Exhibit 99.1 Amendment No. 2, dated October 15, 2004, to the Amended and
Restated Loan and Security Agreement, by and among the Company,
Congress Financial Corporation, as Agent, and the other parties
Execution
AMENDMENT NO. 2 TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
As of October 15, 2004
Congress Financial Corporation, as Agent
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Congress Financial Corporation, a Delaware corporation, in its capacity as
agent pursuant to the Loan Agreement (as hereinafter defined) acting for and on
behalf of the parties thereto as lenders (in such capacity, "Agent") and the
parties to the Loan Agreement as lenders (individually, each a "Lender and,
collectively, "Lenders") and The Pep Boys - Manny, Moe & Xxxx, a Pennsylvania
corporation ("Pep Boys"), The Pep Boys Xxxxx Xxx & Xxxx of California, a
California corporation ("PBY-California"), Pep Boys - Xxxxx Xxx & Xxxx of
Delaware, Inc., a Delaware corporation ("PBY-Delaware"), and Pep Boys - Manny,
Moe & Xxxx of Puerto Rico, Inc., a Delaware corporation ("PBY-Puerto Rico"; and
together with Pep Boys, PBY-California and PBY-Delaware, each individually, a
"Borrower" and collectively, "Borrowers" as hereinafter further defined), PBY
Corporation, a Delaware corporation ("PBY") and Carrus Supply Corporation, a
Delaware corporation ("Carrus" and, together with PBY, each individually, a
"Guarantor" and collectively, "Guarantors" as hereinafter further defined) have
entered into certain financing arrangements pursuant to which Agent and Lenders
may make loans and advances and provide other financial accommodations to
Borrowers as set forth in the Amended and Restated Loan and Security Agreement,
dated August 1, 2003 by and among Agent, The CIT Group/Business Credit, Inc.
and General Electric Capital Corporation as Co-Documentation Agents, Lenders,
Borrowers and Guarantors, as amended by Amendment No. 1 to Amended and Restated
Loan and Security Agreement dated as of October 24, 2003 (as the same now
exists or may hereafter be amended, modified, supplemented, extended, renewed,
restated or replaced, the "Loan Agreement") and the agreements, documents and
instruments at any time executed and/or delivered in connection therewith or
related thereto, including, but not limited to, this Amendment No. 2 to Amended
and Restated Loan and Security Agreement ("Amendment"), but excluding the
Synthetic Lease Facility Agreements and Hedge Agreements (all of the foregoing
together with the Loan Agreement, as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced, being
collectively referred to herein as the "Financing Agreements").
Borrowers and Guarantors have requested that Agent and Lenders consent to
certain transactions and agree to amend certain reporting requirements, and
enter into certain amendments to the Financing Agreements in connection
therewith. Agent and Lenders are willing to agree to the foregoing, subject to
the terms and conditions contained herein.
In consideration of the foregoing, the mutual agreements and covenants
contained herein, and other good and valuable consideration, the adequacy and
sufficiency of which are hereby acknowledged, Agent, each Lender, each Borrower
and each Guarantor agree as follows:
1. Definitions.
(a) Additional Definitions. As used herein, the following
terms shall have the respective meanings given to them below, and the Loan
Agreement and the other Financing Agreements are hereby amended to include, in
addition and not in limitation, the following definitions:
(i) "GMAC Trade Payables Agreement" shall mean the Trade
Payables Agreement by and between GMAC Commercial Finance LLC and Borrowers,
substantially in the form attached hereto as Exhibit A.
(ii) "Lombard" shall mean RBS Lombard, Inc., a New York
corporation.
(iii) "Lombard Agency Agreement" shall mean the Agency
Agreement dated December 27, 2002 by and between Pep Boys and Lombard, the
Amendment to Agency Agreement dated as of June 23, 2004, by and among Borrowers
and Lombard, and the Second Amendment to Agency Agreement dated as of
October 15, 2004, by and among Borrowers and Lombard each substantially in the
form attached hereto as Exhibit B.
(iv) "Lombard Agency Transactions" shall mean the purchases
of equipment by Pep Boys as agent for Lombard pursuant to the Lombard Agency
Agreement, which equipment is to be leased by Lombard as lessor to Borrowers as
lessee, provided that, such "Lombard Agency Transactions" as defined herein
shall be limited to unreimbursed purchases of equipment not to exceed
$35,000,000 outstanding and unreimbursed in the aggregate.
(v) "Lombard Progress Payment Rider" shall mean the
Progress Payment Rider dated as of October 15, 2004, by and among Borrowers and
Lombard, as a rider to the Master Lease Agreement dated as of October 15, 2004,
by and among Borrowers and Lombard, each substantially in the form attached
hereto as Exhibit C.
(b) Interpretation. All capitalized terms used herein
shall have the meanings assigned thereto in the Loan Agreement and the other
Financing Agreements, unless otherwise defined herein.
2. Amendments to Loan Agreement.
(a) Cash Equivalents. Section 1.22 of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:
"1.22 Cash Equivalents" shall mean, at any time, (a) any
evidence of Indebtedness with a maturity date of one hundred
eighty (180) days or less issued or directly and fully
guaranteed or insured by the United States of America or any
agency or instrumentality thereof; provided, that, the full
faith and credit of the United States of America is pledged in
support thereof; (b) certificates of deposit or bankers'
acceptances with a maturity of one hundred eighty (180) days or
less of any financial institution that is a member of the
Federal Reserve System having combined capital and surplus and
undivided profits of not less than $250,000,000; (c) commercial
paper (including variable rate demand notes) with a maturity of
one hundred eighty (180) days or less issued by a corporation
(except an Affiliate of any Borrower or Guarantor) organized
under the laws of any State of the United States of America or
the District of Columbia and rated at least A-1 by Standard &
Poor's Ratings Service, a division of The XxXxxx-Xxxx
Companies, Inc. or at least P-1 by Xxxxx'x Investors Service,
Inc.; (d) repurchase obligations with a term of not more than
thirty (30) days for underlying securities of the types
described in clause (a) above entered into with any financial
institution having combined capital and surplus and undivided
profits of not less than $250,000,000; (e) repurchase
agreements and reverse repurchase agreements relating to
marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any
governmental agency thereof and backed by the full faith and
credit of the United States of America, in each case maturing
within one hundred eighty (180) days or less from the date of
acquisition; provided, that, the terms of such agreements
comply with the guidelines set forth in the Federal Financial
Agreements of Depository Institutions with Securities Dealers
and Others, as adopted by the Comptroller of the Currency on
October 31, 1985; (f) investments in money market funds and
mutual funds which invest substantially all of their assets in
securities of the types described in clauses (a) through (e)
above; and (g) investments in money market funds administered
or managed by financial institutions satisfactory to Agent,
and which invest substantially all of their assets in
securities consisting of Indebtedness of any state or states of
the United States of America, or any political subdivision of
such states."
(b) Weekly Reporting. Section 7.1(a)(i) of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefore:
"(i) (i) after the end of each calendar month,
as soon as available, but in any event no later than five (5)
days after the end of such month, a Monthly Collateral Report,
as of the last business day of the immediately preceding month,
or (ii) so long as Excess Availability is less than
$75,000,000, after the end of each calendar week, as soon as
available, but in any event no later than five (5) days after
the end of such week, a Weekly Collateral Report, as of the
last business day of the immediately preceding week, in each
case as to the Accounts and Inventory balances, duly completed
and executed by the chief financial officer, Vice
President-Finance of Pep Boys, or such other financial officer
of Pep Boys reasonably acceptable to the Agent on behalf of
Borrowers; provided that, without limiting any other rights of
Agent, upon Agent's request, Borrower shall provide Agent on a
daily basis with a schedule of Accounts, collections received
and credits issued and on a weekly basis with an inventory
report in the event that at any time either: (1) a Default or
an Event of Default, shall exist or have occurred, or
(2) Borrowers shall have failed to deliver any Borrowing Base
Certificate in accordance with the terms hereof, or (3) upon
Agent's good faith belief, any information contained in any
Borrowing Base Certificate is incomplete, inaccurate or
misleading, or Excess Availability shall be less than
$37,500,000;"
(c) Weekly Reporting. Section 7.1(a)(ii)(F) of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefore:
"(F) agings of accounts payable and agings of all amounts
due under the GMAC Trade Payables Agreement, together with such
other reports concerning the GMAC Trade Payables Agreement and
the related indebtedness as Agent may from time to time
reasonably request, and"
(d) Credit Card Reporting. Section 7.1(a)(iv) of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefore:
"(iv) at any time when Excess Availability is less than
$75,000,000, as soon as available, but in any event not later
than five (5) Business Days after receipt by any Borrower, the
monthly statements received by any Borrower from any Credit
Card Issuers or Credit Card Processors, together with such
additional information with respect thereto as shall be
sufficient to enable Agent to monitor the transactions pursuant
to the Credit Card Agreements; and"
(e) Lease Reporting. Section 7.1(a) of the Loan Agreement
is hereby amended by adding the following immediately following Section
7.1(a)(v):
"(vi) as soon as possible after the end of each month (but in
any event within ten (10) Business Days after the end of each
month) at any time that Excess Availability is equal to or less
than $75,000,000, or more frequently as Agent may in good faith
request if at any time Excess Availability is equal to or less
than $37,500,000, a report setting forth the status of payments
to owners and lessors of the leased premises of Borrowers."
(f) Indebtedness. Section 9.9 of the Loan Agreement is
hereby amended by adding the following immediately after Section 9.9(s):
"(t) Indebtedness of Borrowers entered into in the ordinary
course of business pursuant to the GMAC Trade Payables
Agreement, provided, that, as to each and all of such
indebtedness: (i) Agent shall have received not less than
ten (10) Business Days prior written notice of the Borrowers
intention to enter into the GMAC Trade Payables Agreement,
(ii) Agent shall have received true, correct and complete
copies of the GMAC Trade Payables Agreement and any amendments,
supplements or other agreements, related thereto, as duly
authorized, executed and delivered by the parties thereto,
(iii) such indebtedness shall be incurred by Borrowers at
commercially reasonable rates and terms in a bona fide arms'
length transaction, (iv) all of such indebtedness is
unsecured by any assets of any Borrower or Guarantor, (v) such
indebtedness shall not at any time include terms and
conditions which in any manner adversely affect Agent or any
rights of Agent as determined in good faith by Agent and
confirmed by Agent to Borrowers in writing, (vi) as of the date
of incurring such indebtedness and after giving effect thereto,
no Event of Default shall exist or have occurred, (vii)
Borrowers shall not, directly or indirectly, (A) amend, modify,
alter or change the terms of the agreements with respect to
such indebtedness, except, that, Borrowers may, after prior
written notice to Agent, amend, modify, alter or change the
terms thereof so as to extend the maturity thereof or defer the
timing of any payments in respect thereof, or to forgive or
cancel a portion of such indebtedness (other than pursuant to
payments thereof), or to reduce the rate or any fees in
connection therewith, or to make any covenants contained
therein less restrictive or burdensome as to Borrowers or
otherwise more favorable to Borrowers (as determined in good
faith by Agent), or (B) redeem, retire, defease, purchase or
otherwise acquire such indebtedness, or, except as expressly
set forth in the GMAC Trade Payables Agreement, set aside or
otherwise deposit or invest any sums for such purpose, and
(viii) Borrowers shall furnish to Agent all notices or demands
in connection with such indebtedness either received by any
Borrower or on their behalf promptly after the receipt thereof,
or sent by any Borrower on its behalf, concurrently with the
sending thereof, as the case may be; and
(u) Indebtedness of Pep Boys entered into in the ordinary
course of business pursuant to the Lombard Progress Payment
Rider, provided, that, as to each and all of such
indebtedness: (i) Agent shall have received true, correct and
complete copies of all agreements, documents and instruments
evidencing or otherwise related to such indebtedness, as duly
authorized, executed and delivered by the parties thereto,
(ii) such indebtedness shall be incurred by Borrowers' at
commercially reasonable rates and terms in a bona fide arms'
length transaction, (iii) all of such indebtedness is unsecured
by any assets of any Borrower or Guarantor, (iv) such
indebtedness shall not at any time include terms and conditions
which in any manner adversely affect Agent or any rights of
Agent as determined in good faith by Agent and confirmed by
Agent to Borrowers in writing, (v) as of the date of incurring
such indebtedness and after giving effect thereto, no Event of
Default shall exist or have occurred, (vi) Borrowers may only
make regularly scheduled payments of principal and interest in
respect of such indebtedness, (vii) Borrowers shall not,
directly or indirectly, (A) amend, modify, alter or change the
terms of the agreements with respect to such indebtedness,
except, that, Borrowers may, after prior written notice to
Agent, amend, modify, alter or change the terms thereof so as
to extend the maturity thereof or defer the timing of any
payments in respect thereof, or to forgive or cancel a portion
of such indebtedness (other than pursuant to payments thereof),
or to reduce the rate or any fees in connection therewith, or
to make any covenants contained therein less restrictive or
burdensome as to Borrowers or otherwise more favorable to
Borrowers (as determined in good faith by Agent), or (B)
redeem, retire, defease, purchase or otherwise acquire such
indebtedness, or set aside or otherwise deposit or invest any
sums for such purpose, and (viii) Borrowers shall furnish to
Agent all notices or demands in connection with such
indebtedness either received by any Borrower or on their behalf
promptly after the receipt thereof, or sent by any Borrower on
its behalf, concurrently with the sending thereof, as the case
may be."
3. Consent to Lombard Agency Transactions. Subject to the terms
and conditions contained herein and effective upon Agent's receipt of an
Equipment Rights Agreement, substantially in the form attached hereto as
Exhibit D, executed and delivered by all parties thereto other than Agent,
Agent and Lenders hereby consent to Borrowers entering into the Lombard Agency
Agreement and the Lombard Progress Payment Rider and to consummating the
Lombard Agency Transactions.
4. Consent to GMAC Trade Payables Agreement. Subject to the terms
and conditions contained herein, Agent and Lenders hereby consent to Pep Boys
entering into the GMAC Trade Payables Agreement.
5. Additional Representations, Warranties and Covenants. In
addition to the continuing representations, warranties and covenants heretofore
or hereafter made by each Borrower and Guarantor to Agent and Lenders pursuant
to the other Financing Agreements, each Borrower and Guarantor hereby jointly
and severally represents, warrants and covenants with and to Agent and Lenders
as follows, which representations, warranties and covenants are continuing and
shall survive the execution and delivery hereof and shall be incorporated into
and made a part of the Financing Agreements:
(a) No Event of Default or condition or event which with
notice or passage of time or both would constitute an Event of Default exists
or has occurred as of the date of this Amendment (after giving effect to the
amendments made and consents granted by Agent and Lenders pursuant to this
Amendment). As of the date of any Borrower or Guarantor entering into the
GMAC Trade Payables Agreement, the Lombard Agency Agreement and the Lombard
Progress Payment Rider and after giving effect to each such transaction
thereunder, the aggregate amount of outstanding Exempted Debt represented by
such transaction, when aggregated with all other outstanding Exempted Debt,
shall not exceed the Exempted Debt Limit, and such transaction is and shall
be in compliance with the terms and conditions set forth in the Pep Boys
Indentures.
(b) This Amendment and each other agreement or instrument
to be executed and delivered by Borrowers and Guarantors hereunder has been
duly executed and delivered by each Borrower and Guarantor and is in full force
and effect as of the date hereof, and the agreements and obligations of each
Borrower contained herein and therein constitute legal, valid and binding
obligations of each Borrower and Guarantor enforceable against each Borrower
and Guarantor in accordance with their terms.
(c) Neither the execution and delivery of the GMAC Trade
Payables Agreement, the Lombard Agency Agreement and the Lombard Progress
Payment Rider, nor the consummation of the transactions contemplated by the
GMAC Trade Payables Agreement, the Lombard Agency Agreement, and the Lombard
Progress Payment Rider nor compliance with the provisions of the GMAC Trade
Payables Agreement, the Lombard Agency Agreement, and the Lombard Progress
Payment Rider or instruments thereunder shall result in (i) the creation or
imposition of any lien, claim, charge or encumbrance upon any of the
Collateral, except in favor of Agent and Lenders or (ii) the incurrence,
creation, assumption of any Indebtedness of any Borrower or Guarantor, except
as expressly permitted under Section 9.9 of the Loan Agreement (after giving
effect to this Amendment) and by the other Financing Agreements.
(d) No court of competent jurisdiction has issued any
injunction, restraining order or other order which prohibits consummation of
the transactions contemplated in respect of the GMAC Trade Payables Agreement,
the Lombard Agency Agreement and the Lombard Progress Payment Rider, and no
governmental or other action or proceeding has been threatened or commenced in
the United States of America, seeking any injunction, restraining order or
other order which seeks to void or otherwise modify the transactions described
in the GMAC Trade Payables Agreement, the Lombard Agency Agreement and the
Lombard Progress Payment Rider. Neither the execution and delivery of the GMAC
Trade Payables Agreement or the Lombard Agency Agreement, nor the consummation
of the transactions contemplated by the GMAC Trade Payables Agreement, the
Lombard Agency Agreement and the Lombard Progress Payment Rider, nor compliance
with the provisions thereof, shall violate any Federal or state securities laws
or any other law or regulation or any order or decree of any court or
governmental instrumentality in respect or shall conflict with or result in the
breach of, or constitute a default in any respect under, any indenture, or
other material mortgage, agreement, instrument or undertaking to which any
Borrower or Guarantor is a party or may be bound, or violate any provision of
the organizational documents of any Borrower or Guarantor.
(e) Each Borrower and Guarantor shall take such steps and
execute and deliver, and cause to be executed and delivered, to Agent, such
additional UCC financing statements and termination statements, and other and
further agreements, documents and instruments as Agent may require in order to
more fully evidence, perfect and protect Agent and Lenders' security interest
in Collateral.
6. Conditions to Effectiveness of Consent and Amendment. The
effectiveness of the amendments and consents set forth in this Amendment shall
be subject to the satisfaction of each of the following conditions precedent:
(a) Agent shall have received an executed original or
executed original counterparts of this Amendment (as the case may be), duly
authorized, executed and delivered by the required parties hereto;
(b) Agent shall have received, in form and substance
satisfactory to Agent, all consents, waivers, acknowledgments, releases,
terminations and such other documents and agreements from third persons which
Agent may deem necessary or desirable in order to permit, protect and perfect
Agent's and Lenders' security interests in and liens upon the Collateral;
(c) Agent shall have received a true and complete copy of
the Lombard Agency Agreement and the Lombard Progress Payment Rider, duly
authorized, executed and delivered by the parties thereto; and
(d) no Event of Default shall exist or have occurred and no
event or condition shall have occurred or exist which notice or passage of time
or both would constitute an Event of Default (after giving effect to the
amendments made and consents granted by Agent and Lenders pursuant to this
Amendment).
7. Additional Events of Default. The parties hereto acknowledge,
confirm and agree that the failure of any Borrower or Guarantor to comply with
the covenants and agreements contained herein shall constitute an Event of
Default under the Financing Agreements (subject to the applicable cure period,
if any, with respect thereto provided for in the Loan Agreement).
8. Effect of this Amendment. Except as modified pursuant hereto,
no other waivers, changes or modifications to the Financing Agreements are
intended or implied, and in all other respects, the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as
of the effective date hereof. To the extent of conflict between the terms of
this Amendment and the other Financing Agreements, the terms of this Amendment
shall control.
9. Further Assurances. The parties hereto shall execute and
deliver such additional documents and take such additional actions as may be
necessary to effectuate the provisions and purposes of this Amendment.
10. Governing Law. The rights and obligations hereunder of each of
the parties hereto shall be governed by and interpreted and determined in
accordance with the laws of the State of New York (without giving effect to
principles of conflicts of laws).
11. Binding Effect. This Amendment shall be binding upon and inure
to the benefit of each of the parties hereto and their respective successors
and assigns. Any acknowledgment or consent contained herein shall not be
construed to constitute a consent to any other or further action by any
Borrower or Guarantor or to entitle any Borrower or Guarantor to any other
consent. The Loan Agreement and this Amendment shall be read and construed as
one agreement.
12. Counterparts. This Amendment may be executed in any number of
counterparts, but all of such counterparts shall together constitute but one
and the same agreement. In making proof of this Amendment, it shall not be
necessary to produce or account for more than one counterpart thereof signed by
each of the parties thereto.
[Remainder of page intentionally blank]
AGENT BORROWERS
/s/CONGRESS FINANCIAL /s/THE PEP BOYS - MANNY, MOE & XXXX
CORPORATION, as Agent
/s/THE PEP BOYS XXXXX XXX & XXXX OF
CALIFORNIA
/s/PEP BOYS - MANNY, MOE & XXXX OF
DELAWARE, INC.
GUARANTORS
/s/PBY CORPORATION
/s/CARRUS SUPPLY CORPORATION
LENDERS
/s/CONGRESS FINANCIAL CORPORATION
/s/XXXXX FARGO FOOTHILL, LLC
/s/WHITEHALL BUSINESS CREDIT CORP.
/s/THE CIT GROUP/BUSINESS CREDIT, INC.
/s/GENERAL ELECTRIC CAPITAL CORPORATION
/s/RZB FINANCE, LLC
/s/LASALLE BUSINESS CREDIT LLC
/s/PNC BANK, NATIONAL ASSOCIATION
/s/UPS CAPITAL CORPORATION
/s/ORIX FINANCIAL SERVICES, INC.
