Document:

INDEMNIFICATION AGREEMENT

 

This Indemnification Agreement, dated as of _________________________________ (this "Agreement"), is made by and between The Pep Boys-Manny, Moe & Jack, a Pennsylvania corporation (the "Company"), and the undersigned (the "Indemnitee").

RECITALS

WHEREAS, the Company recognizes that competent and experienced persons are increasingly reluctant to serve or to continue to serve as directors or officers of corporations unless they are protected by comprehensive liability insurance or indemnification, or both, due to increased exposure to litigation costs and risks resulting from their service to such corporations, and due to the fact that the exposure frequently bears no reasonable relationship to the compensation of such directors and officers;

WHEREAS, the Company's Amended and Restated Bylaws (the "Bylaws") require the Company to indemnify its directors and officers to the fullest extent permitted by the Pennsylvania Business Company Law of 1988, as amended (the "PBCL");

WHEREAS, Section 1741 of the PBCL empowers the Company to indemnify any person who  is or was serving as a representative of the Company, or who is or was serving at the request of the Company, as a representative of another corporation or enterprise;

WHEREAS, Section 1746 of the PBCL and the Bylaws expressly provide that the indemnification provisions set forth in the PBCL and the Bylaws, respectively, are not exclusive and thereby contemplate that contracts may be entered into between the Company and members of the Company's Board of Directors (the "Board"), officers and other persons with respect to indemnification;

WHEREAS, the Company desires and has requested that the Indemnitee serve or continue to serve as a director and/or officer of the Company, as the case may be, free from undue concern for unwarranted claims for damages arising out of or related to such services to the Company; 

WHEREAS, the Indemnitee does not regard the protection available under the Bylaws and the Company's liability insurance as adequate in certain circumstances to cover all possible exposure for which the Indemnitee should be protected, and the Indemnitee is willing to serve, continue to serve or to provide additional service for or on behalf of the Company on the condition that the Indemnitee is furnished the indemnity provided for herein;

WHEREAS, the Board has determined that, in order to attract and retain qualified individuals to serve as directors and/or officers, it is reasonable, prudent and necessary to promote the best interests of the Company and its shareholders for the Company to contractually obligate itself to indemnify, and to advance certain expenses, fees and other amounts to the Indemnitee as set forth herein;

WHEREAS, this Agreement is a supplement to Section 7 of the Bylaws and any resolutions, amendments or restatements adopted pursuant thereto, and shall not be deemed a substitute therefor, nor diminish or abrogate any rights of the Indemnitee thereunder; and

WHEREAS, the Indemnitee may have certain rights to indemnification, advancement of expenses and/or insurance provided by or through its Fund Indemnitor(s) (as defined herein) , which the Indemnitee and such entity or entities intend to be secondary to the primary obligation of the Company to indemnify and advance expenses to the Indemnitee as provided herein, with the Company's acknowledgement and agreement to the foregoing being a material condition to the Indemnitee's willingness to serve on the Board.

AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth below, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as follows:

	INDEMNIFICATION.

	Third Party Proceedings.  In the event that the Indemnitee was or is a party, or is threatened to be made a party, to any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or proceeding, whether civil, criminal, administrative or investigative (each, a "Proceeding"), other than a Proceeding by or in the right of the Company, by reason of the fact that the Indemnitee is or was a director, officer, partner, trustee, fiduciary, employee or agent (each, a "Representative") of the Company, or is or was serving at the request of the Company as a Representative of another domestic or foreign corporation for profit or not-for-profit, partnership, joint venture, trust, employee benefit plan or other enterprise (each, an "Enterprise"), the Company shall indemnify the Indemnitee, to the fullest extent provided by law, against all expenses and costs, including, without limitation, attorneys' fees (collectively, "Expenses"), and any judgments, penalties, fines, settlement amounts and liabilities paid to resolve a Proceeding (collectively, "Resolution Amounts") actually and reasonably incurred by the Indemnitee in connection with a Proceeding, so long as the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal proceeding, had no reasonable cause to believe the Indemnitee's conduct was unlawful.  The termination of any Proceeding by judgment, order, settlement or conviction or upon a plea of nolo contendere or its equivalent shall not of itself create a presumption that the Indemnitee did not act in good faith and in a manner that the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company and, with respect to any criminal proceeding, had reasonable cause to believe that the Indemnitee's conduct was unlawful.

	Proceedings By or in the Right of the Company.  In the event that the Indemnitee was or is a party, or is threatened to be made a party, to any threatened, pending or completed Proceeding by or in the right of the Company to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a Representative of the Company or is or was serving at the request of the Company as a Representative of another Enterprise, the Company shall indemnify the Indemnitee, to the fullest extent provided by law, against all Expenses and Resolution Amounts actually and reasonably incurred by the Indemnitee in connection with a Proceeding, so long as the Indemnitee acted in good faith and in a manner the Indemnitee reasonably believed to be in, or not opposed to, the best interests of the Company. Indemnification shall not be made under this section in respect of any claim, issue or matter as to which the Indemnitee has been adjudged to be liable to the Company, unless and only to the extent that the court in which the action was brought determines that, despite the adjudication of liability but in view of all the circumstances of the case, the Indemnitee is fairly and reasonably entitled to indemnity for the amounts that such court or another court of competent jurisdiction deems proper.

	Mandatory Indemnification of Expenses.  Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee has been successful on the merits or otherwise in defense of any Proceeding referred to in Section 1(a) or Section 1(b), or in defense of any claim, issue or matter therein, the Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by the Indemnitee in connection therewith. For purposes of this Section 1(c), the term "successful on the merits or otherwise" shall include, but not be limited to, (i) any termination, withdrawal, or dismissal (with or without prejudice) of any Proceeding against the Indemnitee without any express finding of liability or guilt against the Indemnitee, or (ii) the expiration of a reasonable period of time after the making of any claim or threat of a Proceeding without the institution of the same and without any promise or payment made to induce a settlement.  If the Indemnitee is not wholly successful in such Proceeding but is successful on the merits or otherwise as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by the Indemnitee in connection with each successfully resolved claim, issue or matter.

	Indemnification for Expenses as a Witness.  Notwithstanding any other provision of this Agreement, to the extent that the Indemnitee is, by reason of the fact that the Indemnitee is or was a Representative of the Company or is or was serving at the request of the Company as a Representative of another Enterprise, a witness, or made (or asked) to respond to discovery requests, in any Proceeding to which the Indemnitee is not a party, the Company shall indemnify the Indemnitee against all Expenses actually and reasonably incurred by the Indemnitee in connection therewith.

	ADVANCEMENT OF EXPENSES. The Company shall advance all Expenses incurred by the Indemnitee in connection with any Proceeding referred to in Section l hereof within thirty (30) days following receipt by the Company of the written request of the Indemnitee, coupled with appropriate documentation to support the requested payment, whether prior to or after the final disposition of such Proceeding.  For purposes of any advancement hereunder, the Indemnitee shall be deemed to have acted (i) in good faith and in a manner the Indemnitee reasonably believed to be in or not opposed to the best interest of the Company, and (ii) with respect to any criminal action or procedure, to have had no reasonable cause to believe the Indemnitee's conduct was unlawful if, under either (i) or (ii), the Indemnitee's action is based on the records or books of account of the Company, or the records or books of account of another Enterprise, including financial statements, or on information supplied to the Indemnitee by the officers of the Company or other Enterprises in the course of their duties, or on the advice of legal counsel for the Company or other Enterprises or on information or records given or reports made to the Company or other Enterprises by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Company or other Enterprises.  The Indemnitee hereby undertakes to repay such amounts advanced only if, and to the extent that, it shall ultimately be determined that the Indemnitee is not entitled to be indemnified by the Company as authorized hereby. 

	NOTICE AND PROCEDURES.  

	Notice to Company. The Indemnitee shall give the Company notice in writing as soon as practicable of any claim made against the Indemnitee for which indemnification will or could be sought under this Agreement.  Such notice shall include supporting documentation and shall be given in accordance with the provisions of Section 13(e) hereof.  Failure to give such notice shall excuse performance of the Company of its obligations contained herein only to the extent such delay was prejudicial to the Company.  In addition, the Indemnitee shall provide the Company such documents and information as may reasonably be requested and as are within the Indemnitee's power to provide.

	Procedure for Indemnification.  The Indemnitee shall be presumed to be entitled to indemnification under this Agreement upon submission of a request for indemnification hereunder, and the Company shall have the burden of proof in overcoming that presumption in reaching a determination contrary to that presumption.  Any indemnification for Resolution Amounts shall be made no later than thirty (30) days following the determination of such Resolution Amounts, as evidenced by appropriate documentation (e.g., settlement agreement, court order), unless (i) a court of competent jurisdiction has determined that Indemnitee is not entitled to Indemnification hereunder and no right of further appeal from such determination exists or (b) a Proceeding is pending before a court of competent jurisdiction to determine if Indemnitee is entitled to indemnification hereunder.  If following any such Proceeding, the court of competent jurisdiction determines that Indemnitee is entitled to indemnification hereunder, and no right of further appeal from such determination exists, then the Resolution Amounts shall be paid within thirty (30) days following such determination.

If a claim under this Agreement, any applicable law, or any provision of the Company's Amended and Restated Articles of Incorporation (the "Articles") or Bylaws providing for indemnification hereunder is not paid in full by the Company by its due date, then the Indemnitee may bring an action against the Company to recover the unpaid amount of the claim and, subject to Sections 11, the Indemnitee shall also be entitled to be paid for the Expenses of bringing such action.  It shall be a defense to any such action that the Indemnitee has not met the minimum standards of conduct under applicable law or this Agreement to permit indemnification to the Indemnitee for the amount claimed, but the burden of proving such defense shall be on the Company, and the Indemnitee shall be entitled to receive advance payments of Expenses pursuant to Section 2 unless and until a court of competent jurisdiction determines that Indemnitee is not entitled to indemnification., and no right of further appeal from such determination exists.  

It is the parties' intention that if the Company contests an Indemnitee's right to indemnification, the question of the Indemnitee's right to indemnification shall be for the court to decide, and neither the failure of the Company (including the Board, any committee or subgroup of the Board, independent legal counsel, or the Company's shareholders) to have made a determination that indemnification of the Indemnitee is proper in the circumstances because the Indemnitee has met the applicable standard of conduct required by applicable law, nor an actual determination by the Company (including the Board, any committee or subgroup of the Board, independent legal counsel, or the Company's shareholders) that the Indemnitee has not met such applicable standard of conduct, shall create a presumption that the Indemnitee has or has not, as the case may be, met the applicable standard of conduct.

	Notice to Insurers.  If, at the time of the receipt of a notice of a claim pursuant to Section 3(b), the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such Proceeding to the insurers in accordance with the procedures set forth in the respective policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such Proceeding in accordance with the terms of such policies. 

	Selection of Counsel.  In the event the Company shall be obligated under Section 2 to advance the Expenses of any Proceeding against the Indemnitee, the Company shall be entitled to assume the defense of such Proceeding upon delivery of written notice to the Indemnitee of the Company's election so to do.  Any such counsel appointed by the Company shall be approved by the Indemnitee, which approval shall not be unreasonably withheld or delayed.  After delivery of such notice, approval of such counsel by the Indemnitee and the retention of such counsel by the Company, the Company will not be liable to the Indemnitee under this Agreement for any attorneys' fees of another counsel subsequently incurred by the Indemnitee with respect to the same Proceeding; provided, however, that (i) the Indemnitee shall have the right to employ counsel in any such Proceeding at the Indemnitee's expense; and (ii) if (A) the engagement of counsel by the Indemnitee was previously authorized by the Company, (B) there is a conflict of interest between the Company and the Indemnitee in the conduct of any such defense, as determined in good faith by the Company's counsel, or (C) the Company shall not, in fact, have engaged counsel to assume the defense of such Proceeding, then the Expenses (including attorneys' fees) of the Indemnitee's counsel shall be at the expense of the Company, subject to the Indemnitee's repayment obligations under Section 2 hereof.

	Settlements. The Company shall not be liable to the Indemnitee under this Agreement for any amounts paid in settlement of any Proceeding effected without its written consent.  The Company shall not settle any Proceeding in any manner which would impose any penalty or limitation on the Indemnitee without the Indemnitee's written consent. Neither the Company nor the Indemnitee will unreasonably withhold consent to any proposed settlement.

	ADDITIONAL INDEMNIFICATION RIGHTS; NONEXCLUSIVITY.

	Scope.  Notwithstanding any other provision of this Agreement, the Company shall indemnify the Indemnitee to the fullest extent permitted by law, notwithstanding that such indemnification is not specifically authorized by the other provisions of this Agreement, the Articles, the Bylaws or by statute.  Reference in this Agreement to any law shall be to such law as it existed on the date hereof, and in the event of any amendment, alteration or repeal of any law which narrows the right of a Pennsylvania corporation to indemnify the Indemnitee or the Company's Representatives, such changes shall have no effect on this Agreement or the parties' rights and obligations hereunder, to the extent permitted by law; provided, however, that any amendment, alteration or repeal of any law which permits the Company, without requiring any further action by shareholders or directors, to limit further the liability of the Indemnitee or the Company's Representatives or to provide broader indemnification or advancement rights than the Company was permitted to provide prior to such change, shall be, ipso facto, within the purview of the Indemnitee's rights and the Company's obligations under this Agreement.  

No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of the Indemnitee under this Agreement in respect of any action or inaction of the Indemnitee prior to such amendment, alteration or repeal, in the Indemnitee's capacity as a Representative of the Company or a Representative of another Enterprise at the Company's request.  

	Effectiveness and Duration of Rights. All rights and obligations of the parties hereunder shall be effective as of the date on which the Indemnitee first serves on the Board or as an officer of the Company, as applicable, and shall continue as to the Indemnitee even though the Indemnitee may have ceased to serve as a Representative of the Company or a Representative of another Enterprise at the Company's request. This Agreement shall be binding on and shall inure to the benefit of the parties' respective heirs, successors, assigns and personal and legal representatives.

	Nonexclusivity.  The indemnification and other rights provided by this Agreement shall not be deemed exclusive of any rights to which the Indemnitee may be entitled under applicable law, the Articles, the Bylaws, any agreement, any vote of shareholders or disinterested directors, or otherwise, both as to any action or inaction in the Indemnitee's official capacities and as to any action or inaction in another capacity while holding such office.  

	PRIMACY OF INDEMNIFICATION; SUBROGATION.  

	Insurance Coverage.  To the extent that the Company maintains an insurance policy or policies providing liability insurance that covers the Indemnitee, the Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any Representative of the Company.  

	Indemnitor of First Resort.  If and to the extent that the Indemnitee has rights to indemnification, advancement of Expenses and/or insurance provided by or through its investment fund(s), corporate entity(s) with which the Indemnity is affiliated, employer(s) or their affiliates, (collectively, the "Fund Indemnitors"), the Company hereby agrees that (i) between the Company and the Fund Indemnitors, it is the indemnitor of first resort (i.e., its obligations to Indemnitee are primary and any obligation of the Fund Indemnitors to advance Expenses or to provide indemnification for Expenses or other liabilities incurred by Indemnitee are secondary); (ii) it shall be required to advance the full amount of Expenses incurred by Indemnitee and shall be liable for the full amount of all indemnification payments, each to the extent required by the terms of this Agreement, the Articles, the Bylaws or any other agreement between the Company and Indemnitee, without regard to any rights Indemnitee may have against the Fund Indemnitors; and (iii)  it irrevocably waives, relinquishes and releases the Fund Indemnitors from any and all claims against the Fund Indemnitors for contribution, subrogation or any other recovery of any kind in respect thereof.  The Company further agrees that no advancement or payment by the Fund Indemnitors on behalf of Indemnitee with respect to any claim for which Indemnitee has sought indemnification from the Company shall affect the foregoing and the Fund Indemnitors shall have a right of contribution and/or be subrogated to the extent of such advancement or payment to all of the rights of recovery of Indemnitee against the Company.  The Company and Indemnitee agree that the Fund Indemnitors are express third party beneficiaries of the terms of this section.

	Subrogation.  Except as provided in Section 5(b) above, (i) in the event the Company makes any payment to the Indemnitee under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee (other than against the Fund Indemnitors), who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights; (ii) the Company shall not be liable under this Agreement to make any payment of Expenses, Resolution Amounts or any other amounts otherwise indemnifiable hereunder, if and to the extent that the Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise; and (iii) if the Indemnitee is or was serving at the request of the Company as a Representative of another enterprise, the Company's obligation to indemnify the Indemnitee or advance Expenses hereunder to the Indemnitee shall be reduced by any amount the Indemnitee has actually received as indemnification or advancement of Expenses from such other enterprise or its affiliates.

	PARTIAL INDEMNIFICATION.  If the Indemnitee is entitled under any provision of this Agreement to indemnification by the Company for some or a portion of the Expenses or Resolution Amounts actually or reasonably incurred in the investigation, defense, appeal or settlement of any Proceeding, but not, however, for the total amount thereof, the Company shall nevertheless indemnify the Indemnitee for the portion of such Expenses or Resolution Amounts to which the Indemnitee is entitled.

	MUTUAL ACKNOWLEDGMENT.  Each of the Company and the Indemnitee acknowledge that, in certain instances, federal law or public policy may override applicable state law and prohibit the Company from indemnifying the Indemnitee under this Agreement or otherwise.  For example, the Company and the Indemnitee acknowledge that the Securities and Exchange Commission (the "SEC") has taken the position that indemnification is not permissible for liabilities arising under certain federal securities laws, and federal legislation prohibits indemnification for certain ERISA violations.

	DIRECTOR AND OFFICER LIABILITY INSURANCE.  If, following the date hereof, the Company determines that it is not practicable, for cost or other reasons, to maintain director and officer liability insurance, it shall notify the Indemnitee and provide the Indemnitee with an opportunity to resign from the Board prior to taking action to terminate such policy.

	SEVERABILITY.  Nothing in this Agreement is intended to require or shall be construed as requiring the Company to do or fail to do any act in violation of applicable law.  If this Agreement or any portion hereof shall be invalidated on any ground by any court of competent jurisdiction, then the Company shall nevertheless indemnify the Indemnitee to the full extent permitted by any applicable portion of this Agreement that shall not have been invalidated, and the balance of this Agreement not so invalidated shall be enforceable in accordance with its terms.

	EXCEPTIONS TO INDEMNIFICATION AND ADVANCEMENT OBLIGATIONS.  Notwithstanding any other provision herein to the contrary, the Company shall not be obligated pursuant to the terms of this Agreement:

	Claims Initiated by the Indemnitee.  To indemnify or to advance Expenses to the Indemnitee with respect to Proceedings or claims initiated or brought voluntarily by the Indemnitee and not by way of defense, except with respect to Proceedings brought to establish or enforce a right to indemnification or advancement of Expenses under this Agreement; provided, however, that indemnification or advancement of Expenses for such Proceedings may be made with the approval of the Board;

	Lack of Good Faith; Frivolous Claims.  To indemnify the Indemnitee for Expenses, Resolution Amounts or for any other liabilities of any type whatsoever incurred by the Indemnitee with respect to any Proceeding initiated by the Indemnitee to enforce or interpret this Agreement, if a court of competent jurisdiction determines that each of the material assertions made by the Indemnitee in such Proceeding was either frivolous or made in bad faith;

	Fraud.  To indemnify the Indemnitee for Expenses, Resolution Amounts or for any other liabilities of any type whatsoever if a final decision by a court of competent jurisdiction determines that the Indemnitee has committed fraud on the Company;

	Insured Claims.  To indemnify the Indemnitee for Expenses, Resolution Amounts or for any other liabilities of any type whatsoever to the extent such Expenses, Resolution Amounts or liabilities have been paid directly to the Indemnitee by an insurance carrier under a policy of officer and director liability insurance maintained by the Company or otherwise;

	Claims under Section 16(b).  To indemnify the Indemnitee for Expenses, Resolution Amounts or for any other liabilities of any type whatsoever, including, without limitation, the payment of profits arising from the purchase and sale by the Indemnitee of securities in violation of Section 16(b) of the Securities Exchange Act of 1934, as amended, or any similar successor statute; or 

	Willful Misconduct or Recklessness.  To indemnify the Indemnitee for Expenses, Resolution Amounts or for any other liabilities of any type whatsoever if a final decision by a court of competent jurisdiction shall determine that the act or failure to act by the Indemnitee giving rise to the claim for indemnification constitutes willful misconduct or recklessness.

	ATTORNEYS' FEES.  In the event that any action is instituted by the Indemnitee under this Agreement to enforce or interpret any of the terms hereof, the Indemnitee shall be entitled to be paid all Expenses incurred by the Indemnitee with respect to such action, unless as a part of such action, the court of competent jurisdiction determines that each of the material assertions made by the Indemnitee as a basis for such action were made in bad faith, or were frivolous or fraudulent, or that such indemnification was unlawful.  In the event of an action instituted by or in the name of the Company under this Agreement or to enforce or interpret any of the terms of this Agreement, the Indemnitee shall be entitled to be paid all Expenses incurred by the Indemnitee in defense of such action (including with respect to the Indemnitee's counterclaims and cross-claims made in such action), unless as a part of such action the court determines that each of the Indemnitee's material defenses to such action were made in bad faith or were frivolous.

	DEFINITIONS.

	For the purposes of this Agreement, references to "affiliate" shall mean any entity which, directly or indirectly, is in the control of, is controlled by, or is under common control with, another entity.

	For purposes of this Agreement, "Company" shall include all constituent corporations absorbed in a consolidation, merger or division, as well as the surviving or new corporations surviving or resulting therefrom, so that if the Indemnitee is or was a Representative of the constituent, surviving or new corporation, or is or was serving at the request of the constituent, surviving or new corporation as a Representative of another enterprise, the Indemnitee shall stand in the same position under the provisions of this Agreement with respect to the surviving or new corporation as the Indemnitee would have if he, she or it had served the surviving or new corporation in the same capacity.

	MISCELLANEOUS.

	Legal Matters.  This Agreement and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the Commonwealth of Pennsylvania, without giving effect to principles of conflict of laws.  Each party hereby submits to the exclusive jurisdiction and venue of the federal and state courts located in Philadelphia County, Pennsylvania over any dispute arising under this Agreement.   EACH PARTY HEREBY WAIVES ITS RIGHT TO A JURY TRIAL IN CONNECTION WITH ANY PROCEEDING OVER ANY DISPUTE ARISING UNDER THIS AGREEMENT.

	No Employment Rights.  Nothing contained in this Agreement is intended to create in the Indemnitee any right to employment by the Company or any of its affiliates

	Entire Agreement; Enforcement of Rights.  This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and merges all prior discussions between them.  No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement.  The failure by either party to enforce any rights under this Agreement shall not be construed as a waiver of any rights of such party.  

	Construction.  This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.

	Notices.  Any notice, demand, request or other communication required by or permitted to be given under this Agreement shall be in writing and shall be deemed delivered when delivered personally, or 24 hours after being deposited with a nationally recognized overnight courier service, or 48 hours after being deposited in the U.S. mail, as certified or registered mail, with postage prepaid, if to the Company, to 311 West Allegheny Ave, Philadelphia, PA 19132 Attn: General Counsel; or if to the Indemnitee, to the address listed on the signature page hereof; or to such other address as any party hereto shall have specified in a notice given in accordance with this section.

	Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument. 

 

IN WITNESS WHEREOF, the parties hereto have executed this Indemnification Agreement as of the date and year first written above

COMPANY:

THE PEP BOYS - MANNY, MOE & JACK

 

By:_______________________________________

Name:

Title:

 

INDEMNITEE:

By:_______________________________________

Name:_______________________________________

Address:______________________________________

_____________________________________________TENTH AMENDMENT TO

TENTH AMENDMENT TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

TENTH AMENDMENT, dated as of September 27, 2010, to the Credit Agreement referred to below (this "Amendment"), by and among DICK'S SPORTING GOODS, INC., a Delaware corporation (the "Borrower"), GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation, as Agent for the Lenders party to such Credit Agreement (in such capacity, the "Agent"), and the Lenders signatory hereto.

W I T N E S S E T H: 

WHEREAS, the Borrower, the other Loan Parties signatory thereto, the Agent and the Lenders are parties to that certain Second Amended and Restated Credit Agreement, dated as of July 28, 2004 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"); and

WHEREAS, Borrower, Agent and Required Lenders have agreed to amend certain provisions of the Credit Agreement, in the manner, and on the terms and conditions, provided for herein.

NOW THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

	Definitions. Capitalized terms not otherwise defined herein (including in the Recitals hereto) shall have the meanings ascribed to them in the Credit Agreement as amended hereby (the "Amended Credit Agreement").

	Amendments to Credit Agreement. The Credit Agreement is hereby amended as of the Effective Date (as defined below) as follows:

	Amendment to Section 1.1(g) of the Credit Agreement. Section 1.1(g) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(g) Non-Funding Lenders.

(i) Responsibility. The failure of any Non-Funding Lender to make any Loan, incur any Letter of Credit Obligation or make any payment required by it hereunder, or to fund any purchase of any participation to be made or funded by it on the date specified therefor shall not relieve any other Lender (each such other Lender, an "Other Lender") of its obligations to make such Loan, incur such Letter of Credit Obligation, make any payment required by it hereunder, or fund the purchase of any such participation on such date, and neither Agent nor, other than as expressly set forth herein, any other Lender shall be responsible for the failure of any Non-Funding Lender to make a Loan, incur a Letter of Credit Obligation, make any payment required by it hereunder, or fund the purchase of a participation.

(ii) Reallocation. If any Lender is a Non-Funding Lender or Impacted Lender, all or a portion of such Non-Funding Lender's or Impacted Lender's Letter of Credit Obligations (unless such Lender is the L/C Issuer that issued such Letter of Credit) shall, at Agent's election at any time or upon any L/C Issuer's written request delivered to Agent (whether before or after the occurrence of any Default or Event of Default), be reallocated to and assumed by the Lenders that are not Non-Funding Lenders or Impacted Lenders pro rata in accordance with their Commitment Percentages of the Loans (calculated as if the Non-Funding Lender's or Impacted Lender's Commitment Percentage was reduced to zero and each other Lender's Commitment Percentage had been increased proportionately), provided that no Lender shall be reallocated any such amounts or be required to fund any amounts that would cause the sum of its outstanding Loans and outstanding Letter of Credit Obligations to exceed its Revolving Credit Commitment. Upon any Lender ceasing to be a Non-Funding Lender or Impacted Lender, any reallocation occurring pursuant to this Section 1.1(g)(ii) as a result of such Lender becoming a Non-Funding Lender or Impacted Lender shall no longer be in effect.

(iii) Voting Rights. Notwithstanding anything set forth herein to the contrary, including Section 11.1, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a "Lender" (or be, or have its Loans and Revolving Credit Commitments, included in the determination of "Required Lenders" or "affected Lender" pursuant to Section 11.1) for any voting or consent rights under or with respect to any Loan Document, provided that (A) the Revolving Credit Commitment of a Non-Funding Lender may not be increased, (B) the principal of a Non-Funding Lender's Loans may not be reduced or forgiven, and (C) the interest rate applicable to Obligations owing to a Non-Funding Lender may not be reduced. Moreover, for the purposes of determining Required Lenders, the Loans, Letter of Credit Obligations, and Revolving Credit Commitments held by Non-Funding Lenders shall be excluded from the total Loans and Revolving Credit Commitments outstanding.

(iv) Borrower Payments to a Non-Funding Lender. Agent shall be entitled to hold, in a non-interest bearing account, all portions of any payments received by Agent for the benefit of any Non-Funding Lender pursuant to this Agreement as cash collateral. Agent is hereby authorized to use such cash collateral to pay in full the Aggregate Excess Funding Amount to the appropriate Lenders thereof, and then, to hold as cash collateral the amount of such Non-Funding Lender's pro rata share, without giving effect to any reallocation pursuant to Section 1.1(g)(ii), of all funding obligations until the Obligations are paid in full in cash, all Letter of Credit Obligations have been discharged or cash collateralized and all Revolving Credit Commitments have been terminated. Upon any such unfunded obligations owing by a Non-Funding Lender becoming due and payable, Agent shall be authorized to use such cash collateral to make such payment on behalf of such Non-Funding Lender. With respect to such Non-Funding Lender's failure to fund Loans or purchase participations in Letters of Credit or Letter of Credit Obligations, any amounts applied by Agent to satisfy such funding shortfalls shall be deemed to constitute a Loan or amount of the participation required to be funded and, if necessary to effectuate the foregoing, the other Lenders shall be deemed to have sold, and such Non-Funding Lender shall be deemed to have purchased, Loans or Letter of Credit participation interests from the other Lenders until such time as the aggregate amount of the Loans and participations in Letters of Credit and Letter of Credit Obligations are held by the Lenders in accordance with their Commitment Percentages. Any amounts owing by a Non-Funding Lender to Agent which are not paid when due shall accrue interest at the interest rate applicable during such period to Loans that are Index Rate Loans. In the event that Agent is holding cash collateral of a Non-Funding Lender that cures pursuant to clause (v) below or ceases to be a Non-Funding Lender pursuant to definition of Non-Funding Lender, Agent shall return the unused portion of such cash collateral to such Lender. The "Aggregate Excess Funding Amount" of a Non-Funding Lender shall be the aggregate amount of (A) all unpaid obligations owing by such Lender to the Agent, L/C Issuers, and other Lenders under the Loan Documents, including such Lender's pro rata share of all Loans and Letter of Credit Obligations, plus, without duplication, (B) all amounts of such Non-Funding Lender reallocated to other Lenders pursuant to Section 1.1(g)(ii).

(v) Cure. A Lender may cure its status as a Non-Funding Lender under clause (a) of the definition of Non-Funding Lender if such Lender (A) fully pays to Agent, on behalf of the applicable Lenders, the Aggregate Excess Funding Amount, plus all interest due thereon and (B) timely funds the next Loan required to be funded by such Lender or makes the next reimbursement required to be made by such Lender. Any such cure shall not relieve any Lender from liability for breaching its contractual obligations hereunder.

(vi) Fees. A Lender that is a Non-Funding Lender pursuant to clause (a) of the definition of Non-Funding Lender shall not earn and shall not be entitled to receive, and the Borrowers shall not be required to pay, such Lender's portion of the Non-use Fee during the time such Lender is a Non-Funding Lender pursuant to clause (a) thereof. In the event that any reallocation of Letter of Credit Obligations occurs pursuant to Section 1.1(g)(ii), during the period of time that such reallocation remains in effect, the Letter of Credit Fee payable with respect to such reallocated portion shall be payable to (A) all Lenders based on their pro rata share of such reallocation or (B) to the L/C Issuer for any remaining portion not reallocated to any other Lenders.

(vii) Anything in this Agreement to the contrary notwithstanding, each Lender hereby agrees with each other Lender that no Lender shall take any action to protect or enforce its rights arising out of this Agreement or the Revolving Credit Notes (including exercising any rights of off-set) without first obtaining the prior written consent of Agent or Required Lenders, it being the intent of Lenders that any such action to protect or enforce rights under this Agreement and the Revolving Credit Notes shall be taken in concert and at the direction or with the consent of Agent or Required Lenders and not individually by a single Lender."

	Amendment to Section 1.6(a) of the Credit Agreement. Section 1.6(a) of the Credit Agreement is hereby amended by adding a new sentence at the end thereof as follows:

"For purposes of this Section 1.6(a), the Revolving Credit Commitment of any Non-Funding Lender shall be deemed to be zero."

	Amendment to Section 1.12(b) of the Credit Agreement. Section 1.12(b) of the Credit Agreement is hereby amended by adding a new sentence at the end thereof as follows:

"If a Non-Funding Lender receives any such payment as described in the first sentence of this Section 1.12(b), such Lender shall turn over such payments to Agent in an amount that would satisfy the cash collateral requirements set forth in Section 1.1(g)."

	Amendment to Section 1.22 of the Credit Agreement. Section 1.22 of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"Within fifteen (15) days after Borrower (i) receives written notice and demand from any Lender (an "Affected Lender") for payment of additional amounts or increased costs as provided in Section 1.17(a), 1.19 or 1.20, (ii) has knowledge that one or more Lenders has become an Impacted Lender or Non-Funding Lender, or (iii) receives written notice from Agent that one or more Lenders has become an Impacted Lender or a Non-Funding Lender under clause (b), (c) or (d) of the definition thereof (which notice will be promptly provided by Agent in the event that Agent receives written notice from said Lender with respect to clause (b) of the definition of Non-Funding Lender, if Agent obtains knowledge of the circumstances set forth in clause (c) of the definition of Non-Funding Lender, or upon Agent's reasonable determination that an Impacted Lender or a Non-Funding Lender under clause (d) of the definition thereof exists; provided, that Agent shall have no liability for any failure to provide, delay in providing, error or mistake in or omission from, any such notice), Borrower may, at its option, notify Agent and such Affected Lender, Non-Funding Lender or Impacted Lender, as applicable, of its intention to replace said Lender. So long as no Default or Event of Default shall have occurred and be continuing, Borrower may obtain, at Borrower's expense, a replacement Lender ("Replacement Lender") for the Affected Lender, Non-Funding Lender or Impacted Lender, which Replacement Lender must be reasonably satisfactory to Agent. If Borrower obtains a Replacement Lender within ninety (90) days following notice of its intention to do so, the Affected Lender, Non-Funding Lender or Impacted Lender must sell and assign its Loans and Commitments to such Replacement Lender for an amount equal to the principal balance of all Revolving Credit Loans held by the Affected Lender, Non-Funding Lender or Impacted Lender and all accrued interest and Fees with respect thereto through the date of such sale, provided that Borrower shall have reimbursed such Affected Lender, Non-Funding Lender or Impacted Lender for any additional amounts or increased costs that it is entitled to receive under this Agreement through the date of such sale and assignment. Notwithstanding the foregoing, with respect to a Lender that is a Non-Funding Lender or an Impacted Lender, unless Borrower has obtained a Replacement Lender within ninety (90) days after Borrower obtains knowledge or notice that such Lender is a Non-Funding Lender or an Impacted Lender, Agent may of its own accord, but shall not be obligated to, obtain a Replacement Lender and execute an Assignment and Acceptance on behalf of such Non-Funding Lender or Impacted Lender at any time with three (3) Business Days' prior notice to such Lender and, so long as no Default has occurred and is continuing, upon the consent of Borrower, which shall not be unreasonably withheld or delayed, and cause such Lender's Loans and Revolving Credit Commitments to be sold and assigned, in whole or in part, at par. Upon any such replacement, assignment and payment and compliance with the other provisions of Section 10.2, such replaced Lender shall no longer constitute a "Lender" for purposes hereof; provided, any rights of such replaced Lender to indemnification hereunder shall survive.

Notwithstanding the foregoing, Borrower shall not have the right to obtain a Replacement Lender if the Affected Lender rescinds its demand for increased costs or additional amounts within fifteen (15) days following its receipt of Borrower's notice of intention to replace such Affected Lender. Furthermore, if Borrower gives a notice of intention to replace and does not so replace such Affected Lender within ninety (90) days thereafter, Borrower's rights under this Section 1.22, only with respect to the particular Affected Lender and with respect to the particular event or series of events at that time that triggered a determination regarding the particular Affected Lender, shall terminate and Borrower shall promptly pay all increased costs or additional amounts demanded by such Affected Lender pursuant to Sections 1.17(a), 1.19 and 1.20."

	Amendments to Section 6.2 of the Credit Agreement. 

	Section 6.2(c) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(c) Investments in Cash Equivalents and Permitted Investments, which are subject to a first priority perfected Lien of Agent for the benefit of Lenders; provided that such Investments need not be subject to a first priority perfected Lien of Agent if (i) there are no Revolving Loans or Letter of Credit Obligations outstanding, (ii) (A) Excess Availability is less than or equal to 50% of the lesser of (1) the Aggregate Revolving Credit Commitment and (2) the Borrowing Base and (B) the aggregate outstanding principal amount of such Cash Equivalents and Permitted Investments does not exceed $25,000,000, or (iii) (A) Excess Availability is more than 50% of the lesser of (1) the Aggregate Revolving Credit Commitment and (2) the Borrowing Base and (B) the aggregate outstanding principal amount of such Cash Equivalents and Permitted Investments does not exceed $50,000,000; provided further that the aggregate outstanding principal amount of such Cash Equivalents and Permitted Investments shall not exceed $0 at any time after Agent has the right to deliver an Activation Notice (whether or not such Activation Notice has been delivered or rescinded) in accordance with Annex B;"

	Section 6.2 of the Credit Agreement is hereby amended by deleting the word "and" before clause (j) where it appears therein and adding new clauses (k), (l) and (m) immediately after clause (j) as follows:

"; (k) loans or advances to employees for the purpose of travel, entertainment or relocation in the ordinary course of business; provided that (i) all such loans and advances shall not exceed $15,000,000 in the aggregate outstanding at any time and (ii) no Default or Event of Default has occurred and is continuing both before and after giving effect to any such loans or advances;

(l) Investments in foreign Subsidiaries of Borrower not to exceed $25,000,000 in the aggregate outstanding at any time; provided that no Default or Event of Default has occurred and is continuing both before and after giving effect to any such Investment; and

(m) any other Investments not to exceed $25,000,000 (the "Investment Cap") in the aggregate outstanding at any time in joint ventures or domestic Subsidiaries of Borrower that are not Loan Parties; provided that (i) no Default or Event of Default has occurred and is continuing both before and after giving effect to any such Investment and (ii) the Investment Cap shall not apply if Excess Availability (as determined on a pro forma basis for each of the twelve fiscal months following the making of such Investment) is greater than twenty percent (20%) of the Aggregate Revolving Credit Commitment."

	Amendments to Section 6.3 of the Credit Agreement. 

	Section 6.3(c) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(c) (x) Capital Lease Obligations (including any such Capital Lease Obligations set forth in Schedule 6.3) and (y) Indebtedness (including any such Indebtedness set forth in Schedule 6.3), in each case, incurred to finance the acquisition or improvement of any fixed or capital assets (including, but not limited to, financing construction of (i) new stores and (ii) buildings adjacent to new or existing stores on land (A) which was purchased (or in the case of land and buildings, purchased or purchased, sold and leased back) for the sole purpose of the construction of a store and (B) which constitutes the excess portion of land purchased (or in the case of land and buildings, purchased or purchased, sold and leased back) in a transaction where the minimum amount of land required to be purchased (or in the case of land and buildings, purchased or purchased, sold and leased back) in such transaction exceeded that necessary for such store ("Adjacent Construction") (in each case, which may include land acquisition costs and related site work, demolition of existing structures and costs related to preparing outparcels or other excess land for sale or lease), but excluding any other real estate or real property), and any Indebtedness assumed in connection with the acquisition of any such assets or secured by a Lien on any such assets prior to the acquisition thereof, and extensions, renewals and replacements of any such Indebtedness that do not increase the outstanding principal amount thereof or result in an earlier maturity date or decreased weighted average life thereof; provided that (i) the holders of such Indebtedness are not afforded covenants, defaults, rights or remedies more burdensome in any material respect to the obligor or obligors than those contained in the Indebtedness being extended, renewed or replaced and (ii) if requested by Agent, the Loan Parties will use commercially reasonable efforts to cause the holder of such Indebtedness to enter into an intercreditor agreement with Agent, providing for access and use of the property during a liquidation on terms reasonably satisfactory to Agent;"

	Section 6.3(k) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(k) at any time after consummation of the Merger, any other unsecured Indebtedness of Borrower not to exceed $200,000,000 in the aggregate at any time outstanding;"

	Section 6.3 of the Credit Agreement is hereby amended by deleting the word "and" before clause (o) where it appears therein and adding a new clause (p) immediately after clause (o) as follows:

"; and (p) Indebtedness in respect of Synthetic Lease Obligations incurred solely for the purpose of financing new stores and Adjacent Construction; provided that (i) each transaction under which Synthetic Lease Obligations are incurred must be for a period of at least five (5) years or otherwise satisfactory to Agent, (ii) no Default or Event of Default has occurred and is continuing both before and after giving effect to the incurrence of any such Indebtedness, (iii) Borrower has no obligation (but has an option) under the terms of the Synthetic Lease to purchase the property the subject of the Synthetic Lease from the lessor (or owner) upon the expiration of such Synthetic Lease and (iv) the amount of all such Synthetic Lease Obligations (A) incurred in any Fiscal Year shall not exceed $50,000,000 in the aggregate during such Fiscal Year and (B) outstanding at any one time shall not exceed $250,000,000 in the aggregate."

	Amendment to Section 6.6 of the Credit Agreement. Section 6.6 of the Credit Agreement is hereby amended by deleting the word "and" before clause (g) where it appears therein and adding a new clauses (h) and (i) immediately after clause (g) as follows:

"(h) unsecured guarantees provided in the ordinary course of business in connection with sporting events for which Borrower is providing sponsorship; and

(i) guarantees incurred for the benefit of any other Loan Party, guarantying such Loan Party's Synthetic Lease Obligations permitted under Section 6.3(p)."

	Amendments to Section 6.7 of the Credit Agreement. 

	Section 6.7(c) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(c) Liens (i) on fixed or capital assets acquired by any Loan Party which are permitted under Section 6.3(c), so long as (A) such Liens and the Indebtedness secured thereby are incurred prior to or within ninety (90) days after such acquisition or the completion of the construction or improvement thereof (other than refinancings thereof permitted hereunder), (B) the Indebtedness secured thereby does not exceed 100% of the cost of acquisition or improvement of such fixed or capital assets, and (C) such Liens shall not extend to any other property or assets of the Loan Parties; (ii) incurred solely for the purpose of financing the construction of the New Dick's HQ, which Liens do not apply to any property or assets of the Loan Parties other than the real estate so financed, and (iii) granted pursuant to the Bank of America Lease and the Collateral Assignment of Purchase Agreement, in each case as in effect on February 28, 2007, to secure, among other things, the obligations evidenced by the Progress Payment Promissory Note;"

	Section 6.7 of the Credit Agreement is hereby amended by deleting the word "and" before clause (g) where it appears therein and adding a new clause (h) immediately after clause (g) as follows:

"; and (h) Liens securing Indebtedness permitted under Section 6.3(p); provided that such Liens do not at any time encumber any property other than the property financed by such Indebtedness."

	Amendment to Section 6.8(e) of the Credit Agreement. Section 6.8(e) of the Credit Agreement is hereby amended by deleting the word "and" before clause (e) where it appears therein and adding a new clause (f) immediately after clause (e) as follows: 

", and (f) ground leases entered into with lessors in connection with (i) any Synthetic Lease transaction; provided that the Indebtedness in respect of the related Synthetic Lease Obligation is permitted under Section 6.3(p) or (ii) any Capital Lease transaction; provided that the Indebtedness in respect of the related Capital Lease Obligation is permitted under Section 6.3(c)."

	Amendment to Section 6.12(b) of the Credit Agreement. Section 6.12(b) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(b) Subject to Section 6.5(a)(ii), Borrower may make dividends and distributions in the form of Stock to its Stockholders, and in connection with mergers as permitted by Section 6.1(a)(iv)."

	Amendment to Section 6.12 of the Credit Agreement. Section 6.12 of the Credit Agreement is hereby amended by deleting the word "and" before clause (j) where it appears therein and adding a new clause (k) immediately after clause (j) as follows: 

"; and (k) Borrower may make dividends in the form of cash or common stock to its Stockholders; provided that (i) no Default or Event of Default has occurred and is continuing both before and after giving effect to the making of any such dividend and (ii) immediately prior to, and immediately after giving effect to, the making of any such dividend, Excess Availability is greater than twenty percent (20%) of the Aggregate Revolving Credit Commitment."

	Amendment to Section 6.14 of the Credit Agreement. Section 6.14 of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows: 

"6.14 Sale-Leasebacks. No Loan Party shall enter into any sale-leaseback, synthetic lease or similar transaction involving any of its property or assets except pursuant to a (a) Permitted Sale and Leaseback Transaction or (b) Synthetic Lease transaction; provided that the Indebtedness in respect of the related Synthetic Lease Obligation is permitted under Section 6.3(p).

	Amendment to Section 6.19 of the Credit Agreement. Section 6.19 of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows: 

"6.19 Limitation on Negative Pledge Clauses. No Loan Party shall directly or indirectly, enter into any agreement (other than the Loan Documents and the Merger Agreement), with any Person which prohibits or limits the ability of any Loan Party to create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than in connection with (i) any Indebtedness permitted under Section 6.3(c) secured by a Lien permitted hereunder on assets of the Loan Parties so long as such prohibition or limitation in any documentation governing or relating to such Indebtedness extends only to such assets securing such Indebtedness or (ii) any Synthetic Lease transaction; provided that (A) the Indebtedness in respect of the related Synthetic Lease Obligation is permitted under Section 6.3(p) and (B) such prohibition or limitation in any documentation governing or relating to such Synthetic Lease or related Synthetic Lease Obligations extends only to the property the subject of the Synthetic Lease."

	Amendment to Section 6.21(a) of the Credit Agreement. Section 6.21(a) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(a) renew (by amendment, modification or otherwise) any lease of real property or similar agreements other than (i) renewals of existing leases of real property upon terms that are not less favorable than then current market terms and (ii) renewals of Synthetic Leases in accordance with and pursuant to any existing renewal options set forth in such Synthetic Leases; provided that the Indebtedness in respect of the related Synthetic Lease Obligation is permitted under Section 6.3(p), or"

	Amendment to Section 8.1(d) of the Credit Agreement. Section 8.1(d) of the Credit Agreement is hereby amended by amending and restating such Section in its entirety as follows:

"(d) A default shall occur under any other agreement, document or instrument to which any Loan Party is a party or by which any such Loan Party or its property is bound, and such default (i) involves the failure to make any payment (after expiration of any applicable grace period), whether of principal, interest or otherwise, due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise) in respect of any Indebtedness of such Loan Party in an aggregate amount exceeding $50,000,000 or (ii) causes (or permits any holder of such Indebtedness or a trustee to cause) such Indebtedness, or a portion thereof in an aggregate amount exceeding $50,000,000 to become due prior to its stated maturity or prior to its regularly scheduled dates of payment."

	Amendment to Section 10.2(a) of the Credit Agreement. Section 10.2(a) of the Credit Agreement is hereby amended by adding a new sentence at the end thereof as follows:

"Notwithstanding anything set forth herein to the contrary, Lenders cannot make assignments to Non-Funding Lenders or Impacted Lenders."

	Amendment to Section 11.1 of the Credit Agreement. Section 11.1 of the Credit Agreement is hereby amended by adding a new sentence at the end thereof as follows:

"Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a "Lender" (or be, or have its Loans and Commitments, included in the determination of "Required Lenders" or "affected Lenders" pursuant to this Section 11.1) for any voting or consent rights under or with respect to any Loan Document, except that a Non-Funding Lender shall be treated as an "affected Lender" for purposes of Section 11.1(a) solely with respect to an increase in such Non-Funding Lender's Revolving Credit Commitment, a reduction of the principal amount owed to such Non-Funding Lender or, unless such Non-Funding Lender is treated the same as the other Lenders, a reduction in the interest rates applicable to the Loans held by such Non-Funding Lender. Moreover, for the purposes of determining Required Lenders, the Loans and Revolving Credit Commitment held by Non-Funding Lenders shall be excluded from the total Loans and Revolving Credit Commitments outstanding."

	Amendments to Annex A to the Credit Agreement. Annex A of the Credit Agreement is amended by:

	amending and restating the following definitions to read as follows:

"Fixed Charge Coverage Ratio" shall mean, with respect to any period, the ratio of the following for such period of Borrower and its Subsidiaries determined in accordance with GAAP: (a) EBITDA plus the aggregate amount of Net Proceeds received during any such period by Borrower or any of its Subsidiaries from a sale of Fixtures and Equipment (including the proceeds received by Borrower or any such Subsidiaries in a Permitted Sale and Leaseback Transaction), permitted under Section 6.8 of this Agreement; less Capital Expenditures which are not financed through Operating Leases to (b) the sum of (i) Interest Expense plus (ii) principal paid on Indebtedness (including Capitalized Lease Obligations but excluding the principal of the Revolving Credit Loan) or required to be paid during such period plus (iii) taxes to the extent accrued or otherwise payable with respect to such period plus (iv) all regular cash dividends (as distinguished from extraordinary or non-recurring cash dividends) payable by Borrower on Stock in respect of such period."

"Indebtedness" of any Person shall mean (a) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services (including reimbursement and all other obligations with respect to surety bonds, letters of credit and bankers' acceptances, whether or not matured, but not including obligations to trade creditors incurred in the ordinary course of business that are not unpaid for more than 90 days past the stated due date therefor), (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all indebtedness created or arising under any conditional sale or other title retention agreements with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in an event of default may be limited to repossession or sale of such property), (d) all Capital Lease Obligations, (e) all Guaranteed Indebtedness, (f) all obligations of such Person under any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement, interest rate option contract, foreign exchange contract, currency swap agreement, futures contract, option contract, synthetic cap, commodity purchase or option agreements or other similar agreement or contract designed to protect such Person against fluctuations in interest rates, currency values or commodity prices, as the case may be, or other hedging or derivative agreements, (g) all Synthetic Lease Obligations, (h) all Indebtedness referred to in clause (a), (b), (c), (d), (e), (f) or (g) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon or in property (including accounts and contract rights) owned by such Person, even though such Person has not assumed or become liable for the payment of such Indebtedness, and (i) the Obligations.

"Non-Funding Lender" means any Lender that has (a) failed to fund any payments required to be made by it under the Loan Documents within two (2) Business Days after any such payment is due (excluding expense and similar reimbursements that are subject to good faith disputes), (b) given written notice (and Agent has not received a revocation in writing), to Borrower, Agent, any Lender, or the L/C Issuer or has otherwise publicly announced (and Agent has not received notice of a public retraction) that such Lender believes it will fail to fund payments or purchases of participations required to be funded by it under the Loan Documents or one or more other syndicated credit facilities, (c) failed to fund, and not cured, loans, participations, advances, or reimbursement obligations under one or more other syndicated credit facilities, unless subject to a good faith dispute, or (d) any Lender that has, or any Person that directly or indirectly Controls such Lender has, (i) become subject to a voluntary or involuntary case under the Federal Bankruptcy Reform Act of 1978 (11 U.S.C. Section 101, et seq.) or any similar bankruptcy laws, (ii) a custodian, conservator, receiver or similar official appointed for it or any substantial part of such Person's assets, or (iii) made a general assignment for the benefit of creditors, been liquidated, or otherwise been adjudicated as, or determined by any Governmental Authority having regulatory authority over such Person or its assets to be, insolvent or bankrupt, and for this clause (d), Agent has determined that such Lender is reasonably likely to fail to fund any payments required to be made by it under the Loan Documents.

"Permitted Investments" shall mean, at any time, (a) any evidence of Indebtedness with a maturity date of three years or less from the date of acquisition issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof; provided, that, the full faith and credit of the United States of America is pledged in support thereof; (b) obligations of state and local governments or agencies thereof (including variable rate demand notes and auction rate securities) with a maturity date or reset period of one year or less from the date of acquisition; (c) commercial paper with a maturity of one year or less from the date of acquisition issued by a corporation (except an Affiliate of Borrower) organized under the laws of any State of the United States of America or the District of Columbia and rated at least A-1 by Standard & Poor's Ratings Service, a division of The McGraw-Hill Companies, Inc. ("S&P") or at least P-1 by Moody's Investors Service, Inc. ("Moody's"); (d) corporate notes (including variable rate demand notes, auction rate securities and Eurodollar notes) issued by a corporation (except an Affiliate of Borrower) organized under the laws of any State of the United States of America or the District of Columbia and rated at least A2 by S&P or at least A by Moody's with a maturity date of two years or less from the date of acquisition; (e) repurchase obligations with a term of not more than thirty (30) days for underlying securities of the types described in clauses (a) above entered into with any financial institution having combined capital and surplus and undivided profits of not less than $500,000,000; (f) repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the United States of America or issued by any governmental agency thereof and backed by the full faith and credit of the United States of America, in each case maturing within one year or less from the date of acquisition; provided, that, the terms of such agreements comply with the guidelines set forth in the Federal Financial Agreements of Depository Institutions with Securities Dealers and Others, as adopted by the Comptroller of the Currency on October 31, 1985; (g) tax-exempt debt securities of municipalities (including state and local governments and their agencies) and corporations with a maturity date or reset period of one year or less from the date of acquisition, including (i) variable rate demand notes and tax and/or revenue anticipation notes which are issued by companies of long-term debt ratings of A or above by S&P or are backed by letters of credit of banks rated at least A-1 by S&P or at least P-1 by Moody's, (ii) municipal tender bonds with long-term debt ratings of A by S&P or A-2 by Moody's and (iii) tax-exempt commercial paper of municipalities that carry minimum ratings of at least A-1 by S&P or at least P-1 by Moody's; and (h) investments in money market funds and mutual funds which invest substantially all of their assets in securities of the type described in clauses (a) through (g) above."

	amending and restating clause (ii)(c) of the definition of "Permitted Sale and Leaseback Transaction" to read as follows:

(c) the lease pertaining to such assets is an Operating Lease for purposes of GAAP or a Capital Lease;"

	adding the following new definitions in appropriate alphabetical order therein:

"Adjacent Construction" shall have the meaning assigned to it in Section 6.3(c).

"Commitment Percentage" means, as to any Lender, the percentage equivalent of such Lender's Revolving Credit Commitment divided by the Aggregate Revolving Credit Commitment; provided that following acceleration of the Loans, such term means, as to any Lender, the percentage equivalent of the principal amount of the Loans held by such Lender, divided by the aggregate principal amount of the Loans held by all Lenders.

"Impacted Lender" means any Lender that fails to provide Agent, within three (3) Business Days following Agent's written request, satisfactory assurance that such Lender will not become a Non-Funding Lender; provided, however, that such determination may be cured by said Lender providing Agent with such assurance to Agent's satisfaction.

"Synthetic Lease" shall mean any so-called synthetic lease, tax retention operating lease or similar off-balance sheet financing product (a) under which the obligor accounts for its interest in the property covered thereby under GAAP as lessee of a lease which is not a capital lease and accounts for its interest in the property covered thereby for federal income tax purposes as the owner and (b) pursuant to which the lessee has the option at the expiration of such lease to, among other things, (i) purchase the property the subject of such lease from the lessor (or owner) for the value specified in such lease as the purchase price upon expiration or (ii) sell such property on behalf of the lessor to a buyer unaffiliated with the lessee and to the extent that the net proceeds from such sale are less than the value specified in such lease (which value typically represents the unamortized cost of the property (including any construction thereon)), make a payment to the lessor (or owner) in an amount up to such difference (the "Residual Value Guarantee Payment"). For the avoidance of doubt, and notwithstanding the characterization of Synthetic Lease Obligations as Indebtedness under this Agreement, for purposes of calculating EBITDA and the Fixed Charge Coverage Ratio, payments made pursuant to a Synthetic Lease (including rent, the purchase price to purchase a property subject of such lease or the Residual Value Guarantee Payment) shall be accounted for and treated as required under GAAP, whether characterized as interest and principal or as rent (but in any case, not both)."

"Synthetic Lease Obligation" shall mean, as to any Person with respect to any Synthetic Lease at any time of determination, the amount set forth in such Synthetic Lease or related documentation as the amount that the lessee is required to pay the lessor (owner) in order to purchase the property the subject of such Synthetic Lease upon expiration of such Synthetic Lease (the "Purchase Price"); provided, however, that if such Purchase Price is not known and quantifiable upon execution of such Synthetic Lease, (i) the Purchase Price shall be determined based on estimates or projections as are set forth in such Synthetic Lease or related documentation, and if no such estimates or projections are set forth in such Synthetic Lease or related documentation, then the Purchase Price shall be calculated as reasonably determined by Borrower, based on all relevant information known at such time, (ii) Borrower shall provide to Agent on the date of execution of such Synthetic Lease a written certification of an Executive Officer of Borrower (A) setting forth the calculations, assumptions, estimates, projections and all other relevant information known at such time upon which Borrower relied to determine the Purchase Price and (B) certifying that the calculation of the Purchase Price is reasonable in light of such assumptions, estimates, projections and other relevant information , and (iii) any such calculation and determination of the Purchase Price shall be reasonably acceptable to Agent. Any calculation of the Purchase Price determined in accordance with the proviso above shall be revised (x) as appropriate to reflect the actual Purchase Price under such Synthetic Lease as soon as such Purchase Price becomes known and quantifiable, and (y) in a manner reasonably acceptable to Agent. In no event shall rental or other minimum payments be included in the calculation of Synthetic Lease Obligation."

	Amendments to Annex F to the Credit Agreement. Annex F of the Credit Agreement is amended by inserting a new clause (h) immediately after clause (g) as follows:

"(h)Non-Funding Lenders; Impacted Lenders. Notwithstanding anything else to the contrary herein, if any Lender is a Non-Funding Lender or Impacted Lender, no L/C Issuer shall be obligated to issue any Letter of Credit unless (i) the Non-Funding Lender or Impacted Lender has been replaced in accordance with Section 1.22 or 11.1, (ii) the Letter of Credit Obligations of such Non-Funding Lender or Impacted Lender have been cash collateralized, (iii) the Revolving Credit Commitments of the other Lenders have been increased by an amount sufficient to satisfy Agent that all future Letter of Credit Obligations will be covered by all Lenders that are not Non-Funding Lenders or Impacted Lenders, or (iv) the Letter of Credit Obligations of such Non-Funding Lender or Impacted Lender have been reallocated to other Lenders in a manner consistent with Section 1.1(g)(ii)."

	Representations and Warranties. To induce the Agent to enter into this Amendment, the Borrower hereby represents and warrants that, after giving effect to this Amendment:

	Each of the execution, delivery and performance by the Borrower and each other Loan Party which is party to the Guaranty of this Amendment and the performance of the Amended Credit Agreement are (i) within the Borrower's and each such Loan Party's corporate or similar powers and have been duly authorized by all necessary corporate or similar action (including, if applicable, the consent of shareholders); (ii) do not contravene any provision of any Loan Party's charter or bylaws or equivalent organizational or charter or other constituent documents; (iii) do not violate any law or regulation, or any order or decree of any court or Governmental Authority; (iv) do not conflict with or result in the breach or termination of, constitute a default under or accelerate or permit the acceleration of any performance required by, any indenture, mortgage, deed of trust, lease, material agreement or other material instrument to which any Loan Party is a party or by which any Loan Party or any of its property is bound; (v) do not result in the creation or imposition of any Lien upon any of the property of any Loan Party other than those in favor of the Agent, on behalf of itself and the Lenders, pursuant to the Loan Documents; and (vi) do not require the consent or approval of any Governmental Authority or any other Person.
	This Amendment has been duly executed and delivered by or on behalf of the Borrower and each other Loan Party which is party to the Guaranty.
	Each of this Amendment and the Amended Credit Agreement constitutes a legal, valid and binding obligation of the Borrower and each Loan Party signatory thereto enforceable against the Borrower and such Loan Party in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors' rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
	As of the Effective Date and both before and after giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.
	No action, claim or proceeding is now pending or, to the knowledge of any Loan Party signatory hereto, threatened against such Loan Party, at law, in equity or otherwise, before any court, board, commission, agency or instrumentality of any federal, state, or local government or of any agency or subdivision thereof, or before any arbitrator or panel of arbitrators, which challenges such Loan Party's right, power, or competence to enter into this Amendment or, to the extent applicable, perform any of its obligations under this Amendment, the Amended Credit Agreement or any other Loan Document, or the validity or enforceability of this Amendment, the Amended Credit Agreement or any other Loan Document or any action taken under this Amendment, the Amended Credit Agreement or any other Loan Document or which if determined adversely could have or result in a Material Adverse Effect. To the knowledge of each Loan Party signatory hereto, there does not exist a state of facts which is reasonably likely to give rise to such proceedings.
	All representations and warranties of the Loan Parties contained in the Credit Agreement and the other Loan Documents are true and correct as of the date hereof with the same effect as though such representations and warranties had been made on and as of the date hereof, except to the extent that any such representation or warranty expressly relates to an earlier date.

	Remedies. This Amendment shall constitute a Loan Document. The breach by any Loan Party of (a) any representation or warranty in any material respect as of the date when made or deemed made and (b) any covenant or agreement, in each case, in this Amendment shall constitute an immediate Event of Default hereunder and under the other Loan Documents.

	No Other Amendments/Waivers. Except as expressly provided for herein, the Credit Agreement and the other Loan Documents shall be unmodified and shall continue to be in full force and effect in accordance with their terms. In addition, this Amendment shall not be deemed a waiver of any term or condition of any Loan Document by the Agent or the Lenders with respect to any right or remedy which the Agent or the Lenders may now or in the future have under the Loan Documents, at law or in equity or otherwise or be deemed to prejudice any rights or remedies which the Agent or the Lenders may now have or may have in the future under or in connection with any Loan Document or under or in connection with any Default or Event of Default which may now exist or which may occur after the date hereof. The Credit Agreement and all other Loan Documents are hereby in all respects ratified and confirmed.

	Affirmation of Obligations. Each of the Loan Parties signatory hereto hereby acknowledges, agrees and affirms (a) its obligations under the Credit Agreement and the other Loan Documents, including, without limitation, its guaranty obligations thereunder, (b) that such guaranty shall apply to the Obligations in accordance with the terms thereof, (c) the grant of the security interest in its Collateral pursuant to the Loan Documents and (d) that such liens and security interests created and granted are valid and continuing and secure the Obligations in accordance with the terms thereof.

	Waiver of Claims. The Borrower and the other Loan Parties signatory hereto hereby acknowledge and agree that as of September 27, 2010, (a) the aggregate outstanding amount of the Revolving Credit Loan is $0.00 and (b) Letters of Credit are outstanding having an undrawn amount of $21,580,640.18, and that such amounts are payable pursuant to the Credit Agreement without defense, offset, withholding, counterclaim or deduction of any kind. The Borrower and each other Loan Party hereby waive, release, remise and forever discharge the Agent, the Lenders and each other Indemnified Person from any and all Claims of any kind or character, known or unknown, which the Borrower ever had, now has or might hereafter have against the Agent or any Indemnified Person which relates, directly or indirectly, to any acts or omissions of the Agent or such Lender or any other Indemnified Person on or prior to the Effective Date.

	Fees and Expenses. The Borrower hereby reconfirms its obligations pursuant to Section 11.2 of the Credit Agreement to pay and reimburse the Agent for all reasonable out-of-pocket expenses (including, without limitation, reasonable fees of counsel) incurred in connection with the negotiation, preparation, execution and delivery of this Amendment and all other documents and instruments delivered in connection herewith.

	Effectiveness. This Amendment shall become effective as of September 27, 2010 (the "Effective Date") only upon satisfaction in full in the judgment of the Agent of each of the following conditions:

	Amendment. The Agent shall have received this Amendment duly executed and delivered by the Agent, Required Lenders and the Borrower and acknowledged by the other Loan Parties.

	Representations and Warranties. All representations and warranties contained in this Amendment shall be true and correct on and as of the Effective Date.

	GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK. 

	Counterparts. This Amendment may be executed by the parties hereto on any number of separate counterparts and all of said counterparts taken together shall be deemed to constitute one and the same instrument. This Amendment may be executed and delivered by telecopier or other method of electronic transmission with the same force and effect as if it were a manually executed and delivered counterpart. 

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and delivered as of the day and year first above written.

BORROWER:

DICK'S SPORTING GOODS, INC.

By: /s/ Timothy E. Kullman

Name:Timothy E. Kullman

Title:Executive Vice President and

Chief Financial Officer 

GENERAL ELECTRIC CAPITAL CORPORATION, as Agent and a Lender

By: /s/ Peter Foley

Name: Peter Foley

Its: Duly Authorized Signatory

WELLS FARGO RETAIL FINANCE, LLC, as a Lender

By: /s/ Joseph Burt

Name:Joseph Burt

Title:Director 

U.S. BANK NATIONAL ASSOCIATION, as a Lender

By: /s/ Matthew Kasper

Name:Matthew Kasper

Title:Relationship Manager 

BANK OF AMERICA, N.A., as a Lender 

By: /s/ Andrew Cerassi

Name:Andrew Cerassi

Title:Senior Vice President 

PNC BANK, National ASSOCIATION, as a Lender

By: /s/ Richard F. Muse, Jr.

Name:Richard F. Muse, Jr.

Title:Senior Vice President

JP MORGAN CHASE BANK, N.A., as a Lender

 By: /s/ Thomas G. Williams

Name: Thomas G. Williams

Title:Vice President/Account Executive

WACHOVIA BANK, NATIONAL ASSOCIATION, as a Lender

By: /s/ Joseph Burt

Name:Joseph Burt

Title:Director

CITIZENS BANK OF PENNSYLVANIA, as a Lender

By: /s/ Don Cmar

Name:Don Cmar

Title:Vice President
 

Each of the undersigned Loan Parties hereby (i) acknowledges each of the amendments to the Credit Agreement effected by this Amendment and (ii) confirms and agrees that its obligations under its Guaranty shall continue without any diminution thereof and shall remain in full force and effect on and after the effectiveness of this Amendment.

ACKNOWLEDGED, CONSENTED and AGREED to as of the date first written above.

AMERICAN SPORTS LICENSING, INC.

By: /s/ Timothy E. Kullman

Name:Timothy E. Kullman

Title:President

DSG OF VIRGINIA, LLC

By: /s/ Lee J. Belitsky

Name:Lee J. Belitsky

Title:Secretary

GALYAN'S TRADING COMPANY, LLC

By: /s/ Timothy E. Kullman

Name:Timothy E. Kullman

Title:Executive Vice President and

Chief Financial Officer of Dick's

Sporting Goods, Inc. its sole member

GALYAN'S NEVADA, INC.

By: /s/ Timothy E. Kullman

Name:Timothy E. Kullman

Title:Secretary and Treasurer

GALYAN'S OF VIRGINIA, INC.

By: /s/ Timothy E. Kullman

Name:Timothy E. Kullman

Title:Secretary and Treasurer
 

GOLF GALAXY, LLC

By: /s/ Timothy E. Kullman

Name:Timothy E. Kullman

Title:Executive Vice President and

Chief Financial Officer of Dick's

Sporting Goods, Inc. its sole member

GOLF GALAXY GOLFWORKS, INC.

By: /s/ Joseph R. Oliver

Name:Joseph R. Oliver

Title:Vice President

CHICK'S SPORTING GOODS, LLC

By: /s/ Timothy E. Kullman

Name:Timothy E. Kullman

Title:Executive Vice President and

Chief Financial Officer of Dick's

Sporting Goods, Inc. its sole member

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