AMENDMENT NO. 1 TO LOAN AND SECURITY AGREEMENT
As of June 29, 2001
Congress Financial Corporation
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
Congress Financial Corporation ("Lender") and The Pep Boys - Manny, Moe & Xxxx,
a Pennsylvania corporation ("Pep Boys"), The Pep Boys Manny, Moe & 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 PBY, 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 Lender may make loans and advances and provide other financial
accommodations to Borrower as set forth in the Loan and Security Agreement,
dated September 22, 2000, as amended by this Amendment No. 1 to Loan and
Security Agreement (this "Amendment"), dated as of the date hereof (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,
but excluding the Synthetic Lease Facility 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 Lender consent to the Borrowers
entering into the Equipment Term Loan Documents (as defined below) and enter
into certain amendments to the Financing Agreements in connection therewith.
Lender is 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, 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 shall be
deemed and is hereby amended to include, in addition and not in limitation of,
each of the following definitions:
(i) "Equipment Term Loan Agent" shall mean GMAC Business Credit, LLC, as
Agent, under the $90,000,000 Credit Agreement, dated as of June 29, 2001, among
Pep Boys and GMAC Business Credit, LLC as Agent and Lender.
(ii) "Equipment Term Loan Documents" shall mean each of the documents listed
on the attached Schedule A, dated as of June 29, 2001 between Equipment Term
Loan Agent, and the Borrowers, as in effect on June 29, 2001, and as such
documents may be hereafter amended to the extent permitted under the
Intercreditor Agreement dated as of June 29, 2001 by and between Equipment Term
Loan Agent and Lender, as amended.
(c) Interpretation. For purposes of this Amendment, unless otherwise defined
herein, all terms used herein shall have the respective meanings assigned to
them in the Loan Agreement.
2. Consents. Notwithstanding anything to the contrary contained in
the Loan Agreement or the other Financing Agreements, and subject to the terms
and conditions contained herein and the other Financing Agreements, Lender
hereby consents to the Borrowers entering into the Equipment Term Loan
Documents.
3. Amendments to Loan Agreement.
(a) Use of Proceeds. Section 6.6(b)(ii) of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:
"(ii) for other working capital purposes (which may include the payment of
current maturities of long-term indebtedness permitted to be incurred
hereunder)."
(b) Encumbrances. Section 9.8(a) of the Loan Agreement is hereby amended by
adding thereto, immediately following Section 9.8(a)(xv), the following new
subsection:
"(xvi") liens and security interests on equipment, real property, fixtures or
goods (but excluding Inventory) of Pep Boys, pursuant to, and as more
particularly described in, the Equipment Term Loan Documents."
(i) Section 9.8(b) of the Loan Agreement is hereby amended to replace the
reference in the first sentence to "Sections 9.8 (a)(i) through (xiv)" with
"Sections 9.8 (a)(i) through (xiv) and Section 9.8(a)(xvi)."
(c) Indebtedness. Section 9.9 of the Loan Agreement is hereby amended by
adding thereto, immediately following Section 9.9(p), the following new
subsection:
"(q) Indebtedness of Pep Boys pursuant to the Equipment Term Loan Documents."
(d) Guarantees. Section 9.10 of the Loan Agreement is hereby amended by
adding thereto, immediately following Section 9.10(q), the following new
subsection:
"(r) Indebtedness of The Pep Boys Xxxxx Xxx & Xxxx of California and Pep
Boys-Manny, Moe & Xxxx of Delaware, Inc. under the Guaranty, dated as of
June 29, 2001, as in effect on such date, in favor of the Equipment Term Loan
Agent, guaranteeing the obligations of Pep Boys, provided, that, all of the
conditions set forth in Sections 9.10(n)(i) and (ii) are satisfied with
respect thereto."
4. Collateral. To secure payment and performance of all
obligations, each Borrower and Guarantor hereby grants to Lender and hereby
confirms, reaffirms and restates its prior grant to Lender under the Loan
Agreement and the other Financing Agreements, a continuing security interest
and lien upon, and a right of set-off against, and hereby assigns to Lender,
as security, all of the Collateral.
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 Lender pursuant to the other
Financing Agreements, each Borrower and Guarantor hereby jointly and severally
represents, warrants and covenants with and to Lender 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 and waivers granted by Lender pursuant to this Amendment). As of the
date of any Borrower entering into the Equipment Term Loan Documents and after
giving effect to such transaction, 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 Equipment Term Loan
Documents, nor the consummation of the transactions contemplated by the
Equipment Term Loan Documents, nor compliance with the provisions of the
Equipment Term Loan Documents 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 Lender or as expressly permitted by
Section 9.8 of the Loan Agreement (after giving effect to this Amendment) and
by the other Financing Agreements or (ii) the incurrence, creation,
assumption of any Indebtedness of Borrower or Guarantor, except as expressly
permitted under Section 9.9 and 9.10 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 Equipment Term Loan Documents, 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 Equipment Term Loan Documents. Neither the execution and delivery of
the Equipment Term Loan Documents, nor the consummation of the transactions
contemplated by the Equipment Term Loan Documents, 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 Lender, such additional
UCC financing statements and termination statements, and other and further
agreements, documents and instruments as Lender may require in order to more
fully evidence, perfect and protect Lender's security interest in Collateral.
(f) The Equipment Term Loan Documents have been duly authorized, executed
and delivered by each Borrower and are in full force and effect as of the date
hereof.
6. Conditions to Effectiveness of Consent and Amendment. The
effectiveness of the amendments and consents pursuant to this Amendment shall
be subject to the satisfaction of each of the following conditions precedent:
(a) Lender 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 respective parties hereto;
(b) Lender shall have received an executed original or executed original
counterparts of the Intercreditor Agreement between Equipment Term Loan Agent
and Lender, duly authorized, executed and delivered by the respective parties
thereto;
(c) Lender shall have received, in form and substance satisfactory to
Lender, all consents, waivers, acknowledgments, releases, terminations and such
other documents and agreements from third persons which Lender may deem
necessary or desirable in order to permit, protect and perfect its security
interests in and liens upon the Collateral;
(d) Lender shall have received, in form and substance satisfactory to
Lender, a true and complete copy of the Equipment Term Loan Documents, duly
authorized, 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 Equipment Term
Loan Documents have been consummated prior to or contemporaneously with the
execution of this Amendment; and
(e) 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 Lender 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 as in effect on the
date hereof).
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.
Very truly yours,
/s/ THE PEP BOYS - MANNY, MOE & XXXX
/s/ THE PEP BOYS XXXXX XXX &
XXXX OF CALIFORNIA
/s/ PEP BOYS - MANNY, MOE & XXXX OF
DELAWARE, INC.
/s/ PEP BOYS - MANNY, MOE & XXXX OF
PUERTO RICO, INC.
GUARANTORS
/s/ PBY CORPORATION
/s/ CARRUS SUPPLY CORPORATION
AGREED AND ACCEPTED:
/s/ CONGRESS FINANCIAL CORPORATION
SCHEDULE A
Equipment Term Loan Documents
1. $90,000,000 Credit Agreement dated as of June 29, 2001 among The Pep
Boys-Manny, Moe & Xxxx and GMAC Business Credit, LLC as Lead Arranger,
Syndication Agent and as the Agent for the Lenders and as a Lender.
2. Security Agreement dated as of June 29, 2001 by The Pep Boys-Manny,
Moe & Xxxx, The Pep Boys Xxxxx Xxx & Xxxx of California and Pep Boys-Manny,
Moe & Xxxx of Delaware, Inc. in favor of GMAC Business Credit, LLC as Lead
Arranger, Syndication Agent and as Agent.
3. Guaranty dated as of June 29, 2001 by The Pep Boys Xxxxx Xxx & Xxxx
of California and Pep Boys-Manny, Moe & Xxxx of Delaware, Inc. in favor of
GMAC Business Credit, LLC.
4. Mortgages and Deeds of Trust dated as of June 29, 2001 in favor of
GMAC Business Credit, LLC encumbering the Mortgaged Properties comprising
the Collateral (each as defined in the Credit Agreement referenced in item
1 above), each substantially in the form of Exhibit M to the Credit
Agreement.
