FOURTH AMENDMENT
Exhibit 10.1
Execution
Version
FOURTH AMENDMENT
FOURTH AMENDMENT, dated as of December 18, 2007 (this “Amendment”), to the CREDIT
AGREEMENT dated as of June 30, 2006 (as amended, supplemented or modified from time to time, the
“Credit Agreement”) among CSK AUTO, INC., the Lenders party thereto, and JPMORGAN CHASE
BANK, N.A., as Administrative Agent., and XXXXXX COMMERCIAL PAPER INC. and WACHOVIA BANK, NATIONAL
ASSOCIATION, as Co-Syndication Agents.
W I T N E S S E T H:
WHEREAS, the Company, the Administrative Agent, the Co-Syndication Agents and the Lenders are
parties to the Credit Agreement;
WHEREAS, the parties hereto have agreed to amend the Credit Agreement upon the terms and
conditions set forth herein;
NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, and in consideration of the premises contained herein, the parties hereto agree as
follows:
1. Defined Terms. Unless otherwise defined herein, capitalized terms which are
defined in the Credit Agreement are used herein as defined therein.
2. Amendments to Credit Agreement.
(a) Amendments to Section 1.01. Effective upon the Effective Date (as defined below),
Section 1.01 of the Credit Agreement is hereby amended by:
(i) deleting the definition of “Applicable Rate” where it appears therein, and
inserting in lieu thereof, the following new definition:
““Applicable Rate” means, for any day, with respect to any Eurodollar Loan or ABR
Loan, the applicable rate per annum set forth below under the caption “Eurodollar Spread” or “ABR
Spread” as applicable, based upon the then current corporate ratings issued by Xxxxx’x and S&P for
the Company, and provided, that if at any time either of Xxxxx’x or S&P does not have or
withdraws its rating on the Company, for the purposes hereof, the rating shall be deemed to be less
than B2or B, as the case may be:
| Grid Level | Xxxxx’x Rating | Eurodollar Spread | ABR Spread | |||||||
1
|
>B2 | 5.00 | % | 4.00 | % | |||||
2
|
B2 | 6.00 | % | 5.00 | % | |||||
3
|
<B2 | 7.00 | % | 6.00 | % | |||||
If at any time the S&P rating for the Company is less than B then Grid Level 3 shall apply
(notwithstanding the then current Xxxxx’x rating). If at any time the S&P rating for the Company
is equal to or greater than B, the current Xxxxx’x rating shall determine the Grid Level. If any
Event of Default shall have occurred and be continuing as of any date on which the Applicable Rate
would have otherwise been adjusted in accordance with this definition, the Applicable Rate shall in
no event be
reduced on such date (from the Applicable Rate as in effect prior to such date) until such
Event of Default is cured or waived.”
(ii) amending the definition of “Consolidated EBITDAR” by (a) deleting the word “and”
where it appears before clause (xii) thereof and adding “, and” at the end of such clause,
and (b) by adding, immediately prior to the words “less (b)” where they appear
therein, a new clause (xiii) thereto as follows:
“(xiii) any expense or write-off of deferred debt issuance costs and amendment fees
related to this Agreement”
(iii) amending the definition of “Interest Expense” by deleting the “)” where it
appears after the word “Loans” therein.
(iv) inserting the following new definitions in appropriate alphabetical order:
““Fourth Amendment” means the fourth amendment, dated as of December 18, 2007,
to this Agreement.
“Fourth Amendment Effective Date” means December 18, 2007.
“PIK Component” means (i) if Grid Level 2 (as set forth in the definition of
Applicable Rate) is applicable, 0.50% per annum, or (ii) if Grid Level 3 (as set forth in
the definition of Applicable Rate) is applicable, 1.00% per annum.”
(b) Amendment to Section 2.05. Section 2.05 of the Credit Agreement is hereby amended
by (i) deleting the words “(other than any credit facility incurred, or repricing effected,
concurrently with a Change of Control)” after the word “Loans” where it first appears in the second
proviso thereof, (ii) deleting the word “first” where it appears in the second proviso thereof and
inserting the word “second” in lieu thereof; and (iii) deleting the term “Third Amendment Effective
Date” where it appears in the second proviso thereof and inserting “Fourth Amendment Effective
Date” in lieu thereof.
(c) Amendment to Section 2.06. Section 2.06(c) of the Credit Agreement is hereby
amended by adding the following new sentence at the end of such Section:
“Each prepayment of Loans under this Section prior to the second anniversary of the Fourth
Amendment Effective Date shall be subject to a prepayment premium equal to 1% of the Loans so
prepaid, which premium shall be payable on the date of such prepayment.”
(d) Amendment to Section 2.08. Section 2.08(f) of the Credit Agreement is hereby
amended so that it provides as follows:
“(f) Notwithstanding anything to the contrary in this Agreement, all borrowings, conversions
and continuations of Eurodollar Loans and all selections of Interest Periods shall be in such
amounts and be made pursuant to such elections so that, (i) after giving effect thereto, the
aggregate principal amount of each Eurodollar Loan shall be equal to $5,000,000 or (subject to
Section 2.13(f)), a whole multiple of $1,000,000 in excess thereof and (ii) no more than one
Eurodollar Loan shall be outstanding at any one time.”
(e) Amendment to Section 2.13. Section 2.13 of the Credit Agreement is hereby amended
by adding the following new clause (f) at the end of such Section:
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“(f) Notwithstanding the foregoing, the Company shall have the option, with any interest
accruing on and after January 8, 2008 to pay the PIK Component included in any interest payment by
adding such PIK Component to the principal of the Loans as of the Interest Payment Date on which
such interest payment is due. The Company may exercise such option with respect to the interest
payable on any Interest Payment Date by giving irrevocable notice of such exercise to the
Administrative Agent no later than (i) in the case of interest payable on a Eurodollar Borrowing,
the date of the Interest Election Request for the Interest Period related to such Interest Payment
Date and (ii) in the case of interest payable on an ABR Borrowing, the later of the Interest
Election Request related to the conversion thereof from a Eurodollar Borrowing or the last Interest
Payment Date for such ABR Borrowing, (it being understood that if no such notice is given all of
such PIK Component shall be payable in cash). Any principal of the Loans resulting from interest
being paid under this clause (f) by adding such interest to the principal of the Loans may be
included in Eurodollar Loans without regard to the whole multiple requirement of Section 2.08(f).”
(f) Amendment to Section 6.07. Effective upon the Effective Date, Section 6.07 of the
Credit Agreement is hereby amended by deleting such Section in its entirety and inserting in lieu
thereof the following new Section:
“Financial Covenants. (a) As of the end of any fiscal quarter of the Company ending
on the dates set forth below, permit the Fixed Charge Coverage Ratio to be less than the ratio set
forth opposite such dates below:
| Fixed Charge Coverage | ||||
| Quarter | Dates | Ratio | ||
Q3 ‘07
|
November 4, 2007 | 1.40:1.00 | ||
Q4 ‘07
|
February 3, 2008 | 1.25:1.00 | ||
Q1 ‘08
|
May 4, 2008 | 1.20:1.00 | ||
Q2 ‘08
|
August 3, 2008 | 1.15:1.00 | ||
Q3 ‘08
|
November 2, 2008 | 1.20:1.00 | ||
Q4 ‘08
|
February 1, 2009 | 1.20:1.00 | ||
Q1 ‘09 — maturity
|
May 3, 2009 and any quarter end thereafter | 1.45:1.00 |
(b) As of the last day of the fiscal quarter ending on or about the date set forth below,
permit the Leverage Ratio to be greater than the ratio set forth opposite such date below:
| Quarter | Dates | Leverage Ratio | ||
Q3 ‘07
|
November 4, 2007 | 4.00:1.00 | ||
Q4 ‘07
|
February 3, 2008 | 5.30:1.00 | ||
Q1 ‘08
|
May 4, 2008 | 5.80:1.00 | ||
Q2 ‘08
|
August 3, 2008 | 6.00:1.00 | ||
Q3 ‘08
|
November 2, 2008 | 5.75:1.00 | ||
Q4 ‘08
|
February 1, 2009 | 4.50:1.00 | ||
Q1 ‘09 — Q3 ‘09
|
May 3, 2009, August 2, 2009 and November 1, 2009 | 3.25:1.00 | ||
Q4 ‘09 — maturity
|
January 31, 2010 and any quarter end thereafter | 3.00:1.00 |
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(c) Make, or commit to make, Capital Expenditures for the Company and its Subsidiaries for the
fiscal year ending (i) February 1, 2009 exceeding $25 million, or (ii) January 31, 2010 exceeding
$25 million, provided that any part of the amount specified above for the fiscal year ending
February 1, 2009, if not so expended during such fiscal year, may be carried over for expenditure
during the first two fiscal quarters of the fiscal year ending January 31, 2010.
3. Conditions to Effectiveness of this Amendment. This Amendment shall become
effective on the date (the “Effective Date”), upon which the Administrative Agent shall
have received (i) counterparts of this Amendment duly executed by the Company, the Guarantors, the
Administrative Agent and the Required Lenders, (ii) payment, for distribution to each Lender that
has signed and delivered this Amendment to the Administrative Agent by not later than 5:00 p.m.
(New York City time) on December 18, 2007 (or such later time or date as agreed by the Company and
the Administrative Agent), an amendment fee equal to 1.00% of the outstanding Loans of such Lender,
and (iii) payment of all fees and invoiced out-of-pocket costs and expenses of the Administrative
Agent payable by the Company under the Credit Documents and as otherwise agreed, including without
limitation, the reasonable fees and expenses of counsel to the Administrative Agent.
4. Representations and Warranties; No Default; Limited Effect.
(a) Representations and Warranties. After giving effect to this Amendment, the Company
and the Guarantors hereby represent and warrant that all representations and warranties contained
in the Credit Agreement and the other Credit Documents are true and correct in all material
respects on and as of the Effective Date (unless stated to relate to a specific earlier date, in
which case, such representations and warranties shall be true and correct in all material respects
as of such earlier date) and that no Default or Event of Default shall have occurred and be
continuing or would result from the execution and delivery of this Amendment.
(b) Limited Effect. Except as expressly modified by this Amendment, the Credit
Agreement and the other Credit Documents are ratified and confirmed and are, and shall continue to
be, in full force and effect in accordance with their respective terms. Each Credit Party
acknowledges and agrees that such Credit Party is truly and justly indebted to the Lenders and the
Administrative Agent for the Obligations, without defense, counterclaim or offset of any kind, and
such Credit Party ratifies and reaffirms the validity, enforceability and binding nature of such
Obligations. The Company acknowledges and agrees that nothing in this Amendment shall constitute an
indication of the Lenders’ willingness to consent to any other amendment or waiver of any other
provision of the Credit Agreement or a waiver of any Default or Event of Default.
5. Counterparts. This Amendment may be executed by one or more of the parties to this
Amendment on any number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same instrument. A set of
the copies of this Amendment signed by the parties hereto shall be delivered to the Company and the
Administrative Agent. The execution and delivery of this Amendment by any Lender, or by the
Administrative Agent with the consent of any Lender, shall be binding upon such Lender’s successors
and assigns (including transferees of its commitments and Loans in whole or in part prior to
effectiveness hereof) and binding in respect of all of its commitments and Loans, including any
acquired subsequent to its execution and delivery hereof and prior to the effectiveness hereof.
6. Acknowledgement of Guarantors. The Guarantors acknowledge and consent to all of
the terms and conditions of this Amendment and agree that this Amendment and all documents executed
in connection herewith do not operate to reduce or discharge the Guarantors’ obligations under the
Credit Agreement or the other Credit Documents. The Guarantors further acknowledge and agree that
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the Guarantors have no claims, counterclaims, offsets, or defenses (other than payment) to
the Credit Documents and the performance of the Guarantors’ obligations thereunder or if the
Guarantors did have any such claims, counterclaims, offsets or defenses (other than payment) to
the Credit Documents or any transaction related to the Credit Documents, the same are hereby
waived, relinquished and released in consideration of execution and delivery of this Amendment.
7. Credit Document. This Amendment is a Credit Document executed pursuant to the
Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered
and applied in accordance with the terms and provisions of the Credit Agreement.
8. GOVERNING LAW. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER
THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
* * * * *
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered
by their respective duly authorized officers as of the date first above written.
| CSK AUTO, INC. | ||||||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||||||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||||||
| Title: | Executive VP of Finance and CFO | |||||||
| Acknowledged | ||||||||
| CSK AUTO CORPORATION | ||||||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||||||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||||||
| Title: | Executive VP of Finance and CFO | |||||||
| XXXXXXX.XXX, INC. | ||||||||
| By: | /s/ Xxxxx X. Xxxxxxxxxxx | |||||||
| Name: | Xxxxx X. Xxxxxxxxxxx | |||||||
| Title: | Executive VP of Finance and CFO | |||||||
CSK Auto, Inc. Amendment
| JPMORGAN CHASE BANK, N.A. as Administrative | ||||||||
| Agent and a Lender | ||||||||
| By: | /s/ Xxxxx Xxxxxxx | |||||||
| Name: | Xxxxx Xxxxxxx | |||||||
| Title: | Managing Director | |||||||
CSK Auto, Inc. Amendment
