Exhibit 10.18.6
EXECUTION COPY
THIRD AMENDMENT
TO
STOCKHOLDERS' AGREEMENT
THIS THIRD AMENDMENT (this "Third Amendment"), dated as of May 16, 2002,
is by and among EQUITY CSKA LIMITED, EQUITY CSKB LIMITED, EQUITY CSKC LIMITED,
AUTO EQUITY LIMITED, AUTO PARTS LIMITED, AUTO INVESTMENTS LIMITED, CSK
INVESTMENTS LIMITED, CSK EQUITY LIMITED, NEW CSK EQUITY LIMITED, INVESTCORP CSK
HOLDINGS L.P., CSK INTERNATIONAL LIMITED, X.X. XXXXXX (SUISSE) S.A., as
successor to CHASE BANK (C.I.) NOMINEES LIMITED, SOUTH BAY LIMITED, INVESTCORP
INVESTMENT EQUITY LIMITED, BALLET LIMITED, DENARY LIMITED, GLEAM LIMITED,
HIGHLANDS LIMITED, NOBLE LIMITED, OUTRIGGER LIMITED, QUILL LIMITED, RADIAL
LIMITED, SHORELINE LIMITED and ZINNIA LIMITED, each being a corporation
organized under the laws of the Cayman Islands, CHILTERN TRUSTEES LIMITED, in
its capacity as trustee of The Carmel Trust, a trust governed by the laws of
Canada and established under a trust settlement made August 17, 1977 ("Chiltern
Trustees Limited"), Glenellen Investment Co., a Cayman Islands corporation,
Transatlantic Investments, LLC., XXXXXXX XXXXXXX and THE JAB TRUST
(collectively, the "Stockholders"), CSK AUTO CORPORATION, a Delaware corporation
(the "Company"), and CSK AUTO, INC., an Arizona corporation and a wholly-owned
subsidiary of the Company, each of whom is a party to that certain Stockholders'
Agreement, dated as of October 30, 1996, as amended by that certain Amendment
thereto, dated as of June 12, 1998, as further amended by that certain letter
agreement, dated December 8, 1998, and as further amended by that certain Second
Amendment thereto (the "Second Amendment"), dated as of December 7, 2001 (the
"Stockholders' Agreement").
RECITALS
WHEREAS, under the terms of the Stockholders' Agreement, the Company has
granted the Stockholders certain demand and piggyback registration rights in
respect of the Registrable Stock (as defined therein) held by the Stockholders;
WHEREAS, pursuant to a December 7, 2001 Stock Purchase Agreement (the
"Purchase Agreement") between the Company, LB I Group Inc. ("Xxxxxx") and
Investcorp CSK Holdings L.P. ("ICH," with Xxxxxx, each a "Buyer" and
collectively, the "Buyers") the Company sold to the Buyers (or their assigns) on
December 21, 2001 (the "Closing Date'") (i) $50 million principal amount of its
7% Convertible Subordinated Debentures (the "Convertible Debentures"), which are
convertible into shares of the Company's common stock, par value $0.01 per share
(the "Common Stock") (as converted, the "Conversion Shares"), and (ii)
associated warrants (the "Make-Whole Warrants") to purchase shares of Common
Stock (as exercised, the "Make-Whole Shares");
WHEREAS, contemporaneously with the execution and delivery of the Purchase
Agreement, the Company and the Buyers executed a Registration Rights Agreement
(the
"Registration Rights Agreement"), pursuant to which the Company agreed (i) to
file a registration statement (herein referred to as the "Primary Registration
Statement") within 30 days of the Closing Date, concerning the resale of at
least 12.7 million shares of Common Stock, which shares included the Conversion
Shares, shares payable in lieu of cash interest payments on the Convertible
Debentures, and the Make-Whole Shares (collectively, the "Registrable
Securities"), and (ii) to use its best efforts to have the Primary Registration
Statement be declared effective by the U.S. Securities and Exchange Commission
(the "SEC") within 120 days of its filing deadline.;
WHEREAS, in the Second Amendment, the Stockholders (i) agreed to waive any
piggyback registration held under the Stockholders' Agreement in respect of the
registration of Registrable Securities pursuant to the Primary Registration
Statement, and (ii) agreed not to require the filing of any registration
statement pursuant to any exercise of any demand registration rights held under
the Stockholders' Agreement until the Primary Registration Statement had been
declared effective by the SEC;
WHEREAS, the SEC has indicated that it deems the issuance of the
Make-Whole Shares to be subject to certain conditions precedent, meaning the
Make-Whole Shares cannot be registered for resale in the Primary Registration
Statement. Because it is not possible to register for resale all of the
Registrable Securities in the Primary Registration Statement pursuant to the
Registration Rights Agreement, the Company and the Buyers have entered into an
Amended and Restated Registration Rights Agreement, dated as of the date hereof
(the "Amended Registration Rights Agreement," attached hereto as Annex A). The
Amended Registration Rights Agreement excludes the Make-Whole Shares from the
Primary Registration Statement and requires the Company to file an additional
registration statement (the "Make-Whole Registration Statement") within two
Business Days of the Make-Whole Date (as defined in the Convertible Debentures),
registering for resale any Make-Whole Securities (as defined in the Amended
Registration Rights Agreement) issued or issuable on the Make-Whole Date;
WHEREAS, the Company is seeking to obtain consents and waivers from the
Stockholders necessary to make the waivers of registration rights granted by the
Stockholders in the Second Amendment apply to any Make-Whole Securities that may
be required to be registered for resale in the Make-Whole Registration
Statement; and
WHEREAS, the Stockholders wish to set forth certain additional agreements
and understandings concerning future registrations of shares of Capital Stock of
the Company for sale or resale to the public.
NOW, THEREFORE, in consideration of the mutual covenants and premises
contained herein and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
2
ARTICLE I
AMENDMENTS
Section 1.1. The second paragraph of Section 9.1(d)(viii) of the
Stockholders' Agreement is hereby amended by deleting the first sentence of such
paragraph and replacing such first sentence (containing the definition of
"Xxxxxx Registration Statement") as follows:
"Xxxxxx Registration Statement" shall mean the registration statement
prepared and filed pursuant to Section 2(a)(i) of the Amended Registration
Rights Agreement.
The remainder of the second paragraph of Section 9.1(d)(viii) shall remain
unchanged.
Section 1.2. Section 9.1 of the Stockholders Agreement is hereby amended
to add the following new clause "(e)" at the end thereof.
"(e) If the Company is required to file a Make-Whole Registration
Statement pursuant to Section 2(a)(ii) of the Amended Registration Rights
Agreement, following the date on which the Make-Whole Registration Statement is
declared effective, but subject to Section 2.4 of the Third Amendment to the
Stockholders Agreement, the Company shall be obligated to file any registration
statement requested by any Stockholder pursuant to Section 9.1(a) or Section 9.3
and to use its best efforts to cause such registration statement to be declared
effective within the time periods specified below. If the Company fails to file
such registration statement in response to a Stockholder request or to cause
that registration statement to be declared effective within the time periods
specified, the Company shall incur the penalties specified below to any of
Chiltern Trustees Limited, Glenellen Investment Co. and Transatlantic
Investments, LLC (collectively, the "Carmel Stockholders") if such parties
requested the filing of such registration statement.
(i) If any of the Stockholders exercise their registration rights
under this Section 9.1 or under Section 9.3 at any time commencing 30 days
prior to the Make-Whole Date and ending at the time that the Make-Whole
Registration Statement is declared effective by the Commission, or at any
time during the Company's four or five week accounting period (a "Company
Accounting Month") in which the Make-Whole Registration Statement is
declared effective by the Commission, the Company shall file a
registration statement in respect of such exercise not later than two (2)
Business Days after receipt by the Company of written facsimile notice (as
defined below) of such exercise, but shall not be obligated to make such
filing earlier than the second Business Day after the Make-Whole
Registration Statement is declared effective; provided, however, that if
the written facsimile notice of such exercise is provided to the Company
at least three (3) Business Days prior to the declaration of effectiveness
of the Make-Whole Registration Statement, such filing shall be made by the
Company on the first Business Day following the declaration of
effectiveness of the Make-Whole Registration Statement.
(ii) If any of the Stockholders exercise their registration rights
under this Section 9.1 or under Section 9.3 during the Company Accounting
Month immediately following the Company Accounting Month in which the
Make-Whole Registration
3
Statement is declared effective, the Company shall file a registration
statement in respect of such exercise within five (5) Business Days after
receipt by the Company of written facsimile notice of such exercise.
(iii) If any of the Stockholders exercise their registration rights
under this Section 9.1 or under Section 9.3 after the exercise period
specified in Section 9.1(e)(ii) above, the Company shall file a
registration statement in respect of such exercise within thirty (30)
calendar days after receipt by the Company of written facsimile notice of
such exercise.
(iv) The Company shall use its best efforts to cause any
registration statement filed in accordance with Sections 9.1(e)(i)-(iii),
above, to become effective within 150 calendar days following the later of
(i) the Make-Whole Date or (ii) the date on which the Company receives
written facsimile notice of exercise of such registration rights;
provided, however, that the Company will, commencing with the first
business day after such filing and continuing thereafter, diligently seek
a determination by the Commission as to whether it will be reviewing such
registration statement and if the Company receives notice from the
Commission that it will not be reviewing such registration statement, the
Company shall request effectiveness of such registration statement within
one (1) Business Day of its receipt of such notification from the
Commission.
(v) If a Stockholder exercises its rights under Section 9.1(e)(i)
hereof, all notifications to be provided hereunder by the Company will be
provided by facsimile to the other Stockholders at the last facsimile
number provided by them to the Company and the following time periods will
apply:
A. Section 9.1(b) - both time periods will change
from thirty (30) days to one Business Day after receipt; and
B. Section 9.2 - thirty (30) days will change to one
Business Day after receipt.
(vi) If a Stockholder exercises its rights under Section 9.1(e)(ii)
hereof, all notifications to be provided hereunder by the Company will be
provided by facsimile to the other Stockholders at the last facsimile
number provided by them to the Company and the following time periods will
apply:
A. Section 9.1(b) - both time periods will change
from thirty (30) days to one (1) Business Day; and
B. Section 9.2 - thirty (30) days will change to one
(1) Business Day.
(vii) If a Stockholder exercises its rights under Section
9.1(e)(iii) hereof, all notifications to be provided hereunder will be
provided by facsimile to the other Stockholders at the last facsimile
number provided by them to the Company and the following time periods will
apply:
4
A. Section 9.1(b) - both time periods will change
from thirty (30) days to five (5) Business Days; and
B. Section 9.2 - thirty (30) days will change to five
(5) Business Days.
(viii) If the Company fails to file a registration statement, if
such registration statement is not declared effective by the Commission,
or if the Company fails to make such registration statement available for
the sale of the securities covered by such registration statement, in each
case, within the applicable time period specified above, or if on any day
after such registration statement has been declared effective by the
Commission, sales of all securities requested to be included in such
registration statement cannot be made (each of the foregoing, a
"Registration Failure"), the Company shall, as relief for damages pay to
each of the Carmel Stockholders seeking to exercise its registration
rights under this Section 9.1, which shall be a number of shares of the
Company's common stock equal to the product of (A) 0.0005 multiplied by
(B) the number of shares of the Company's common stock that such Carmel
Stockholder specified in its written facsimile notice requesting
registration multiplied by (C) the sum of (x) the number of calendar days
after the applicable filing deadline that the registration is not filed
with the Commission, plus (y) the number of calendar days after the
effectiveness deadline in Section 9.1(e)(iv) until the registration
statement is declared effective by the Commission, plus (z) the number of
days after the registration statement is declared effective by the
Commission that it is not available for the sale of the securities
required to be included in the registration statement, other than in each
case during a Material Event (as defined below). This payment shall be
paid in the form of shares of the Company's common stock based on the
average final quoted price of the Company's common stock on each of the
five (5) Business Days immediately preceding the date of payment. The
payment provided in this paragraph shall not be the exclusive remedy for a
Registration Failure nor shall it serve as a limitation on damages
recoverable for or equitable relief available for such a Registration
Failure. The payments to which any Carmel Stockholder shall be entitled
pursuant to this paragraph shall be paid on the earlier of (I) the last
day of each calendar month during which such payments are incurred and
(II) the third Business Day after the event or failure giving rise to the
payments is cured. In the event the Company fails to make such payments in
a timely manner, such payments shall bear interest at the rate of 1.5% per
month (prorated for partial months) until paid in full.
(ix) If there is any conflict between Section 9.1(d) of the Stockholders'
Agreement and this Section 9.1(e), the terms of this Section 9.1(e) shall
control. If the Company is not required to file a Make-Whole Registration
Statement pursuant to the terms of the Amended Registration Rights Agreement,
this Section 9.1(e) shall terminate.
For purposes hereof, "Make-Whole Registration Statement" shall mean the
registration statement to be prepared and filed pursuant to Section 2(a)(ii) of
the Amended Registration Rights Agreement. For purposes hereof, "Material Event"
shall mean any event that results in (i) a registration statement, in the good
faith opinion of the Board of Directors of the Company and its counsel,
containing an untrue statement of a material fact or omitting to state a
material
5
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (ii) the need to
delay the disclosure of material non-public information concerning the Company,
the disclosure of which at that time is not, in the good faith opinion of the
Company's Board of Directors and its counsel, in the best interests of the
Company; provided, however, that during any three hundred sixty-five (365) day
period no more than two such Material Events shall be permitted and such
Material Events shall not exceed an aggregate of forty-five (45) days.
For purpose hereof, "written facsimile notice" shall mean notice
sent via facsimile to the Company at 000-000-0000, attention: Xxxxxx
Xxxxxx and at 000-000-0000, attention: Xxx Xxxxxx, between 9:00 a.m. and
5:00 p.m., New York time on a Business Day.
For purposes hereof, "Business Day" shall mean any day other than
Saturday, Sunday or any other day on which commercial banks in the City of New
York are authorized or required by law to remain closed."
ARTICLE II
CONSENT AND WAIVER
Section 2.1. Consent. Each of the Stockholders hereby consents to the
execution and delivery of Amendment No. 1 to the Securities Purchase Agreement,
the Amended Registration Rights Agreement, and all documents contemplated
therein, the transactions contemplated thereby, the performance by the parties
thereto of their respective obligations thereunder and the rights granted to the
Buyers thereunder, notwithstanding any provisions to the contrary contained in
the Stockholders' Agreement. To the extent that the Stockholders' rights under
Article 9 of the Stockholders' Agreement to include their Registrable Stock (as
defined in the Stockholders' Agreement) in any registration of the Company's
securities conflicts with the preferential allocation granted to the Buyers
under the Amended Registration Rights Agreement in respect of their Make-Whole
Securities, each of the Stockholders hereby expressly waives any such conflict
and consent to the granting of such preferential registration rights to the
Buyers.
Section 2.2. Waivers. Each Stockholder hereby waives the terms and
provisions of the Stockholders' Agreement to the extent that the transactions
contemplated by the Amended Registration Rights Agreement do not comply with
such terms and provisions. Specifically, without limitation, each Stockholder
(i) waives any piggyback registration rights it may have under the Stockholders'
Agreement in respect of the registration contemplated by Section 2(a)(ii) of the
Registration Rights Agreement, (ii) agrees, in the event a Make-Whole
Registration Statement must be filed pursuant to Section 2(a)(ii) of the Amended
Registration Rights Agreement, not to require the filing of any registration
statement pursuant to its exercise of any demand registration rights it may have
under Article 9 of the Stockholders' Agreement from the Make-Whole Date until
after the Make-Whole Registration Statement has been declared effective; and
(iii) agrees that, notwithstanding Section 9.1(c) or any other provision of the
Stockholders' Agreement (including Section 2.5 of this Third Amendment),
regardless of any registration statements the Company may have on file with the
SEC that are currently effective or on which effectiveness is pending (including
the Company Registration Statement, the Investcorp Registration Statement, the
Carmel Registration Statement, and the Default Registration Statement, each as
defined below in Section 2.5), the Company shall not be
6
prohibited by any Stockholder from filing the Make-Whole Registration Statement,
if such filing is necessary pursuant to Section 2(a)(ii) of the Amended
Registration Rights Agreement
Section 2.3. Withdrawal of Registration Request. Each of the Carmel
Stockholders shall, as of the date hereof, withdraw the registration request it
submitted to the Company on April 12, 2002 pursuant to Section 9.3 of the
Stockholders' Agreement (the "Registration Request"). The Registration Request
shall be treated as null, void and without force or effect and none of the other
parties to the Stockholders' Agreement shall have any rights (including
piggy-back registration rights) or obligations as a result of the original
submission of the Registration Request or any subsequent submission of a request
for registration with respect or in response to such Registration Request.
Section 2.4. Blackout and Lock-Up Periods.
(a) All capitalized terms used in this Section 2.4 and not defined therein
or previously in this Third Amendment shall have the meanings set forth in
Section 2.5 of this Third Amendment.
(b) Notwithstanding anything in Section 9.1 of the Stockholders Agreement,
except as provided in Section 2.5 of this Third Amendment, no Stockholder shall
exercise its rights to request any registration of shares under the
Stockholders' Agreement prior to the earliest occurrence of the following
events: (i) the Company not receiving a request to file a Default Registration
Statement by the eleventh day following a Company Default, (ii) the completion
of the period of distribution relating to an offering commenced pursuant to the
Default Registration Statement; (iii) the completion of the period of
distribution relating to an offering commenced pursuant to the Investcorp
Registration Statement; (iv) the completion of the period of distribution
relating to an offering commenced pursuant to the Carmel Registration Statement;
(v) the Company not receiving any request to file either the Investcorp
Registration Statement or the Carmel Registration Statement by the end of the
twenty-first (21st) day following the Lock-Up Release or the expiration of any
lock-ups imposed in connection with the Company Registration Statement; or (vi)
both the Company and the Carmel Stockholders have withdrawn all of their
respective shares from the Company Registration Statement. For purposes of this
Section 2.4, the period of distribution for any offering (other than the
offering in connection with the Default Registration Statement) shall be 90 days
following the effectiveness of the registration statement related to such
offering, or such earlier time as all of the shares registered under such
registration statement have been sold. In the case of the offering related to
the Default Registration Statement, the period of distribution shall be 180 days
following the effectiveness of the Default Registration Statement, or such
earlier time as all of the shares registered under the Default Registration
Statement have been sold.
(c) In addition to any lock-up periods that may be imposed on any of the
Stockholders or the Company pursuant to Section 2.5, each of the Stockholders
and the Company agrees that it will not sell or issue (either publicly or
privately) any shares of Registrable Stock or any other shares of Capital Stock
(or securities convertible into Common Stock) during the following periods:
7
(i) from the date of this Agreement until the earlier of (A) the
effectiveness of the Company Registration Statement; (B) the effectiveness of
the Default Registration Statement; (C) the end of the tenth day following a
Company Default, if the Company has not received a request to file a Default
Registration Statement by such time; or (D) such time as both the Company and
the Carmel Stockholders have withdrawn all of their respective shares from the
Company Registration Statement; and
(ii) if the Company Registration Statement is declared effective,
from the Lock-Up Release or the expiration of any lock-ups imposed in connection
with the Company Registration Statement (collectively, the "Lock-Up Termination
Date") until the earlier of (X) the effectiveness of the Investcorp Registration
Statement; (Y) the effectiveness of the Carmel Registration Statement; or (Z)
the twenty-first day following the Lock-Up Termination Date, if the Company has
not received any request to file either the Investcorp Registration Statement or
the Carmel Registration Statement by such time
(d) Notwithstanding anything contained in this Third Amendment, the
Company may issue shares of Common Stock upon the conversion of any convertible
securities or the exercise of any options outstanding as of the date hereof or
options issued in the future under plans in existence as of the date hereof.
Specifically, without limitation, the Company shall not be prohibited under this
Third Amendment from (A) converting the Convertible Debentures into Common Stock
upon the effectiveness of the Xxxxxx Registration Statement; (B) issuing shares
of Common Stock upon the exercise of the Make-Whole Warrants; (C) issuing shares
upon the exercise of options issued under existing option plans; or (D) issuing
options under plans in existence as of the date hereof.
(e) Except for the Xxxxxx Registration Statement, the Make-Whole
Registration Statement, or a registration statement on Form S-8 or Form S-4 or
any successor form to such forms or a registration statement required under the
registration rights agreement entered into in connection with the Company's
Senior Notes issued on or about the Closing Date, the Company shall not file any
registration statements prior to the earlier to occur of the events described in
Section 2.4(b).
Section 2.5. Registration Statements.
(a) The Company shall file a registration statement (the "Company
Registration Statement"), which, except as otherwise provided herein, shall be
deemed to be an incidental registration statement under Section 9.2 of the
Stockholders' Agreement, registering shares of Capital Stock for sale to the
public in accordance with the terms of this Section 2.5 by June 14, 2002 (the
"Registration Date"), which is two days following the scheduled meeting of the
stockholders of the Company on a proposal to amend the Company's certificate of
incorporation to increase the authorized number of shares of the Company's
Common Stock to 58,000,000. Each Stockholder agrees to vote all of its shares of
Capital Stock in favor of approval of such proposal. Each Stockholder and the
Company agree to keep all members of the Company's board of directors appraised
of potential significant Company-related strategic developments, including any
discussions with third parties related thereto, until the effectiveness of the
Company Registration Statement.
8
(b) Each Stockholder other than each of the Carmel Stockholders agrees
that it shall not request to include any shares of Common Stock held by such
party in the Company Registration Statement, pursuant to Section 9.2 of the
Stockholders' Agreement or otherwise, and hereby waives its right to participate
in the Company Registration Statement.
(c) The total number of shares of Common Stock to be registered for sale
or resale in the Company Registration Statement shall be 11,284,000 (not
including any shares necessary to cover the over-allotment option), subject to
adjustment by the managing underwriter for the offering (as set forth in
paragraph 2.5(d) below). Of this amount, the Company shall register 5,642,000
shares of Common Stock for sale (plus any additional shares necessary to cover
the over-allotment option), and the Carmel Stockholders shall collectively
register up to 5,642,000 shares of Common Stock for resale.
(d) The registration of Common Stock made in the Company Registration
Statement is to involve an underwritten public offering (the "Company
Offering"), and the managing underwriters shall be agreed upon in writing as
soon as possible by the Company and the Carmel Stockholders. The Carmel
Stockholders shall select the one firm from such managing underwriters that will
make all decisions as to when any lock-ups entered into in connection with the
Company Registration Statement shall terminate (the "Lock-Up Release
Underwriter"). The Lock-Up Release Underwriter shall serve as one of the joint
book running underwriters for the Company Offering. The Company shall determine
if there shall be two or three joint book running underwriters and shall select
the one or two additional joint book running underwriters (collectively, the
"Company Underwriter" and, together with the Lock-Up Release Underwriter, the
"Underwriter"), as the case may be, for the Company Offering. If the
Underwriter advises the Company in writing (with a copy to each Carmel
Stockholder) that, in its good faith opinion, the number of shares of Common
Stock requested to be included in the Company Registration Statement would
materially adversely affect the marketing of the shares to be sold by the
Company or the Carmel Stockholders (such writing to state the approximate number
of shares which may be included in the Company Offering without such effect),
the Company shall exclude from such registration, to the extent of the number of
shares which the Company is so advised must be excluded from the Company
Offering to avoid such adverse effect, (i) first, shares that the Company
proposes to register for its own account, up to 2,600,000 shares of Common
Stock; (ii) second, shares that the Carmel Stockholders requested to be included
in such registration up to an aggregate maximum for all Carmel Stockholders of
2,600,000 shares of Common Stock; and (iii) third, additional shares allocated
pro rata between the number of remaining shares that the Company proposed to
register for its own account and the number of remaining shares that the Carmel
Stockholders requested to be included in the Company Registration Statement. If
there are three joint book running underwriters, then the Company and the Carmel
Stockholders shall require that the Underwriter's determinations regarding (A)
the offering price of the shares in the Company Offering and (B) any reduction
in the number of shares to be included in the Company Offering (as provided in
the previous sentence), shall be made either by agreement among the joint book
running underwriters or, if they do not reach such an agreement, by averaging
the good faith price or reduction, as the case may be, suggested by the Lock-Up
Release Underwriter and the good faith price or reduction, as the case may be,
suggested by the Company Underwriter. Notwithstanding Section 9.8 of the
Stockholders'
9
Agreement, if requested in writing by the Underwriter, each Stockholder agrees
not to sell publicly any shares of Registrable Stock or any other shares of
Capital Stock (other than shares of Registrable Stock or other shares of Capital
Stock being registered in the Company Offering), without the consent of the
Lock-Up Release Underwriter, for a period of not more than 90 days following the
effective date of the Company Registration Statement. For purposes of
clarification, "materially adversely affect" means a reduction in price of at
least $0.50 per share.
(e) Notwithstanding any other provision of this Section 2.5, at any time
prior to the time the Company Registration Statement is declared effective, any
party that has registered shares for sale or resale pursuant to the Company
Registration Statement shall have the right to not sell all or any portion of
such shares pursuant to, and may withdraw all or any portion of such shares
from, the Company Registration Statement, subject to the provisions of this
Section 2.5(e). The Company shall provide the Carmel Stockholders with written
notice (the "Effectiveness Notice") at least 48 hours prior to the date of the
proposed effectiveness. The Company and the Carmel Stockholders shall
immediately inform each other upon any withdrawal of shares from the Company
Registration Statement.
(i) If the Carmel Stockholders withdraw all of their shares from the
Company Registration Statement (regardless of the price of the shares offered
pursuant to the Company Registration Statement), the Company may (but shall not
be obligated to) proceed to register shares for its own account pursuant to the
Company Registration Statement and such withdrawal shall not terminate the
lock-ups of the Carmel Stockholders entered into pursuant to Section 2.5(d). If
the Carmel Stockholders withdraw some but not all of their shares from the
Company Registration Statement, the Company shall either (A) proceed to register
the remaining Carmel Stockholder shares and shares for its own account pursuant
to the Company Registration Statement, or (B) shall withdraw all of the
Company's shares from the Company Registration Statement, in which case the
parties' rights with respect to the Company Registration Statement will be
governed by the remainder of this Section 2.5(e).
(ii) If the Company withdraws all of its shares from the Company
Registration Statement and (A) the shares offered for sale thereunder are priced
by the Underwriter at more than 80% of the closing price on the NYSE for the
Company's Common Stock on May 8, 2002 per share (the "Price"), and (B) the
Carmel Stockholders have not previously or contemporaneously withdrawn all of
their shares from the Company Registration Statement, then the Carmel
Stockholders shall, within two Business Days of the Company's withdrawing its
shares from the Company Registration Statement either (X) withdraw their shares
from the Company Registration Statement; (Y) direct the Company to continue to
use its best efforts to have the Company Registration Statement (registering
only shares included thereunder for resale by the Carmel Stockholders) declared
effective and to cooperate in such manner as may be reasonably requested by the
Carmel Stockholders in the marketing of all shares to be sold in the Company
Offering ("Marketing Activities," which shall include, without limitation, the
Company participating in any customary "road shows" and related presentations to
prospective purchasers in connection therewith, and using all reasonable efforts
to maximize the price at which such shares are sold); or (Z) direct the Company
to file a Default Registration Statement (as defined below) pursuant to Section
2.5(f)(v) of this Third Amendment.
10
(iii) If the Company withdraws all of its shares from the Company
Registration Statement and the shares offered for sale thereunder are priced by
the Underwriter at or below the Price, and if the Carmel Stockholders have not
withdrawn or do not withdraw all of their shares from the Company Registration
Statement, the Company shall use its best efforts to file and to cause to go
effective an amended Company Registration Statement, and shall cooperate in
Marketing Activities as reasonably requested by the Carmel Stockholders.
(iv) In the event that the both the Company and each of the Carmel
Stockholders have withdrawn all of their shares from the Company Registration
Statement pursuant to this Section 2.5(e), all terms and conditions of this
Third Amendment and the Stockholders' Agreement shall remain in full force and
effect, except that the restrictions set forth in Section 2.4 of this Third
Amendment shall terminate. If the Company or one or more Carmel Stockholders
refuses to enter into an underwriting agreement in connection with the Company
Registration Statement or determines to sell less than all of its shares
pursuant to such underwriting agreement, any such refusing party shall be deemed
under this Third Amendment to have withdrawn from the Company Registration
Statement any of its shares not sold pursuant to such underwriting agreement.
(v) Once the Company or any Carmel Stockholder has withdrawn its
shares from the Company Registration Statement, any such withdrawing party shall
not be entitled to re-include any withdrawn shares in the Company Registration
Statement without the prior written consent of all non-withdrawing parties.
(f) Subsequent Registration Statements.
(i) In any underwriting agreement relating to the Company Offering,
the Company will require that if the Lock-Up Release Underwriter agrees to an
early release of any lock-up imposed in connection with the Company Registration
Statement ("Lock-Up Release"), which Lock-Up Release shall apply to all such
lock-ups, each other underwriter involved in the Company Offering must also
release any such lock-up.
(ii) Following the Lock-Up Termination Date, the Company shall
provide written notice of the occurrence of such Lock-Up Termination Date to all
Stockholders. Each member of the Investcorp Group shall have ten (10) days from
receipt of such notice to request the Company to file a registration statement
under Section 9.1 or 9.3 of the Stockholders' Agreement (the "Investcorp
Registration Statement"), which registration statement may include some or all
of the shares held by any such Investcorp Group member. Upon receiving a request
pursuant to this Section 2.5(f)(ii), the Company shall promptly notify the
Carmel Stockholders and The JAB Trust in writing that it has received a request
to file the Investcorp Registration Statement. Each Carmel Stockholder and The
JAB Trust shall have 10 days following receipt of such notice from the Company
to inform the Company whether such Stockholder wishes to include its shares in
the Investcorp Registration Statement. Each Carmel Stockholder shall have the
right to include any of its remaining shares (whether registered or
unregistered) in the Investcorp Registration Statement, and The JAB Trust shall
have the right to include any of its shares in the Investcorp Registration
Statement. The Company shall not be delayed in filing the Investcorp
Registration
11
Statement by the application of the last sentence of Section 9.1(c) of the
Stockholders' Agreement with respect to the Company Registration Statement.
(iii) If the registration of Common Stock made in the Investcorp
Registration Statement involves an underwritten public offering (the "Investcorp
Offering"), the Investcorp Group shall be entitled to select the sole or the
lead managing underwriter, as the case may be, of such offering (the "Investcorp
Underwriter"); provided, however, that if (A) the Carmel Stockholders do not
sell all of their shares pursuant to the Company Registration Statement, and (B)
the shares offered in the Company Offering were priced by the Underwriter (net
of underwriting discounts and commissions) below the Price, then (i) three joint
book running underwriters shall participate in the Investcorp Offering, (ii) one
of which shall be selected by the Carmel Stockholders, and two of which shall be
selected by the Investcorp Group (the three joint book running underwriters
shall be referred to herein as the "Investcorp Underwriter"), and (iii)
agreements among the underwriters with regard to price and reduction in the
number of shares included in the Investcorp Offering shall be made in the manner
specified in Section 2.5(d). If the Investcorp Underwriter advises the Company
in writing (with a copy to each Stockholder registering shares for resale in the
Investcorp Registration Statement) that, in its good faith opinion, the number
of shares of Common Stock requested to be included in the Investcorp
Registration Statement would materially adversely affect (as defined in Section
2.5(d)) the marketing of the shares to be sold in such offering (such writing to
state the approximate number of shares which may be included in such offering
without such effect), the Company shall include in such registration: first, a
number of shares of Common Stock owned by the Investcorp Group equal to the
number of shares of Common Stock sold by the Carmel Stockholders pursuant to the
Company Registration Statement; and second, shares allocated pro rata between
the remaining collective number of shares proposed to be included by members of
the Investcorp Group and the collective number of shares proposed to be included
by the Carmel Stockholders and The JAB Trust. If requested in writing by the
Investcorp Underwriter, each Stockholder agrees not to sell publicly any shares
of Registrable Stock or any other shares of Capital Stock (other than shares of
Registrable Stock or other shares of Capital Stock being registered in the
Investcorp Offering), without the consent of such Investcorp Underwriter, for a
period of not more than 90 days following the effective date of the Investcorp
Registration Statement.
(iv) If following receipt of notice from the Company concerning the
Lock-Up Termination Date the Investcorp Group does not request that the Company
file the Investcorp Registration Statement pursuant to Section 2.6(f)(ii) within
such ten day period, each Carmel Stockholder will have ten (10) days to request
the Company to file a registration statement under Section 9.1 or 9.3 of the
Stockholders' Agreement (the "Carmel Registration Statement"). Only the Carmel
Stockholders shall be entitled to participate in the Carmel Registration
Statement, and each Carmel Stockholder shall have the right to include any of
its remaining shares (whether registered or unregistered) in the Carmel
Registration Statement. If the registration of Common Stock made in the Carmel
Registration Statement involves an underwritten public offering (the "Carmel
Offering"), the Carmel Stockholders shall be entitled to select the sole or the
lead managing underwriter, as the case may be, of such offering (the "Carmel
Underwriter"). If requested in writing by the Carmel Underwriter, the Company
and each Stockholder (other than each Carmel Stockholder participating in such
offering) agree not to sell publicly any shares of
12
Registrable Stock or any other shares of Capital Stock without the consent of
such underwriter for a period of not more than 90 days following the effective
date of the Carmel Registration Statement. The Company shall not be delayed in
filing the Carmel Registration Statement by the application of the last sentence
of Section 9.1(c) of the Stockholders' Agreement with respect to the Company
Registration Statement or otherwise.
(v) The Stockholders agree that a "Company Default" shall have
occurred if, at any time prior to the Carmel Stockholders withdrawing all of its
shares from the Company Registration Statement, the Company (i) does not file
the Company Registration Statement by the Registration Date (a "Filing
Default"); (ii) does not use its best efforts to have the Company Registration
Statement declared effective as promptly as practicable or cooperate in
Marketing Activities reasonably requested by the Carmel Stockholders (a "Best
Efforts Default"); or (iii) has withdrawn all of its shares from the Company
Registration Statement and the shares offered for sale thereunder are priced by
the Underwriter at more than the Price (a "Benchmark Withdrawal Default"). Upon
the occurrence of a Company Default, notwithstanding anything herein to the
contrary, each Carmel Stockholder may during the Default Notice Period (as
defined in Section 2.5(f)(vi) request that the Company file a registration
statement under Section 9.1 or 9.3 of the Stockholders' Agreement (the "Default
Registration Statement"), which registration statement may include some or all
of the shares held by any such Carmel Stockholder. The Company must file any
Default Registration Statement within two Business Days of receiving such a
request from any Carmel Stockholder. If the Company fails to timely file a
Default Registration Statement, or fails to cause the Default Registration
Statement to be declared effective within 150 days of the date such Default
Registration Statement was filed, it shall pay the Carmel Stockholders damages
calculated in the same manner provided in Section 9.1(d)(viii) of the
Stockholders' Agreement. The Company and each Stockholder (other than each
Carmel Stockholder) shall have no right to include any shares (whether
registered or unregistered) in the Default Registration Statement. The Company
shall be bound by the final sentence of Section 9.1(c) following the filing of
the Default Registration Statement. Additionally, the Company and each
Stockholder (other than each Carmel Stockholder participating in such offering)
agree not to issue or sell (publicly or privately) any shares of Registrable
Stock or any other shares of Capital Stock for 180 days following the
effectiveness of the Default Registration Statement or such earlier time as all
of the shares registered under the Default Registration Statement have been
sold.
(vi) The "Default Notice Period" shall mean: (A) with respect to a
Filing Default, ten (10) days after such Filing Default; (B) with respect to a
Best Efforts Default, at any time when such a Company Default has occurred and
is continuing, or, if the Company has delivered to the Carmel Stockholders
written notice of its intent to abandon its efforts to cause the Company
Registration Statement to go effective, within ten (10) days of the Carmel
Stockholders' receipt of such notice; or (iii) with respect to a Benchmark
Withdrawal Default, two Business Days after such Benchmark Withdrawal Default.
Section 2.6. Appointment of Additional Directors. If the Stockholders'
Agreement has not been terminated pursuant to Section 12 thereof, upon a request
from the Carmel Stockholders, each Stockholder party to this Third Amendment
agrees to take all possible actions to cause two additional persons designated
by the Carmel Stockholders (in addition to the three
13
persons designated by the Carmel Stockholders as of the date of this Third
Amendment) to be elected to the Company's Board of Directors (the "Board"). If
the Carmel Stockholders designate additional persons to be elected to the Board,
each Stockholder party to this Third Amendment further agrees to take all
possible actions to cause two additional persons designated by the Investcorp
Group (in addition to any persons designated by the Carmel Stockholders as of
the date of this Third Amendment) to be elected to the Board. Any actions taken
by the Stockholders pursuant to this Section 2.6 shall be conducted as promptly
as practicable following the annual meeting of the Company's stockholders on
June 12, 2002, and prior to the next such annual meeting of the Company's
stockholders.
Section 2.7. Continuation of Stockholders' Agreement. Subject to the terms
of this Third Amendment and the Stockholders' Agreement generally, to the extent
any Stockholder retains any Registrable Stock all rights or obligations granted
under the Stockholders' Agreement not expressly waived or amended hereby shall
continue to be binding on each such Stockholder, including without limitation
all registration rights and obligations applicable to such Registrable Stock.
ARTICLE III
MISCELLANEOUS
3.1. Counterparts. This Third Amendment may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
3.2. Captions. The captions herein are included for convenience of
reference only and shall not be construed in the construction or interpretation
hereof. All references to an Article or Section include all subparts thereof.
3.3 Definitions. Initial capitalized terms used herein without definition
that are defined in the Stockholders' Agreement shall have the meanings given to
such terms therein.
[SIGNATURE PAGES FOLLOW]
14
SIGNATURE PAGES TO THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
IN WITNESS WHEREOF, the parties hereto have caused this Third Amendment to
be duly executed as of the day and year first above-written.
CSK AUTO CORPORATION
/s/ Xxxxxx Xxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxx
Title: President and Chief Operating Officer
CSK AUTO, INC.
/s/ Xxxxxx Xxxxxx
---------------------------------------------
Name: Xxxxxx Xxxxxx
Title: President and Chief Operating Officer
XXXXXXX XXXXXXX
---------------------------------------------
SIGNATURE PAGES TO THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
EQUITY CSKA LIMITED
By: /s/ Sydney X. Xxxxxxx
----------------------------------------
Name: The Director Ltd.
Title: Director
EQUITY CSKB LIMITED
By: /s/ Sydney X. Xxxxxxx
----------------------------------------
Name: The Director Ltd.
Title: Director
EQUITY CSKC LIMITED
By: /s/ Sydney X. Xxxxxxx
----------------------------------------
Name: The Director Ltd.
Title: Director
AUTO EQUITY LIMITED
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Director
AUTO PARTS LIMITED
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
AUTO INVESTMENTS LIMITED
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Director
SIGNATURE PAGES TO THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
CSK INVESTMENTS LIMITED
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Director
CSK EQUITY LIMITED
By: /s/ Xxxxxxx Xxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Director
NEW CSK EQUITY LIMITED
By: /s/ Xxxx Xxxxxx
----------------------------------------
Name: Xxxx Xxxxxx
Title: Director
INVESTCORP CSK HOLDINGS L.P.
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Director
CSK INTERNATIONAL LIMITED
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
X.X. XXXXXX (SUISSE) SA, AS SUCCESSOR
TO CHASE MANHATTAN PRIVATE BANK
(SWITZERLAND)
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGES TO THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
SOUTH BAY LIMITED
By: /s/ Illegible
----------------------------------------
Name: Martonmere Services Ltd.
Title: Director
BALLET LIMITED
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Authorized Representative
DENARY LIMITED
By: /s/ Xxxxxxx Xx Xxxxx
----------------------------------------
Name: Xxxxxxx Xx Xxxxx
Title: Authorized Representative
GLEAM LIMITED
By: /s/ Xxxxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Authorized Representative
HIGHLANDS LIMITED
By: /s/ Xxxxx Xx Xxxxxxx
----------------------------------------
Name: Xxxxx Xx Xxxxxxx
Title: Authorized Representative
NOBLE LIMITED
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Authorized Representative
SIGNATURE PAGES TO THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
OUTRIGGER LIMITED
By: /s/ X. Xxxxxxx
----------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Authorized Representative
QUILL LIMITED
By: /s/ Xxxxx Xxxxxxx
----------------------------------------
Name: Xxxxx Xxxxxxx
Title: Authorized Representative
RADIAL LIMITED
By: /s/ Xxxxx Xxxx
----------------------------------------
Name: Xxxxx Xxxx
Title: Authorized Representative
SHORELINE LIMITED
By: /s/ Xxxxxx Xx Xxxxxx
----------------------------------------
Name: Xxxxxx Xx Xxxxxx
Title: Authorized Representative
ZINNIA LIMITED
By: /s/ Xxxxx Xxxxxx
----------------------------------------
Name: Xxxxx Xxxxxx
Title: Authorized Representative
INVESTCORP INVESTMENT EQUITY LIMITED
By: /s/ Sydney X. Xxxxxxx
----------------------------------------
Name: Sydney X. Xxxxxxx
Title: Director
SIGNATURE PAGES TO THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
CHILTERN TRUSTEES LIMITED, AS TRUSTEE
OF CARMEL TRUST
By: /s/ Illegible
----------------------------------------
Name: Illegible
Title: Director
TRANSATLANTIC INVESTMENTS, LLC.
By: /s/ Xxxxx Xxxx
----------------------------------------
Name: Xxxxx Xxxx
Title: EVP
GLENELLEN INVESTMENT CO.
By: /s/ Xxxxxx Xxxxx
----------------------------------------
Name: Xxxxxx Xxxxx
Title: Illegible
THE JAB TRUST
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
By:
----------------------------------------
Name:
---------------------------------
Title:
---------------------------------
SIGNATURE PAGES TO THIRD AMENDMENT TO STOCKHOLDERS' AGREEMENT
