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Exhibit 4.01.1
EXECUTION COPY
AMENDMENT XX. 0
XXXXXXXXX XX. 0, dated as of February 17, 2000 (this "Amendment"), to the
Third Amended and Restated Credit Agreement, dated as of September 30, 1999 (as
amended, supplemented or otherwise modified from time to time, the "Credit
Agreement"), among CSK AUTO, INC. (the "Company"), the several lenders from time
to time parties to the Credit Agreement (the "Lenders"), THE CHASE MANHATTAN
BANK, a New York banking corporation, as administrative agent for the Lenders
(in such capacity, the "Administrative Agent"), DLJ CAPITAL FUNDING, INC., a
Delaware corporation, as syndication agent for the Lenders (in such capacity,
the "Syndication Agent") and XXXXXX COMMERCIAL PAPER INC., as Delaware
corporation, as documentation agent for the Lenders (in such capacity, the
"Documentation Agent").
W I T N E S S E T H:
WHEREAS, the Company wishes to enter into a joint venture with Advance
Stores Company Incorporated ("Advance Stores") and certain financial investors,
to make capital and other asset contributions (the "PartsAmerica Investment") to
XxxxxXxxxxxx.xxx, Inc. ("PartsAmerica"), and to acquire and subscribe to a
portion of the outstanding Capital Stock of PartsAmerica pursuant to an asset
contribution agreement and a stock purchase agreement and any related
agreements, collectively having terms substantially consistent with the terms
described in the Summary Terms of Proposed Formation of and Investment in
PartsAmerica and the Summary Term Sheet of PartsAmerica Services Agreement,
attached hereto as Annex 1 ("PartsAmerica Term Sheet") or otherwise reasonably
satisfactory to the Administrative Agent;
WHEREAS, in connection with the PartsAmerica Investment, the Company shall
provide certain services to PartsAmerica in accordance with a services agreement
among PartsAmerica, Advance Stores and the Company (together with any related
agreements, collectively, the "PartsAmerica Services Agreement"), having terms
substantially consistent with the terms described in the PartsAmerica Term Sheet
or otherwise reasonably satisfactory to the Administrative Agent;
WHEREAS, the Company has requested that the Lenders consent to amend
certain provisions in the Credit Agreement to allow for the PartsAmerica
Investment and the provision of services in connection therewith; and
WHEREAS, the Lenders are willing to consent to the requested amendment on
any subject to the terms and conditions contained herein.
NOW THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
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I. Definitions. Unless otherwise defined herein, terms defined in the
Credit Agreement are used herein as therein defined.
II. Amendments to Credit Agreement.
A. Amendments to Section 1 (Definitions).
1. Subsection 1.1 of the Credit Agreement is hereby amended by adding
in their proper alphabetical order the following definitions:
"Advance Stores": Advance Stores Company Incorporated, a Virginia
corporation.
"Company Pledge Agreement Amendment": the Amendment and Supplement to
the Company Pledge Agreement, dated as of February 17, 2000, executed by
the Company and the Administrative Agent, covering the PartsAmerica
Investment, as the same may be amended, modified or supplemented from time
to time.
"PartsAmerica": XxxxxXxxxxxx.xxx, Inc., a Delaware corporation.
"PartsAmerica Investment": the capital and other asset contributions
by the Company to, and the acquisition by the Company of a portion of the
outstanding Capital Stock of, PartsAmerica pursuant to an asset
contribution agreement and a stock purchase agreement, having terms
substantially consistent with the terms described in the PartsAmerica Term
Sheet or otherwise reasonably satisfactory to the Administrative Agent.
"PartsAmerica Services Agreement": the services agreement among
PartsAmerica, Advance Stores and the Company and any related agreements,
collectively having terms substantially consistent with the terms described
in the PartsAmerica Term Sheet or otherwise reasonably satisfactory to the
Administrative Agent.
"PartsAmerica Term Sheet": the Summary Terms of Proposed Formation of
and Investment in PartsAmerica and the Summary Term Sheet of PartsAmerica
Services Agreement, attached as Annex 1 to the Amendment No. 1, dated as of
February , 2000, to this Agreement.
2. Subsection 1.1 of the Credit Agreement is hereby amended by
deleting in its entirety the definitions of "Company Pledge Agreement" and
"Consolidated Net Income" and substituting in lieu thereof, respectively, the
following:
"Company Pledge Agreement": the Company Pledge Agreement, dated as of
June 22, 1999 made by the Company in favor of the Administrative Agent for
the ratable benefit of the Lenders, a copy of which is attached hereto as
Exhibit G-2, as amended,
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modified or supplemented by the Company Pledge Agreement Amendment, and as
the same may be further amended, modified or supplemented from time to
time.
"Consolidated Net Income": for any period, net income of the Company
and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP; provided that: (i) the net income (but not loss) of any Person that
is not a Subsidiary or that is accounted for by the equity method of
accounting shall be included only to the extent of the amount of dividends
or distributions paid in cash to the Company or a wholly-owned Subsidiary,
provided, further, that the non-cash charges associated with losses
attributable to the PartsAmerica Investment shall be excluded, (ii) the net
income of any Person acquired in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded and (iii)
net income of any Subsidiary shall be excluded to the extent that the
declaration or payment of dividends or similar distributions by that
Subsidiary of that net income is prohibited or not permitted at the date of
determination.
B. Amendments to Section 7 (Affirmative Covenants). Subsection 7.9(b)
of the Credit Agreement is hereby amended by deleting said subsection in its
entirety and by substituting in lieu thereof the following:
"As soon as practicable, deliver to the Administrative Agent (i) stock
certificates representing 100% of all issued and outstanding shares of
Capital Stock of (A) all Subsidiaries of the Company and (B) all other
Persons of which the Capital Stock is issued, granted to, owned or held by
the Company including, without limitation, the Capital Stock of
PartsAmerica (unless the investment in such Person with respect to which
Capital Stock is issued, granted to, owned or held by the Company has an
initial value of less than $2,500,000 and the creation of a security
interest by the Company with respect thereto is prohibited), and undated
stock powers for each such certificate, executed in blank and delivered by
a duly authorized officer of the Company, and (ii) executed supplements to
the Subsidiary Guarantee and the Subsidiary Security Agreement and executed
Subsidiary Pledge Agreement and/or supplements thereto, as applicable,
each in form and substance satisfactory to the Administrative Agent,
whereby any such Subsidiaries, of which the stock certificates, stock
powers, relevant Security Documents and/or supplements to such Security
Documents have not been previously delivered to the Administrative Agent,
become party to such Subsidiary Guarantee, Subsidiary Security Agreement
and Subsidiary Pledge Agreement."
C. Amendments to Section 8 (Negative Covenants).
1. Subsection 8.5 of the Credit Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (e) of said subsection, (ii)
deleting the word "and" at the end of clause (f) of said subsection, (iii)
deleting the period at the end of clause (g) of said subsection and
substituting in lieu thereof a semi-colon and (iv) adding the following
phrase to the end of said subsection immediately after the semi-colon at
the end of clause (g):
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"(h) for the conveyance and transfer to PartsAmerica of such capital or
other assets of the Company or any of its Subsidiary (as set forth in
Schedule A to the PartsAmerica Term Sheet) as consideration for the
acquisition of, and subscription to, such Capital Stock of PartsAmerica (as
set forth in the PartsAmerica Term Sheet); and (i) for conveyances and
transfers to the joint ventures specifically permitted under subsection
8.6(k)".
2. Subsection 8.6 of the Credit Agreement is hereby amended by (i)
deleting the word "and" at the end of clause (h) of said subsection, (ii)
deleting the period at the end of clause (i) of said subsection and
substituting in lieu thereof a semi-colon and (iii) adding the following
phrase to the end of said subsection immediately after the semi-colon at
the end of clause (i):
"(j) the Company may make such capital and other asset contributions (as
set forth in Schedule A to the PartsAmerica Term Sheet) to, and subscribe
to and purchase such Capital Stock (as set forth in the PartsAmerica Term
Sheet) of, PartsAmerica; and (k) the Company or any of its Subsidiaries may
make investments in, or loans or investments to, joint ventures or other
Persons engaged primarily in one or more businesses in which the Company
and its Subsidiaries are engaged or directly related thereto in an
aggregate amount not to exceed $7,500,000 plus the sum of any cash amounts
dividended or distributed to the Company or any Subsidiary of the Company
by such joint venture or other Person".
3. Subsection 8.12 of the Credit Agreement is hereby amended by (i)
deleting the word "and" immediately before clause (z) after the proviso of
said subsection and inserting in lieu thereof a comma and (ii) adding the
following phrase to the end of said subsection immediately before the
period:
"and (xx) the provision of services and the performance of obligations
contemplated to be provided and performed by the Company under the
PartsAmerica Services Agreement".
The PartsAmerica Investment shall not affect the exceptions otherwise provided
under subsection 8.6.
III. Amendments to the Company Pledge Agreement. Each of the Lenders
parties hereto hereby requests, and consents to, the execution and delivery by
the Administrative Agent of (a) the Company Pledge Agreement Amendment and (b)
any instruments or documents reasonably requested by the Company releasing
security interests in favor of the Administrative Agent on assets included
within the PartsAmerica Investment.
IV. Amendments to the Security Agreements. Each of the Lenders parties
hereto hereby requests, and consents to, the execution and delivery by the
Administrative Agent of amendments to the Security Agreements to exclude from
the granting clauses thereof any
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investment in any Person other than a Subsidiary having an initial value of less
than $2,500,000 if the creation of a security interest with respect thereto
would be prohibited, as otherwise permitted in Subsection 7.9(b) of the Credit
Agreement.
V. Conditions Precedent. This Amendment shall become effective as of the
date when each of the conditions precedent set forth below shall have been
satisfied or waived (the date such conditions are fulfilled, the "Amendment
Effective Date"):
A. Amendment Documents. The Administrative Agent shall have received
each of the following (together with this Amendment, the "Amendment Documents"):
1. This Amendment, executed and delivered by a duly authorized
officer of the Company, the Administrative Agent and the Required Lenders; and
2. The Company Pledge Agreement Amendment, executed and delivered by
a duly authorized officer of the Company and the Administrative Agent, together
with an Acknowledgement and Consent, executed and delivered by a duly authorized
officer of PartsAmerica.
B. Other Documents.
1. The Company shall have executed and delivered such documents
(including, without limitation, Uniform Commercial Code financing statements
(the "Financing Statements") and stock powers) and taken such other actions
(including, without limitation, the filing of such Financing Statements and the
delivery of stock certificates) as may have been reasonably requested by or on
behalf of the Administrative Agent, and in the reasonable form or manner as may
have been so requested, to perfect the security interests and liens created by
the Amendment Documents to which the Company is a party or by the Credit
Documents as amended by such Amendment Documents, in each case with the priority
contemplated by such Amendment Documents or the Credit Documents as so amended.
2. The Administrative Agent shall have received, to the extent that
it has not theretofore received, a certificate of the Secretary or Assistant
Secretary of the Company as to the incumbency and signature of each of the
officers signing the Amendment Documents to which the Company is a party, and
any other instrument or document delivered by the Company in connection
herewith, together with evidence of the incumbency of such Secretary or
Assistant Secretary.
C. No Default or Event of Default. On and as of the Amendment
Effective Date and after giving effect to this Amendment and the transactions
contemplated hereby, no Default or Event of Default shall have occurred and be
continuing.
VI. General.
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A. Representation and Warranties. To induce the Administrative Agent
and the Lenders parties hereto to enter into this Amendment, the Company hereby
represents and warrants to the Administrative Agent and Lenders as of the
Amendment Effective Date that:
1. Power; Authorization; Enforceable Obligations.
a. The Company has the corporate power and authority to make and
deliver each of the Amendment Documents, and to perform the Credit
Documents, to which it is a party, as amended by the Amendment
Documents, and has taken all necessary corporate action to authorize
the execution, delivery and performance of each of the Amendment
Documents and the performance of such Credit Documents, as so amended.
b. No consent or authorization of, or filing with, any Person
(including, without limitation, any Governmental Authority) is
required in connection with the execution and delivery by the Company
of the Amendment Documents, or for the performance, validity or
enforceability against the Company, of any Amendment Document or the
Credit Document to which it is a party, as amended by the Amendment
Documents, except for consents, authorizations and filings which have
been obtained or made and are in full force and effect.
c. Each Amendment Document has been duly executed and delivered
on behalf of the Company.
d. Each Amendment Document and each Credit Document to which the
Company is a party, as amended by the applicable Amendment Document,
constitutes a legal, valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms, except
as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting creditors'
rights generally and by general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
2. No Legal Bar. The execution, delivery and performance of the
Amendment Documents and the performance of the Credit Documents to which
the Company is a party, as amended by the Amendment Documents, (a) will not
violate any Requirement of Law or any Contractual Obligation applicable to
or binding upon the Company or any Subsidiary of the Company or any of
their respective properties or assets, in any manner which, individually or
in the aggregate, (i) would have a material adverse effect on the ability
of the Company or any such Subsidiary to perform its obligations under the
Credit Documents, as amended by the Amendment Documents, (ii) would give
rise to any liability on the part of the Administrative Agent or any Lender
or (iii) would have a material adverse effect on the business, assets,
condition (financial or otherwise) or results of operations of the Company
and its Subsidiaries taken as a whole, and (b) will not result in the
creation or imposition of any Lien on any of its properties or assets
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pursuant to any Requirement of Law applicable to it, as the case may be, or
any of its Contractual Obligations, except for the Liens arising under the
Security Documents.
3. Representations and Warranties in Credit Documents. The
representations and warranties made by the Company in each Credit Document
to which it is a party and herein are true and correct in all material
respects on and as of this Amendment Effective Date, before and after
giving effect to this Amendment, as if made on the Amendment Effective
Date.
B. Continuing Effect of Credit Documents. Except as expressly amended,
modified and supplemented hereby, the provisions of the Credit Agreement and the
other Credit Documents are and shall remain in full force and effect.
C. Expenses. The Company agrees to pay or reimburse the Lenders for
all of their reasonable out-of-pocket costs and expenses incurred in connection
with the Amendment and any other documents prepared in connection herewith, and
consummation of the transactions contemplated hereby and thereby, including the
reasonable fees and expenses of counsel to the Lenders.
D. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
E. Confidentiality. Each of the Administrative Agent and the Lenders
agrees to keep confidential all information contained in the PartsAmerica Term
Sheet provided to it by the Company in accordance with and subject to subsection
11.6(f) of the Credit Agreement.
F. Counterparts. This Amendment may be executed in any number of
counterparts by the parties hereto, each of which counterparts when so executed
shall be an original, but all counterparts taken together shall constitute one
and the same instrument. This Amendment may be delivered by facsimile
transmission of the relevant signature pages thereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their respective duly authorized officers as of
the day and year first above written.
CSK AUTO, INC.
By: /s/ Xxx X. Xxxxxx
------------------------------
Name: Xxx X. Xxxxxx
Title: Chief Financial Officer
& Treasurer
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CONFIDENTIAL
ANNEX 1 TO AMENDMENT NO. 1
Summary Terms of Proposed Formation
of and Investment in XxxxxXxxxxxx.xxx, Inc.
and the
Summary Term Sheet of XxxxxXxxxxxx.xxx, Inc. Services Agreement
For Distribution to CSK Auto, Inc.'s Bank Group
The following is a summary of the Formation and Investment Term Sheet and
Services Agreement Term Sheet related to the formation, investment and on-going
operations of XxxxxXxxxxxx.xxx. The following summaries contain certain key
aspects of the terms of CSK Auto, Inc.'s participation in XxxxxXxxxxxx.xxx.
Issuer: XxxxxXxxxxxx.xxx, Inc., a newly formed Delaware
corporation ("PartsAmerica" or the "Company").
Strategic Investors: CSK Auto, Inc. ("CSK") and Advance Stores Company
Incorporated ("Advance").
Financial Investors: CSK, Sequoia Capital ("Sequoia"), Xxxxxx Xxxxxx
Partners ("TWP") and Advance Holding Corporation
("AHC") shareholders or their respective affiliates.
CSK will invest $2.25 million. AHC shareholders will
invest $2.25 million in cash in PartsAmerica. In
exchange for cash, the financial investors will receive
an aggregate of 10,500,000 shares of Series B
Convertible Preferred Shares of PartsAmerica.
Asset Contribution: CSK will contribute the assets set forth on Schedule A
attached hereto and Advance will contribute the assets
set forth on Schedule B attached hereto. In exchange
for the asset contributions, CSK and Advance shall each
receive 10,000,000 Series A Convertible Preferred
Shares of PartsAmerica. 10,000,000 shares represents
approximately 26.2% of the equity of PartsAmerica
(assuming management ownership of 20.0%).
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Series A Convertible The Series A Convertible Preferred Shares are
Preferred Shares: convertible on a one for one basis into common shares of
the Company at the option of the holders or, in certain
circumstances, automatically. Series A Convertible
Preferred Shares have an 8% annual cumulative
preferential dividend which is payable at the discretion
of the board of directors of the Company. All cumulative
dividends are waived in the event of a voluntary or
automatic conversion.
Cash Investment: All initial cash investments will be made in Series B
Convertible Preferred Shares. Series B Convertible
Preferred Shares have similar terms to the Series A
Convertible Preferred Shares, but are entitled to a
liquidation preference over the Series A Convertible
Preferred and Common Shares upon liquidation,
dissolution, winding up, or sale (including by merger,
consolidation, sale of assets or otherwise) of the
Company.
Voting Rights: The Series A or Series B Convertible Preferred Shares do
not have any special voting rights (other than by law),
but vote on an as converted basis with the Common
Shares. CSK, Advance, and Sequoia have certain board
level special approval rights.
Cash Amounts: The following are the initial cash funding amounts:
Entity Cash Preferred Shares %
(Series B)
CSK: $2,250,000 1,125,000 3.0
Sequoia Capital(a): $15,000,000 7,500,000 19.7
AHC Shareholders(b): $2,250,000 1,125,000 3.0
TWP: $1,500,000 750,000 1.9
(a) $2.5 million funded at closing and $12.5 million
funded upon achieving certain conditions.
(b) FS Equity Partners IV, Sears Xxxxxxx & Co.,
Ripplewood Holdings, and Xxxxxxxx X. Xxxxxxx or their
respective affiliates.
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Initial Ownership Structure: Assuming approximately 7,625,000 Common
Shares are used for PartsAmerica
management equity grants, the initial
ownership structure on an as converted
basis will be:
CSK: 29.2%
Advance(c): 29.2%
Sequoia: 19.7%
TWP: 1.9%
Management(d): 20.0%
(c) including AHC shareholders
(d) includes certain employees of CSK
and Advance
Restrictions on Transfer: The Series A Convertible Preferred
Shares, Series B Convertible Preferred
Shares and Common Shares of the Company
have standard restrictions on transfer
including a one-year restriction on most
transfers, right of first refusal on
most transfers, a restriction on the
sale to a competitor of CSK or Advance,
and tag-along rights.
Board Representation: Following the purchase of Series B
Convertible Preferred Shares by the
Financial Investors, Initial Board of
Directors of PartsAmerica shall consist
of seven directors: two (2)
representatives designated by each of
CSK and Advance, one representative from
Sequoia, the CEO of the Company, and one
mutually agreed upon representative.
Registration Rights: Customary registration rights.
Term of Services Agreement: Three (3) years with automatic one (1)
year renewals unless any party gives
notice at least 180 days before the
expiration of the then current term.
Supply: CSK and Advance will provide inventory
to PartsAmerica at wholesale prices that
vary depending on delivery method. With
limited exceptions, CSK and Advance will
be the exclusive suppliers of inventory
to PartsAmerica.
Merchandising: It is anticipated that PartsAmerica will
carry substantially all of the
merchandise that is carried by CSK and
Advance. PartsAmerica may source
products from third party vendors if CSK
and Advance do not carry the product and
do not wish to carry the product for
PartsAmerica; provided, however,
PartsAmerica may in no event out source
a "Key Product" if CSK or Advance sells
a comparable Key Product. Third party
suppliers need to abide by similar
customer service and fulfillment
criteria as CSK and Advance.
PartsAmerica cannot source from any
direct competitors of CSK or Advance.
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Inventory: It is PartsAmerica's intent to pursue a virtual
inventory business model whereby PartsAmerica will, to
the extent possible, use the warehouses, distribution
centers, stores, delivery trucks and inventory owned by
CSK and Advance. Inventory shall not be differentiated
within a warehouse or store.
Delivery Options: PartsAmerica plans to offer three delivery methods: (1)
ship out of warehouse via third party shipper; (2)
in-store pick-up in applicable markets; or, (3) same
day home delivery in applicable markets.
Wholesale Pricing: The wholesale price charged to PartsAmerica will vary
based on delivery method. CSK believes that the
wholesale margin is consistent with the other wholesale
arrangements of CSK and its subsidiaries.
Warranty/Returns/ CSK and Advance will handle returns (warranty, cores,
Cores: and other returns) for PartsAmerica. In certain
instances, CSK and Advance will charge a
return-handling fee to PartsAmerica.
Retail Pricing: PartsAmerica shall determine the retail prices offered
on the site for all consumers (business-to-business
customers will have prices as determined by CSK or
Advance).
Fulfillment: Generally, PartsAmerica will direct orders to a store
or fulfillment center based primarily on the
geographic location of the customer.
Settlement: PartsAmerica will make bi-weekly payments in full to
CSK and Advance for all sales, handling fees, and other
charges incurred in a given two-week period.
Promotion: CSK and Advance will promote PartsAmerica as their
exclusive e-commerce partner. PartsAmerica shall
promote CSK and Advance as its exclusive retail
partners. Promotion will include references to
PartsAmerica on CSK and Advance's websites and to CSK
and Advance on PartsAmerica's website.
Business-to-Business: PartsAmerica has the option to pursue a
business-to-business e-commerce model that would allow
PartsAmerica to fulfill internet orders for CSK and
Advance for a fee. Pricing for each customer will be
determined by CSK or Advance, as applicable.
PartsAmerica shall be responsible for enhancements to
the site or CD-ROMs to enable the business-to-business
program. CSK and Advance shall not be excluded from
participating in alternative purchasing solutions.
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Exclusivity: PartsAmerica will not market any competitor of CSK or
Advance on the site and will not sell any auto merchandise
in retail brick-and-mortar stores. CSK and Advance will not
sell directly or indirectly sell Auto Merchandise through
the CSK or Advance website or any other third party website
(except for in business-to-business as provided for above).
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SCHEDULE A
CONTRIBUTION BY CSK
Asset Contribution Cash Contribution
------------------ -----------------
1. The E-Commerce portion of the CSK Xxxx.xxx $2,250,000
Web Site and any contracts related thereto
2. Electronic Parts Catalog License and any
contracts related thereto
3. Business Plan to CSK Xxxx.xxx and any
contracts related thereto
4. Various Domain Names and any contracts
related thereto
5. Microsoft CarPoint Agreement and any contracts
related thereto
6. Indentifix Database Front-End Software and any
contracts related thereto
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SCHEDULE B
CONTRIBUTION BY ADVANCE
Asset Contribution
------------------
1. XxxxxXxxxxxx.xxx URL.
2. Royalty free license to the trademark and trade name PartsAmerica -- In
perpetuity, for use in e-commerce only.
3. Copy of Advance's current EPC for use by PartsAmerica on its site.
4. Confidential business opportunity dated 9/16/99.
5. Presentation of Advance Board of Directors.
6. Confidential summary term sheets of online venture dated 10/1/99.
7. Confidential internal discussion points of potential joint venture with CSK
dated 11/11/99.
8. Confidential business plan for XxxxxXxxxxxx.xxx dated 11/26/99.
9. Confidential initial term sheet for XxxxxXxxxxxx.xxx dated 11/30/99.
10. Summary model build-up for XxxxxXxxxxxx.xxx dated 12/7/99.
11. December 22nd consumer study.
12. Other relevant market studies.
13. Various domain names.
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EXECUTION COPY
AMENDMENT AND SUPPLEMENT TO
COMPANY PLEDGE AGREEMENT
AMENDMENT AND SUPPLEMENT, dated as of February 17, 2000 (this "Amendment
and Supplement"), to the Company Pledge Agreement, dated as of June 22, 1999 (as
supplemented by the Company Pledge Agreement Supplement, dated as of September
30, 1999, and as the same may be further amended, supplemented or otherwise
modified from time to time, the "Pledge Agreement"), made by CSK AUTO, INC., an
Arizona Corporation (the "Pledgor"), in favor of THE CHASE MANHATTAN BANK, a New
York banking corporation, as administrative agent (in such capacity, the
"Administrative Agent") for the several lenders (the "Lenders") from time to
time parties to the Third Amended and Restated Credit Agreement, dated as of
September 30, 1999 (as amended, supplemented or otherwise modified from time to
time, the "Credit Agreement"), among the Pledgor, the Lenders, the
Administrative Agent, DLJ CAPITAL FUNDING, INC., a Delaware Corporation, as
syndication agent for the Lenders, (in such capacity, the "Syndication Agent")
and XXXXXX COMMERCIAL PAPER INC., a Delaware corporation, as documentation
agent for the Lenders (in such capacity, the "Documentation Agent").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, the Lenders have made
certain loans to the Pledgor;
WHEREAS, pursuant to that certain Pledge Agreement, the Pledgor has granted
to the Administrative Agent a first lien on and security interest in all of its
right, title and interest in the Collateral (as defined in the Pledge
Agreement);
WHEREAS, the Company wishes to enter into a joint venture with Advance
Stores Company Incorporated ("Advance Stores") and certain financial investors
to make capital and other asset contributions (the "PartsAmerica Investment") to
XxxxxXxxxxxx.xxx, Inc. ("PartsAmerica"), and to acquire and subscribe to a
portion of the outstanding Capital Stock of PartsAmerica;
WHEREAS, pursuant to that certain Amendment No. 1, dated as of February 17,
2000, to the Credit Agreement (the "Amendment No. 1") the lenders have consented
to amend and waive certain provisions of the Credit Agreement to allow for the
PartsAmerica Investment; and
WHEREAS, it is a condition for the Lenders to consent to the Amendment No.
1 that the Pledgor shall have executed and delivered this Amendment and
Supplement to the Administrative Agent for the ratable benefit of the Lenders.
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NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Unless otherwise defined herein, terms defined in the Pledge
Agreement are used herein as therein defined.
2. Clause (a) of Section 4 is hereby amended by adding to the end of
such clause immediately prior to the semi-colon the following phrase: "owned by
the Pledgor".
3. As additional collateral security for the prompt and complete
payment when due (whether at stated maturity, by acceleration or otherwise) of
the Obligations and in order to induce the Lenders to make their loans and other
extensions of credit under the Credit Agreement and to consent to Amendment No.
1, the Pledgor hereby delivers to the Administrative Agent, for the benefit of
the Lenders, all of the issued and outstanding shares of stock of PartsAmerica,
owned by the Pledgor and listed on Schedule I hereto, together with all stock
certificates or instruments, options, rights or interest of any nature
whatsoever which may be issued or granted by PartsAmerica to the Pledgor in
respect of such stock while the Pledge Agreement, as amended and supplemented
hereby, is in force (the "Additional Pledged Stock"; as used in the Pledge
Agreement as amended and supplemented by this Amendment and Supplement, the
"Pledged Stock" shall be deemed to include the Additional Pledged Stock) and an
undated stock power for each such stock certificate or instrument, duly executed
in blank by the Pledgor, and hereby transfers and grants to the Administrative
Agent, for the ratable benefit of the Lenders, a first priority security
interest in the Pledgor's right, title and interest in the Additional Pledged
Stock and all Proceeds thereof.
4. The Pledgor hereby represents and warrants that the representations
and warranties contained in paragraph 4 of the Pledge Agreement are true and
correct on the date of this Amendment and Supplement with references to the
shares of the "Pledged Stock" to include the Additional Pledged Stock, with
references therein to the "Issuers" to include PartsAmerica, and with references
to the "Pledge Agreement" to mean the Pledge Agreement as amended and
supplemented by this Amendment and Supplement.
5. This Amendment and Supplement forms a part of the Pledge Agreement
and is subject to the terms thereof. Schedule I to the Pledge Agreement shall
hereby be deemed to include each item listed on Schedule I to this Amendment and
Supplement.
6. THIS AMENDMENT AND SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
7. This Amendment and Supplement may be executed in any number of
counterparts by the parties hereto, each of which counterparts when so executed
shall be an original, but all counterparts taken together shall constitute one
and the same instrument. This Amendment and Supplement may be delivered by
facsimile transmission of the relevant signature pages thereof.
18
3
IN WITNESS WHEREOF, the undersigned have caused this Amendment and
Supplement to be duly executed by their authorized representatives as of the
date first above written.
CSK AUTO, INC.
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: Chief Financial Officer & Treasurer
THE CHASE MANHATTAN BANK, as
Administrative Agent
By:
-----------------------------
Name:
Title:
19
4
IN WITNESS WHEREOF, the undersigned have caused this Amendment and
Supplement to be duly executed by their authorized representatives as of the
date first above written.
CSK AUTO, INC.
By:
----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK, as Administrative
Agent
By: /s/ Xxxx X. Xxxxxx
----------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
20
Schedule I
DESCRIPTION OF ADDITIONAL PLEDGED STOCK
Stock
Issuer Class of Stock Certificate No. No. of Shares
------ -------------- --------------- -------------
XxxxxXxxxxxx.xxx, Inc. 8% Series A 10,000,000
Convertible
Preferred Shares
8% Series B
Convertible 1,250,000
Preferred Shares
21
EXECUTION COPY
AMENDMENT TO SECURITY AGREEMENTS
AMENDMENT, dated as of February 17, 2000 (this "AMENDMENT"), to (1) the
Company Security Agreement, dated as of October 30, 1996, made by CSK AUTO,
INC., an Arizona Corporation ("CSK" or the "COMPANY"), (2) the Subsidiary
Security Agreement, dated as of September 30, 1999, made by the signatories
thereto (each a "GRANTOR"), both in favor of THE CHASE MANHATTAN BANK, a New
York banking corporation, (the "COMPANY SECURITY AGREEMENT" and the "SUBSIDIARY
SECURITY AGREEMENT" collectively, the "SECURITY AGREEMENTS") as administrative
agent (in such capacity, the "ADMINISTRATIVE AGENT") for the several lenders
(the "LENDERS") from time to time parties to the Third Amended and Restated
Credit Agreement, dated as of September 30, 1999 (as amended, supplemented or
otherwise modified from time to time, the "CREDIT AGREEMENT"), among the
Company, the Lenders, the Administrative Agent, DLJ CAPITAL FUNDING, INC., a
Delaware Corporation, as syndication agent for the Lenders, (in such capacity,
the "Syndication Agent") and XXXXXX COMMERCIAL PAPER, INC., a Delaware
corporation, as documentation agent for the Lenders (in such capacity, the
"DOCUMENTATION AGENT").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, the Lenders have made
certain loans to the Company;
WHEREAS, pursuant to the Security Agreements, the Grantors have granted to
the Administrative Agent for the ratable benefit of the Lenders a security
interest in all of its right, title and interest in the Collateral (as defined
in the Security Agreements);
WHEREAS, the Company wishes to enter into a joint venture with Advance
Stores Company Incorporated ("ADVANCE STORES") and certain financial investors
to make capital and other asset contributions (the "PARTSAMERICA INVESTMENT")
to XxxxxXxxxxxx.xxx, Inc. ("PARTSAMERICA"), and to acquire and subscribe to a
portion of the outstanding Capital Stock of PartsAmerica;
WHEREAS, pursuant to that certain Amendment No. 1, dated as of February
17, 2000, to the Credit Agreement (the "AMENDMENT NO. 1") the Lenders have
consented to amend and waive certain provisions of the Credit Agreement to
allow for the PartsAmerica Investment; and
WHEREAS, it is a condition for the Lenders to consent to the Amendment No.
1 that the Company shall have executed and delivered this Amendment and
Supplement to the Administrative Agent for the ratable benefit of the Lenders.
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
22
2
1. Unless otherwise defined herein, terms defined in the Credit Agreement
are used herein as therein defined.
2. Amendments to Section 2 (Grant of Security Interest). Section 2 of the
Company Security Agreement and Section 2 of the Subsidiary Security Agreement
are hereby amended by deleting said subsections in their entirety and by
substituting in lieu thereof the following:
"As collateral security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or otherwise) of
the Obligations, each Grantor hereby grants to the Administrative Agent for
the ratable benefit of the Lenders a security interest in all of the
following property now owned or at any time hereafter acquired by such
Grantor or in which such Grantor now has or at any time in the future may
acquire any right, title or interest, excluding, however, any investment in
any Person other than a Subsidiary having an initial value of less than
$2,500,000 if the creation of a security interest with respect thereto
would be prohibited, as otherwise permitted in Subsection 7.9(b) of the
Credit Agreement (collectively, the "Collateral"):
(i) all Accounts;
(ii) all Chattel Paper;
(iii) all Contracts;
(iv) all Copyrights;
(v) all Copyright Licenses;
(vi) all Documents;
(vii) all Equipment;
(viii) all General Intangibles;
(ix) all Instruments;
(x) all Inventory;
(xi) all Patents;
(xii) all Patent Licenses;
(xiii) all Trademarks;
(xiv) all Trademark Licenses;
23
3
(xv) all other Goods and personal property of such Grantor,
whether tangible or intangible and whether now or hereafter owned by
such Grantor, and wherever located; and
(xvi) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing".
3. The Company hereby represents and warrants that the representations and
warranties contained in paragraph 2 of the Security Agreements are true and
correct on the date of this Amendment with references to "Collateral" as used in
the Security Agreements as amended and supplemented by this Amendment shall be
deemed to exclude any investment in any Person other than a Subsidiary having an
initial value of less than $2,500,000 if the creation of a security interest
with respect thereto would be prohibited, as otherwise permitted in Subsection
7.9(b) of the Credit Agreement.
4. This Amendment forms a part of the Security Agreements and is subject
to the terms thereof.
5. THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
6. This Amendment may be executed in any number of counterparts by the
parties hereto, each of which counterparts when so executed shall be an
original, but all counterparts taken together shall constitute one and the same
instrument. This Amendment may be delivered by facsimile transmission of the
relevant signature pages thereof.
24
4
IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly
executed by their authorized representatives as of the date first above written.
CSK AUTO, INC.
By: /s/ Xxx X. Xxxxxx
---------------------------------------
Name: Xxx X. Xxxxxx
Title: Chief Financial Officer & Treasurer
THE CHASE MANHATTAN BANK, as
Administrative Agent
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
25
THE CHASE MANHATTAN BANK, as
Administrative Agent, Issuing Lender and a Lender
By: /s/ Xxxx X. Xxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxx
Title: Managing Director
ALLIANCE INVESTMENTS LIMITED
By: /s/ Illegible
----------------------------------------------
Name: Illegible
Title: Authorized Signatory
BANK ONE, NA (CHICAGO-MAIN OFFICE)
By: /s/ Xxxxxxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Vice President
BANK POLSKA KASA OPIEKI S.A. GROUP
PEKAO S.A.
By: /s/ Hussein B. El-Xxxxx
----------------------------------------------
Name: Hussein B. El-Xxxxx
Title: Vice President
DLJ CAPITAL FUNDING, INCORPORATED
as Syndication Agent and a Lender
By: /s/ Xxxx Xxxxxxx
----------------------------------------------
Name: Xxxx Xxxxxxx
Title: Managing Director
XXXXX XXXXX INSTITUTIONAL SENIOR LOAN FUND
BY: XXXXX XXXXX MANAGEMENT
AS INVESTMENT ADVISOR
By: /s/ Xxxxx X. Page
----------------------------------------------
Name: Xxxxx X. Page
Title: Vice President
XXXXX XXXXX SENIOR INCOME TRUST
BY: XXXXX XXXXX MANAGEMENT
AS INVESTMENT ADVISOR
By: /s/ Xxxxx X. Page
----------------------------------------------
Name: Xxxxx X. Page
Title: Vice President
26
ELT LTD.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Authorized Agent
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
FIVE FINANCE CORP.
By: [ILLEGIBLE]
----------------------------------------------
Name:
Title:
XXXXXX XXXXX, V.P.
Citibank Global Asset Management
000 Xxxxxxxxx Xxx./00xx Flr./Zone 10
Ph: (212) 559-4205
IKB DEUTSCHE INDUSTRIEBANK AG,
LUXEMBOURG BRANCH
By: /s/ Xxxxx Xxxxxx
----------------------------------------------
Name: Xxxxx Xxxxxx
Title: Executive Director
By: /s/ Xxxxxxx Ziwey
----------------------------------------------
Name: Xxxxxxx Ziwey
Title: Director
INDOSUEZ CAPITAL FUNDING IIA, LIMITED
BY: INDOSUEZ CAPITAL, as Portfolio Advisor
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
INDOSUEZ CAPITAL FUNDING IV, L.P.
BY: INDOSUEZ CAPITAL, as Portfolio Advisor
By: /s/ Xxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxx
Title: Vice President
THE INDUSTRIAL BANK OF JAPAN, LIMITED
By: /s/ Xxxxxxx X. Xxxxxxxx
----------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Joint General Manager
27
K2H CYPRESSTREE-1 LLC
By: /s/ Xxxxxxxx Xxxxxx
----------------------------------------------
Name: Xxxxxxxx Xxxxxx
Title: Authorized Agent
XXXXXX COMMERCIAL PAPER, INC.
as Documentation Agent and a Lender
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
XXXXXX SYNDICATED LOANS, INC.
as Documentation Agent and a Lender
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Authorized Signatory
MITSUBISHI TRUST & BANKING
CORPORATION
By: /s/ XXXXXXXXX XXXXXXX
----------------------------------------------
Name: XXXXXXXXX XXXXXXX
Title: Senior Vice President
NATIONAL BANK OF CANADA
By: /s/ Xxxxx X. Xxxxxxxxx
----------------------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: AVP
OASIS COLLATERALIZED HIGH INCOME
PORTFOLIOS -1, LTD.
By: INVESCO Senior Secured Management,
Inc., as Sub-Advisor
By: /s/ Xxxxxxx Xxxxxxxx
-----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signatory
OSPREY INVESTMENTS PORTFOLIO
By: /s/ Xxxx X. Xxxxxxxxxxx
----------------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Vice President
28
OXFORD STRATEGIC
INCOME FUND
By: Xxxxx Xxxxx Management
as Investment Advisor
By: /s/ Xxxxx X. Page
----------------------------------------------
Name: Xxxxx X. Page
Title: Vice President
SANWA BANK CALIFORNIA
By: /s/ Xxxx X. Xxxx
----------------------------------------------
Name: Xxxx X. Xxxx
Title: AVP
SENIOR DEBT PORTFOLIO
By: BOSTON MANAGEMENT AND
RESEARCH, as Investment Advisor
By: /s/ Xxxxx X. Page
----------------------------------------------
Name: Xxxxx X. Page
Title: Vice President
SEQUILS-PILGRIM I LTD.
By: PILGRIM INVESTMENTS, INC. as its
Investment Manager
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PILGRIM CLO 1999-1 LTD.
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
PILGRIM PRIME RATE TRUST
BY: PILGRIM INVESTMENTS, INC., as its
Investment Manager
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
ML CLO XII PILGRIM AMERICA (CAYMAN)
LTD.
By: PILGRIM INVESTMENTS, INC. as its
Investment Manager
By: /s/ Xxxxxx X. Xxxxxx
----------------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXXXXXXXX CLO, LTD.
By: XXXXXXXXX CAPITAL PARTNERS LLC, as
its Collateral Manager
By: /s/ Xxxxxxxxxxx X. Xxxxx
----------------------------------------------
Name: Xxxxxxxxxxx X. Xxxxx
Title: Partner
29
STRATA FUNDING LTD.
By: INVESCO Senior Secured Management, Inc.,
as Sub-Managing Agent
By: Xxxxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Signature
STRATEGIC MANAGED LOAN PORTFOLIO
By: Xxxx X. Xxxxxxxxxxx
--------------------------------------
Name: Xxxx X. Xxxxxxxxxxx
Title: Vice President
THE SUMITOMO TRUST & BANKING CO., LTD.,
New York Branch
By: Xxxxxxx X. Xxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
TRANSAMERICA BUSINESS CREDIT CORP.
By: Xxxxx Xxxxxxxx
--------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
XXX XXXXXX CLO II, LIMITED
By: XXX XXXXXX MANAGEMENT INC., as its
Collateral Manager
By: Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXX XXXXXX CLO I, LIMITED
By: XXX XXXXXX MANAGEMENT INC., as its
Collateral Manager
By: Xxxxxx X. Xxxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Vice President
XXXXX FARGO BANK, N.A.
By: Xxxxxxx Xxxx
--------------------------------------
Name: Xxxxxxx Xxxx
Title: Vice President
