Exhibit 99.2
Execution
AMENDMENT NO. 5 TO AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
January 27, 2006
Wachovia Bank, National Association, as Agent
1133 Avenue of the Americas
New York, New York 10036
Ladies and Gentlemen:
Wachovia Bank, National Association, 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 & Jack, a Pennsylvania corporation (“Pep Boys”), The Pep Boys Manny Moe & Jack of California, a California corporation (“PBY-California”), Pep Boys - Manny, Moe & Jack of Delaware, Inc., a Delaware corporation (“PBY-Delaware”), and Pep Boys - Manny, Moe & Jack 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, Amendment No. 2 to Amended and Restated Loan and Security Agreement dated as of October 15, 2004, Amendment No. 3 to Amended and Restated Loan and Security Agreement dated as of December 2, 2004, and Amendment No. 4 to Amended and Restated Loan and Security Agreement dated as of November 16, 2005, (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. 5 to Amended and Restated Loan and Security Agreement (“Amendment No. 5”), 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 desire to incur a term loan to be secured by owned real property of the Borrowers and Guarantors and the improvements thereon in order to defease the remaining notes outstanding under the 1998 Senior Note Indenture in such a manner that the 1998 Senior Note Indenture cease to be of further effect with respect to such remaining notes and 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, the Required Lenders, each Borrower and each Guarantor agree as follows:
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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;”
“(vi) the disposition by Borrowers and Guarantors of owned Real Property and improvements thereon which are subject to the lien of the Term Loan Agent pursuant to and in accordance with the terms of the Term Loan Agreements, provided, that, Agent shall have received not less than twenty (20) Business Days prior written notice of such proposed disposition;
“(xix) the security interests in and mortgages and liens upon the owned Real Property (including rights under contracts with third parties for services necessary to the operation of such Real Property) of Borrowers and Guarantors in favor of Term Loan Agent, on behalf of itself and the Term Loan Lenders to secure the Indebtedness permitted under Section 9.9(w) hereof (and any Refinancing Indebtedness in replacement thereof), provided, that, (A) such assets do not constitute Collateral, and (B) Agent has received a Collateral Access Agreement with respect to all such property subject to the lien in favor of the Term Loan Agent, in form and substance satisfactory to Agent, executed by the Term Loan Agent;
“(b) Notwithstanding anything the contrary set forth in Section 9.8(a) Borrowers and Guarantors shall not create, grant or suffer to exist any liens, security interests or other encumbrances upon the Capital Stock of any of their Subsidiaries, provided that, such restriction shall not apply to the Capital Stock of Colchester.”
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“(i) the aggregate principal amount of such Indebtedness shall not (after application of the Term Loan proceeds as contemplated by Amendment No. 5) exceed $119,215,000 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 (other than the 1998 Senior Note Indenture) in effect as of the date of Amendment No. 5;
(ii) Intentionally Deleted;
(iii) Intentionally Deleted,
(iv) as of the date of Amendment No. 5, the principal amount of such outstanding Indebtedness under the 1997 Senior Note Indenture is $215,000;
(v) Intentionally Deleted,
(vi) as of the date of Amendment No. 5, the principal amount of such outstanding Indebtedness under the 2002 Senior Note Indenture is $119,000,000,”
“(k) Indebtedness of any Borrower or Guarantor for borrowed money (other than Indebtedness permitted under Sections 9.9(a) through (j) and (l) through (W) 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 or Guarantor at commercially reasonable rates and terms in a bona fide arms’ length transaction, (iv) if any of such Indebtedness is to
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be secured by any assets of such Borrower or Guarantor, then (A) the security interests and liens on the assets of such Borrower or Guarantor 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 Borrowers and Guarantors 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 and Guarantors may only make regularly scheduled payments of principal and interest in respect of such Indebtedness, except, that, Borrowers and Guarantors may make optional prepayments of principal or redeem, retire, defease, purchase or otherwise acquire such Indebtedness, provided, that, 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 as of the date of such payment and after giving effect thereto, the Excess Availability shall be not less than $25,000,000 and (2) as of the date of such payment and after giving effect thereto, no Default or Event of Default shall exist or be continuing, (viii) Borrowers and Guarantors shall not, directly or indirectly, amend, modify, alter or change 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 in such manner as would be permitted under Subsections (i) through (vii) of this Section 9.9(k) (as determined in good faith by Agent), 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 on its behalf, concurrently with the sending thereof, as the case may be;”
“(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(f), Section 9.9(g), Section 9.9(h), Section 9.9(i), Section 9.9(j), Section 9.9(k), Section 9.9 (q), Section 9.9(s) and Section 9.9(W) (the “Refinancing Indebtedness”); provided, that, as to any such
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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 and terms and conditions set forth in this Agreement as the Indebtedness so refinanced, except as otherwise expressly modified or permitted under this Section 9.9(l), (viii) the Refinancing Indebtedness may be secured by assets other than Collateral, (ix) Borrowers and Guarantors 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) Intentionally Deleted], and (xii) Borrowers and Guarantors shall
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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;”
“(w) Indebtedness of such Borrowers and Guarantors to Term Loan Agent and Term Loan Lenders evidenced by or arising under the Term Loan Agreements (as in effect on the date hereof), provided, that:
(i) the principal amount of such Indebtedness shall not exceed $200,000,000 less the aggregate amount of all repayments, repurchases or redemptions thereof, whether optional or mandatory, plus interest thereon at the rate provided in the Term Loan Agreements as in effect on the date hereof,
(ii) as of the date hereof, no event of default, or event which with notice or passage of time or both would constitute an event of default exists, or has occurred under the Term Loan Agreements,
(iii) Agent shall have received true, correct and complete copies of all of the Term Loan Agreements, as duly authorized, executed and delivered by the parties thereto,
(iv) Borrowers and Guarantors shall not, directly or indirectly, make, or be required to make, any payments in respect of such Indebtedness, except, that, (A) Borrower and Guarantor may make regularly scheduled payments of principal and interest and fees and other amounts due and payable in respect of such Indebtedness (and Refinancing Indebtedness in respect thereof) in accordance with the terms of the Term Loan Agreements as in effect on the date hereof, (B) Borrower may make mandatory prepayments of principal, interest and other amounts in respect of such Indebtedness with the net cash proceeds received by any Borrower or Guarantor from the sale or other disposition or casualty loss of any of the assets subject to the lien of the Term Loan Agent provided, such dispositions are made in accordance with Section 9.7(b) hereof,
(v) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change the terms of the agreements with respect to such Indebtedness, except, that,
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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 a portion of such Indebtedness (other than pursuant to payments thereof), or to release any liens or security interests in any assets of Borrowers and Guarantors 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 Borrowers and Guarantors or otherwise more favorable to Borrowers and Guarantors (as determined in good faith by Agent), or (B) redeem, retire, repay, defease, purchase or otherwise acquire such Indebtedness, or set aside or otherwise deposit or invest any sums for such purpose other than as permitted in clause (iv) immediately above, except that Borrowers and Guarantors may make optional prepayments of principal or redeem, retire, defease, purchase or otherwise acquire such Indebtedness, provided, that, 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 as of the date of such payment and after giving effect thereto, the Excess Availability shall be not less than $25,000,000 and (2) as of the date of such payment and after giving effect thereto, no Default or Event of Default shall exist or be continuing, and
(vi) Borrowers and Guarantors shall furnish to Agent all notices or demands in connection with such Indebtedness either received by any Borrower or Guarantor on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor;”
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AGENT |
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/s/WACHOVIA BANK |
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NATIONAL ASSOCIATION, as Agent |
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BORROWERS |
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/s/THE PEP BOYS - MANNY, MOE & JACK |
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/s/THE PEP BOYS MANNY MOE & JACK OF CALIFORNIA |
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/s/PEP BOYS - MANNY, MOE & JACK OF DELAWARE, INC. |
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/s/PEP BOYS - MANNY, MOE & JACK OF PUERTO RICO, INC. |
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GUARANTORS |
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/s/PBY CORPORATION |
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/s/CARRUS SUPPLY CORPORATION |
LENDERS |
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/s/WACHOVIA BANK, NATIONAL ASSOCIATION |
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/s/WELLS FARGO FOOTHILL, LLC |
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/s/WHITEHALL BUSINESS CREDIT CORP. |
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/s/THE CIT GROUP/BUSINESS CREDIT, INC. |
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/s/GENERAL ELECTRIC CAPITAL CORPORATION |
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/s/RZB FINANCE, LLC |
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/s/SIEMENS FINANCIAL SERVICES, INC. |
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/s/LASALLE BUSINESS CREDIT LLC |
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/s/PNC BANK, NATIONAL ASSOCIATION |
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/s/UPS CAPITAL CORPORATION |
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