Exhibit 99.2 Amendment No. 3, dated December 2, 2004, to the Amended and
Restated Loan and Security Agreement, by and among the Company,
Congress Financial Corporation, as Agent, and the other parties
thereto.
AMENDMENT NO. 3 TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
December 2, 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 - Manny, Moe & 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,
and Amendment No. 2 to Amended and Restated Loan and Security Agreement dated
as of October 15, 2004 (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. 3 to Amended and Restated Loan and Security
Agreement ("Amendment No. 3"), 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 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) "2004 Senior Subordinated Note Indenture" shall
mean the Indenture, by and between Pep Boys and Wachovia Bank, National
Association, as Trustee, executed and delivered by the parties thereto on the
2004 Senior Subordinated Note Issuance Date, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced, pursuant to which Pep Boys shall have issued promissory notes in the
maximum aggregate principal amount equal to the 2004 Senior Subordinated Note
Issuance Amount (such promissory notes being referred to as the "2004 Senior
Subordinated Notes").
(ii) "2004 Senior Subordinated Note Issuance Amount"
shall mean the aggregate principal amount of the notes of Pep Boys issued
pursuant to the 2004 Senior Subordinated Note Indenture on the 2004 Senior
Subordinated Note Issuance Date, provided, that, such amount shall not exceed
$200,000,000.
(iii) "2004 Senior Subordinated Note Issuance Date"
shall mean the date that Agent determines that all of the conditions precedent
set forth in Schedule 9.9(i) have been satisfied.
(iv) "Amendment No. 3" shall mean Amendment No. 3
to Amended and Restated Loan and Security Agreement by and among Borrowers,
Guarantors, Agent and Lenders, as the same now exists or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced.
(v) "First Facility Reserve Reduction Date" shall
mean the date that Agent determines that all of the conditions precedent set
forth in Schedule 1.66(a) have been satisfied.
(vi) "Maintenance Reversion Date" shall mean the
date that Excess Availability has been greater than $75,000,000 for thirty (30)
consecutive days, provided, that, (a) no more than three (3) Maintenance
Reversion Dates may occur during the term of this Agreement and (b) if an
additional Minimum EBITDA Maintenance Event occurs, no further Maintenance
Reversion Dates shall occur during the term of this Agreement.
(vii) "Minimum EBITDA Maintenance Event" shall mean
the period commencing the end of any month during which Excess Availability is
at anytime less than $50,000,000 and ending on a Maintenance Reversion Date;
provided, that, (a) no more than three (3) Maintenance Reversion Dates may
occur during the term of this Agreement, and (b) if an additional Minimum
EBITDA Maintenance Event occurs no further Maintenance Reversion Dates may
occur during the term of this Agreement.
(viii) "Second Facility Reserve Reduction Date" shall
mean the date that Agent determines that all of the conditions precedent set
forth in Schedule 1.66(b) have been satisfied.
(ix) "Synthetic Lease Facility Agent" shall mean
Wachovia Bank, National Association, as Agent for the Tranche A Lenders (as
such term is defined in the Synthetic Lease Facility Agreements) under the
Synthetic Lease Facility Agreements, together with any successors or assigns.
(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) Applicable Margin. Section 1.8 of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:
"1.8 "Applicable Margin" shall mean, at any time, as
to the Interest Rate for Prime Rate Loans and the Interest Rate
for Eurodollar Rate Loans, the applicable percentage (on a per
annum basis) set forth below if Quarterly Average Excess
Availability for the immediately preceding fiscal quarter is in
the amount indicated for such percentage is at the level
indicated for such percentage:
Quarterly Average Applicable Prime Applicable Eurodollar
Excess Availability Prime Rate Margin Rate Margin
------------------- ----------------- ---------------------
(i) $50,000,000
or more 0% 1 1/2%
(ii) Greater than
$25,000,000
and less than
$50,000,000 0% 1 3/4%
(iii) Greater than
$10,000,000
and equal to
or less than
$25,000,000 1/4% 2%
(iv) $10,000,000
or less 1/2% 2 1/4%
provided, that, the Applicable Margin shall be calculated and
established once each fiscal quarter (commencing with the
fiscal quarter ending on or about April 30, 2005) in accordance
with the terms of Section 1.83 hereof and shall remain in
effect until adjusted thereafter during the next fiscal
quarter;"
(b) Applicable Unused Line Fee Percentage. Section 1.9 of
the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:
"1.9 "Applicable Unused Line Fee Percentage" shall mean, at
any time, as to the calculation of the Unused Line Fee set
forth in Section 3.2(a) hereof, the Applicable Unused Line Fee
Percentage as set forth below if Quarterly Average Excess
Availability for the immediately preceding fiscal quarter is in
the amount indicated for such percentage:
Quarterly Average Applicable Unused
Excess Availability Line Fee Percentage
----------------------- ----------------------
(i) $50,000,000 or more 1/4%
(ii) Greater than
$25,000,000 and less
than $50,000,000 1/4%
(iii) Greater than
$10,000,000 and equal to
or less than $25,000,000 3/8%
(iv) $10,000,000 or less 3/8%
provided, that, the Applicable Unused Line Fee Percentage shall
be calculated and established once each fiscal quarter and
shall be effective as of each January, April, July, and October
of each calendar year. As of the date of Amendment No. 3, the
Applicable Unused Line Fee Percentage is 1/4%."
(c) Borrowing Base. The reference in Section 1.13(a)(ii)
to "$50,000,000" is hereby deleted and the sum of "$37,500,000" is hereby
substituted therefor.
(d) Facility Reserve. Section 1.66 of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:
"1.66 "Facility Reserve" shall mean an amount equal to: (a) the
lesser of (i) $99,000,000, provided, that, on the First
Facility Reserve Reduction Date, such amount shall be reduced
to the then aggregate outstanding principal amount of Tranche A
Loans and (ii) the aggregate outstanding principal amount of
Tranche A Loans (as such term is defined in the Synthetic Lease
Facility Agreements) minus (b) the lesser of: (i) $10,000,000
and (ii) zero, unless Synthetic Lease Facility Agent has
received an appraisal pursuant to Section 4.4 of the Amended
and Restated Intercreditor and Lien Subordination Agreement,
dated the date hereof, by and among Borrowers, Guarantors,
Wachovia Development Corporation, Wachovia Bank, National
Association, as Agent, under the Synthetic Lease Facility
Agreements, and Agent, then, an amount equal to (A) fifty(50%)
percent of the net forced liquidation value of the Properties
(as such term is defined in the Synthetic Lease Facility
Agreements), set forth in the most recent appraisal received by
Synthetic Lease Facility Agent minus (B) the aggregate
principal amount of Loans and Lessor Advances (as such terms
are defined in the Synthetic Lease Facility Agreements) owing
to any Lenders or Lessor, as the case may be (as such term is
defined in the Synthetic Lease Facility Agreements) other than
Tranche A Lenders (as such term is defined in the Synthetic
Lease Facility Agreements); provided, that on the Second
Facility Reserve Date the Facility Reserve shall be permanently
reduced to zero (-0-)."
(e) Exempted Debt Limit. Section 1.60 of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefor:
"1.60 Exempted Debt Limit" shall mean, on any date of
determination, a dollar amount equal to (a) the amount equal to
15% of Consolidated Net Tangible Assets of Pep Boys and its
Subsidiaries, less (b) $25,000,000."
(f) Interest Rate. Section 1.83 of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:
"1.83 "Interest Rate" shall mean,
(a) Subject to clauses (b) and (c) of this definition
below:
(i) as to Prime Rate Loans, a rate equal to
the Prime Rate, and
(ii) as to Eurodollar Rate Loans, a rate
equal to one and three-quarters (1 3/4%) percent per
annum in excess of the Adjusted Eurodollar Rate (in
each case, based on the Eurodollar Rate applicable for
the Interest Period selected by a Borrower or by an
Administrative Borrower on behalf of such Borrower as
in effect three (3) Business Days after the date of
receipt by Agent of the request of such Borrower for
such Eurodollar Rate Loans in accordance with the terms
hereof, whether such rate is higher or lower than any
rate previously quoted to such Borrower).
(b) Subject to clause (c) of this definition below,
effective as of the first (1st) day of the second month
of each fiscal quarter commencing with the fiscal
quarter ending April 30, 2005 (i.e., June 1, 2005), the
Interest Rate payable by Borrowers shall be increased
or decreased, as the case may be, (A) as to Prime Rate
Loans, to the rate equal to the Applicable Margin on a
per annum basis in excess of the Prime Rate, and (B) as
to Eurodollar Rate Loans, to the rate equal to the
Applicable Margin on a per annum basis in excess of the
Adjusted Eurodollar Rate.
(c) Notwithstanding anything to the contrary contained
in clauses (a) and (b) of this definition, the
Applicable Margin otherwise used to calculate the
Interest Rate for Prime Rate Loans and Eurodollar Rate
Loans shall be the then applicable percentage set forth
in the definition of the term Applicable Margin for
each category of Loans (without regard to the amount of
Excess Availability) plus two (2%) percent per annum,
at Agent's option or at the written direction of the
Required Lenders, after five (5) Business Days' notice
to any Borrower, (i) for the period (A) from and after
the effective date of termination or non-renewal hereof
(including any termination of the initial term or any
renewal term) until Agent has received full and final
payment of all outstanding and unpaid Obligations or as
to contingent Obligations, cash collateral in the
amount and on the terms required under Section 14.1
hereof (notwithstanding entry of a judgment against a
Borrower) and (B) from and after the date of the
occurrence of an Event of Default for so long as such
Event of Default is continuing as determined by Agent,
and (ii) on Loans at any time outstanding in excess of
the Borrowing Base (whether or not such excess(es),
arise or are made with or without Agent's or any
Lender's knowledge or consent and whether made before
or after an Event of Default)."
(g) Maximum Credit. Section 1.92 of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:
"1.92 "Maximum Credit" shall mean $357,500,000 plus the amount
of any increase thereof effected pursuant to the terms of
Section 2.5 hereof; provided, that, the Maximum Credit shall
not exceed $400,000,000."
(h) Reserves. Clause (B) of the definition of Reserves set
forth in Section 1.133 of the Loan Agreement is hereby deleted and the
following substituted therefor:
"(B) at anytime that Excess Availability shall be less than
$50,000,000, then Agent shall establish and maintain the
Special Reserve."
(i) Pep Boys Subordinated Indentures. Section 1.116 of the
Loan Agreement is hereby deleted in its entirety and the following substituted
therefor:
"1.116 "Pep Boys Subordinated Indentures" shall mean,
collectively, the following (as the same now exists or may
hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced): (i) the 1998 Subordinated Note
Indenture, (ii) the 1997 Subordinated Note Indenture, (iii) the
XXXXX Indenture, (iv) upon and at all times after the 2004
Senior Subordinated Note Issuance Date, the 2004 Senior
Subordinated Note Indenture, and (v) all agreements, documents
and instruments executed and/or delivered in connection with
any of the foregoing."
(j) Special Reserve. Section 1.136 of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:
"1.136 "Special Reserve" shall mean the amount equal to
$15,000,000."
(k) Loans. Section 2.1(c)(iii) of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:
"(iii) the aggregate principal amount of the Loans and the
Letter of Credit Accommodations outstanding at any time plus
the aggregate principal amount of Tranche A Loans (as such term
is defined in the Synthetic Lease Facility Agreements)
outstanding at any time shall not exceed the Maximum Credit
(less the amount of the Facility Reserve);"
(l) Increase of Maximum Credit. Section 2 of the Loan
Agreement is hereby amended to include the following new Section 2.5:
"2.5 Increase of Maximum Credit. The Administrative
Borrower may, at any time (but no more than twice during the
term of this Agreement), deliver a request(s) to the Agent to
provide additional Commitments in an aggregate amount of up to
$42,500,000 (each a "Maximum Credit Increase"). The Borrowers
shall have the right to offer the opportunity to participate in
the Maximum Credit Increase to any Lender and any other
Eligible Transferee, provided, that, (x) the minimum additional
Commitment of each such Lender or Eligible Transferee
participating in the Maximum Credit Increase shall equal or
exceed $5,000,000, (y) no Lender or Eligible Transferee shall
be obligated to participate in such Maximum Credit Increase,
and (z) in the event Lenders and Eligible Transferees have
committed in writing to participating in the Maximum Credit
Increase in an aggregate amount in excess of the maximum amount
requested by Administrative Borrower or permitted hereunder,
the Agent shall then have the right to allocate such
commitments, first to Lenders and then to Eligible
Transferee(s), on whatever basis the Agent determines is
appropriate. On the effective date for any Maximum Credit
Increase, which shall be the first Business Day on which all of
the conditions precedent set forth in clauses (i) through (vii)
below shall have been satisfied (each a "Maximum Credit
Increase Effective Date"), the Commitments shall be increased
by the amount committed to by each Lender or Eligible
Transferee on such Maximum Credit Increase Effective Date,
subject to the satisfaction of the following conditions:
(i) the Administrative Borrower shall have given
the Agent at least 30 days prior written notice of its
intention to effect a Maximum Credit Increase and the desired
amount of such Maximum Credit Increase;
(ii) the Agent shall have received from each Lender
or Eligible Transferee that is part of the proposed Maximum
Credit Increase an Assignment and Acceptance duly executed by
such Lender or Eligible Transferee, provided, that, the
aggregate Commitments (or, in the case of a Lender, increase in
Commitments) set forth in such Assignment and Acceptance(s),
shall equal, in the aggregate, the amount of such Maximum
Credit Increase;
(iii) the conditions precedent to a making a Loan set
forth in Section 4.2 hereof shall be satisfied as of the
applicable Maximum Credit Increase Effective Date for such
Maximum Credit Increase, both before and after giving effect to
such Maximum Credit Increase;
(v) the effectiveness of such Maximum Credit
Increase on such Maximum Credit Increase Effective Date shall
not violate any applicable law and shall not be enjoined,
temporarily, preliminarily or permanently;
(vi) there shall have been paid to each Lender and
Eligible Transferee participating in such Maximum Credit
Increase all fees (such fees to be mutually agreed to by the
parties) and expenses due and payable to such Person on or
before the Maximum Credit Increase Effective Date;
(vii) there shall have been paid to the Agent, for
the account of the Agent, all fees and expenses (including
reasonable fees and expenses of counsel) due and payable
pursuant to any Loan Document on or before the Maximum
Increase Effective Date; and
(viii) and if such Maximum Credit Increase shall occur
prior to the Second Facility Reserve Reduction Date, Agent
shall have received evidence that the Synthetic Lease Facility
Agreements have been amended (to the extent necessary) to
reflect that the such Lender's (or its Affiliate, as the case
may be) pro rata share of outstanding Tranche A Loans is equal
to its Pro Rata Share (after giving effect to the Maximum
Credit Increase)."
(m) Letter of Credit Accommodation Sublimit. The reference
in Section 2.2(e) of the Loan Agreement to "$50,000,000" is hereby deleted and
"$75,000,000" is substituted therefor.
(n) Unused Line Fee. Section 3.2(a) of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:
"(a) While this Agreement is in effect and for so long
thereafter as any of the Obligations are outstanding, Borrowers
shall pay to Agent for the account of Lenders, monthly, an
unused line fee at a rate equal to the Applicable Unused Line
Fee Percentage per annum calculated upon the amount by which
the Maximum Credit (less the Facility Reserve) exceeds the
average daily principal balance of the outstanding Loans and
Letter of Credit Accommodations during the immediately
preceding month (or part thereof); such unused line fee shall
be payable on the first day of each month in arrears."
(o) Inventory Appraisals. Section 7.3(d) of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefore:
"(d) upon Agent's request, Borrowers shall deliver, or cause
to be delivered, to Agent written appraisals as to the
Inventory in form, scope and methodology acceptable to Agent
and by an appraiser acceptable to Agent, addressed to Agent and
Lenders and upon which Agent and Lenders are expressly
permitted to rely (i) at Borrowers' expense, no more than
two (2) times in any twelve (12) month period (and no more than
one (1) time in any twelve (12) month period in the event that
Excess Availability is equal to or greater than $100,000,000 at
all times during the most recently ended twelve (12)
consecutive months), but at any time or times as Agent may
request in excess of the number of appraisals set forth above
at the expense of Agent and Lenders, or (ii) at Borrowers'
expense at any time on or after an Event of Default;"
(p) Encumbrances.
(i) Section 9.8(a)(xi) of the Loan Agreement is
hereby deleted and the following substituted therefor:
"(xi) liens and security interests on assets of Borrowers and
Guarantors to secure Indebtedness of Borrowers and Guarantors
permitted under Sections 9.9(k) and (l) hereof, provided, that,
such assets do not constitute Collateral;
(ii) Section 9.8(a)(xiv) of the Loan Agreement is
hereby deleted and the following substituted therefor:
"(xiv) (A) prior to the Second Facility Reserve Reduction Date,
liens and security interests on assets of Borrowers and
Guarantors in connection with Synthetic Lease Facility
Agreements, provided, that, liens on the Collateral shall only
be permitted so long as Lenders (or their Affiliates, as
provided in Section 14.7(a) hereof) are the sole holders of the
Tranche A Notes (as such term is defined in the Synthetic Lease
Facility Agreements); and (B) upon the occurrence of the Second
Facility Reserve Reduction Date and at anytime thereafter liens
and security interests on assets and property of Borrowers and
Guarantors (other than Collateral) in connection with Synthetic
Lease Facility Agreements pursuant to the guaranty permitted to
be made pursuant to Section 9.9(v) hereof;"
(q) Indebtedness.
(i) Subsections 9.9(h)(i) through (vi) of the Loan
Agreement are hereby deleted in their entirety and the following substituted
therefor:
"(i) the aggregate principal amount of such Indebtedness shall
not exceed $393,215,000, less the aggregate amount of all
repayments, repurchases or redemptions thereof from and after
such date, whether optional or mandatory, plus interest thereon
at the applicable rates provided in the Pep Boys Senior
Indentures in effect as of the date of Amendment No. 3;
(ii) Intentionally Deleted;
(iii) as of the date of Amendment No. 3, the principal amount
of such outstanding Indebtedness under the 1995 Senior Note
Indenture is $100,000,000, provided, that, upon the 2004
Senior Subordinated Note Issuance Date, such amount shall be
permanently reduced (in part and at the option of Borrowers in
whole) with the proceeds of the 2004 Senior Subordinated Notes,
(iv) as of the date of Amendment No. 3, the principal amount
of such outstanding Indebtedness under the 1997 Senior Note
Indenture is $215,000;
(v) as of the date of Amendment No. 3, the principal amount of
such outstanding Indebtedness under the 1998 Senior Note
Indenture is $143,000,000;
(vi) as of the date of Amendment No. 3, the principal amount
of such outstanding Indebtedness under the 2002 Senior Note
Indenture is $150,000,000,"
(ii) Section 9.9(i) is deleted in its entirety and the
following substituted therefor:
"(i) Indebtedness of Pep Boys evidenced by or arising under
the Pep Boys Subordinated Indentures, provided, that,
(i) all notes issued pursuant to such Pep Boys
Subordinated Indentures (other than the 2004 Senior
Subordinated Notes) as of the date of Amendment No. 3 have been
indefeasibly paid in full,
(ii) the aggregate principal amount of such
Indebtedness shall not exceed the 2004 Senior Subordinated Note
Issuance Amount, less the aggregate amount of all repayments,
repurchases or redemptions thereof, whether optional or
mandatory, plus interest thereon at the applicable rates
provided in the Pep Boys Subordinated Indentures in effect on
the 2004 Senior Subordinated Note Issuance Date,
(iii) such Indebtedness is and shall remain
unsecured;
(iv) such Indebtedness is and shall remain, in all
respects, subject to, and subordinate in right of payment to,
the right of Agent and Lenders to receive the prior
indefeasible payment and satisfaction in full of all of the
Obligations,
(v) the Obligations shall at all times constitute
"Senior Indebtedness" as such term is defined in each of the
Pep Boys Subordinated Indentures and shall be entitled to all
of the rights and benefits of Senior Indebtedness under the
terms of such Pep Boys Subordinated Indentures,
(vi) Borrowers and Guarantors shall use the proceeds
of all loans and other indebtedness pursuant to the 2004 Senior
Subordinated Note Indenture only for the refinancing of
Indebtedness permitted under Section 9.9(h) hereof and to repay
outstanding Loans hereunder,
(vii) Pep Boys shall not, directly or indirectly,
make, or be required to make, any payments in respect of such
Indebtedness, except, that, Pep Boys may make regularly
scheduled payments of interest, on an unaccelerated basis, in
respect of such Indebtedness in accordance with the terms of
the Pep Boys Subordinated Indentures as in effect on the 2004
Senior Subordinated Note Issuance Date and payments otherwise
permitted pursuant to Section 9.9(i)(viii)(B),
(viii) Borrowers shall not, directly or indirectly,
(A) amend, modify, alter or change any of the material terms of
such Indebtedness or any of the Pep Boys Subordinated
Indentures as in effect on the 2004 Senior Subordinated Note
Issuance Date, 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 any portion of such Indebtedness other than pursuant to
payments thereof, or to reduce the interest rate or any fees in
connection therewith, or to make the provisions thereof less
restrictive or burdensome than the terms or conditions of the
Pep Boys Subordinated Indentures as in effect on the date
hereof, or (B) make optional prepayments of principal or
redeem, retire, defease, purchase or otherwise acquire such
Indebtedness, or set aside or otherwise deposit or invest any
sums for such purpose, except, that, Borrowers may make
optional prepayments of principal or redeem, retire, defease,
purchase or otherwise acquire such Indebtedness, provided,
that, as to any such payment each of the following conditions
is satisfied as determined by Agent: (1) as of the date of
such payment and after giving effect thereto, Excess
Availability for each of the immediately preceding thirty (30)
consecutive days shall have been not less than $25,000,000, and
(2) as of the date of such payment and after giving effect
thereto, the Excess Availability shall be not less than
$25,000,000 and as of the date of such payment and after giving
effect thereto, no Default or Event of Default shall exist or
be continuing, and, except that Pep Boys may redeem or retire
such Indebtedness with proceeds of Refinancing Indebtedness
with respect thereto as permitted in this Section 9.9(l)
hereof, and
(ix) Borrowers shall furnish to Agent all notices or
demands in connection with such Indebtedness either received by
any Borrower or Guarantor or on its behalf promptly after the
receipt thereof, or sent by any Borrower or Guarantor or on its
behalf concurrently with the sending thereof, as the case may
be;"
(iii) Section 9.9(k) of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"(k) Indebtedness of any Borrower or Guarantor for borrowed
money (other than Indebtedness permitted under Sections 9.9(a)
through (j) and (l) through (v) hereof), arising after
August 1, 2003 owing to any person (other than to a Borrower,
Guaranty or Subsidiary) in an aggregate amount not to exceed
$250,000,000 at any time outstanding for all Borrowers and
Guarantors; 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 intention to
incur such indebtedness, which notice shall set forth in
reasonable detail satisfactory to Agent, the person to whom
such indebtedness will be owed and the anticipated interest
rate, schedule of repayments and maturity date with respect
thereto and such other information with respect thereto as
Agent may request, (ii) 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, (iii) such indebtedness shall be incurred by
such Borrower at commercially reasonable rates and terms in a
bona fide arms' length transaction, (iv) if any of such
indebtedness is to be secured by any assets of such Borrower,
then (A) the security interests and liens on the assets of
Borrower in favor of such person to secure such indebtedness
shall not be on any of the Collateral, and (B) Borrowers and
Guarantors shall use their best efforts to obtain a Collateral
Access Agreement executed by such Person in favor of Agent,
(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 Borrower 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) Borrower may only make regularly scheduled payments of
principal and interest in respect of such indebtedness,
(viii) Borrower shall not, directly or indirectly, (A) amend,
modify, alter or change the terms of the agreements with
respect to such indebtedness, except, that, Borrower 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 release any liens or security
interests in any assets of Borrower which secure such
indebtedness (if any), or to reduce the rate or any fees in
connection therewith, or to make any covenants contained
therein less restrictive or burdensome as to Borrower or
otherwise more favorable to Borrower (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 (ix) Borrower
shall furnish to Agent all notices or demands in connection
with such Indebtedness either received by Borrower or on its
behalf promptly after the receipt thereof, or sent by Borrower
on its behalf, concurrently with the sending thereof, as the
case may be;"
(iv) Section 9.9(l) of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"(l) Indebtedness issued in exchange for, or the
proceeds of which are used to extend, refinance, replace or
substitute for, Indebtedness permitted under Section 9.9(b),
Section 9.9(h), Section 9.9(i), Section 9.9(f), Section 9.9(j),
Section 9.9(k), Section 9.9 (q) and Section 9.9(s) hereof
(the "Refinancing Indebtedness"); provided, that, as to any such
Refinancing Indebtedness, each of the following conditions is
satisfied: (i) Agent shall have received not less than ten
(10) Business Days' prior written notice of the intention to
incur such Indebtedness, which notice shall set forth in
reasonable detail satisfactory to Agent, the anticipated amount
of such Indebtedness, the schedule of repayments and maturity
date with respect thereto and such other information with
respect thereto as Agent may request, (ii) promptly upon
Agent's request, 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,
(iii) such Indebtedness incurred by any Borrower or Guarantor
shall be at rates and with fees or other charges no higher or
greater than the prevailing market rates of interest, charges
and fees at the time of incurrence of such Refinancing
Indebtedness, (iv) the Refinancing Indebtedness shall have a
Weighted Average Life to Maturity and a final maturity equal to
or greater than the Weighted Average Life to Maturity and the
final maturity, respectively, of the Indebtedness being
extended, refinanced, replaced, or substituted for, (v) as of
the date of incurring such Indebtedness and after giving effect
thereto, no Event of Default shall exist or have occurred and
be continuing, (vi) the principal amount of such Refinancing
Indebtedness shall not exceed the principal amount of and
interest on the Indebtedness so extended, refinanced, replaced
or substituted for (plus the amount of reasonable refinancing
fees and expenses incurred in connection therewith),
(vii) the Refinancing Indebtedness shall be subject to the same
restrictions set forth in this Agreement as the Indebtedness
so refinanced, (viii) the Refinancing Indebtedness may be
secured by assets other than Collateral, (ix) Borrowers shall
use their best efforts to obtain a Collateral Access Agreement
executed by such Person in favor of Agent, (x) the Refinancing
Indebtedness shall not at any time include any terms that
include any limitation on the right of Borrowers to request or
receive Loans or Letter of Credit Accommodations or the right
of Borrowers or Guarantors to amend, modify, supplement,
replace, renew or extend any of the terms or conditions of this
Agreement, any of the other Financing Agreements, the
Synthetic Lease Facility Agreements or otherwise in any way
adversely affect the arrangements of Borrowers and Guarantors
with Agent and Lenders and such Refinancing Indebtedness shall
not at any time include terms and conditions which in any
manner adversely affect Agent or any rights of Agent and
Lenders as determined by Agent in good faith, (xi) Borrowers
and Guarantors shall not, directly or indirectly, (A) amend,
modify, alter or change in any material respect the terms of the
agreements with respect to such Indebtedness, except, that,
Borrowers and Guarantors 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 any
portion of such Indebtedness (other than pursuant to payments
thereof), or to reduce the interest rate or any fees in
connection therewith, or to make the provisions thereof less
restrictive or burdensome as to Borrowers or Guarantors, or (B)
redeem, retire, defease, purchase or otherwise acquired such
Indebtedness, or set aside or otherwise deposit or invest any
sums for such purpose, except as expressly required pursuant to
the terms thereof or pursuant to regularly scheduled payments
permitted herein or with the proceeds of any other Refinancing
Indebtedness permitted hereunder, and (xii) Borrowers and
Guarantors shall furnish to Agent all notices or demands in
connection with such Indebtedness received by any Borrower or
Guarantor or on its behalf promptly after the receipt thereof,
or sent by any Borrower or Guarantor, concurrently with the
sending thereof, as the case may be;"
(v) Section 9.9 of the Loan Agreement is hereby amended
to add the following additional subsection (v) thereto:
"(v) upon the occurrence of the Second Facility Reserve
Reduction Date, any guarantee made by Borrowers and Guarantors
of obligations owing under the Synthetic Lease Facility
Agreements, provided, that, such Indebtedness is not secured by
assets or properties of the Borrowers and Guarantors other than
as permitted in Section 9.8(a)(xiv)(B) hereof and the principal
amount of Indebtedness secured thereby does not exceed Pep Boys
obligations in respect of the Master Lease (as such term is
defined in the Synthetic Lease Agreements)."
(r) Minimum EBITDA. Section 9.17 of the Loan Agreement
entitled "Adjusted Tangible Net Worth" is hereby deleted and the following
substituted therefor:
"9.17 Minimum EBITDA. As of the end of the month after the
occurrence of an Minimum EBITDA Maintenance Event, Pep Boys and
its Subsidiarie (inclusive of Colchester), shall have
consolidated EBITDA for the twelve (12) consecutive months
then-ended of at least the amount set forth next to such month
indicated on Schedule 9.17 annexed hereto."
(s) Frequency of Field Exams. Section 9.21(f) of the Loan
Agreement is hereby deleted and the following substituted therefor:
"(f) all out-of-pocket expenses and costs heretofore and from
time to time heretofore and from time to time hereafter
incurred by Agent during the course of periodic field
examinations of the Collateral and such Borrower's or
Guarantor's operations, plus a per diem charge at Agent's then
standard rate for Agent's examiners in the field and office
(which rate as of the date hereof is $850 per person per day);
provided that, so long as (i) Excess Availability is greater
than $50,000,000 at all times during the preceding 12 months,
and no Event of Default has occurred, no more than two (2)
periodic field exams shall be conducted in any consecutive
twelve (12) month period, and (ii) if Excess Availability is
less than $50,000,000 at any time during the preceding 12
months, but no Event of Default has occurred, no more than four
(4) periodic field exams shall be conducted in any consecutive
twelve (12) month period."
(t) Agents. Section 12.14 of the Loan Agreement is hereby
amended by adding the following sentence at the end of such Section:
"As of the date of Amendment No. 3, Wachovia Capital Markets
LLC, has been designated sole lead arranger and sole book
runner and Wachovia Bank, National Association has been
designated Co-Agent, such designations shall not create any
rights in favor of such parties in such capacities nor subject
such parties to any duties or obligations in such capacities.
In furtherance of the foregoing designations the cover page of
the Loan Agreement is hereby replaced with the cover page
annexed to Amendment Xx. 0 xx Xxxxxxx 0."
(x) Xxxx. Section 14.1(a) is hereby deleted in its
entirety and the following substituted therefor:
"(a) This Agreement and the other Financing Agreements shall
become effective as of the date set forth on the first page
hereof and shall continue in full force and effect for a term
ending on December 2, 2009 (the "Renewal Date"), and from year
to year thereafter, unless sooner terminated pursuant to the
terms hereof. Agent may, at its option (or shall at the
direction of any Lender in writing received by Agent at least
sixty (60) days prior to the Renewal Date or the anniversary of
any Renewal Date, as the case may be), terminate this Agreement
and the other Financing Agreements, or Administrative Borrower
or any Borrower may terminate this Agreement and the other
Financing Agreements, in each case, effective on the Renewal
Date or on the anniversary of the Renewal Date in any year by
giving to the other party at least sixty (60) days prior
written notice; provided, that, if such termination or
non-renewal of this Agreement and all other Financing
Agreements occurs prior to the Second Facility Reserve
Reduction Date, the Synthetic Lease Facility Agreements must be
terminated simultaneously. In addition, Borrowers may
terminate this Agreement at any time upon ten (10) days prior
written notice to Agent (which notice shall be irrevocable),
provided, that, if such termination of the Financing Agreements
occurs prior to the occurrence of the Second Facility Reserve
Reduction Date, the Synthetic Lease Facility Agreements must be
simultaneously terminated. Agent may, at its option, and shall
at the direction of Required Lenders, terminate this Agreement
at any time on or after an Event of Default. Upon the Renewal
Date or any other effective date of termination of the
Financing Agreements, Borrowers shall pay to Agent all
outstanding and unpaid Obligations (and all amounts owing under
the Synthetic Lease Facility Agreements shall be paid in
accordance with the requirements of such documents) and shall
furnish cash collateral to Agent (or at Agent's option, a
letter of credit issued for the account of Borrowers and at
Borrowers' expense, in form and substance satisfactory to Agent
in good faith, by an issuer reasonably acceptable to Agent and
payable to Agent as beneficiary) in such amounts as Agent
determines are reasonably necessary to secure Agent and Lenders
from loss, cost, damage or expense, including reasonable
attorneys' fees and legal expenses, in connection with any
contingent Obligations, including issued and outstanding Letter
of Credit Accommodations (in such amounts as set forth in the
immediately succeeding sentence) and checks or other payments
provisionally credited to the Obligations and/or as to which
Agent or any Lender has not yet received final payment and any
continuing obligations of Agent or any Lender pursuant to any
Deposit Account Control Agreement, and for any of the
Obligations arising under or in connection with any Hedge
Agreement in such amounts as the other party to such Hedge
Agreement may require (unless such Obligations arising under or
in connection with any Hedge Agreement are paid in full in cash
and terminated in a manner satisfactory to such other party).
The amount of such cash collateral (or letter of credit, as
Agent may determine) as to any Letter of Credit Accommodations
shall be in the amount equal to one hundred five (105%) percent
of the amount of the Letter of Credit Accommodations plus the
amount of any fees and expenses payable in connection therewith
through the end of the latest expiration date of such Letter of
Credit Accommodations. Such payments in respect of the
Obligations and cash collateral shall be remitted by wire
transfer in Federal funds to the Agent Payment Account or such
other bank account of Agent, as Agent may, in its discretion,
designate in writing to Administrative Borrower for such
purpose. Interest shall be due until and including the next
Business Day, if the amounts so paid by Borrowers to the Agent
Payment Account or other bank account designated by Agent are
received in such bank account later than 12:00 noon, New York
City time, except, that, if Administrative Borrower notifies
Agent that a payment shall be received after 12:00 noon and
such payment is received by Lender prior to 2:00 p.m. of the
same day, interest shall not accrue through the next Business
Day."
(v) Early Termination Fee. Section 14.1(c) of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefor:
"(c) If for any reason this Agreement is terminated prior to
the Renewal Date, in view of the impracticality and extreme
difficulty of ascertaining actual damages and by mutual
agreement of the parties as to a reasonable calculation of
Agent's and each Lender's lost profits as a result thereof,
Borrowers agree to pay to Agent for itself and the ratable
benefit of Lenders, upon the effective date of such
termination, an early termination fee in the amount equal to:
Amount Period
----------------------------- ----------------------------------------
(i) .50% of Maximum Credit From the date of Amendment Xx. 0 xx
xxx xxxxxxxxx Xxxxxxxx 0, 0000
(xx) .25% of Maximum Credit From and after December 3, 2006 to and
including December 2, 2007
Such early termination fee shall be presumed to be the amount
of damages sustained by Agent and Lenders as a result of such
early termination and Borrowers and Guarantors agree that it is
reasonable under the circumstances currently existing. In
addition, Agent and Lenders shall be entitled to such early
termination fee upon the occurrence of any Event of Default
described in Sections 10.1(g) and 10.1(h) hereof, even if Agent
and Lenders do not exercise the right to terminate this
Agreement, but elect, at their option, to provide financing to
any Borrower or permit the use of cash collateral under the
United States Bankruptcy Code. The early termination fee
provided for in this Section 14.1 shall be deemed included in
the Obligations."
3. Schedules to Loan Agreement. The Loan Agreement is hereby
amended by adding new Schedules 1.66(a), 1.66(b), Schedule 9.9(i) as annexed
to Amendment No.3, and deleting Schedules 1 and 9.17 to the Loan Agreement
and substituting Schedules 1 and 9.17 as annexed to this Amendment No. 3 in
substitution therefor.
4. 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 No. 3 (after giving
effect to the amendments made and consents granted by Agent and Lenders
pursuant to this Amendment No. 3). As of the date of any Borrower or
Guarantor entering into this Amendment No. 3 and after giving effect to each
such transaction hereunder, 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 No. 3 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 this Amendment
No. 3, nor the consummation of the transactions contemplated by this
Amendment No. 3, nor compliance with the provisions of this Amendment No. 3
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 No. 3) 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 this Amendment No. 3, 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 this Amendment No. 3. Neither the execution and delivery of
this Amendment No. 3, nor the consummation of the transactions contemplated
by this Amendment No. 3, 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.
5. Amendment Fee. In consideration of the amendments set forth
herein, Borrowers shall pay to Agent for the ratable benefit of Lenders) or
Agent, at its option, may charge the account of Borrower maintained by
Agent, an amendment fee in the amount of $446,875.00, which fee is fully
earned and payable as of the date hereof and shall constitute part of the
Obligations.
6. Commitments. As of the date of Amendment. No. 3, each Lender,
by its signature to Amendment No. 3, agrees that its Commitment is as is set
forth on Schedule 1 to Amendment No. 3 and Schedule 1 to the Loan Agreement
is hereby deleted and replaced by Schedule 1 to Amendment No. 3.
7. Conditions to Effectiveness of Amendment No. 3. The
effectiveness of the amendments in this Amendment No. 3 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 No. 3 (as the case may be),
duly authorized, executed and delivered by the required parties hereto;
(b) Agent shall have received an executed original or
executed original counterparts of Amendment No. 1 to Fee Letter (as the case
may be), duly authorized, executed and delivered by the parties thereto
together with the fees referred in Section 5 above and the fees referred to
in Amendment No.1 to Fee Letter;
(c) 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;
(d) Borrowers shall have Excess Availability greater than
the amount equal to (i) $75,000,000, plus (ii) the amount of any reduction
in the Facility Reserve occurring on the date of this Amendment No. 3 or
resulting from any transactions related to the Synthetic Lease Facility
Agreements and effected on the date of this Amendment No. 3;
(e) Agent shall have received a fully executed original or
executed original counterparts of the consent required under the Synthetic
Lease Facility Agreements to the amendments set forth herein; and
(f) 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 No. 3).
8. 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).
9. Effect of this Amendment No. 3. 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 No. 3 and the other Financing
Agreements, the terms of this Amendment No. 3 shall control.
10. 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 No. 3.
11. 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).
12. Binding Effect. This Amendment No. 3 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 No. 3 shall be
read and construed as one agreement.
13. Counterparts. This Amendment No. 3 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 No. 3, 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 left 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/ SIEMENS FINANCIAL SERVICES, INC.
/s/LASALLE BUSINESS CREDIT LLC
/s/PNCBANK, NATIONAL ASSOCIATION
/s/UPS CAPITAL CORPORATION
SCHEDULE 1.66(a)
TO
LOAN AND SECURITY AGREEMENT
Conditions Precedent to First Facility Reserve Reduction Date
---------------------------------------------------------------
The First Facility Reserve Reduction Date shall be the date upon which all of
the following conditions shall be satisfied as determined by Agent in good
faith:
(a) Agent shall have received not less than seven (7) Business
Days' prior written notice of any proposed permanent repayment of the
outstanding principal amount of Tranche A Loans under the Synthetic Lease
Facility Agreements (the "Synthetic Lease Reduction"),
(b) as of the date of any such Synthetic Lease Reduction, and
after giving effect thereto, no Event of Default or act, condition or event
which with notice or passage of time or both would constitute an Event of
Default, shall exist or have occurred and be continuing,
(c) pursuant to such Synthetic Lease Reduction, Borrowers and
Guarantors shall not become obligated with respect to any Indebtedness, nor
any of their property become subject to any security interest, mortgage,
pledge, lien, charge, or other encumbrance, other than the liens permitted
under Section 9.8 (a)(xiv) hereof, and
(d) Agent shall have received, in form and substance
satisfactory to Agent, a duly executed certificate of the Synthetic Lease
Facility Agent, pursuant to which Synthetic Lease Facility Agent, certifies to
Agent and Lenders that (i) the Tranche A Lenders have received a permanent
payment of outstanding principal amount of the Tranche A Loans, (ii) the amount
of such permanent payment, (iii) the remaining aggregate outstanding principal
amount of the Tranche A Loans after giving effect to such payment and (iv) no
Default or Event of Default exists or has occurred and is continuing under the
Synthetic Lease Facility Agreements.
..
SCHEDULE 1.66(b)
TO
LOAN AND SECURITY AGREEMENT
Conditions Precedent to Second Facility Reserve Reduction Date
----------------------------------------------------------------
The Second Facility Reserve Reduction Date shall be the date upon which all of
the following conditions shall be satisfied as determined by Agent in good
faith:
(a) Agent shall have received not less than seven (7)
Business Days' prior written notice of either (i) any proposed permanent
repayment of the then entire outstanding principal amount of Tranche A Loans
under the Synthetic Lease Facility Agreements or (ii) the replacement
(and repayment in full) of all Tranche A Lenders which are, immediately prior
to the Second Facility Reserve Reduction Date, also Lenders under this
Agreement (the "Synthetic Lease Tranche A Termination"),
(b) as of the date of any such Synthetic Lease Tranche A
Termination, and after giving effect thereto, no Event of Default or act,
condition or event which with notice or passage of time or both would
constitute an Event of Default, shall exist or have occurred and be continuing,
(c) Simultaneously upon the receipt by the Owner Trustee and
the Synthetic Lease Facility Agent of a security interest in assets and
properties of Borrower and Guarantors (other than Collateral) appraised at an
aggregate value sufficient to support the Synthetic Lease Tranche A
Termination, Agent shall have received, in form and substance satisfactory to
Agent, (i) all releases, terminations and such other documents as Agent may
request to evidence and effectuate the termination by the Owner Trustee
(as such term is defined in the Synthetic Lease Facility Agreements) and the
Synthetic Lease Facility Agent on behalf of the Tranche A Lenders and Tranche B
Lenders the termination and release by it or them, as the case may be, of any
interest in and to any assets and properties of each Borrower and Guarantor
constituting Collateral, duly authorized, executed and delivered by it or each
of them, including, but not limited to, UCC termination statements for all UCC
financing statements previously filed by it or any of them or their
predecessors, as secured party and any Borrower or Guarantor, as debtor , and
(ii) a duly executed certificate of the Synthetic Lease Facility Agent,
pursuant to which Synthetic Lease Facility Agent, certifies to Agent and
Lenders that (i) either (A) the Tranche A Loans have been indefeasibly paid in
full or (B) all of the Tranche A Lenders which are, immediately prior to the
Second Facility Reserve Reduction Date, also Lenders under this Agreement, have
to the extent required by such Lenders have been replaced and repaid
(to the extent such lenders have required replacement and repayment),
(d) Agent shall have received, in form and substance
satisfactory to Agent, a duly executed certificate of the Synthetic Lease
Facility Agent, pursuant to which Synthetic Lease Facility Agent, certifies to
Agent and Lenders that no Default or Event of Default exists or has occurred
and is continuing under the Synthetic Lease Facility Agreements,
(e) Agent shall have received opinion letters of counsel to
Borrowers and Guarantors, addressed to Agent and Lenders that any liens and
security interest on assets of Borrowers and Guarantors granted in connection
with the Synthetic Lease Facility Agreements do not violate any of the terms of
the existing agreements of Borrowers and Guarantors (including without
limitation, the Senior Note Indentures), each in form and substance
satisfactory to Agent and its counsel,
(f) Agent shall have received, in form and substance
satisfactory to Agent, a Collateral Access Agreement, by and among the Owner
Trustee and the Synthetic Facility Lease Agent and the Agent, duly executed and
delivered by the parties thereto, and
(g) promptly upon Agent's request, Borrowers shall deliver, or
cause to be delivered, to Agent true, correct and complete copies of all
agreements, documents and instruments relating to such amendment of the
Synthetic Lease Facility Agreements.
SCHEDULE 9.9(i)
TO
LOAN AND SECURITY AGREEMENT
The Indebtedness evidenced by the 2004 Senior Subordinated Note
Indenture shall be deemed consented to by Agent and all Lenders (without any
additional action on the part of Agent and Lenders) and the 2004 Senior
Subordinated Note Issuance Date shall be deemed to have occurred on the date
upon which all of the following conditions shall be satisfied as determined by
Agent in good faith:
(a) Agent shall have received a copy of the Preliminary Prospectus
relating to the Offering and Sale of the 2004 Senior Subordinated Notes
(the "Preliminary Prospectus") immediately prior to its public distribution but
in any event not later than the date of Amendment No. 3 and such other
information with respect thereto as Agent may request,
(b) as of the date of any such issuance of Borrowers of the
2004 Senior Subordinated Notes pursuant to the terms of the 2004 Senior
Subordinated Note Indenture, and after giving effect thereto, no Event of
Default or act, condition or event which with notice or passage of time or
both would constitute an Event of Default, shall exist or have occurred and be
continuing,
(c) Agent shall have received, a true and complete copy of the
2004 Senior Subordinated Note Indenture and all related agreements, duly
authorized, duly executed and delivered by and to the appropriate parties
thereto and all notices, instruments, documents and agreements relating
thereto, including all exhibits and schedules thereto, together with evidence
that the transactions contemplated under the terms and conditions of the 2004
Senior Subordinated Note Indenture have been consummated on terms
substantially similar to those set forth in the Preliminary Prospectus,
(d) the Indebtedness evidenced by the 2004 Senior Subordinated
Note Indenture shall satisfy all of the criteria set forth in Section 9.9(i) of
the Agreement,
(e) the aggregate principal amount of Indebtedness issued
pursuant to the 2004 Senior Subordinated Note Indenture shall not exceed
$200,000,000,
(f) such Indebtedness incurred by any Borrower or Guarantor shall
be at rates and with fees or other charges no higher or greater than the
prevailing market rates of interest, charges and fees at the time of incurrence
of such Indebtedness but in any event the interest rate with respect to such
Indebtedness shall not exceed ten (10%) percent per annum,
(g) Agent shall have received an opinion of counsel to the
Borrowers and Guarantors, in form and substance satisfactory to Agent,
addressed to Agent and Lenders stating, among other things and without
limitation, that the execution and delivery of the 2004 Senior Subordinated
Note Indenture and the consummation of the transactions contemplated therein
shall not violate any term or condition set forth in any of the Pep Boys
Indentures.
(h) Agent shall have received a certificate of Borrowers and
Guarantors on the 2004 Senior Subordinated Note Issuance Date certifying to the
Agent and Lenders as follows: (i) 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 2004 Senior Subordinated Note
Indenture, (ii) 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, (iii) neither the execution and delivery of the 2004 Senior
Subordinated Note Indenture, nor the consummation of the transactions
contemplated by the 2004 Senior Subordinated Note Indenture, nor compliance
with the provisions of the 2004 Senior Subordinated Note Indenture or
instruments thereunder shall result in (A) the creation or imposition of any
lien, claim, charge or encumbrance upon any of the Collateral, except in favor
of Agent for the benefit of Agent and Lenders or as expressly permitted by
Section 9.8 of the Loan Agreement and by the other Financing Agreements or (B)
the incurrence, creation, assumption of any Indebtedness of any Borrower or
Guarantor, except as expressly permitted under Section 9.9 and 9.10 of the
Loan Agreement and by the other Financing Agreements, (iv) 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 2004 Senior Subordinated Note Indenture, 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 2004 Senior
Subordinated Note Indenture, and (v) neither the execution and delivery of the
2004 Senior Subordinated Note Indenture, nor the consummation of the
transactions contemplated by the 2004 Senior Subordinated Note Indenture, 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, and
(j) any issuance of a 2004 Senior Subordinated Note Indenture and
the 2004 Senior Subordinated Notes shall have occurred no later than May 31,
2005.
SCHEDULE 9.17
TO
LOAN AND SECURITY AGREEMENT
Minimum Consolidated EBITDA
-----------------------------
Period Minimum EBITDA
----------------------------------------- -----------------------
(measured for the twelve (12) consecutive
months then-ended)
For the month ending January 31, 2005
through and including the month ending
December 2005 $145,000,000
For the month ending January 31, 2006,
and at the end of each month thereafter $170,000,000
