, waived or otherwise
modified from time to time, in each case, subject to the
limitations in Section 6.21 hereof.
'Convertible Note Hedge' shall mean that certain transaction
entered into pursuant to that certain Confirmation of OTC
Convertible Note Hedge dated as of February [__], 2004, by and
between Borrower and Merrill Lynch International, and that
certain Guarantee of Merrill Lynch & Co., Inc. dated as of
February [__], 2004 in favor of Borrower, each in
substantially the same form as the draft dated February [__],
2004
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attached as Annex H hereto, as each such agreement may be
amended, supplemented or otherwise modified from time to time
in accordance with the terms hereof and thereof.
'Convertible Note Indenture' shall mean that certain Indenture
by and between the Borrower and Wachovia Bank, N.A., as
trustee, in substantially the same form as the draft dated
February [__], 2004 attached as Annex I hereto, as such
agreement may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof and
thereof.
'Convertible Note Warrant Transaction' shall mean that certain
transaction entered into pursuant to the Confirmation of OTC
Warrant Transaction dated as of February 12, 2004, by and
between Borrower and Merrill Lynch International, and that
certain Guarantee of Merrill Lynch & Co., Inc. dated as of
February 12, 2004 in favor of Borrower, as each such agreement
may be amended, supplemented or otherwise modified from time
to time in accordance with the terms hereof and thereof.
'Convertible Notes' shall mean the Senior Convertible Notes
due 2024 issued by the Borrower pursuant to the Convertible
Note Indenture, in substantially the same form as Exhibit A to
the form of Convertible Note Indenture attached as Annex I
hereto, as such Convertible Notes may be amended, supplemented
or otherwise modified from time to time in accordance with the
terms hereof and thereof.
'Excess Availability' shall mean, at any time, (a) Borrowing
Availability, minus (b) the aggregate Revolving Credit Loan
then outstanding, minus (c) the aggregate amount of all then
outstanding and unpaid trade payables and other obligations of
Borrower which are outstanding more than sixty (60) days past
due as of such time, minus (d) without duplication, the amount
of checks issued by Borrower to pay trade payables and other
obligations which are more than sixty (60) days past due as of
such time, but not yet sent.
'Permitted Investments' shall mean, at any time, (a) any
evidence of Indebtedness with a maturity date of three years
or less from the date of acquisition issued or directly and
fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof; provided, that, the
full faith and credit of the United States of America is
pledged in support thereof; (b) obligations of state and local
governments or agencies thereof (including variable rate
demand notes and auction rate securities) with a maturity date
or reset period of one year or less from the date of
acquisition; (c) commercial paper with a maturity of one year
or less from the date of acquisition issued by a corporation
(except an Affiliate of Borrower) organized under the laws of
any State of the United States of America or the District of
Columbia and rated at least A-1
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by Standard & Poor's Ratings Service, a division of The
McGraw-Hill Companies, Inc. ("S&P") or at least P-1 by Moody's
Investors Service, Inc. ("Moody's"); (d) corporate notes
(including variable rate demand notes, auction rate securities
and Eurodollar notes) issued by a corporation (except an
Affiliate of Borrower) organized under the laws of any State
of the United States of America or the District of Columbia
and rated at least A2 by S&P or at least A by Moody's with a
maturity date of two years or less from the date of
acquisition; (e) repurchase obligations with a term of not
more than thirty (30) days for underlying securities of the
types described in clause (a) above entered into with any
financial institution having combined capital and surplus and
undivided profits of not less than $500,000,000; (f)
repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or
unconditionally guaranteed by the United States of America or
issued by any governmental agency thereof and backed by the
full faith and credit of the United States of America, in each
case maturing within one year or less from the date of
acquisition; provided, that, the terms of such agreements
comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers
and Others, as adopted by the Comptroller of the Currency on
October 31, 1985; and (g) investments in money market funds
and mutual funds which invest substantially all of their
assets in securities of the types described in clauses (a)
through (f) above.
'Registration Rights Agreement' means that certain
Registration Rights Agreement entered into among the Borrower,
Merrill, Lynch, Pierce, Fenner & Smith Incorporated and any
other initial purchasers of the Convertible Notes, as amended,
supplemented or otherwise modified in accordance with the
terms hereof and thereof."
11. Amendment to Annex A. Annex A to the Credit Agreement
is hereby amended as of the Amendment Effective Date by amending and restating
each of the following definitions in its entirety to read as follows:
"'Change of Control' shall mean (a) the failure of the
Permitted Holders to directly own Stock of Borrower
representing 51% or more of the voting capital stock of
Borrower or to Control Borrower; or (b) the Permitted Holders
shall cease to have the power to designate or elect a majority
of Borrower's board of directors or a majority of Borrower's
board of directors at any time in office are no longer
designated or elected by the Permitted Holders, or (c) a
Change in Control, as defined in the Convertible Note
Indenture.
'Restricted Payment' shall mean, with respect to any Person,
either directly or indirectly, (a) the declaration or payment
of any dividend or the incurrence of any liability to make any
other payment or distribution of cash or other property or
assets in respect of such Person's Stock, (b)
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any payment on account of the purchase, redemption, defeasance
or other retirement, or to obtain the surrender of, such
Person's Stock or any other payment or distribution made in
respect thereof, (c) any payment, loan, contribution, or other
transfer of funds or other property to any Stockholder or
Affiliate of such Person other than relating to salaries,
bonuses and other compensation to such Person's officers,
directors and employees in the ordinary course of business
consistent with past practice, (d) any payment, purchase,
redemption, retirement, or other acquisition for value or
setting apart of any money for a sinking, or other analogous
fund for the purchase, redemption, retirement or other
acquisition of, or to obtain the surrender of, or any payment
(scheduled, voluntary or other) of principal of or interest
on, or any other amount owing in respect of, any Subordinated
Note or any other Subordinated Debt, or any Convertible Note
or (e) any payment of a claim for the recision of the purchase
or sale of, or for material damages arising from the purchase
or sale of any Stock of such Person, or of a claim for
indemnification or contribution arising out of or relating to
any such claim for damages or recision."
12. Convertible Note Documents. Borrower shall deliver to
Agent true and correct executed copies of the Convertible Note Documents
promptly upon issuance of the Convertible Notes.
13. Schedule 3.9. On or before 25 days following the date
on which Borrower issues the Convertible Notes, Borrower will deliver to Agent
an updated Schedule 3.9 to the Credit Agreement.
14. Representations and Warranties. To induce Required
Lenders and Agent to enter into this Amendment, Borrower hereby represents and
warrants that:
(a) Each of the execution, delivery and
performance by Borrower and each Guarantor of this Amendment and the performance
of the Credit Agreement, as amended hereby (the "Amended Credit Agreement") are
(i) within Borrower's and each Guarantor's corporate power and have been duly
authorized by all necessary corporate and shareholder action; (ii) do not
contravene any provision of any Loan Party's charter or bylaws or equivalent
organizational or charter or other constituent documents; (iii) do not violate
any law or regulation, or any order or decree of any court or Governmental
Authority; (iv) do not conflict with or result in the breach or termination of,
constitute a default under or accelerate or permit the acceleration of any
performance required by, any indenture, mortgage, deed of trust, lease,
agreement or other instrument to which any Loan Party is a party or by which any
Loan Party or any of its property is bound; (v) do not result in the creation or
imposition of any Lien upon any of the property of any Loan Party other than
those in favor of Agent, on behalf of itself and the Lenders, pursuant to the
Loan Documents; and (vi) do not require the consent or approval of any
Governmental Authority or any other Person.
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(b) This Amendment has been duly executed and
delivered by or on behalf of Borrower and each Guarantor.
(c) Each of this Amendment and the Amended
Credit Agreement constitutes a legal, valid and binding obligation of Borrower
and each Guarantor enforceable against Borrower in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
and by general equitable principles (whether enforcement is sought by
proceedings in equity or at law).
(d) No Default or Event of Default has occurred
and is continuing both before and after giving effect to this Amendment.
(e) No action, claim or proceeding is now
pending or, to the knowledge of any Loan Party signatory hereto, threatened
against such Loan Party, at law, in equity or otherwise, before any court,
board, commission, agency or instrumentality of any federal, state, or local
government or of any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators, which challenges such Loan Party's right, power, or
competence to enter into this Amendment or, to the extent applicable, perform
any of its obligations under this Amendment, the Amended Credit Agreement or any
other Loan Document, or the validity or enforceability of this Amendment, the
Amended Credit Agreement or any other Loan Document or any action taken under
this Amendment, the Amended Credit Agreement or any other Loan Document or which
if determined adversely could have or result in a Material Adverse Effect. To
the knowledge of each Loan Party, there does not exist a state of facts which is
reasonably likely to give rise to such proceedings.
(f) All representations and warranties of the
Loan Parties contained in the Credit Agreement and the other Loan Documents are
true and correct as of the date hereof with the same effect as though such
representations and warranties had been made on and as of the date hereof,
except to the extent that any such representation or warranty expressly relates
to an earlier date.
15. Remedies. This Amendment shall constitute a Loan
Document. The breach by any Loan Party of any representation, warranty, covenant
or agreement in this Amendment shall constitute an immediate Event of Default
hereunder and under the other Loan Documents.
16. No Other Amendments/Waivers. Except as expressly
amended herein, the Credit Agreement and the other Loan Documents shall be
unmodified and shall continue to be in full force and effect in accordance with
their terms. In addition, this Amendment shall not be deemed a waiver of any
term or condition of any Loan Document by the Agent or the Lenders with respect
to any right or remedy which the Agent or the Lenders may now or in the future
have under the Loan Documents, at law or in equity or otherwise or be deemed to
prejudice any rights or remedies which the Agent or the Lenders may now have or
may have in the future under or in connection with any Loan Document or under or
in connection with any Default or Event of Default which
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may now exist or which may occur after the date hereof. The Credit Agreement and
all other Loan Documents are hereby in all respects ratified and confirmed.
17. Outstanding Indebtedness; Waiver of Claims. Borrower
hereby acknowledges and agrees that as of February 11, 2004 the aggregate
outstanding principal amount of the Revolving Credit Loan is $0 and that such
principal amount is payable pursuant to the Credit Agreement without offset,
withholding, counterclaim or deduction of any kind. Borrower hereby waives,
releases, remises and forever discharges Agent, Lenders and each other
Indemnified Person from any and all Claims of any kind or character, known or
unknown, which Borrower ever had, now has or might hereafter have against Agent
or any Indemnified Person which relates, directly or indirectly, to any acts or
omissions of Agent or such Lender or any other Indemnified Person on or prior to
the Amendment Effective Date.
18. Expenses. Borrower hereby reconfirms its obligations
pursuant to Section 11.2 of the Credit Agreement to pay and reimburse Agent for
all reasonable out-of-pocket expenses (including, without limitation, reasonable
fees of counsel) incurred in connection with the negotiation, preparation,
execution and delivery of this Amendment and all other documents and instruments
delivered in connection herewith.
19. Effectiveness. This Amendment shall become effective
as of February 11, 2004 (the "Amendment Effective Date") only upon satisfaction
in full in the judgment of the Agent of each of the following conditions on or
prior to February 11, 2004:
(a) Amendment. Agent shall have received eight (8)
original copies of this Amendment duly executed and delivered by Agent, Lenders
and Borrower and acknowledged by ASL.
(b) Payment of Expenses. Borrower shall have paid to
Agent all costs and expenses owing in connection with this Amendment and the
other Loan Documents and due to Agent and Lenders (including, without
limitation, reasonable legal fees and expenses).
(c) Representations and Warranties. All representations
and warranties contained in this Amendment shall be true and correct on and as
of the Amendment Effective Date.
20. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY,
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
21. Counterparts. This Amendment may be executed by the
parties hereto on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
(REMAINDER OF PAGE INTENTIONALLY LEFT BLANK)
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IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered as of the day and year first above
written.
BORROWER:
DICK'S SPORTING GOODS, INC.
By: /s/ Jeffrey Hennion
-------------------------------------
Name: Jeffrey Hennion
Title: Treasurer
AGENT:
GENERAL ELECTRIC CAPITAL CORPORATION,
as Agent
By: /s/ Charles Chiodo
-------------------------------------
Name: Charles Chiodo
Its: Duly Authorized Signatory
LENDERS:
GENERAL ELECTRIC CAPITAL CORPORATION
By: /s/ Charles Chiodo
-------------------------------------
Name: Charles Chiodo
Its: Duly Authorized Signatory
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PNC BUSINESS CREDIT
By: /s/ Stephen W. Boyd
-------------------------------------
Name: Stephen W. Boyd
Title: Vice President
FLEET RETAIL FINANCE INC.
By: /s/ James R. Dore
-------------------------------------
Name: James R. Dore
Title: Managing Director
NATIONAL CITY BANK OF PENNSYLVANIA
By: /s/ Richard M. Beaty II
-------------------------------------
Name: Richard M. Beaty II
Title: Assistant Vice President
WACHOVIA BANK, NATIONAL ASSOCIATION
By: /s/ Anthony D. Braxton
-------------------------------------
Name: Anthony D. Braxton
Title: Director
CITIZEN'S BANK OF PENNSYLVANIA
By: /s/ Don Cmar
-------------------------------------
Name: Don Cmar
Title: Vice President
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The undersigned Guarantor hereby (i) acknowledges to each of the amendments to
the Credit Agreement effected by this Amendment and (ii) confirms and agrees
that its obligations under its Guaranty shall continue without any diminution
thereof and shall remain in full force and effect on and after the effectiveness
of this Amendment.
ACKNOWLEDGED, CONSENTED and
AGREED to as of the date first written
above.
AMERICAN SPORTS LICENSING, INC.
By: /s/ Jeffrey R. Hennion
-------------------------------------
Name: Jeffrey R. Hennion
Title: Treasurer
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ANNEX G
DRAFT OFFERING MEMORANDUM
13
ANNEX H
FORM OF CONVERTIBLE NOTE HEDGE
14
ANNEX I
FORM OF CONVERTIBLE NOTE INDENTURE
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