Exhibit 99.3
SECOND WAIVER
SECOND WAIVER dated as of June 16, 2006 (this "Waiver") to the SECOND
AMENDED AND RESTATED CREDIT AGREEMENT dated as of July 25, 2005 (as amended or
modified, the "Credit Agreement"), among CSK AUTO, INC. (the "Company"), the
Lenders, the Co-Syndication Agents and the Co-Documentation Agents party
thereto, and JPMORGAN CHASE BANK, N.A., as Administrative Agent.
WITNESSETH:
WHEREAS, the Company has requested that the Administrative Agent and
the Required Lenders agree to waive compliance with certain provisions of the
Credit Agreement; and
WHEREAS, the Administrative Agent has obtained the consent of the
Required Lenders to execute this Waiver, but only 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. Waivers. (a) Until the earliest of the following (such earliest
date, the "Financial Statement Waiver Termination Date") of:
(i) the first date on which (A) an event of default has occurred
and is continuing under any of the Indentures in respect of the Company's
$225,000,000 of 7% Senior Subordinated Notes due 2014 (the "Senior
Subordinated Notes"), $125,000,000 of 3 3/8% Senior Exchangeable Notes due
2025 (the "3 3/8% Notes") or $100,000,000 of 4 5/8% Senior Exchangeable
Notes due 2035 (the "4 5/8% Notes" and collectively with 3 3/8% Notes, the
"Exchange Notes"; the Senior Subordinated Notes collectively with the
Exchange Notes, the "Existing Notes") and (B) (1) the Exchange Note Waivers
(as defined in Section 4 hereof) are not in effect and the commitments
under the Backstop Commitment Letter (as defined in Section 4 hereof) (the
"Backstop Commitments") (or the commitments under any credit agreement as
contemplated by said commitment letter) with the Company are not in effect
with respect to funding for the payment in full of the Exchange Notes, or
it is not reasonable for the Company to expect that it will be able to
borrow under such commitments by the date five days after any duly
effective acceleration of any Exchange Notes, or (2) the Exchange Note
Waivers are in effect and the Subordinated Note Waiver (as defined in
Section 4 hereof) is not in effect and (x) the Backstop Commitments (or the
commitments under any credit agreement as contemplated by the Backstop
Commitment Letter) are not in effect with respect to the payment in full of
the Senior Subordinated Notes, and (y) the Senior Subordinated Commitment
(as defined in Section 4 hereof) is not in effect or it is not reasonable
for the
Company to expect that it will be able to borrow under such commitment by
the date five days after any duly effective acceleration of the Senior
Subordinated Notes;
(ii) the date five days after any duly effective acceleration of
any of the Existing Notes if such Existing Notes have not then been paid in
full;
(iii) the date on which the Company has filed with the Securities
and Exchange Commission its report on Form 10-K for its fiscal year ended
January 29, 2006 (the "2005 Form 10-K") and, if such date is on or after
May 10, 2007, its report on Form 10-K for its fiscal year ending February
4, 2007 (the "2006 Form 10-K"), and its reports on Form 10-Q then required
to be filed for each of its fiscal quarters ended after January 29, 2006
(the "Specified Form 10-Qs"); and
(iv) the Scheduled Financial Statement Waiver Termination Date
(as defined below);
the Lenders hereby waive (x) the requirements under the Credit Documents that
the Company deliver the 2005 Form 10-K, the 2006 Form 10-K and the Specified
Form 10-Qs and financial statements for the fiscal years ended January 29, 2006
and February 4, 2007 and for the quarters of its 2006 fiscal year and other
information and documents required to be delivered under the Credit Documents in
connection with such reports or such financial statements and (y) any Default or
Event of Default under the Credit Agreement occurring as a result of any default
under, or acceleration of any Indebtedness due under, any of the Indentures for
the Existing Notes, in each case resulting from any failure by the Company to
timely file with the Securities Exchange Commission or deliver to the holders of
any of the Existing Notes or to any trustee therefor the 2005 Form 10-K, the
2006 Form 10-K or any Specified Form 10-Q. The "Scheduled Financial Statement
Waiver Termination Date" shall be December 13, 2006, provided that in the event
that on or prior to December 13, 2006 (A) any Existing Notes not refinanced with
proceeds from either the Term Facility (as defined below) or notes issued as
contemplated in the Senior Subordinated Commitment have been amended, or one or
more waivers (each, an "Existing Note Waiver") in respect thereof have been
granted, in either case in such a manner so that the failure by the Company to
timely file some or all of the 2005 Form 10-K, the 2006 Form 10-K and the
Specified 10-Qs does not constitute an event of default thereunder for any
period of time (any such period, an "Existing Notes Waiver Period") and (B) an
extension fee of 0.25% of the aggregate amount of Commitments as of such date
has been paid to the Administrative Agent for the ratable account of all
Lenders, the Scheduled Financial Statement Waiver Termination Date shall be
extended to the earlier of June 13, 2007 or the date five days before the date
on which the first Existing Notes Waiver Period ends.
(b) The Lenders hereby waive the requirements of Sections 6.01, 6.02
and 6.10 of the Credit Agreement to the extent necessary to permit the Company
to:
(i) solicit or obtain any amendment to or waiver of any of the
Indentures for the Existing Notes having terms consistent with the terms
set forth therefor in the presentation to the Lenders dated June 5, 2006,
or if in effect on the date hereof, having terms consistent with the
Exchange Note Waivers;
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(ii) if the Backstop Commitments are in effect, incur
Indebtedness as contemplated by the Backstop Commitments and use all of the
proceeds thereof to immediately repurchase or, upon any acceleration
thereof, pay any of the Existing Notes (together with transaction fees and
consent fees for any Existing Notes not so paid or repurchased);
(iii) if the Backstop Commitments are in effect, incur the Liens
contemplated by the Backstop Commitments and, in connection therewith,
enter with the Administrative Agent and the collateral or administrative
agent under the term facility provided for in the Backstop Commitments (the
"Term Facility") into an intercreditor agreement having principal terms as
set forth in Schedule 1 hereto (the "Intercreditor Agreement"); and
(iv) incur Indebtedness in the form of publicly issued or
privately placed senior unsecured notes or subordinated notes (including
notes issued as contemplated in the Senior Subordinated Commitment) in
order to refinance any of the Existing Notes or the Term Facility in whole
or in part at any time and to pay fees and expenses in connection with such
incurrence and refinancing, provided that such notes shall require no
scheduled principal payments and permit no scheduled puts on the part of
the holders thereof on or prior to the date six months after the Maturity
Date and shall otherwise have terms consistent with then market conditions
and the requirements of the Credit Agreement and reasonably acceptable to
the Administrative Agent.
(c) The Lenders hereby waive (i) any condition or required
representation or warranty that could not be satisfied or made or deemed made,
and (ii) any Default or Event of Default, in either case to the extent that such
condition or required representation or warranty could not be satisfied or made
or deemed made or such Default or Event of Default would not have occurred had
any of the financial statements of the Company referred to in, or furnished to
the Lenders pursuant to, the Credit Documents for any period ended prior to
January 29, 2006 been in a form consistent with any restatements of financial
statements of the Company or Holdings as a result of information obtained or
developed in connection with the preparation or audit of the financial
statements of the Company or Holdings for the fiscal year ended January 29, 2006
or in connection with the review and investigation (the "Audit Committee
Review") by the Audit Committee of the Board of Directors of Holdings announced
in a press release filed with the Securities and Exchange Commission on March
27, 2006 as part of a report on Form 8-K (the "March 27 8-K"), provided that all
the material changes reflected in such restatements that, in the reasonable
opinion of the Administrative Agent, are, or reflect matters relating to
financial condition or results of operation that are, adverse to the interest of
the Lenders, are consistent with the scope of the store surplus fixtures and
supplies inventory and vendor allowance matters described in the March 27 8-K
and in a press release filed with the Securities and Exchange Commission on May
22, 2006 as part of a report on Form 8-K (the "May 22 8-K") (the "Updated
Specified Matters").
3. Agreements. (a) The Company agrees that prior to its filing of the
2005 Form 10-K and each Specified Form 10-Q, it shall compute the Borrowing Base
and prepare Borrowing Base Certificates in a manner that is consistent with the
treatment of the Updated Specified Matters in the Borrowing Base Certificate
dated April 30, 2006, furnished to the
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Administrative Agent on such date or as otherwise may be required by the
Administrative Agent, subject to any adjustments thereto (including adjustments
to reflect results of the Audit Committee Review at the time) as shall be
reasonably satisfactory to the Administrative Agent.
(b) The Company agrees to deliver to the Administrative Agent for
prompt distribution to each Lender as soon as available, and in any event within
35 days after the end of each fiscal month of the Company, management financial
reports of the Company setting forth (i) a consolidated balance sheet and
consolidated statements of income and operations and (ii) calculations
demonstrating compliance with Section 6.07 of the Credit Agreement (including
calculations of Consolidated EBITDAR and Consolidated EBITDA (which shall be
Consolidated EBITDAR net of Consolidated Lease Expense), with any such financial
statements to be prepared in a manner materially consistent with the Company's
past practices (unless otherwise required to conform with the results of the
audit or changes in GAAP) and, to the extent relevant, on the basis of
management's good faith efforts, in such form and detail reasonably satisfactory
to the Administrative Agent. The Lenders acknowledge that such management
financial reports are not final and are subject to change either in connection
with the preparation of the 2005 Form 10-K, the 2006 Form 10-K or the Specified
Form 10-Qs, or as a result of or arising out of any restatement in connection
with the audit conducted for the fiscal year ended January 29, 2006, as the case
may be.
(c) The Company agrees that (i) it shall not permit, as of the end of
any fiscal quarter ending prior to the Financial Statement Waiver Termination
Date, the Fixed Charge Coverage Ratio to be less than 1.00 to 1.00, and (ii) any
non-compliance with this Section 3(c) shall be an Event of Default under Article
VII(c) of the Credit Agreement.
(d) The Company agrees that it will not borrow under the Commitments
in order to repurchase, redeem or pay or prepay the principal of any of the
Existing Notes, any notes issued as contemplated by the Senior Subordinated
Commitment or any loans under the Term Facility (other than scheduled interim
installments of such loans).
4. Conditions to Effectiveness of this Waiver. This Waiver shall
become effective upon (a) receipt by the Administrative Agent of counterparts of
this Waiver duly executed or consented to by the Company, the Administrative
Agent and the Required Lenders and (b) payment by the Company of a fee for the
account of each Lender executing and delivering the Waiver on or prior to 12:00
p.m. (New York City time) on Friday, June 16, 2006 (or such later time as the
Company and the Administrative Agent shall agree) in an amount equal to 0.25% of
such Lender's Commitment; and (c) by 5:00 p.m. (New York City time) on June 16,
2006, the Company shall have received and accepted either (A) a commitment
letter or equivalent agreement with one or more financial institutions
reasonably satisfactory to the Administrative Agent providing for a fully
committed financing for a repurchase or payment of the Exchange Notes or all of
the Existing Notes on terms consistent with the terms set forth for such a
financing in the presentation to the Lenders dated June 5, 2006 and otherwise on
terms reasonable under the circumstances (such commitment letter or other
agreement, the "Backstop Commitment Letter"), provided that, if the Backstop
Commitment Letter does not provide a commitment for the repurchase or payment of
the Senior Subordinated Notes, either the Senior Subordinated Waiver or the
Senior Subordinated Commitment (each as defined below) shall also be in full
force and effect, or (B) (i) lock up agreements with holders of at least 51% of
each of
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the 4 5/8% Notes and the 3 3/8% Notes, on terms reasonably acceptable to the
Administrative Agent, providing the terms for Existing Notes Waivers with
respect to each of the 4 5/8% Notes and the 3 3/8% Notes (such lock up
agreements and, together with, upon effectiveness thereof, such Existing Notes
Waivers, the "Exchange Note Waivers"), and (ii) either (1) a commitment letter
or equivalent agreement with one or more financial institutions reasonably
satisfactory to the Administrative Agent providing for a fully committed
financing for a repurchase or payment of the Senior Subordinated Notes with new
senior subordinated notes (such commitment letter or other agreement, the
"Senior Subordinated Commitment"), or (2) a lock up agreement with holders of at
least 51% of the holders of the Senior Subordinated Notes, on terms reasonably
acceptable to the Administrative Agent, providing the terms for an Existing
Notes Waiver with respect to the Senior Subordinated Notes (such lock up
agreement, and, together with, upon effectiveness thereof, such Existing Notes
Waiver, the "Senior Subordinated Waiver").
5. Authorization to Administrative Agent. The Lenders hereby authorize
and instruct the Administrative Agent to enter into the Intercreditor Agreement
at any time at the request of the Company in connection with any borrowing by
the Company under the Term Facility.
6. Acknowledgement of Guarantors. The Guarantors acknowledge and
consent to all of the terms and conditions of this Waiver and agree that this
Waiver 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
the Guarantors have no claims, counterclaims, offsets, or defenses 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 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 Waiver.
7. Continuing Effect; No Other Waiver. Except as expressly set forth
in this Waiver, all of the terms and provisions of the Credit Documents are
ratified and confirmed, and are and shall remain in full force and effect and
the Company shall continue to be bound by all of such terms and provisions. The
waiver provided for herein is limited as specified herein and shall not
constitute (i) any other waiver of the Credit Documents or (ii) an admission by
the Company of any past, present or future Default or Event of Default under the
Credit Documents or any past, present or future default or event of default
under any other indebtedness of the Company or Holdings. The Company
acknowledges and agrees that nothing in this Waiver 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 not referenced in this Waiver or for any other time period.
The parties hereto agree that this Waiver supersedes and replaces the waiver
among the parties hereto dated as of May 4, 2006 and extended on June 13, 2006.
8. Expenses. The Company agrees to pay and reimburse the
Administrative Agent for all its reasonable out-of-pocket costs and expenses
incurred in connection with the preparation and delivery of this Waiver,
including, without limitation, the reasonable fees and disbursements of counsel
to the Administrative Agent.
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9. Credit Document. This Waiver 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.
10. Counterparts. This Waiver may be executed by one or more of the
parties to this Waiver 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 Waiver
signed by the parties hereto shall be delivered to the Company and the
Administrative Agent. The execution and delivery of this Waiver 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.
11. GOVERNING LAW. THIS WAIVER AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS WAIVER 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 Waiver to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
CSK AUTO, INC.
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President -- CFO
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[GUARANTORS].
CSK AUTO CORPORATION
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President -- CFO
---------------------------------
▇▇▇▇▇▇▇.▇▇▇
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
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Title: Senior Vice President -- CFO
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CSK Auto, Inc. Waiver
JPMORGAN CHASE BANK, N.A. as
Administrative Agent and a Lender
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
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Title: Managing Director
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CSK Auto, Inc. Waiver
UBS Loan Finance LLC
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Director
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Associate Director
Wachovia Bank National Association
By: /s/ ▇▇▇▇ ▇▇▇▇▇
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Name: ▇▇▇▇ ▇▇▇▇▇
Title: Vice President
Allied Irish Banks, p.l.c., as Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇
Title: SVP
By: /s/ ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇'▇▇▇▇▇▇▇
Title: Vice President
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
UPS CAPITAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Director, Portfolio Management
▇▇▇▇▇▇ Commercial Paper Inc., and its affiliates
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
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Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
Title: Vice President
U.S. BANK
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Title: Vice President
ING CAPITAL LLC
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Managing Director
NATIONAL CITY BUSINESS CREDIT, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
BANK OF AMERICA, N.A., as Lender
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President