EXHIBIT 4.2
AMENDED AND RESTATED
$48,500,000
SHORT TERM CREDIT AGREEMENT
among
TBC CORPORATION,
as the Borrower,
THE LENDING INSTITUTIONS PARTY HERETO,
as the Lenders
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
as the Administrative Agent,
and
THE CHASE MANHATTAN BANK,
as the Syndication Agent and Sole Bank Manager
dated as of
November 9, 1998
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS................................................................. 1
ARTICLE II
THE CREDITS................................................................ 11
2.1 Commitment....................................................... 11
2.2 Swing Line Loans................................................. 12
2.3 [Intentionally Omitted].......................................... 13
2.4 Ratable Loans: Types of Advances................................. 13
2.5 Facility Fee..................................................... 13
2.6 Reductions in Aggregate Commitment............................... 13
2.7 Minimum Amount of Each Advance................................... 13
2.8 Optional Principal Payments...................................... 14
2.9 Method of Selecting Types and Interest Periods for New Advances.. 14
2.10 Conversion and Continuation of Outstanding Advances.............. 14
2.11 Changes in Interest Rate, etc.................................... 14
2.12 Rates Applicable After Default................................... 15
2.13 Method of Payment................................................ 15
2.14 Notes; Telephonic Notices........................................ 15
2.15 Interest Payment Dates; Interest and Fee Basis................... 15
2.16 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions....................................... 16
2.17 Lending Installations............................................ 16
2.18 Non-Receipt of Funds by the Administrative Agent................. 16
ARTICLE III
CHANGE IN CIRCUMSTANCES.................................................... 17
3.1 Yield Protection................................................. 17
3.2 Changes in Capital Adequacy Regulations.......................... 17
ARTICLE IV
CONDITIONS PRECEDENT; WITHHOLDING TAX EXEMPTION............................ 18
4.1 Initial Advance.................................................. 18
4.2 Each Advance.................................................... 19
4.3 Withholding Tax Exemption........................................ 20
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ARTICLE V
REPRESENTATIONS AND WARRANTIES............................................. 20
5.1 Corporate Existence and Standing................................. 20
5.2 Authorization and Validity....................................... 21
5.3 No Conflict; Government Consent.................................. 21
5.4 Financial Statements............................................. 21
5.5 Material Adverse Change.......................................... 21
5.6 Taxes............................................................ 21
5.7 Litigation and Contingent Obligations............................ 22
5.8 Subsidiaries..................................................... 22
5.9 ERISA............................................................ 22
5.10 Accuracy of Information.......................................... 22
5.11 Regulation U..................................................... 22
5.12 Material Agreements.............................................. 22
5.13 Compliance With Laws............................................. 23
5.14 Ownership of Properties.......................................... 23
5.15 Plan Assets; Prohibited Transactions............................. 23
5.16 Environmental Matters............................................ 23
5.17 Investment Company Act........................................... 23
ARTICLE VI
COVENANTS.................................................................. 23
6.1 Financial Reporting.............................................. 23
6.2 Use of Proceeds.................................................. 25
6.3 Notice of Default................................................ 25
6.4 Conduct of Business.............................................. 25
6.5 Taxes............................................................ 25
6.6 Insurance........................................................ 25
6.7 Compliance with Laws............................................. 25
6.8 Environmental Covenant........................................... 26
6.9 Maintenance of Properties........................................ 26
6.10 Inspection....................................................... 26
6.11 Dividends........................................................ 26
6.12 Merger........................................................... 26
6.13 Indebtedness..................................................... 26
6.14 Sale of Assets................................................... 27
6.15 Liens............................................................ 27
6.16 Affiliates....................................................... 28
6.17 [Reserved]....................................................... 28
6.18 Consolidated Tangible Net Worth.................................. 28
6.19 Consolidated Total Liabilities................................... 29
6.20 Fixed Charge Coverage Ratio...................................... 29
6.21 [Reserved]....................................................... 29
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6.22 Retail Stores Under Development.................................. 29
6.23 Minimum Working Capital.......................................... 29
6.24 Employee Benefit Plans........................................... 29
6.25 Other Agreements................................................ 29
ARTICLE VII
DEFAULTS................................................................... 29
ARTICLE VIII
ACCELERATION. WAIVERS. AMENDMENTS AND REMEDIES............................. 32
8.1 Acceleration..................................................... 32
8.2 Amendments....................................................... 32
8.3 Preservation of Rights........................................... 33
ARTICLE IX
GENERAL PROVISIONS......................................................... 33
9.1 Survival of Representations...................................... 33
9.2 Governmental Regulation.......................................... 33
9.3 Taxes............................................................ 33
9.4 Headings......................................................... 33
9.5 Entire Agreement................................................. 34
9.6 Several Obligations; Benefits of this Agreement.................. 34
9.7 Expenses: Indemnification........................................ 34
9.8 Numbers of Documents............................................. 34
9.9 Accounting....................................................... 34
9.10 Severability of Provisions....................................... 35
9.11 Nonliability of Lenders.......................................... 35
9.12 Confidentiality.................................................. 35
9.13 Nonreliance...................................................... 35
ARTICLE X
THE ADMINISTRATIVE AGENT................................................... 35
10.1 Appointment; Nature of Relationship.............................. 35
10.2 Powers........................................................... 36
10.3 General Immunity................................................. 36
10.4 No Responsibility for Loans, Recitals, etc....................... 36
10.5 Action on Instructions of Lenders................................ 36
10.6 Employment of Agents and Counsel................................. 37
10.7 Reliance on Documents: Counsel................................... 37
10.8 Administrative Agent's Reimbursement and Indemnification......... 37
10.9 Notice of Default................................................ 37
10.10 Rights as a Lender.............................................. 38
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10.11 Lender Credit Decision.......................................... 38
10.12 Successor Administrative Agent.................................. 38
ARTICLE XI
SETOFF; RATABLE PAYMENTS................................................... 39
11.1 Setoff........................................................... 39
11.2 Ratable Payments................................................. 39
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.......................... 39
12.1 Successors and Assigns........................................... 39
12.2 Participations................................................... 40
12.3 Assignments...................................................... 40
12.4 Dissemination of Information..................................... 41
12.5 Tax Treatment.................................................... 41
ARTICLE XIII
NOTICES.................................................................... 42
13.1 Notices.......................................................... 42
13.2 Change of Address................................................ 42
ARTICLE XIV
COUNTERPARTS............................................................... 42
ARTICLE XV
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL............... 42
15.1 Choice of Law.................................................... 42
15.2 Consent to Jurisdiction.......................................... 42
15.3 Waiver of Jury Trial............................................. 43
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EXHIBITS
EXHIBIT "A-1" REVOLVING NOTE............................................A-1-1
EXHIBIT "A-2" SWING LINE NOTE...........................................A-2-1
EXHIBIT "B" FORM OF OPINION.............................................B-1
EXHIBIT "C" COMPLIANCE CERTIFICATE......................................C-1
EXHIBIT "D" ASSIGNMENT AGREEMENT........................................D-1
EXHIBIT "E" LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION............. E-1
EXHIBIT "F" GUARANTY....................................................F-1
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THIS AMENDED AND RESTATED SHORT TERM CREDIT AGREEMENT (the "Agreement")
is entered into this the 9th day of November, 1998, by and among
TBC CORPORATION ("Borrower"), FIRST TENNESSEE BANK NATIONAL ASSOCIATION as
administrative agent ("Administrative Agent") for itself as Lender and the
other undersigned Lenders, THE CHASE MANHATTAN BANK, as Lender and as the
syndication agent and sole book manager ("Syndication Agent"), and SUNTRUST
BANK, NASHVILLE, N.A. (a "Lender").
W I T N E S S E T H:
WHEREAS, TBC Corporation, NBD Bank (now known as First National Bank of
Chicago) as Co-Agent and Lender, First Tennessee Bank National Association as
Administrative Agent and Lender, and Suntrust Bank, Nashville, N.A., as
Lender entered into a Short Term Credit Agreement on September 25, 1996
("Short Term Agreement"); and
WHEREAS, such parties agreed to amend the September 25, 1996 Short Term
Credit Agreement on the following dates: July 1, 1997; September 23, 1997;
October 28, 1997; December 17, 1997; September 23, 1998; and October 14, 1998
(the "Amendments"); and
WHEREAS, The Chase Manhatten Bank has agreed to replace First National
Bank of Chicago as Lender under this Short Term Agreement as amended by the
Amendments, upon assignment by First National Bank of Chicago of its rights
hereunder and under the other loan documents;
WHEREAS, the parties to this Agreement have agreed to enter into an
Amended and Restated Short Term Credit Agreement for the purpose of
consolidating the Short Term Agreement as amended by the Amendments, and to
evidence the substitution of The Chase Manhatten Bank for First National Bank
of Chicago as a Lender hereunder;
NOW, THEREFORE, for valuable consideration, the receipt of which is
hereby acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which
the Borrower or any of its Subsidiaries (i) acquires any going business or
all or substantially all of the assets of any firm, corporation, partnership,
joint venture, or limited liability company, or division thereof, or any
other entity, whether through purchase of assets, merger or otherwise or (ii)
directly or indirectly acquires (in one transaction or as the most recent
transaction in a series of transactions) at least a majority (in number of
votes) of the securities of a corporation which have ordinary voting power
for the election of directors (other
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than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
ownership interests of a partnership or limited liability company, or joint
venture or any other entity.
"Acquisition Agreement" means the acquisition documents entered into
between the Borrower and Big O pursuant to the Big O Acquisition.
"Administrative Agent" means First Tennessee Bank in its capacity as
administrative agent for the Lenders pursuant to Article X, and not in its
individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article X.
"Advance" means a borrowing hereunder (or conversion or continuation
thereof) consisting of the aggregate amount of the several Loans made on the
same Borrowing Date (or date of conversion or continuation) by the Lenders to
the Borrower of the same Type.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10%
or more of any class of voting securities (or other ownership interests) of
the controlled Person or possesses, directly or indirectly, the power to
direct or cause the direction of the management or policies of the controlled
Person, whether through ownership of stock, by contract or otherwise.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders, as reduced from time to time pursuant to the terms hereof.
"Aggregate Outstandings" means, at any date of determination, the
aggregate of the Outstandings of all the Lenders as of such date of
determination.
"Agreement" means this Amended and Restated Short Term Credit Agreement,
as it may be amended or modified and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Corporate Base Rate for such day or (ii) the
sum of Federal Funds Effective Base Rate for such day plus 1/2% per annum.
"Article" means an article of this Agreement unless another document is
specifically referenced
"Authorized Officer" means any of the President, Senior Vice President
Operations and Treasurer or Vice President and Controller of the Borrower,
acting singly.
"Big O" means Big O Tires, Inc., a Nevada corporation.
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"Big O Acquisition" means the acquisition by the Borrower of all of the
outstanding shares of Big O for a total aggregate purchase price not
exceeding $60,000,000, which occurred contemporaneously with the execution
and delivery of the Short Term Agreement.
"Borrower" means TBC Corporation, a Delaware corporation, and its
successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (i) with respect to any borrowing, a day (other
than a Saturday or Sunday) on which banks generally are open in Memphis and
New York for the conduct of substantially all of their commercial lending
activities, and (ii) for all other purposes, a day (other than a Saturday or
Sunday) on which banks generally are open in Memphis for the conduct of
substantially all of their commercial lending activities.
"Capital Expenditure" means, for any Person and for any period of its
determination, the aggregate of all expenditures and costs (whether paid in
cash or accrued as liabilities during that period and including that portion
of Capital Leases placed in effect during that period which is capitalized on
the balance sheet of such Person) of such Person during such period that, in
conformity with GAAP, are required to be included in or reflected by the
property, plant, or equipment, or any similar fixed asset or long term
capitalized asset accounts reflected in the balance sheet of such Person.
Capital Expenditures does not include amounts attributed to construction or
development of Retail Stores Under Development.
"Capitalized Lease" of a Person means any lease of Property by such
Person as lessee which would be capitalized on a balance sheet of such Person
prepared in accordance with GAAP.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Change in Control" means the acquisition by any Person, or two or more
Persons acting in concert, of beneficial ownership (within the meaning of
Rule 13d-3 of the Securities and Exchange Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of voting
stock of the Borrower.
"Chase" means The Chase Manhattan Bank in its individual capacity, and
its successors and assigns.
"Closing Date" means the date on which the conditions set forth in
Section 4.1 were fulfilled under the Short Term Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
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"Commitment" means, for each Lender, the obligation of such Lender to
make Loans as provided herein not exceeding the amount set forth opposite its
signature below or as set forth in any Notice of Assignment relating to any
assignment that has become effective pursuant to Section 12.3.2, as such
amount may be modified from time to time pursuant to the terms hereof.
"Condemnation" is defined in Section 7.8.
"Consolidated Net Income" means, for any period, the consolidated net
income or loss of the Borrower and its Subsidiaries for such period,
determined in accordance with GAAP.
"Consolidated Net Worth" means, at any date, the consolidated net worth
of the Borrower and its Subsidiaries at such date, determined in accordance
with GAAP.
"Consolidated Tangible Net Worth" means, at any date, Consolidated Net
Worth after subtracting therefrom the aggregate amount of all intangible
assets of the Borrower and its Subsidiaries, including, without limitation,
goodwill, franchises, licenses, patents, trademarks, trade names, copyrights,
service marks, brand names and operating rights, all determined in accordance
with GAAP.
"Consolidated Total Liabilities" means, at any date, the consolidated
total liabilities of the Borrower and its Subsidiaries at such date,
determined in accordance with GAAP, plus Contingent Obligations (excluding
intercompany obligations).
"Contingent Obligation" of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes
or is contingently liable upon, the obligation or liability of any other
Person, or agrees to maintain the net worth or working capital or other
financial condition of any other Person, or otherwise contractually assures
any creditor of such other Person against loss, which shall include any
recourse deficiency amount or guaranteed residual portion under any Synthetic
Lease.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries,
are treated as a single employer under Section 414 of the Code.
"Corporate Base Rate" means a rate per annum equal to the prime rate of
interest announced by First Tennessee Bank from time to time, changing when
and as said prime rate changes.
"Default" means an event described in Article VII.
"EBIT" means, with respect to the Borrower and its Subsidiaries and for
any period of its determination, the Consolidated Net Income of the Borrower
and its Subsidiaries for such period,
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plus the consolidated interest expense and taxes, all determined in
accordance with GAAP consistently applied.
"EBITDA" means, with respect to the Borrower and its Subsidiaries for
any period of determination, EBIT of the Borrower and its Subsidiaries for
such period, plus depreciation and amortization of the Borrower and its
Subsidiaries for such period, all determined in accordance with GAAP.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, judicial decisions, regulations, ordinances, rules,
judgments, orders, decrees, plans, injunctions, permits, concessions, grants,
franchises, licenses, agreements and other governmental restrictions relating
to (i) the protection of the environment, (ii) the effect of the environment
on human health, (iii) emissions, discharges or releases of pollutants,
contaminants, hazardous substances or wastes into surface water, ground water
or land, or (iv) the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of pollutants, contaminants,
hazardous substances or wastes or the clean-up or other remediation thereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time. and any rule or regulation issued thereunder.
"Facility Fee" is defined in Section 2.5.
"Federal Funds Advance" means an Advance which bears interest at the
Federal Funds Effective Rate.
"Federal Funds Effective Base Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published for the preceding day on page
120 of Telerate Data Service (or, if such day is not a Business Day, for the
immediately preceding Business Day), or, if such rate is not so published for
any day which is a Business Day, the average of the quotations at
approximately 10 a.m. (Memphis time) on the preceding day on such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by the Administrative Agent in its
sole discretion.
"Federal Funds Effective Rate" means, with respect to a Federal Funds
Advance, a rate per annum equal to the sum of (a) the Federal Funds Effective
Base Rate, plus (b) 1.15%.
"First Tennessee Bank" means First Tennessee Bank National Association
in its individual capacity, and its successors.
"Fixed Charge Coverage Ratio" means as of the last day of any fiscal
quarter of the Borrower, the ratio of (a) EBIT plus rental payments for the
period of four fiscal quarters ending on the last day of such quarter to (b)
the sum of (i) the Borrower's and its Subsidiaries consolidated interest
expense and rental payments (each as defined under GAAP) for such period.
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"Floating Rate" means, for any day, a rate per annum equal to (i) the
Alternate Base Rate for such day, changing when and as the Alternate Base
Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and in the statements and
pronouncements of the Financial Accounting Standards Board or in such other
statement by such other entity as may be the circumstances as of the date of
determination, consistently applied. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in
this Agreement, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to reflect such
change in GAAP (subject to the approval of the Required Lenders), provided
that, until so amended, (i) such ratio or requirement shall continue to be
computed in accordance with GAAP prior to such change therein, and (ii) the
Borrower shall provide to the Administrative Agent and the Lenders financial
statements and other documents required under this Agreement or as reasonably
requested hereunder setting forth a reconciliation between calculations of
such ratio or requirement made before and after giving effect to such change
in GAAP.
"Guaranties" means the guaranties dated September 25, 1996 executed and
delivered by the Guarantors pursuant to Section 4.1, which were substantially
in the form of Exhibit "F," as amended, supplemented or otherwise modified
from time to time.
"Guarantors" means each of TBC Sales, Inc., TBC International, Inc. and
Big O Tires, Inc.
"Hazardous Material" means (i) any Hazardous Substance, (ii) any
Hazardous Waste, (iii) any petroleum product, or (iv) any pollutant or
contaminant or hazardous, dangerous or toxic chemical, material or substance
within the meaning of any other federal, state or local law, regulation,
ordinance or requirement (including consent decrees and administrative
orders) relating to or imposing liability or standards of conduct concerning
any hazardous, toxic or dangerous waste, substance or material, all as
amended or hereafter amended.
"Hazardous Substance" means any "hazardous substance," as defined by
CERCLA.
"Hazardous Waste" means any "hazardous waste," as defined by the
Resource Conservation and Recovery Act, as amended.
"Indebtedness" means, as to any Person, at a particular time, all items
which constitute, without duplication, (i) indebtedness for borrowed money or
the deferred purchase price of Property (other than trade payables incurred
in the ordinary course of business), (ii) indebtedness evidenced by notes,
bonds, debentures or similar instruments, (iii) obligations with respect to
any conditional sale or title retention agreement, (iv) indebtedness arising
under acceptance facilities and the amount available to be drawn under all
letters of credit (other than trade letters of credit) issued for the
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account of such Person and, without duplication, all drafts drawn thereunder
to the extent such Person shall not have reimbursed the issuer in respect of
the issuer's payment of such drafts, (v) all liabilities secured by any Lien
on any Property owned by such Person even though such Person has not assumed
or otherwise become liable for the payment thereof (other than (A) carriers';
warehousemen's, mechanics', repairmen's or other like non-consensual
statutory Liens arising in the ordinary course of business and (B)
liabilities of Subsidiaries for which recourse may be had by the creditor
only to the Property secured by the Lien), (vi) Capitalized Lease
Obligations, and (vii) Contingent Obligations, other than Intercompany
Contingent Obligations.
"Intercompany Contingent Obligation" means a Contingent Obligation
pursuant to which the Borrower or a Subsidiary is contingently liable solely
with respect to a primary obligation of the Borrower or any Subsidiary and
such primary obligation is included among the liabilities shown on the
Borrower's consolidated balance sheets to be submitted to the Lenders
pursuant to Section 6.1.
"Investment" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business), extension of credit (other than accounts receivable and
trade acceptances arising in the ordinary course of business on terms
customary in the trade) or contribution of capital by such Person; stocks,
bonds, mutual funds, partnership interests, notes, debentures or other
securities owned by such Person; any deposit accounts and certificate of
deposit owned by such Person; and structured notes, derivative financial
instruments and other similar instruments or contracts owned by such Person.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement and their respective successors and assigns.
"Lending Installation" means, with respect to a Lender or the
Administrative Agent, any office, branch, subsidiary or affiliate of such
Lender or the Administrative Agent.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever (including, without limitation, the interest of a vendor
or lessor under any conditional sale, Capitalized Lease or other title
retention agreement).
"Loan" means, with respect to a Lender, such Lender's loan made pursuant
to Article II (or any conversion or continuation thereof).
"Loan Documents" means this Agreement, the Revolving Notes, the Swing
Line Note and the Guaranties.
"Long Term Credit Agreement" means the long term credit agreement
entered into among the Borrower, the Lenders and the Administrative Agent as
of the Closing Date.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of
operations, or prospects of the Borrower or the Borrower and its Subsidiaries
taken as a whole, (ii) the ability of the Borrower to perform its
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obligations under the Loan Documents, or (iii) the validity or enforceability
of any of the Loan Documents or the rights or remedies of the Administrative
Agent or the Lenders thereunder.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Notes" means each of the Revolving Notes and Swing Line Notes.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the
Lenders or to any Lender, the Administrative Agent or any indemnified party
hereunder arising under the Loan Documents.
"Outstandings" means, for each Lender at any date of determination, the
sum of (a) the aggregate outstanding principal amount of all Loans made
pursuant to Section 2.1 by such Lender as of the date of determination, plus
(b) such Lender's outstanding Swing Line Loans.
"Participants" is defined in Section 12.2.1.
"Payment Date" means the last day of each March, June, September, and
December.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage" means, for any Lender, 100% times a fraction (a) the
numerator of which is such Lender's Commitment, and (b) the denominator of
which is the Aggregate Commitment.
"Person" means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or
other entity or organization, or any government or political subdivision or
any agency, department or instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of
the Code as to which the Borrower or any member of the Controlled Group may
have any liability.
"Private Placement" means the private placement of debt by the Borrower
with the Prudential Insurance Company of America or its affiliates for the
purpose of, among other things, funding the Big O Acquisition.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets
owned, leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
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"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor
thereto or other regulation or official interpretation of said Board of
Governors relating to reserve requirements applicable to member banks of the
Federal Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to the extension of credit by banks for the purpose of purchasing or
carrying margin stocks applicable to member banks of the Federal Reserve
System.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within
30 days of the occurrence of such event; provided, however, that a failure to
meet the minimum funding standard of Section 412 of the Code and of Section
302 of ERISA shall be a Reportable Event regardless of the issuance of any
such waiver of the notice requirement in accordance with either Section
4043(a) of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least 51% of
the Aggregate Commitment or, if the Aggregate Commitment has been terminated,
Lenders in the aggregate holding at least 51% of the total of the aggregate
unpaid principal amount of the outstanding Advances.
"Retail Stores Under Development" means retail stores under development
or construction by Big O which are shown as such by the Borrower on its
balance sheet.
"Revolving Credit Termination Balance" means the aggregate principal
amount of Advances outstanding on the Termination Date after giving effect to
any Advances made or repaid on such date.
"Revolving Note" means a promissory note, in substantially the form of
Exhibit "A-l " hereto, duly executed by the Borrower and payable to the order
of a Lender in the amount of its Commitment, including any amendment,
modification, renewal or replacement of such promissory note.
"Sale and Leaseback Transaction" means any sale or other transfer of
Property by any Person with the intent to lease such Property as lessee.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary" of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the
time be owned or controlled, directly or indirectly, by such Person or by one
or more of its Subsidiaries or by such Person and one or more
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of its Subsidiaries, or (ii) any partnership, limited liability company,
association, joint venture or similar business organization more than 50% of
the ownership interests having ordinary Voting power of which shall at the
time be so owned or controlled. Unless otherwise expressly provided, all
references herein to a " Subsidiary" shall mean a Subsidiary of the Borrower.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 10% of
the consolidated assets of the Borrower and its Subsidiaries as would be
shown in the consolidated financial statements of the Borrower and its
Subsidiaries as at the beginning of the twelve-month period ending with the
month in which such determination is made, or (ii) is responsible for more
than 10% of the consolidated net sales or of the consolidated net income of
the Borrower and its Subsidiaries as reflected in the financial statements
referred to in clause (i) above.
"Swing Line Bank" means First Tennessee Bank or any other Lender as a
successor Swing Line Bank.
"Swing Line Commitment" means the obligation of the Swing Line Bank to
make Swing Line Loans up to a maximum of $3,000,000 at any one time
outstanding.
"Swing Line Loan" means a Loan made available to the Borrower by the
Swing Line Bank pursuant to Section 2.2 hereof.
"Swing Line Note" means a promissory note, in substantially the form of
Exhibit "A-2" hereto, duly executed by the Borrower and payable to the order
of the Swing Line Bank in the amount of its Swing Line Commitment, including
any amendment, modification, renewal or replacement of such note and
evidencing such Lender's Swing Line Loans.
"Syndication Agent" means The Chase Manhattan Bank, a New York banking
corporation, in its capacity as Syndication Agent and Sole Book Manager.
"Synthetic Leases" means any lease entered into by Borrower pursuant to
the lease program with Suntrust Capital Markets, Inc., and any future lease
that evidences a transaction that satisfies the requirements of the Statement
of Financial Accounting Standards No. 13 (SFAS 13) promulgated by the
Financial Accounting Standards Board and the Emerging Issues Task Force of
the Financial Accounting Standards Board (1990) (EITF 90-15) that is
classified as a lease for financial accounting purposes and as a loan for tax
purposes.
"Termination Date" means the date which is 364 days after the Closing
Date, or such earlier date of termination of the Lenders' obligations
pursuant to Section 8.1 upon the occurrence of an Event of Default.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating Rate
Advance or Federal Funds Advance.
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"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested and unvested accrued benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans using PBGC actuarial assumptions for single employer plan terminations.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person, or by such Person and one or more
Wholly-Owned Subsidiaries of such Person, or (ii) any partnership, limited
liability company, association, joint venture or similar business
organization 100% of the ownership interests having ordinary voting power of
which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDITS
2.1 Commitment. From and including the date of this Agreement and
prior to the Termination Date, each Lender severally agrees, on the terms and
conditions set forth in this Agreement, to make Loans to the Borrower from
time to time in amounts not to exceed in the aggregate at any one time
outstanding the amount of its Commitment and provided that, after giving
effect to the making of any Loan, the Aggregate Outstandings do not exceed
the Aggregate Commitment. Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow Loans at any time prior to the
Termination Date. The Commitments to lend hereunder shall expire on the
Termination Date. Any outstanding Advances, and all other unpaid Obligations
shall be paid in full by the Borrower on the Termination Date. The Advances
made under this Section 2.1 shall be evidenced by the Revolving Notes.
2.2 Swing Line Loans. In addition to Advances pursuant to Section 2.1,
but subject to the terms and conditions of this Agreement (including but not
limited to those limitations set forth in Section 2.1), the Swing Line Bank
agrees to make the Swing Line Loans to the Borrower in accordance with this
Section 2.2 up to the amount of the Swing Line Commitment; provided, however
that the aggregate amount of the Swing Line Bank's ratable Loans made
pursuant to Section 2.1 and Swing Line Loans outstanding (after giving effect
to any concurrent repayment of Loans) at such time shall not exceed the Swing
Line Bank's Commitment. Amounts borrowed under this Section 2.2 may be
borrowed, repaid and reborrowed to, but not including, the Termination Date.
All outstanding Swing Line Loans shall be paid in full on the Termination
Date. All outstanding Swing Line Loans shall be made as Federal Funds
Advances.
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2.2.1 Swing Line Request. The Borrower may request a Swing Line
Loan from the Swing Line Bank on any Business Day before the Termination Date
by giving the Administrative Agent and the Swing Line Bank notice by 1:00
p.m. (Memphis time) on such Borrowing Date specifying the aggregate amount of
such Swing Line Loan, which shall be an amount not less than $50,000.
2.2.2 Making of Swing Line Loans. The Swing Line Bank shall, on
such Borrowing Date, make the funds for such Swing Line Loan available to the
Borrower at the Administrative Agent's address or at such other place as
indicated in written money transfer instructions from the Borrower delivered
pursuant to Section 4.1(a)(xi) or otherwise.
2.2.3 Swing Line Notes. The Swing Line Loans shall be evidenced by
the Swing Line Notes and each Swing Line Loan shall be paid in full by the
Borrower on or before the Termination Date.
2.2.4 Repayment of Swing Line Loans. The Borrower may at any time
pay, without penalty or premium, all outstanding Swing Line Loans, or, in a
minimum amount of $50,000 any portion of the outstanding Swing Line Loans
upon notice to the Administrative Agent and the Swing Line Bank received by
1:00 p.m. (Memphis time) on such payment date. In addition, the
Administrative Agent (i) may at any time in its sole discretion or (ii) shall
on the Termination Date, require the Lenders (including the Swing Line Bank)
to make a Federal Funds Advance in an amount equal to such Lender's
Percentage of the unreimbursed Swing Line Loans outstanding on such date for
the purpose of repaying Swing Line Loans (to the extent that there is
availability under the Commitment); provided, however, that the obligation of
each Lender to make any such Advance is subject to the condition that the
Swing Line Bank believed in good faith that all conditions under Section 4.2
were satisfied at the time the Swing Line Loan was made. If the Swing Line
Bank receives notice from any Lender that a condition under Section 4.2 has
not been satisfied, no Swing Line Loans shall be made until (a) such notice
is withdrawn by that Lender or (b) the Required Lenders have waived
satisfaction of any such condition. The Lenders shall deliver the proceeds of
such Advance to the Administrative Agent by 2:00 p.m. (Memphis time) on the
applicable Borrowing Date for application to the Swing Line Bank's
outstanding Swing Line Loans. Subject to the proviso contained in the first
sentence of this Section 2.2.4, each Lender's obligation to make available
its Percentage of the Advance referred to in this Section shall be absolute
and unconditional and shall not be affected by any circumstances, including
without limitation, (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Bank, or anyone
else, (ii) the occurrence or continuance of a Default or Unmatured Default,
(iii) any adverse change in the condition (financial or otherwise) of the
Borrower, or (iv) any other circumstances, happening or event whatsoever. If
for any reason a Lender does not make available its Percentage of the
foregoing Advance, such Lender shall be deemed to have unconditionally and
irrevocably purchased from the Swing Line Bank, without recourse or warranty,
an undivided interest and participation in each Swing Line Loan then being
repaid, equal to its Percentage of all such Swing Line Loans being repaid, so
long as such purchase would not cause such Lender to exceed its Commitment.
If any portion of any amount paid (or deemed paid) to the Administrative
Agent should be recovered by or on behalf of the Borrower from the
Administrative Agent in bankruptcy or otherwise, the loss of the amount so
recovered shall be shared ratably among all Lenders.
2.3 [Intentionally Omitted]
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2.4 Ratable Loans: Types of Advances. Each Advance hereunder shall
consist of Loans made from the several Lenders ratably in proportion to the
ratio that their respective Commitments bear to the Aggregate Commitment. The
Advances may be Floating Rate Advances or Federal Funds Advances, or a
combination thereof, selected by the Borrower in accordance with Sections 2.9
and 2.10.
2.5 Facility Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a facility fee in the amount of 10 basis
points on the total amount of such Lender's Commitment (whether used or
unused) from the date hereof to and including the Termination Date, payable
in arrears on each Payment Date hereafter and on the Termination Date (the
"Facility Fee").
2.6 Reductions in Aggregate Commitment. The Borrower may permanently
reduce the Aggregate Commitment in whole, or in part ratably among the
Lenders in a minimum amount of $2,000,000 and in integral multiples of
$1,000,000 in excess thereof, upon at least five Business Days' written
notice to the Administrative Agent, which notice shall specify the amount of
any such reduction, provided, however, that the amount of the Aggregate
Commitment may not be reduced below the aggregate principal amount of the
Aggregate Outstandings. All accrued commitment fees shall be payable on the
effective date of any termination of the obligations of the Lenders to make
Loans hereunder.
2.7 Minimum Amount of Each Advance. Each Federal Funds Advance shall
be in the minimum amount of $100,000, and each Floating Rate Advance shall be
in the minimum amount of $100,000, provided, however, that any Floating Rate
Advance may be in the amount of the unused Aggregate Commitment.
2.8 Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Floating Rate Advances
and/or Federal Funds Advances, or, in a minimum aggregate amount of $500,000,
any portion of the outstanding Floating Rate Advances and/or Federal Funds
Advances not later than 12:00 noon (Memphis time) on the date of such
payment.
2.9 Method of Selecting Types and Interest Periods for New
Advances. The Borrower shall select the Type of Advance. The Borrower shall
give the Administrative Agent irrevocable notice (a "Borrowing Notice") not
later than 11:30 a.m. (Memphis time) on the Borrowing Date of each Advance,
specifying:
(i) the Borrowing Date, which shall be a Business Day, of such Advance,
(ii) the aggregate amount of such Advance, and
(iii) the Type of Advance selected, and
Not later than 2:00 p.m. (Memphis time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Memphis to the Administrative Agent at its
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address specified pursuant to Article XIII. The Administrative Agent will
make the funds so received from the Lenders available to the Borrower at the
Administrative Agent's aforesaid address.
2.10 Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into Federal Funds Advances. Federal
Funds Advances shall continue as Federal Funds Advances unless and until such
Federal Funds Advances are converted into Floating Rate Advances. Subject to
the terms of Section 2.7, the Borrower may elect from time to time to convert
all or any part of an Advance of any Type into any other Type or Types of
Advances. The Borrower shall give the Administrative Agent irrevocable notice
(a "Conversion/Continuation Notice") of each conversion of an Advance not
later than 11:00 a.m. (Memphis time) on the date of the requested conversion
specifying:
(i) the requested date which shall be a Business Day, of such
conversion,
(ii) the aggregate amount and Type of the Advance which is to be
converted, and
(iii) the amount and Type(s) of Advance(s) into which such Advance
is to be converted.
2.11 Changes in Interest Rate, etc. Each Floating Rate Advance and
Federal Funds Advance shall bear interest on the outstanding principal amount
thereof, for each day from and including the date such Advance is made to but
excluding the date it becomes due hereof, at a rate per annum equal to the
Floating Rate or Federal Funds Effective Rate, respectively, for such day.
Changes in the rate of interest on that portion of any Advance maintained as
a Floating Rate Advance will take effect simultaneously with each change in
the Alternate Base Rate. Changes in the rate of interest on that portion of
any Advance maintained as a Federal Funds Advance will take effect
simultaneously with each change in the Federal Funds Effective Base Rate.
2.12 Rates Applicable After Default. During the continuance of a
Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of
the Lenders to changes in interest rates), declare that each Floating Rate
Advance and/or each Federal Funds Advance shall bear interest at a rate per
annum equal to the Floating Rate otherwise applicable to the Floating Rate
Advance plus 2% per annum, or equal to the Federal Funds Effective Rate
otherwise applicable to the Federal Funds Advance plus 2% per annum.
2.13 Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent's
address specified pursuant to Article XIII, or at any other Lending
Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by noon (local time) on the date when
due and unless the Borrower has directed that such payment be applied to
outstanding Swing Line Loans, such payment shall be applied ratably by the
Administrative Agent among the Lenders. Each payment delivered to the
Administrative Agent for the account of any Lender shall be delivered
promptly by the Administrative Agent to such Lender in the same type of funds
that the Administrative Agent received at its address specified pursuant to
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Article XIII or at any Lending Installation specified in a notice received by
the Administrative Agent from such Lender. The Administrative Agent may
charge the account of the Borrower maintained with the Administrative Agent
for each payment of principal, interest and fees as it becomes due hereunder
if so directed by the Borrower from time to time or, if an Event of Default
has occurred and is then continuing, at the Administrative Agent's
discretion.
2.14 Notes; Telephonic Notices. Each Lender is hereby authorized
to record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that neither the failure to
so record nor any error in such recordation shall affect the Borrower's
obligations under such Note. The Borrower hereby authorizes the Swing Line
Bank to extend Swing Line Loans, the Lenders and the Administrative Agent to
extend, convert or continue Advances, effect selections of Types of Advances
and to transfer funds based on telephonic notices made by any person or
persons the Administrative Agent or any Lender in good faith believes to be
acting on behalf of the Borrower. The Borrower agrees to deliver promptly to
the Administrative Agent a written confirmation, if such confirmation is
requested by the Administrative Agent or any Lender, of each telephonic
notice signed by an individual who is authorized so to act pursuant to the
then existing Money Transfer Instructions of Borrower (see Exhibit "E"). If
the written confirmation differs in any material respect from the action
taken by the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent demonstrable error.
2.15 Interest Payment Dates; Interest and Fee Basis. Interest
accrued on each Floating Rate Advance and/or Federal Funds Advance shall be
payable on each Payment Date, commencing with the first such date to occur
after the date hereof, on any date on which the Floating Rate Advance and/or
Federal Funds Advance is prepaid, whether due to acceleration or otherwise,
and at maturity. Interest on Floating Rate Advances and/or Federal Funds
Advances shall be calculated for actual days elapsed on the basis of a 365 or
366 day year, as appropriate. Interest shall be payable for the day an
Advance or Swing Line Loan is made but not for the day of any payment on the
amount paid if payment is received prior to noon (local time) at the place of
payment. If any payment of principal of or interest on an Advance or a Swing
Line Loan shall become due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and, in the case of a
principal payment, such extension of time shall be included in computing
interest in connection with such payment.
2.16 Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, the Administrative
Agent will notify each Lender of the contents of each Aggregate Commitment
reduction notice, Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Administrative Agent will give
each Lender prompt notice of each change in the Alternate Base Rate and
Federal Funds Effective Base Rate.
2.17 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written or telex notice to
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the Administrative Agent and the Borrower, designate a Lending Installation
through which Loans will be made by it and for whose account Loan payments
are to be made.
2.18 Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the
Administrative Agent of (i) in the case of a Lender, the proceeds of a Loan
or (ii) in the case of the Borrower, a payment of principal, interest or fees
to the Administrative Agent for the account of the Lenders, that it does not
intend to make such payment, the Administrative Agent may assume that such
payment has been made. The Administrative Agent may, but shall not be
obligated to, make the amount of such payment available to the intended
recipient in reliance upon such assumption. If such Lender or the Borrower,
as the case may be, has not in fact made such payment to the Administrative
Agent, the recipient of such payment shall, on demand by the Administrative
Agent, repay to the Administrative Agent the amount so made available
together with interest thereon in respect of each day during the period
commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day or (ii) in the case of payment
by the Borrower, the interest rate applicable to the relevant Loan.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether
or not having the force of law), or any interpretation thereof, or the
compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the
Borrower (excluding taxation of the overall net income of any
Lender or applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation, or
(iii)imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining Loans or reduces any amount
receivable by any Lender or any applicable Lending Installation in
connection with Loans or requires any Lender or any applicable
Lending Installation to make any payment calculated by reference to
the amount of Loans held, or interest received by it, by an amount
deemed material by such Lender,
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then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an
amount received which such Lender determines is attributable to making,
funding and maintaining its Loans and its Commitment.
3.2 Changes in Capital Adequacy Regulations. If a Lender
determines the amount of capital required or expected to be maintained by
such Lender, any Lending Installation of such Lender or any corporation
controlling such Lender is increased as a result of a Change, then, within 15
days of demand by such Lender, the Borrower shall pay such Lender the amount
necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is
attributable to this Agreement, its Loans, its obligation to make Loans
hereunder (after taking into account such Lender's policies as to capital
adequacy).
"Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (ii) any adoption of or change in any
other law, governmental or quasi-governmental rule, regulation, policy,
guideline, interpretation, or directive (whether or not having the force
of laws after the date of this Agreement which affects the amount of
capital required or expected to be maintained by any Lender or any
Lending Installation or any corporation controlling any Lender.
"Risk-Based Capital Guidelines" means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital
regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on
Banking Regulation and Supervisory Practices entitled International
Convergence of Capital Measurements and Capital Standards, including
transition rules, and any amendments to such regulations adopted prior
to the date of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT; WITHHOLDING TAX EXEMPTION
4.1 Initial Advance. The Lenders under the Short Term Agreement became
obligated to make the initial Advance pursuant to Section 2.1 thereof, and
the Swing Line Bank became obligated to make the initial Swing Line Loan
under Section 2.2 thereof upon submission, contemporaneously with execution
of the Short Term Agreement, to the Administrative Agent of the following:
(i) Copies of the articles of incorporation of the Borrower, together
with all amendments, and a certificate of good standing, both
certified by the appropriate governmental officer in its
jurisdiction of incorporation.
(ii) Copies, certified by the Secretary or Assistant Secretary of the
Borrower, of its by-laws and of its Board of Directors' resolutions
(and resolutions of other bodies, if any are deemed necessary by
counsel for any Lender) authorizing the execution of the Loan
Documents.
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(iii)An incumbency certificate, executed by the Secretary or
Assistant Secretary of the Borrower, which shall identify by name
and title and bear the signature of the officers of the Borrower
authorized to sign the Loan Documents and to make borrowings
hereunder, upon which certificate the Administrative Agent and the
Lenders shall be entitled to rely until informed of any change in
writing by the Borrower.
(iv) Copies of the articles of incorporation of each Guarantor, together
with all amendments, and a certificate of good standing, both
certified by the appropriate governmental officer in its
jurisdiction of incorporation.
(v) Copies, certified by the Secretary or Assistant Secretary of each
Guarantor, of its by-laws and of its Board of Directors'
resolutions (and resolutions of other bodies, if any are deemed
necessary by counsel for any Lender) authorizing the execution of
the Guaranties.
(vi) An incumbency certificate, executed by the Secretary or Assistant
Secretary of each Guarantor, which shall identify by name and title
and bear the signature of the officers of each Guarantor authorized
to sign the Guaranties.
(vii)A certificate, signed by the treasurer of the Borrower,
stating that on the initial Borrowing Date no Default or Unmatured
Default has occurred and is continuing.
(viii)A written opinion of counsel to the Borrower, addressed to the
Lenders in substantially the form of Exhibit "B" hereto.
(ix) Notes payable to the order of each of the Lenders, and a Swing Line
Note payable to the order of the Swing Line Bank.
(x) Financial statements of the Borrower, and detailed business plans
and projections for the Borrower satisfactory in form and substance
to the Lenders.
(xi) Written money transfer instructions, in substantially the form of
Exhibit "E" hereto, addressed to the Administrative Agent and
signed by an Authorized Officer, together with such other related
money transfer authorizations as the Administrative Agent may have
reasonably requested.
(xii)The Guaranties duly executed by each of the Guarantors.
(xiii)Such other documents as any Lender or its counsel may have
reasonably requested.
and the following events occurred and conditions were fulfilled or waived:
(i) The Borrower paid all fees due at the Closing Date pursuant to the
Short Term Agreement.
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(ii) Completion of the Big O Acquisition, including the granting of all
required regulatory and legal approvals, occurred upon the terms
set forth in the Acquisition Agreement.
(iii)The Private Placement contained terms and conditions
acceptable to the Lenders.
(iv) The Long Term Credit Agreement became effective as of the Closing
Date.
4.2 Each Advance. The Lenders shall not be required to make any
Advance or Swing Line Loan (other than an Advance or Swing Line Loan that,
after giving effect thereto and to the application of the proceeds thereof,
does not increase the aggregate amount of the sum of outstanding Advances and
Swing Line Loans) unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in Article V are true
and correct as of such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely to an earlier
date, in which case such representation or warranty shall be true
and correct on and as of such earlier date.
(iii)All legal matters incident to the making of such Advance shall
be satisfactory to the Lenders and their counsel.
Each Borrowing Notice with respect to each such Advance or Swing Line
Loan shall constitute a representation and warranty by the Borrower that the
conditions contained in Sections 4.2(i) and (ii) have been satisfied.
4.3 Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the
account of any Lender, each Lender that is not incorporated under the laws of
the United States of America, or a state thereof, agrees that it will deliver
to each of the Borrower and the Administrative Agent two duly completed
copies of United States Internal Revenue Service Form 1001 or 4224,
certifying in either case that such Lender is entitled to receive payments
under this Agreement and the Notes without deduction or withholding of any
United States federal income taxes. Each Lender which so delivers a Form 1001
or 4224 further undertakes to deliver to each of the Borrower and the
Administrative Agent two additional copies of such form (or a successor form)
on or before the date that such form expires (currently, three successive
calendar years for Form 1001 and one calendar year for Form 4224) or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent forms so delivered by it, and such amendments thereto or extensions or
renewals thereof as may be reasonably requested by the Borrower or the
Administrative Agent, in each case certifying that such Lender is entitled to
receive payments under this Agreement and the Notes without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent
such Lender from duly completing and delivering any such form with respect to
it and such Lender advises the Borrower and
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the Administrative Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income tax.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1 Corporate Existence and Standing. Each of the Borrower and its
Subsidiaries is a corporation duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation and has all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted.
5.2 Authorization and Validity. The Borrower has the corporate power
and authority and legal right to execute and deliver the Loan Documents and
to perform its obligations thereunder. The execution and delivery by the
Borrower of the Loan Documents and the performance of its obligations
thereunder have been duly authorized by proper corporate proceedings, and the
Loan Documents constitute legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with their terms,
except as enforceability may be limited by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally.
5.3 No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any of its Subsidiaries or the
Borrower's or any Subsidiary's articles of incorporation or by-laws or the
provisions of any indenture, instrument or agreement to which the Borrower or
any of its Subsidiaries is a party or is subject, or by which it, or its
Property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the Property of
the Borrower or a Subsidiary pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, approval, license, authorization,
or validation of, or filing, recording or registration with, or exemption by,
or other action in respect of any governmental or public body or authority,
or any subdivision thereof, is required to authorize, or is required in
connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents.
5.4 Financial Statements. The December 31, 1997 consolidated financial
statements of the Borrower and its Subsidiaries heretofore delivered to the
Lenders were prepared in accordance with GAAP in effect on the date such
statements were prepared and fairly present the consolidated financial
condition and operations of the Borrower and its Subsidiaries at such date
and the consolidated results of operations for the period then ended.
5.5 Material Adverse Change. Since December 31, 1997, there has been
no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower and its Subsidiaries
which could have a Material Adverse Effect, including, but not limited
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to, a change in the relationship between Big O and its franchisees which
could have a Material Adverse Effect.
5.6 Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and which the failure to file would have a Material Adverse Effect, and
have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower or any of its Subsidiaries, except such
taxes, if any, as are being contested in good faith and as to which any
adequate reserves have been provided in accordance with GAAP and as to which
no Lien exists. As of the date of this Agreement, the United States income
tax returns of the Borrower and its Subsidiaries have been audited by the
Internal Revenue Service through the fiscal year ended December 31, 1993. No
tax liens have been filed which could have a Material Adverse Effect and no
claims are being asserted with respect to any such taxes. To the best of
Borrower's knowledge, the charges, accruals and reserves on the books of the
Borrower and its Subsidiaries in respect of any taxes or other governmental
charges are adequate.
5.7 Litigation and Contingent Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could have a Material Adverse
Effect or which seeks to prevent, enjoin or delay the making of the Loans or
Advances. The Borrower has no material contingent obligations not provided
for or disclosed in the financial statements for the most recent period for
which Borrower has then delivered financial statements to the Lenders
pursuant to this Agreement.
5.8 Subsidiaries. Schedule "1" hereto contains an accurate list of all
Subsidiaries of the Borrower as of the date of the Short Term Agreement,
setting forth their respective jurisdictions of incorporation and the
percentage of their respective capital stock owned by the Borrower or other
Subsidiaries. All of the issued and outstanding shares of capital stock of
such Subsidiaries have been duly authorized and issued and are fully paid and
non-assessable.
5.9 ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither the Borrower nor any other
member of the Controlled Group has incurred, or is reasonably expected to
incur, any withdrawal liability to Multiemployer Plans in excess of
$1,000,000 in the aggregate. Each Plan complies in all material respects with
all applicable requirements of law and regulations, noncompliance with which
would have a Material Adverse Effect, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other members of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and
no steps have been taken to reorganize or terminate any Plan, which
withdrawal, reorganization or termination would have a Material Adverse
Effect.
5.10 Accuracy of Information. At the time of its delivery to the
Administrative Agent or any Lender, no information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Administrative
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents contained any material misstatement of fact or
omitted to state a material fact or any fact necessary to make the statements
contained therein not misleading.
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5.11 Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
5.12 Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in
(i) any agreement to which it is a party, which default could have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness, which default could have a Material Adverse Effect.
5.13 Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their businesses or
the ownership of their respective Property, the non-compliance with which
might have a Material Adverse Effect.
5.14 Ownership of Properties. Except as set forth on Schedule "2"
hereto, on the date of the Short Term Agreement, the Borrower and its
Subsidiaries had at such time good title, free of all Liens other than those
permitted by Section 6.12, to all of the Property and assets reflected in the
financial statements as owned by it.
5.15 Plan Assets; Prohibited Transactions. The Borrower is not an
entity deemed to hold "plan assets" within the meaning of 29 C.F.R.
S 2510.3-101 of an employee benefit plan (as defined in Section 3(3) of
ERISA) which is subject to Title I of ERISA or any plan (within the meaning
of Section 4975 of the Code); and neither the execution of this Agreement and
the making of Loans hereunder give rise to a prohibited transaction within
the meaning of Section 406 of ERISA or Section 4975 of the Code.
5.16 Environmental Matters. Neither the Borrower nor any Subsidiary has
received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable Environmental Laws or
are the subject of any federal or state investigation evaluating whether any
remedial action is needed to respond to a release of any toxic or hazardous
waste or substance into the environment, which non-compliance or remedial
action could reasonably be expected to have a Material Adverse Effect.
5.17 Investment Company Act. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
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ARTICLE VI
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1 Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with generally accepted accounting principles, and furnish to the
Lenders:
(i) Within 90 days after the close of each of its fiscal years, a copy
of the Borrower's Annual Report on Form 10-K filed with the
Securities and Exchange Commission (the "SEC") pursuant to the
Securities Exchange Act of 1934 (the "34 Act") or, if Borrower's
Form 10-K is not available, annual audited financial statements for
itself and its consolidated Subsidiaries, including a balance sheet
as of the end of such period, related profit and loss and
reconciliation of surplus statements, and a statement of cash
flows, which financial statements shall be included within an
unqualified audit report certified by independent certified public
accountants (the identity of such accountants to be acceptable to
the Lenders), which statements shall be prepared in accordance with
GAAP on a consolidated basis.
(ii) Within 45 days after the close of the first three quarterly periods
of each of its fiscal years, a copy of Borrower's Quarterly Report
on Form 10-Q filed with the SEC pursuant to the 34 Act or, if
Borrower's Form 10-Q is not available, for itself and its
consolidated Subsidiaries, a consolidated unaudited balance sheet
as at the close of each such period and consolidated profit and
loss and reconciliation of surplus statements and a statement of
cash flows for the period from the beginning of such fiscal year to
the end of such quarter, all certified by its Vice President -
Treasurer, or his designee.
(iii)Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit "C"
hereto signed by its Vice President - Treasurer, or his designee,
showing the calculations necessary to determine compliance with
this Agreement and stating that no Default or Unmatured Default
exists, or if any Default or Unmatured Default exists, stating the
nature and status thereof.
(iv) If there are Unfunded Liabilities relating to any Single Employer
Plan of the Borrower at the close of any fiscal year, a statement
of the Unfunded Liabilities of such Single Employer Plan, certified
as correct by an actuary enrolled under ERISA, within 270 days
after the close of such fiscal year.
(v) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with respect
to any Single Employer Plan, a
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statement, signed by the Vice President - Treasurer of the
Borrower, or his designee, describing said Reportable Event and the
action which the Borrower proposes to take with respect thereto.
(vi) As soon as possible and in any event within 10 days after receipt
by the Borrower or any of its Subsidiaries, a copy of (a) any
notice or claim to the effect that the Borrower or such Subsidiary
is or may be liable to any Person as a result of the release by the
Borrower or such Subsidiary or any other Person of any toxic or
hazardous waste or substance into the environment, if such
liability could have a Material Adverse Effect, and (b) any notice
alleging any violation of any federal, state or local
environmental, health or safety law or regulation by the Borrower
or any of its Subsidiaries which could have a Material Adverse
Effect.
(vii)Promptly upon the furnishing hereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished.
(viii)Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other regular reports
or financial statements which the Borrower or any Subsidiary files
with the Securities and Exchange Commission.
(ix) Such other information (including non-financial information) as the
Administrative Agent or any Lender may from time to time reasonably
request, including but not limited to all press releases concerning
the Borrower.
6.2 Use of Proceeds. The Borrower will, and will cause each Subsidiary
to use the proceeds of the Advances for general corporate purposes. The
Borrower will not, nor will it permit any Subsidiary to, use any of the
proceeds of the Advances to purchase or carry any "margin stock" (as defined
in Regulation U).
6.3 Notice of Default. The Borrower will, and will cause each
Subsidiary to, give prompt notice in writing to the Lenders of the occurrence
of any Default or Unmatured Default and of any other development, financial
or otherwise, which could have a Material Adverse Effect.
6.4 Conduct of Business. The Borrower will, and will cause each
Subsidiary to, carry on and conduct its business in the same general manner
and in the same general fields of enterprise as it is presently conducted and
to do all things necessary to remain duly incorporated, validly existing and
in good standing as a domestic corporation in its jurisdiction of
incorporation and maintain all requisite authority to conduct its business in
each jurisdiction in which its business is conducted and in which the failure
to maintain such authority could have a Material Adverse Effect.
6.5 Taxes. The Borrower will, and will cause each Subsidiary to,
timely file complete and correct United States federal and applicable
foreign, state and local tax returns required by law, which the failure to so
file could have a Material Adverse Effect, and pay when due all taxes,
assessments and governmental charges and levies upon it or its income,
profits or Property, which the failure to pay could have a Material Adverse
Effect, except those which are being contested in good faith by
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appropriate proceedings and with respect to which any adequate reserves have
been set aside in accordance with GAAP.
6.6 Insurance. The Borrower will, and will cause each Subsidiary to,
maintain with financially sound and reputable insurance companies insurance
on all their Property in such amounts and covering such risks as is
consistent with sound business practice, and the Borrower will furnish to any
Lender upon request full information as to the insurance carried.
6.7 Compliance with Laws. The Borrower will, and will cause each
Subsidiary to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which it may be subject and
noncompliance with which could have a Material Adverse Effect.
6.8 Environmental Covenant. The Borrower will, and will cause each of
its Subsidiaries to use and operate all of its facilities and Property in
material compliance with all Environmental Laws, noncompliance with which
could have a Material Adverse Effect, keep all necessary permits, approvals,
certificates and licenses in effect and remain in material compliance
therewith, if failure to keep or comply therewith could have a Material
Adverse Effect, and handle all Hazardous Materials in material compliance
with all applicable Environmental Laws, noncompliance with which could have a
Material Adverse Effect, and provide such information and certifications as
the Administrative Agent or any Lender may reasonably request from time to
time to insure compliance with this Section 6.8.
6.9 Maintenance of Properties. The Borrower will, and will cause each
Subsidiary to, do all things necessary to maintain, preserve, protect and
keep its Property in good repair, working order and condition, normal wear
and tear excepted, and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times.
6.10 Inspection. The Borrower will, and will cause each Subsidiary
to, permit the Administrative Agent and the Lenders, by their respective
representatives and agents, to inspect any of the Property, corporate books
and financial records of the Borrower and each Subsidiary, to examine and
make copies of the books of accounts and other financial records of the
Borrower and each Subsidiary, and to discuss the affairs, finances and
accounts of the Borrower and each Subsidiary with, and to be advised as to
the same by, their respective officers at such reasonable times and intervals
as the Lenders may designate.
6.11 Dividends. The Borrower will not permit any Subsidiary to
declare or pay any dividends except that any Subsidiary may declare and pay
dividends to the Borrower or to a Wholly-Owned Subsidiary.
6.12 Merger. The Borrower will not, nor will it permit any
Subsidiary to, merge or consolidate with or into any other Person, except
that a Subsidiary may merge with the Borrower or a Wholly-Owned Subsidiary,
provided that the Borrower or a Wholly-Owned Subsidiary is the surviving
corporation in any such merger or consolidation.
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6.13 Indebtedness. The Borrower will not, nor will it permit any
Subsidiary to, create, incur or suffer to exist any Indebtedness, except:
(i) The Loans.
(ii) Indebtedness existing under the Amended and Restated Long Term
Credit Agreement.
(iii)Indebtedness existing on the date hereof and described in
Schedule "2" hereto.
(iv) Indebtedness incurred with respect to the Private Placement.
(v) Indebtedness not otherwise permitted by this Section 6.13 not
exceeding (as to the Borrower and all its Subsidiaries) a sum equal
to 5% of Consolidated Net Worth in aggregate principal amount at
any one time outstanding.
(vi) Contingent Obligations arising in connection with Synthetic Leases.
(vii)Contingent Obligations entered into by Big O on behalf of its
franchisees, inclusive of those existing Contingent Obligations of
Big O listed on Schedule "4" hereto, in an amount not to exceed
$24,000,000.
6.14 Sale of Assets. The Borrower will not, nor will it permit any
Subsidiary to, lease, sell or otherwise dispose of its Property, to any other
Person except for (i) sales of inventory in the ordinary course of business,
and sale of Big O retail stores to Big O franchisees in the ordinary course
of business, (ii) leases, sales or other dispositions of its Property that,
together will all other Property of the Borrower and its Subsidiaries
previously leased, sold or disposed of (other than inventory or retail stores
in the ordinary course of business) as permitted by this Section during the
twelve-month period ending with the month in which any such lease, sale or
other disposition occurs, do not constitute a Substantial Portion of the
Property of the Borrower and its Subsidiaries, (iii) the sale of the assets
or stock of Battery Associates, Inc. and Northern States Tire, Inc., and
(iv) leases, sales or other dispositions of its Property arising or occurring
in connection with Synthetic Leases.
6.15 Liens. The Borrower will not, nor will it permit or suffer
any Subsidiary to, create, incur, or suffer to exist any Lien in, of or on
the property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies on
its Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which any
adequate reserves in accordance with generally accepted principles
of accounting shall have been set aside on its books.
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of
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obligations not more than 60 days past due or which are being
contested in good faith by appropriate proceedings and for which
any adequate reserves shall have been set aside on its books.
(iii)Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation.
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real Property as are of a nature
generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in the
business of the Borrower or its Subsidiaries.
(v) Liens on the capital stock, partnership interest, or other evidence
of ownership of any Subsidiary or such Subsidiary's assets that
secure project financing for such Subsidiary.
(vi) Purchase money Liens upon or in Property now owned or hereafter
acquired in the ordinary course of business (consistent with the
Borrower's business practices) to secure (A) the purchase price of
such Property or (B) Indebtedness incurred solely for the purpose
of financing the acquisition, construction, or improvement of any
such Property to be subject to such Liens, or Liens existing on any
such Property at the time of acquisition, or extensions, renewals,
or replacements of any of the foregoing for the same or a lesser
amount; provided that no such Lien shall extend to or cover any
Property other than the Property being acquired, constructed, or
improved and replacements, modifications, and proceeds of such
Property, and no such extension, renewal, or replacement shall
extend to or cover any Property not theretofore subject to the Lien
being extended, renewed, or replaced, and provided further that the
aggregate amount of new purchase money Liens arising in any fiscal
year of Borrower shall not exceed the principal amount of
$3,000,000.
(vii)Liens existing on the date of the Short Term Agreement and
described in Schedule "2" hereto.
(viii)Liens arising or occurring in connection with Synthetic
Leases.
6.16 Affiliates. The Borrower will not, and will not permit any
Subsidiary to, enter into any transaction (including, without limitation, the
purchase or sale of any Property or service) with, or make any payment or
transfer to, any Affiliate except in the ordinary course of business and
pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arms-length transaction, provided that the foregoing
shall not apply to transactions (i) between the Borrower and any Wholly-Owned
Subsidiary; or (ii) if such transactions occur in the ordinary course of
business consistent with past practices of the Borrower
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and/or the Subsidiary, transactions between the Borrower or any Wholly-Owned
Subsidiary and TBC de Mexico or TBC Worldwide or transactions between Big O
and any joint venture established by Big O in the ordinary course of
business.
6.17 [Reserved].
6.18 Consolidated Tangible Net Worth. The Borrower will maintain
at all times a Consolidated Tangible Net Worth of not less than the greater
of (i) $65,000,000, or (ii) Consolidated Tangible Net Worth on completion of
the Big O Acquisition, less $3,000,000, but not greater than $70,000,000,
plus 50% of the Borrower's Consolidated Net Income (without giving effect to
any losses) for each fiscal year of the Borrower ending on or after December
31, 1998. For the sole purpose of calculating the Consolidated Tangible Net
Worth covenant herein, repurchases by the Borrower of its capital stock shall
not be subtracted from the computation of Consolidated Tangible Net Worth
only to the extent of $5,000,000 in repurchases annually.
6.19 Consolidated Total Liabilities. The Borrower will not permit
the ratio of (i) Consolidated Total Liabilities to (ii) Consolidated Tangible
Net Worth to be greater than 2.25 to 1.00 at any time (measured at the end of
each fiscal quarter).
6.20 Fixed Charge Coverage Ratio. The Borrower will not permit the
Fixed Charge Coverage Ratio (measured at the end of each fiscal quarter for
the then-most recently ended four fiscal quarters) to be less than 2.25 to
1.00. Compliance shall be demonstrated on a pro forma basis until such time
as Big O's results shall have been included in Borrower's consolidated
financial statements for four fiscal quarters.
6.21 [Reserved]
6.22 Retail Stores Under Development. The Borrower shall not at
any time, on a consolidated basis, have in excess of $20,000,000 allocated to
Retail Stores Under Development on its balance sheet.
6.23 Minimum Working Capital. Borrower will maintain working
capital (calculated as current assets less current liabilities, each
determined in accordance with GAAP) of at least $40,000,000, such amount to
be determined quarterly.
6.24 Employee Benefit Plans. The Borrower will properly conduct,
and cause each Subsidiary to properly conduct, each Single Employer Plan as
to which it may have any liability in compliance with all applicable
requirements of law and regulations noncompliance with which could have a
Material Adverse Effect.
6.25 Other Agreements. The Borrower will not, and will not permit
any Subsidiary to, enter into any agreement containing any provision which
would be violated or breached by the performance of its obligations hereunder
or under any instrument or document delivered or to be delivered by it
hereunder or in connection with the transactions contemplated hereby.
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ARTICLE VII
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1 Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the
Administrative Agent under or in connection with this Agreement, any Loan, or
any certificate or information delivered in connection with this Agreement or
any other Loan Document shall be materially false on the date as of which
made.
7.2 Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other obligations under
any of the Loan Documents within five days after the same becomes due.
7.3 Failure of the Borrower or any of its Subsidiaries to perform
or observe any agreement contained in Article VI and either (i) such failure
is not remedied within two Business Days after any Authorized Officer obtains
knowledge thereof or (ii) within such two-day period, the Required Lenders
give the Borrower notice that such failure constitutes a Default hereunder.
7.4 The breach by the Borrower (other than a breach which
constitutes a Default under Section 7.1, 7.2 or 7.3) of any of the terms or
provisions of this Agreement which is not remedied within thirty (30) days
after the earlier to occur of (i) the date the Borrower shall have obtained
knowledge thereof and (ii) written notice thereof to the Borrower from the
Administrative Agent or any Lender.
7.5 Failure of the Borrower or any of its Subsidiaries to pay when
due any Indebtedness aggregating in excess of $2,000,000 ("Material
Indebtedness"); or the default by the Borrower or any of its Subsidiaries in
the performance of any term, provision or condition contained in any
agreement under which any such Material Indebtedness was created or is
governed, or any other event shall occur or condition exist, the effect of
which is to cause, or to permit the holder or holders of such Material
Indebtedness to cause, such Material Indebtedness to become due prior to its
stated maturity; or any Material Indebtedness of the Borrower or any of its
Subsidiaries shall be declared to be due and payable or required to be
prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or the Borrower or any of its Subsidiaries shall
not pay, or admit in writing its inability to pay, its debts generally as
they become due.
7.6 The Borrower or any of its Subsidiaries shall (i) have an
order for relief entered with respect to it under the Federal bankruptcy laws
as now or hereafter in effect, (ii) make an assignment for the benefit of
creditors, (iii) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Substantial Portion of its Property, (iv)
institute any proceeding seeking an order for relief under the Federal
bankruptcy laws as now or hereafter in effect or seeking to adjudicate it a
bankrupt or insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief
of debtors or fail
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to file an answer or other pleading denying the material allegations of any
such proceeding filed against it, (v) take any corporate action to authorize
or effect any of the foregoing actions set forth in this Section 7.6, or (vi)
fail to contest in good faith any appointment or proceeding described in
Section 7.7.
7.7 Without the application, approval or consent of the Borrower
or any of its Subsidiaries, a receiver, trustee, examiner, liquidator or
similar official shall be appointed for the Borrower or any of its
Subsidiaries or any Substantial Portion of its Property, or a proceeding
described in Section 7.6(iv) shall be instituted against the Borrower or any
of its Subsidiaries and such appointment continues undischarged or such
proceeding continues undismissed or unstayed for a period of 30 consecutive
days.
7.8 Any court, government or governmental agency shall condemn,
seize or otherwise appropriate, or take custody or control of (each a
"Condemnation"), all or any portion of the Property of the Borrower and its
Subsidiaries which, when taken together with all other Property of the
Borrower and its Subsidiaries so condemned, seized, appropriated, or taken
custody or control of, during the twelve-month period ending with the month
in which any such Condemnation occurs, constitutes a Substantial Portion.
7.9 The Borrower or any of its Subsidiaries shall fail within 30
days to pay, bond or otherwise discharge any judgment or order for the
payment of money in excess of $3,000,000, which is not stayed on appeal or
otherwise being appropriately contested in good faith.
7.10 The Unfunded Liabilities of all Plans shall exceed in the
aggregate an amount the payment of which could reasonably be expected to have
a Material Adverse Effect or any Reportable Event shall occur in connection
with any Plan.
7.11 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has
incurred withdrawal liability to such Multiemployer Plan in an amount which,
when aggregated with all other amounts required to be paid to Multiemployer
Plans by the Borrower or any other member of the Controlled Group as
withdrawal liability (determined as of the date of such notification),
exceeds an amount, or requires payments exceeding an amount per annum, the
payment of which in either case could reasonably be expected to have a
Material Adverse Effect.
7.12 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding
the plan year in which the reorganization or termination occurs by an amount
the payment of which could reasonably be expected to have a Material Adverse
Effect on the business, financial condition, .or results of operations of the
Borrower and its Subsidiaries taken as a whole.
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7.13 The Borrower or any of its Subsidiaries shall be the subject
of any proceeding or investigation pertaining to the release by the Borrower
or any of its Subsidiaries, or any other Person of any Hazardous Material
into the environment, or any violation of any Environmental Law, which, in
either case, could reasonably be expected to have a Material Adverse Effect.
7.14 Any Change in Control shall occur.
7.15 The representations and warranties set forth in "Section 5.15
Plan Assets; Prohibited Transactions" shall at any time not be true and
correct.
7.16 Any of the Guaranties shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of the Guaranties.
ARTICLE VIII
ACCELERATION. WAIVERS. AMENDMENTS AND REMEDIES
8.1 Acceleration. If any Default described in Section 7.6 or 7.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part
of the Administrative Agent or any Lender. If any other Default occurs, and
is then continuing, the Required Lenders (or the Administrative Agent with
the consent of the Required Lenders) may terminate or suspend the obligations
of the Lenders to make Loans hereunder, or declare the Obligations to be due
and payable, or both, whereupon the Obligations shall become immediately due
and payable, without presentment, demand, protest or notice of any kind, all
of which the Borrower hereby expressly waives.
If, within 14 days after acceleration of the maturity of the Obligations
or termination of the obligations of the Lenders to make Loans hereunder as a
result of any Default (other than any Default as described in Section 7.6 or
7.7 with respect to the Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or entered, the
Required Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
8.2 Amendments. Subject to the provisions of this Article VIII,
the Required Lenders (or the Administrative Agent with the consent in writing
of the Required Lenders) and the Borrower may enter into agreements
supplemental hereto for the purpose of adding or modifying any provisions to
the Loan Documents or changing in any manner the rights of the Lenders or the
Borrower hereunder or waiving any Default hereunder; provided, however, that
no such supplemental agreement shall, without the consent of each Lender
affected thereby:
(i) Extend the final maturity of any Loan or Note or forgive all or any
portion of the principal amount thereof, or reduce the rate or
extend the time of payment of interest or fees thereon.
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(ii) Reduce the percentage specified in the definition of Required
Lenders.
(iii)Extend the Termination Date, or increase the amount of the
Commitment of any Lender hereunder, or permit the Borrower to
assign its rights under this Agreement.
(iv) Amend this Section 8.2.
(v) Release any Guarantor from its obligations under its Guaranty.
No amendment of any provision of this Agreement relating to the
Administrative Agent shall be effective without the written consent of the
Administrative Agent. The Administrative Agent may waive payment of the fee
required under Section 12.3.2 without obtaining the consent of any other
party to this Agreement.
8.3 Preservation of Rights. No delay or omission of the Lenders
or the Administrative Agent to exercise any right under the Loan Documents
shall impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence
of a Default or the inability of the Borrower to satisfy the conditions
precedent to such Loan shall not constitute any waiver or acquiescence. Any
single or partial exercise of any such right shall not preclude other or
further exercise thereof or the exercise of any other right, and no waiver,
amendment or other variation of the terms, conditions or provisions of the
Loan Documents whatsoever shall be valid unless in writing signed by the
Lenders required pursuant to Section 8.2, and then only to the extent in such
writing specifically set forth. All remedies contained in the Loan Documents
or by law afforded shall be cumulative and all shall be available to the
Administrative Agent and the Lenders until the Obligations have been paid in
full.
ARTICLE IX
GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes
and the making of the Loans herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3 Taxes. Any taxes (excluding income taxes on the overall net income
of any Lender) or other similar assessments or charges made by any
governmental or revenue authority in respect of the Loan Documents shall be
paid by the Borrower, together with interest and penalties, if any.
9.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
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9.5 Entire Agreement. The Loan Documents and the Long Term Credit
Agreement embody the entire agreement and understanding among the Borrower,
the Administrative Agent and the Lenders and supersede all prior agreements
and understandings among the Borrower, the Administrative Agent and the
Lenders relating to the subject matter thereof.
9.6 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or administrative agent of any other (except to the
extent to which the Administrative Agent is authorized to act as such). The
failure of any Lender to perform any of its obligations hereunder shall not
relieve any other Lender from any of its obligations hereunder. This
Agreement shall not be construed so as to confer any right or benefit upon
any Person other than the parties to this Agreement and their respective
successors and assigns.
9.7 Expenses: Indemnification. The Borrower previously reimbursed the
Administrative Agent for any costs, and out-of-pocket expenses (including
outside attorneys' fees and time charges of attorneys for the Administrative
Agent, which attorneys may be employees of the Administrative Agent) paid or
incurred by the Administrative Agent in connection with the preparation,
negotiation, execution and delivery, of the Loan Documents. The Borrower also
agrees to reimburse the Administrative Agent and the Lenders for any costs,
internal charges and out-of-pocket expenses (including attorneys' fees and
time charges of attorneys for the Administrative Agent and the Lenders, which
attorneys may be employees of the Administrative Agent or the Lenders) paid
or incurred by the Administrative Agent or any Lender in connection with the
amendment, modification, administration, collection and enforcement of the
Loan Documents. The Borrower further agrees to indemnify the Administrative
Agent, the Syndication Agent, and each Lender, its directors, officers and
employees against all losses, claims, damages, penalties, judgments,
liabilities and expenses (including, without limitation, all expenses of
litigation or preparation therefor whether or not the Administrative Agent,
the Syndication Agent, or any Lender is a party thereto) which any of them
may pay or incur arising out of or relating to this Agreement, the other Loan
Documents, the transactions contemplated hereby or the direct or indirect
application or proposed application of the proceeds of any Loan hereunder
except to the extent that they are determined by a court of competent
jurisdiction in a final and non-appealable order to have resulted from the
gross negligence or willful misconduct of the party seeking indemnification
and except that the foregoing indemnity shall not extend to any claim
asserted by Borrower against any Lender or the Administrative Agent for
breach of its obligations as allowed under this Agreement. The obligations of
the Borrower under this Section shall survive the termination of this
Agreement.
9.8 Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to
each of the Lenders.
9.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP.
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9.10 Severability of Provisions. Any provision in any Loan
Document that is held to be inoperative, unenforceable, or invalid in any
jurisdiction shall, as to that jurisdiction, be inoperative, unenforceable,
or invalid without affecting the remaining provisions in that jurisdiction or
the operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
9.11 Nonliability of Lenders. The relationship between the
Borrower and the Lenders and the Administrative Agent shall be solely that of
borrower and lender. Neither the Administrative Agent nor any Lender shall
have any fiduciary responsibilities to the Borrower. Neither the
Administrative Agent nor any Lender undertakes any responsibility to the
Borrower to review or inform the Borrower of any matter in connection with
any phase of the Borrower's business or operations. The Borrower agrees that
neither the Administrative Agent nor any Lender shall have liability to the
Borrower (whether sounding in tort, contract or otherwise) for losses
suffered by the Borrower in connection with, arising out of, or in any way
related to, the transactions contemplated and the relationship established by
the Loan Documents, or any act, omission or event occurring in connection
therewith, unless it is determined by a court of competent jurisdiction in a
final and non-appealable order that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought.
Neither the Administrative Agent nor any Lender shall have any liability with
respect to, and the Borrower hereby waives, releases and agrees not to ▇▇▇
for, any special, indirect or consequential damages suffered by the Borrower
in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.
9.12 Confidentiality. Each Lender agrees to hold any confidential
information which it may receive from the Borrower pursuant to this Agreement
in confidence, except for disclosure (i) to its Affiliates and to other
Lenders and their respective Affiliates, (ii) to legal counsel, accountants,
and other professional advisors to that Lender or to a Transferee, (iii) to
regulatory officials, (iv) to any Person as requested pursuant to or as
required by law, regulation, or legal process, (v) to any Person in
connection with any legal proceeding to which that Lender is a party, and
(vi) permitted by Section 12.4.
9.13 Nonreliance. Each Lender hereby represents that it is not
relying on or looking to any margin stock (as defined in Regulation U of the
Board of Governors of the Federal Reserve System) for the repayment of the
Loans provided for herein.
ARTICLE X
THE ADMINISTRATIVE AGENT
10.1 Appointment; Nature of Relationship. First Tennessee Bank is hereby
appointed by the Lenders as the Administrative Agent and under each other
Loan Document, and each of the Lenders irrevocably authorizes the
Administrative Agent to act as the contractual representative of such Lender
with the rights and duties expressly set forth herein and in the other Loan
Documents. The Administrative Agent agrees to act as such contractual
representative upon the express conditions contained in this Article X.
Notwithstanding the use of the defined term "Administrative Agent" it is
expressly understood and agreed that the Administrative Agent shall not have
any
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fiduciary responsibilities to any Lender by reason of this Agreement or any
other Loan Document and that the Administrative Agent is merely acting as the
representative of the Lenders with only those duties as are expressly set
forth in this Agreement and the other Loan Documents. In its capacity as the
Lenders contractual representative, the Administrative Agent (i) does not
hereby assume any fiduciary duties to any of the Lenders, (ii) is a
"representative" of the Lenders within the meaning of Section 9-105 of the
Uniform Commercial Code, and (iii) is acting as an independent contractor,
the rights and duties of which are limited to those expressly set forth in
this Agreement and the other Loan Documents. Each of the Lenders hereby
agrees to assert no claim against the Administrative Agent on any agency
theory or any other theory of liability for breach of fiduciary duty, all of
which claims each Lender hereby waives. It is also expressly understood
that, as of the date of this Amended and Restated Short Term Credit
Agreement, there shall no longer be a Co-Administrative Agent hereunder or
under any of the Loan Documents.
10.2 Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers
as are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan
Documents to be taken by the Administrative Agent.
10.3 General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for any action taken or omitted to be taken by it or
them hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
10.4 No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or
verify (i) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under any
Loan Document, including, without limitation, any agreement by an obligor to
furnish information directly to each Lender; (iii) the satisfaction of any
condition specified in Article IV, except receipt of items required to be
delivered to the Administrative Agent; (iv) the validity, enforceability,
effectiveness, sufficiency or genuineness of any Loan Document or any other
instrument or writing furnished in connection therewith; or (v) the value,
sufficiency, creation, perfection or priority of any interest in any
collateral security. The Administrative Agent shall have no duty to disclose
to the Lenders, unless requested, information that is not required to be
furnished by the Borrower to the Administrative Agent at such time, but is
voluntarily furnished by the Borrower to the Administrative Agent (either in
their capacity as Administrative Agent or in their individual capacity).
10.5 Action on Instructions of Lenders. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of
the Lenders and on all holders of Notes. The Lenders hereby acknowledge that
the Administrative Agent shall be under no duty to
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take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders. The Administrative
Agent shall be fully justified in failing or refusing to take any action
hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or
continuing to take any such action.
10.6 Employment of Agents and Counsel. The Administrative Agent may
execute any of its duties as Administrative Agent hereunder and under any
other Loan Document by or through employees, agents, and attorneys-in-fact
and shall not be answerable to the Lenders, except as to money or securities
received by it or its authorized agents, for the default or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. The
Administrative Agent shall be entitled to advice of counsel concerning all
matters pertaining to the agency hereby created and its duties hereunder and
under any other Loan Document.
10.7 Reliance on Documents: Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine
and correct and to have been signed or sent by the proper person or persons,
and, in respect to legal matters, upon the opinion of counsel selected by the
Administrative Agent, which counsel may be employees of the Administrative
Agent.
10.8 Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent ratably in
proportion to their respective Commitments (or, if the Commitments have been
terminated, in proportion to their Commitments immediately prior to such
termination) (i) for any amounts not reimbursed by the Borrower for which the
Administrative Agent is entitled to reimbursement by the Borrower under the
Loan Documents, (ii) for any other reasonable expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents, and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Administrative Agent. The obligations
of the Lenders under this Section 10.8 shall survive payment of the
Obligations and termination of this Agreement.
10.9 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Administrative Agent has received written notice
from a Lender or the Borrower referring to this Agreement describing such
Default or Unmatured Default and stating that such notice is a "notice of
default". In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give prompt notice thereof to the Lenders.
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10.10 Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers
hereunder and under any other Loan Document as any Lender and may exercise
the same as though it were not the Administrative Agent, and the term
"Lender" or "Lenders" shall, at any time when the Administrative Agent, is a
Lender, unless the context otherwise indicates, include the Administrative
Agent in its individual capacity. The Administrative Agent may accept
deposits from, lend money to, and generally engage in any kind of trust,
debt, equity or other transaction, in addition to those contemplated by this
Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted
hereby from engaging with any other Person.
10.11 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement and the other
Loan Documents. Each Lender also acknowledges that it will, independently and
without reliance upon the Administrative Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement and the other Loan Documents.
10.12 Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower, or be removed by the Required Lenders, such resignation or removal
to be effective upon the appointment of a successor Administrative Agent or,
if no successor new Administrative Agent has been appointed, 45 days after
the retiring or removed Administrative Agent gives notice of its intention to
resign or is removed. Upon any such resignation or removal the Required
Lenders shall have the right to appoint, on behalf of the Borrower and the
Lenders and with the consent of the Borrower (which shall not be unreasonably
withheld), a successor Administrative Agent. If the Administrative Agent has
resigned or been removed and no successor Administrative Agent has been
appointed, the Lenders may perform all the duties of the Administrative Agent
hereunder and the Borrower shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Administrative Agent shall be deemed
to be appointed hereunder until such successor Administrative Agent has
accepted the appointment. Any such successor Administrative Agent shall be a
commercial bank having capital and retained earnings of at least $50,000,000.
Upon the acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the resigning Administrative Agent. Upon the
effectiveness of the resignation or removal of the Administrative Agent, the
resigning Administrative Agent shall be discharged from its duties and
obligations hereunder and under the Loan Documents. After the effectiveness
of the resignation of an Administrative Agent, the provisions of this Article
X shall continue in effect for the benefit of such Administrative Agent in
respect of any actions taken or omitted to be taken by it while it was acting
as the Administrative Agent hereunder and under the other Loan Documents.
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ARTICLE XI
SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default occurs, any and all deposits (including all account
balances, whether provisional or final and whether or not collected or
available) and any other Indebtedness at any time held or owing by any Lender
to or for the credit or account of the Borrower may be offset and applied
toward the payment of the Obligations owing to such Lender, whether or not
the Obligations, or any part hereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant
to Section 3.1, 3.2 or 3.4 and other payments received by the Swing Line Bank
with respect to the Swing Line Loan) in a greater proportion than that
received by any other Lender, such Lender agrees, promptly upon demand, to
purchase a portion of the Loans held by the other Lenders so that after such
purchase each Lender will hold its ratable proportion of Loans. If any
Lender, whether in connection with setoff or amounts which might be subject
to setoff or otherwise, receives collateral or other protection for its
Obligations or such amounts which may be subject to setoff, such Lender
agrees, promptly upon demand, to take such action necessary such that all
Lenders share in the benefits of such collateral ratably in proportion to
their Loans. In case any such payment is disturbed by legal process, or
otherwise, appropriate further adjustments shall be made.
ARTICLE XII
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents, and (ii) any assignment by any Lender must be made in
compliance with Section 12.3. Notwithstanding clause (ii) of this Section,
any Lender may at any time, without the consent of the Borrower or the
Administrative Agent, assign all or any portion of its rights under this
Agreement and its Notes to a Federal Reserve Bank; provided, however, that no
such assignment to a Federal Reserve Bank shall release the transferor Lender
from its obligations hereunder. The Administrative Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with Section 12.3 in the case of an assignment thereof
or, in the case of any other transfer, a written notice of the transfer is
filed with the Administrative Agent. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of
the Loan Documents. Any request, authority or consent of any Person, who at
the time of making such request or giving such authority or consent is the
holder of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
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12.2 Participations.
12.2.1 Permitted Participants: Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held by
such Lender, or any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by the Borrower under
this Agreement shall be determined as if such Lender had not sold such
participating interests, and the Borrower and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under the Loan Documents.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Loan, or Commitment, in which such
Participant has an interest which forgives principal, interest or fees or
reduces the interest rate or fees payable with respect to any such Loan, or
Commitment, postpones any date fixed for any regularly-scheduled payment of
principal of, or interest or fees on, any such Loan, or Commitment, releases
any guarantor of any such Loan or releases any substantial portion of
collateral, if any, securing any such Loan.
12.2.3 Benefit of Setoff. The Borrower agrees that each Participant
shall be deemed to have the right of setoff provided in Section 11.1 in
respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest
were owing directly to it as a Lender under the Loan Documents, provided that
each Lender shall retain the right of setoff provided in Section 11.1 with
respect to the amount of participating interests sold to each Participant.
The Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 11.1, agrees to share with
each Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if each
Participant were a Lender.
12.3 Assignments.
12.3.1 Permitted Assignments. Any Lender may, in the ordinary course
of its business and in accordance with applicable law, at any time assign to
one or more banks or other entities ("Purchasers") all or any part of its
rights and obligations under the Loan Documents. Such assignment shall be
substantially in the form of Exhibit "D" hereto or in such other form as may
be agreed to by the parties thereto. The consent of the Borrower and the
Administrative Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an Affiliate
thereof; provided, however, that if a Default has occurred and is continuing,
the consent of the Borrower shall not be required. Such consent shall not be
unreasonably withheld or delayed. Each such assignment shall be in an amount
not less than the lesser of (i) $5,000,000 or (ii)
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the remaining amount of the assigning Lender's Commitment (calculated as at
the date of such assignment).
12.3.2 Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in the form
attached as Exhibit "I" to Exhibit "D" hereto (a "Notice of Assignment"),
together with any consents required by Section 12.3.1, (ii) payment of a
$3,000 fee to the Administrative Agent for processing such assignment, and
(iii) notice of such assignment delivered to the Lenders by the transferring
Lender, such assignment shall become effective on the effective date
specified in such Notice of Assignment. The Notice of Assignment shall
contain a representation by the Purchaser to the effect that none of the
consideration used to make the purchase of the Commitment and Loans under the
applicable assignment agreement are "plan assets" as defined under ERISA and
that the rights and interests of the Purchaser in and under the Loan
Documents will not be "plan assets" under ERISA. On and after the effective
date of such assignment, such Purchaser shall for all purposes be a Lender
party to this Agreement and any other Loan Document executed by the Lenders
and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party hereto, and no
further consent or action by the Borrower, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect to the
percentage of the Aggregate Commitment, Loans, and L/C Participation Amounts
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3.2, the transferor Lender, the
Administrative Agent and the Borrower shall make appropriate arrangements so
that replacement Notes are issued to such transferor Lender and new Notes or,
as appropriate, replacement Notes, are issued to such Purchaser, in each case
in principal amounts reflecting their Commitment, as adjusted pursuant to
such assignment.
12.4 Dissemination of Information. The Borrower authorizes each
Lender to disclose to any Participant or Purchaser or any other Person
acquiring an interest in the Loan Documents by operation of law (each a
"Transferee") and any prospective Transferee any and all information in such
Lender's possession concerning the creditworthiness of the Borrower and its
Subsidiaries, provided that each Transferee and prospective Transferee agrees
to be bound by Section 9.12 of this Agreement.
12.5 Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section 4.3.
ARTICLE XIII
NOTICES
13.1 Notices. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices, requests and other communications
to any party hereunder shall be in writing (including bank wire, facsimile
transmission or similar writing) and shall be given to such party: (x) in the
case of the Borrower or the Administrative Agent, at its address or facsimile
number set forth on the signature pages hereof, (y) in the case of any
Lender, at its address or facsimile number set forth
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below its signature hereto, or (z) in the case of any party, such other
address or facsimile number as such party may hereafter specify for the
purpose by notice to the Administrative Agent and the Borrower. Each such
notice, request or other communication shall be effective (i) if given by
facsimile transmission, when transmitted to the facsimile number specified in
this Section and confirmation of receipt is received, (ii) if given by mail,
72 hours after such communication is deposited in the mail with first class
postage prepaid, addressed as aforesaid, or (iii) if given by any other
means, when delivered at the address specified in this Section; provided that
notices to the Administrative Agent under Article II shall not be effective
until received.
13.2 Change of Address. The Borrower, the Administrative Agent and
any Lender may each change the address for service of notice upon it by a
notice in writing to the other parties hereto.
ARTICLE XIV
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Administrative Agent and the Lenders and each party has notified the
Administrative Agent by telex or telephone, that it has taken such action.
ARTICLE XV
CHOICE OF LAW, CONSENT TO JURISDICTION, WAIVER OF JURY TRIAL
15.1 Choice of Law. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
TENNESSEE, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
15.2 Consent to Jurisdiction. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR TENNESSEE
STATE COURT SITTING IN TENNESSEE IN ANY ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES
THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW
OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO
BRING PROCEEDINGS) AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE
ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE
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ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN TENNESSEE.
15.3 Waiver of Jury Trial. THE BORROWER, THE ADMINISTRATIVE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
[SIGNATURES ON NEXT PAGE(S)]
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IN WITNESS WHEREOF, the Borrower, the Lenders, the Syndication Agent and
the Administrative Agent have executed this Agreement as of the date first
above written.
TBC CORPORATION
Borrower
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
Executive Vice President and Treasurer
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇,
Executive Vice President and
Treasurer
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Commitments
$14,500,000 FIRST TENNESSEE BANK NATIONAL ASSOCIATION
Individually and as Administrative Agent
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇, Vice President
National Department
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇, Vice
President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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$21,500,000 THE CHASE MANHATTAN BANK,
Individually and as Syndication Agent
and Sole Book Manager
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Vice President
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (▇-▇)
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇,
Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
$12,500,000 SUNTRUST BANK, NASHVILLE, N.A.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, Vice President
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇, Vice President
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
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EXHIBIT "A-1"
AMENDED AND RESTATED
SHORT TERM
REVOLVING NOTE
$ November 9, 1998
This Amended and Restated Short Term Revolving Note (the _Note_) is an
amendment and restatement of that certain Short Term Revolving Note of the
undersigned payable to the Lender in the original principal amount of AMOUNT
($ ) dated September 25, 1996.
TBC Corporation, a Delaware corporation (the "Borrower"), promises to
pay to the order of SunTrust Bank, Nashville, N.A. (the "Lender") the lesser
of the principal sum of AMOUNT ($ ) or the aggregate unpaid
principal amount of all Loans made by the Lender to the Borrower pursuant to
Section 2.1 of the Agreement (as hereinafter defined), in immediately
available funds at the main office of First Tennessee Bank National
Association in Memphis, Tennessee, as Administrative Agent, together with
interest on the unpaid principal amount hereof at the rates and on the dates
set forth in the Agreement. The Borrower shall pay the principal of and
accrued and unpaid interest on the Loans in full on the Termination Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Loan and the date and amount of each
principal payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to the
benefits of, the Amended and Restated Short Term Credit Agreement dated as of
November 9, 1998 (which, as it may be amended or modified and in effect from
time to time, is herein called the "Agreement"), among the Borrower, the
lenders party thereto, including the Lender, and First Tennessee Bank
National Association, as Administrative Agent, to which Agreement reference
is hereby made for a statement of the terms and conditions governing this
Note, including the terms and conditions under which this Note may be prepaid
or its maturity date accelerated. Capitalized terms used herein and not
otherwise defined herein are used with the meanings attributed to them in the
Agreement.
TBC CORPORATION
By:
Print Name:
Title:
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SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF TBC CORPORATION
Dated: November 9, 1998
Principal Maturity of Maturity
Date Amount of Interest Principal Unpaid
Loan Period Amount Balance
Paid
(See Attached)
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EXHIBIT "A-2"
AMENDED AND RESTATED
SWING LINE NOTE
$3,000,000.00 November 9, 1998
This Amended and Restated Swing Line Note (the _Note_) is an amendment
and restatement of that certain Swing Line Note of the undersigned payable to
the Lender in the original principal amount of Three Million Dollars
($3,000,000.00) dated September 25, 1996.
TBC Corporation, a Delaware corporation (the "Borrower"), promises to
pay to the order of First Tennessee Bank National Association (the "Swing
Line Bank") the lesser of the principal sum of Three Million Dollars
($3,000,000.00) or the aggregate unpaid principal amount of all Swing Line
Loans made by the Lender to the Borrower pursuant to Section 2.2 of the
Amended and Restated Short Term Credit Agreement (as the same may be amended
or modified, the "Agreement") hereinafter referred to, in immediately
available funds at the main office of First Tennessee Bank National
Association in Memphis, Tennessee, as Administrative Agent, together with
interest on the unpaid principal amount hereof at the rates and on the dates
set forth in the Agreement. The Borrower shall pay the principal of and
accrued and unpaid interest on the Swing Line Loans in full on the
Termination Date.
The Swing Line Bank shall, and is hereby authorized to, record on the
schedule attached hereto, or to otherwise record in accordance with its usual
practice, the date and amount of each Swing Line Loan and the date and amount
of each principal payment hereunder.
This Swing Line Note is one of the Notes issued pursuant to, and is
entitled to the benefits of, the Amended and Restated Short Term Credit
Agreement dated as of November 9, 1998 among the Borrower, First Tennessee
Bank National Association, individually and as Administrative Agent, and the
lenders named therein, including the Swing Line Bank, to which Agreement, as
it may be amended from time to time, reference is hereby made for a statement
of the terms and conditions governing this Swing Line Note, including the
terms and conditions under which this Swing Line Note may be prepaid or its
maturity date accelerated. Capitalized terms used herein and not otherwise
defined herein are used with the meanings attributed to them in the
Agreement.
TBC CORPORATION
By:
Print Name:
Title:
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SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
AMENDED AND RESTATED NOTE OF TBC CORPORATION
Dated: November 9, 1998
Principal Maturity of Maturity
Date Amount of Interest Principal Unpaid
Loan Period Amount Balance
Paid
(See Attached)
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EXHIBIT "B"
FORM OF OPINION
September 25, 1996
The Administrative Agent
and
the Lenders who are parties to the
Credit Agreement described below.
Gentlemen/Ladies:
We are counsel for TBC Corporation (the "Borrower"), and have
represented the Borrower, and each of its Subsidiaries in connection with its
execution and delivery of a Short Term Credit Agreement dated as of September
25, 1996 (the "Agreement") among the Borrower, the Lenders named therein, and
First Tennessee Bank National Association, as Administrative Agent, and
providing for Advances in an aggregate principal amount not exceeding
$48,500,000 at any one time outstanding. All capitalized terms used in this
opinion and not otherwise defined herein shall have the meanings attributed
to them in the Agreement.
We have examined the Borrower's and each of its Subsidiaries' articles
of incorporation, by-laws, and resolutions, the Loan Documents, and such
other matters of fact and law which we deem necessary in order to render this
opinion. Based upon the foregoing, it is our opinion that:
1. The Borrower, and each of its Subsidiaries are corporations duly
incorporated, validly existing and in good standing under the laws of their
states of incorporation and have all requisite authority to conduct their
business in each jurisdiction in which their business is conducted.
2. The execution and delivery of the Loan Documents to which they are
a party by the Borrower, and each of its Subsidiaries and the performance by
the Borrower, and each of its Subsidiaries of its obligations thereunder have
been duly authorized by all necessary corporate action and proceedings on the
part of the Borrower, and each of its Subsidiaries and will not:
(a) require any consent of the shareholders of the Borrower or any
of its Subsidiaries;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Borrower or any of its
Subsidiaries or its articles of incorporation or by-laws or any
indenture, instrument or agreement binding upon the Borrower or any of
its Subsidiaries; or
(c) result in, or require, the creation or imposition of any Lien
pursuant to the provisions of any indenture, instrument or agreement
binding upon the Borrower or any of its Subsidiaries.
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3. The Loan Documents have been duly executed and delivered by the
Borrower and each of its Subsidiaries, and the Guarantors, and constitute
legal, valid and binding obligations of the Borrower, and each of its
Subsidiaries, and the Guarantors, enforceable in accordance with their terms
except to the extent the enforcement thereof may be limited by bankruptcy,
insolvency or similar laws affecting the enforcement of creditors' rights
generally and subject also to the availability of equitable remedies if
equitable remedies are sought.
4. Except as disclosed in Schedule "3" to the Agreement, there is no
litigation or proceeding against the Borrower or any of its Subsidiaries
which, if adversely determined, could reasonably be expected to have a
Material Adverse Effect.
5. No approval, authorization, consent, adjudication or order of any
governmental authority, which has not been obtained by the Borrower or any of
its Subsidiaries, is required to be obtained by the Borrower or any of its
Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement or in connection with the
payment by the Borrower of the Obligations.
This opinion may be relied upon by the Administrative Agent, the Co-
Agent, the Lenders and their participants, assignees and other transferees.
Very truly yours,
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EXHIBIT "C"
COMPLIANCE CERTIFICATE
To: The Lenders Parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Amended and Restated Credit Agreement dated as of November 9, 1998 (as
amended, modified, renewed or extended from time to time, the "Agreement")
among TBC Corporation (the "Borrower"), the Lenders party thereto and First
Tennessee Bank National Association as Lender and Administrative Agent for
the Lenders. Unless otherwise defined herein, capitalized terms used in this
Compliance Certificate have the meanings ascribed thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected _______________________ of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting
period covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Default or Unmatured Default during or at the end of the
accounting period covered by the attached financial statements or as of the
date of this Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain terms of the
Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it
has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this _____ day of
___________________, 19___.
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SCHEDULE I TO COMPLIANCE CERTIFICATE
Compliance as of _________________, 199_ with
Provisions of Sections 6.18, 6.19 and 6.20 of
the Amended and Restated Credit Agreement
CONSOLIDATED TANGIBLE NET WORTH (Net Worth Less Intangible Assets)
Consolidated Net Worth $
Less Consolidated Intan. Assets
Plus Stock Repurchase
Consolidated Tan. Net Worth
Required
Compliance
FUNDED INDEBTEDNESS (As amended as of 7/31/97)
Consolidated Liabilities $
Plus Guarantees
Consolidated Total Liabilities
Consolidated Tangible Net Worth
Consolidated Total Liabilities to
Consolidated Tangible Net Worth
Required
Compliance
FIXED CHARGE COVERAGE RATIO
(Earnings before Interest, Taxes and Leases to Interest, Taxes & Leases)
Fixed Charge Coverage
EBITL
Total Interest & Lease
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EBITL/ITL
Required, Minimum
Compliance
MINIMUM WORKING CAPITAL
Current Assets $
Less
Current Liabilities
Working Capital
Required, Minimum
Compliance
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EXHIBIT "D"
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT (this "Assignment Agreement") between (the
"Assignor") and (the "Assignee") is dated as of _________________________,
19_. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Amended and
Restated Credit Agreement (which, as it may be amended, modified, renewed or
extended from time to time is herein called the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Credit Agreement [(other than rights and obligations of the Assignor in
its capacity as Issuing Lender)] such that after giving effect to such
assignment the Assignee shall have purchased pursuant to this Assignment
Agreement the percentage interest specified in Item 3 of Schedule 1 of all
outstanding rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1 and the other Loan Documents. The
aggregate Commitment (or Loans and L/C Participation Amounts, if the
applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "Effective Date") shall be the later of the date specified in Item 5 of
Schedule 1 or two Business Days (or such shorter period agreed to by the
Administrative Agent) after a Notice of Assignment substantially in the form
of Exhibit "I" attached hereto has been delivered to the Administrative
Agent. Such Notice of Assignment must include any consents required to be
delivered to the Administrative Agent by Section 12.3.1 of the Credit
Agreement. In no event will the Effective Date occur if the payments required
to be made by the Assignee to the Assignor on the Effective Date under
Sections 4 and 5 hereof are not made on the proposed Effective Date. The
Assignor will notify the Assignee of the proposed Effective Date no later
than the Business Day prior to the proposed Effective Date. As of the
Effective Date, (i) the Assignee shall have the rights and obligations of a
Lender under the Loan Documents with respect to the rights and obligations
assigned to the Assignee hereunder, and (ii) the Assignor shall relinquish
its rights and be released from its corresponding obligations under the Loan
Documents with respect to the rights and obligations assigned to the Assignee
hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Administrative Agent all payments of
principal, interest and fees with respect to the interest assigned hereby.
The Assignee shall advance funds directly to the Administrative Agent with
respect to all Loans and reimbursement payments made on or after the
Effective Date with respect to the interest assigned hereby. [In
consideration for the sale and assignment of Loans and L/C Participation
Amounts hereunder, (i) the Assignee shall pay the Assignor, on the Effective
Date, an amount equal to the principal amount of the portion of all
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Floating Rate Loans assigned to the Assignee hereunder and (ii) with respect
to each Eurodollar Loan made by the Assignor and assigned to the Assignee
hereunder which is outstanding on the Effective Date, (a) on the last day of
the Interest Period therefor or (b) on such earlier date agreed to by the
Assignor and the Assignee or (c) on the date on which any such Eurodollar
Loan either becomes due (by acceleration or otherwise) or is prepaid (the
date as described in the foregoing clauses (a), (b) or (c) being hereinafter
referred to as the "Payment Date"), the Assignee shall pay the Assignor an
amount equal to the principal amount of the portion of such Eurodollar Loan
assigned to the Assignee which is outstanding on the Payment Date. If the
Assignor and the Assignee agree that the Payment Date for such Eurodollar
Loan shall be the Effective Date, they shall agree to the interest rate
applicable to the portion of such Loan assigned hereunder for the period from
the Effective Date to the end of the existing Interest Period applicable to
such Eurodollar Loan (the "Agreed Interest Rate") and any interest received
by the Assignee in excess of the Agreed Interest Rate shall be remitted to
the Assignor. In the event interest for the period from the Effective Date to
but not including the Payment Date is not paid by the Borrower with respect
to any Eurodollar Loan sold by the Assignor to the Assignee hereunder, the
Assignee shall pay to the Assignor interest for such period on the portion of
such Eurodollar Loan sold by the Assignor to the Assignee hereunder at the
applicable rate provided by the Credit Agreement. In the event a prepayment
of any Eurodollar Loan which is existing on the Payment Date and assigned by
the Assignor to the Assignee hereunder occurs after the Payment Date but
before the end of the Interest Period applicable to such Eurodollar Loan, the
Assignee shall remit to the Assignor the excess of the prepayment penalty
paid with respect to the portion of such Eurodollar Loan assigned to the
Assignee hereunder over the amount which would have been paid if such
prepayment penalty was calculated based on the Agreed Interest Rate. The
Assignee will also promptly remit to the Assignor (i) any principal payments
received from the Administrative Agent with respect to Eurodollar Loans prior
to the Payment Date and (ii) any amounts of interest on Loans and fees
received from the Administrative Agent which relate to the portion of the
Loans assigned to the Assignee hereunder for periods prior to the Effective
Date, in the case of Floating Rate Loans or fees, or the Payment Date, in the
case of Eurodollar Loans, and not previously paid by the Assignee to the
Assignor.](1) In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement,
then the party receiving such amount shall promptly remit it to the other
party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest, commitment fees,
or Facility L/C fees is made under the Credit Agreement with respect to the
amounts assigned to the Assignee hereunder (other than a payment of interest
or fees for the period prior to the Effective Date or, in the case of
Eurodollar Loans, the Payment Date, which the Assignee is obligated to
deliver to the Assignor pursuant to Section 4 hereof). The amount of such fee
shall be the difference between (i) the interest or fee, as applicable, paid
with respect to the amounts assigned to the Assignee hereunder and (ii) the
interest or fee, as applicable, which would have been paid with respect to
the amounts assigned to the Assignee hereunder if each interest rate was ____
of 1% less than the interest rate paid by the Borrower or if the commitment
fee was ___ of 1% less than the commitment fee paid by the Borrower or if the
Facility L/C fee was ___% of 1% less than the Facility L/C fee paid by the
(1) Each Assignor may insert its standard payment provisions in lieu of
the payment terms included in this Exhibit.
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Borrower, as applicable. In addition, the Assignee agrees to pay ___% of the
recordation fee required to be paid to the Administrative Agent in connection
with this Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR: LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are
made without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectibility of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of
the Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of
the terms or provisions of any of the Loan Documents, (v) inspecting any of
the Property, books or records of the Borrower, (vi) the validity,
enforceability, perfection, priority, condition, value or sufficiency of any
collateral securing or purporting to secure the Loans or (vii) any mistake,
error of judgment, or action taken or omitted to be taken in connection with
the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the
Assignor or any other Lender and based on such documents and information at
it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Loan Documents, (iii)
appoints and authorizes the Administrative Agent to take such action as
administrative agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto, (iv) agrees
that it will perform in accordance with their terms all of the obligations
which by the terms of the Loan Documents are required to be performed by it
as a Lender, (v) agrees that its payment instructions and notice instructions
are as set forth in the attachment to Schedule 1, (vi) confirms that none of
the funds, monies, assets or other consideration being used to make the
purchase and assumption hereunder are "plan assets" as defined under ERISA
and that its rights, benefits and interests in and under the Loan Documents
will not be "plan assets" under ERISA, [and (vii) attaches the forms
prescribed by the Internal Revenue Service of the United States certifying
that the Assignee is entitled to receive payments under the Loan Documents
without deduction or withholding of any United States federal income taxes].(2)
(2) to be inserted if the Assignee is not incorporated under the laws
of the United States, or a state thereof.
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8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the
Assignor in connection with or arising in any manner from the Assignee's
non-performance of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
shall have the right pursuant to Section 12.3.1 of the Credit Agreement to
assign the rights which are assigned to the Assignee hereunder to any entity
or person, provided that (i) any such subsequent assignment does not violate
any of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained and (ii)
unless the prior written consent of the Assignor is obtained, the Assignee is
not thereby released from its obligations to the Assignor hereunder, if any
remain unsatisfied, including, without limitation, its obligations under
Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the
parties hereto and supersede all prior agreements and understandings between
the parties hereto relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Tennessee.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule l.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above
written.
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By:
Title:
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SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
Amended and Restated Credit Agreement dated as of November 9, 1998 by
and among TBC Corporation, First Tennessee Bank National Association, as
Administrative Agent, and the Lenders party thereto.
2. Date of Assignment Agreement: _______________, 19__
3. Amounts (As of Date of Item 2 above):
Loan Letter of Credit
Facility Subfacility
a. Total of Commitments
(Loans/Facility L/C's) (3)
under Credit Agreement $ [$ ]
b. Assignee's Percentage
of each Facility purchased
under the Assignment
Agreement(4)* %
c. Amount of Assigned Share in
each Facility purchased under
the Assignment Agreement $ [$ ]
4. Assignee's Aggregate (Loan Amount/
L/C Participation Amount)
Commitment Amount
Purchased Hereunder: $
5. Proposed Effective Date:
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
Title: Title:
(3) If a Commitment has been terminated, insert outstanding Loans and
Facility L/C's in place of Commitment
(4) Percentage taken to 10 decimal places
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Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must include notice
address for the Assignor and the Assignee.
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EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
________________, 19__
To: TBC CORPORATION
Attention:
FIRST TENNESSEE BANK NATIONAL ASSOCIATION
Attention:
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Amended and Restated Credit Agreement (the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1
"). Capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to them in the Credit Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered to
the Borrower and the Administrative Agent pursuant to Section 12.3.2 of the
Credit Agreement.
3. Notice of Assignment and any consents and fees required by
Sections 12.3.1 and 12.3.2 of the Credit Agreement have been delivered to the
Administrative Agent, provided that the Effective Date shall not occur if any
condition precedent agreed to by the Assignor and the Assignee has not been
satisfied.
4. The Assignor and the Assignee hereby give to the Borrower and the
Administrative Agent notice of the assignment and delegation referred to
herein. The Assignor will confer with the Administrative Agent before the
date specified in Item 5 of Schedule 1 to determine if the Assignment
Agreement will become effective on such date pursuant to Section 3 hereof,
and will confer with the Administrative Agent to determine the Effective Date
pursuant to Section 3 hereof if it occurs thereafter. The Assignor shall
notify the Administrative Agent if the Assignment Agreement does not become
effective on any proposed Effective Date as a result of the failure to
satisfy the conditions
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precedent agreed to by the Assignor and the Assignee. At the request of the
Administrative Agent, the Assignor will give the Administrative Agent written
confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Administrative Agent
on or before the Effective Date the processing fee of $3,000 required by
Section 12.3.2 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and
the Assignee request and direct that the Administrative Agent prepare and
cause the Borrower to execute and deliver new Notes or, as appropriate,
replacements notes, to the Assignor and the Assignee. The Assignor and, if
applicable, the Assignee each agree to deliver to the Administrative Agent
the original Note received by it from the Borrower upon its receipt of a new
Note in the appropriate amount.
7. The Assignee advises the Administrative Agent that notice and
payment instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that
its rights, benefits, and interests in and under the Loan Documents will not
be "plan assets" under ERISA.
9. The Assignee authorizes the Administrative Agent to act as its
administrative agent under the Loan Documents in accordance with the terms
thereof. The Assignee acknowledges that the Administrative Agent has no duty
to supply information with respect to the Borrower or the Loan Documents to
the Assignee until the Assignee becomes a party to the Credit Agreement.(5)
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
Title: Title:
ACKNOWLEDGE AND CONSENTED TO ACKNOWLEDGED AND CONSENTED TO
BY FIRST TENNESSEE BANK, BY TBC CORPORATION
NATIONAL ASSOCIATION
By: By:
Title: Title:
[Attach photocopy of Schedule 1 to Assignment]
(5) May be eliminated if Assignee is a party to the Credit Agreement
prior to the Effective Date.
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EXHIBIT "E"
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To First Tennessee Bank National Association as Administrative Agent (the
"Administrative Agent") under the Credit Agreement Described Below.
Re: Amended and Restated Short Term Credit Agreement, dated November 9,
1998, (as the same may be amended or modified, the "Credit
Agreement"), among TBC Corporation (the "Borrower"), the Lenders
named therein and the Administrative Agent. Capitalized terms used
herein and not otherwise defined herein shall have the meanings
assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative
Agent may otherwise transfer funds as hereafter directed in writing by the
Borrower in accordance with Section 13.1 of the Credit Agreement or based on
any telephonic notice made in accordance with Section 2.14 of the Credit
Agreement.
Customer/Account Name: TBC Corporation
Credit Funds To Account No. 00-▇▇▇▇▇▇▇
Reference/Attention To: First Tennessee Bank National Association
National Department
Authorized Officer (Customer Representative)
1. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Senior Vice President Operations and Treasurer
2. ▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Controller
3. ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Manager of Credit and Banking
4. ▇▇▇▇▇▇ ▇▇▇▇
Manager of Credit and Collections
(Deliver Completed Form to Credit Support Staff for Immediate Processing)
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EXHIBIT "F"
CONTINUING GUARANTY
GUARANTY: To induce First Tennessee Bank National Association, as
Administrative Agent, and the Lenders (singularly or collectively referred to
as the "Bank"), pursuant to that certain Amended and Restated Short Term
Credit Agreement dated November 9, 1998 and that Amended and Restated Long
Term Credit Agreement dated November 9, 1998, as the same may be amended or
restated from time to time hereafter, to make loans, extend or continue
credit or some other benefit, including letters of credit and foreign
exchange contracts, present or future, direct- and indirect, and whether
several, joint or joint and several (referred to collectively as
"Liabilities"), to TBC Corporation, and its successors (the "Borrower"), and
because the undersigned (the "Guarantor") has determined that executing this
Guaranty is in its interest and to its financial benefit, the Guarantor
absolutely and unconditionally guaranties to the Bank, as primary obligor and
not merely as surety, that the Liabilities will be paid when due, whether by
acceleration or otherwise. The Guarantor will not only pay the Liabilities,
but will also reimburse the Bank for accrued and unpaid interest, and any
expenses, including reasonable attorneys' fees, that the Bank may pay in
collecting from the Borrower or the Guarantor, and for liquidating any
collateral.
LIMITATION: The Guarantor's obligation under this Guaranty is UNLIMITED.
Unless otherwise specified below, the Guarantor's obligation shall be payable
in U. S. Dollars.
CONTINUED RELIANCE: The Bank may continue to make loans or extend credit
to the Borrower based on this Guaranty until it receives written notice of
termination from the Guarantor. That notice shall be effective at the opening
of the Bank for business on the day after receipt of the notice. If
terminated, the Guarantor will continue to be liable to the Bank for any
Liabilities created, assumed or committed to at the time the termination
becomes effective, and all subsequent renewals, extensions, modifications and
amendments of the Liabilities.
SETOFF: Upon any Default (as defined in the Obligations), the Bank shall
have the right to setoff against the Obligations:
1. All securities and other property of the Guarantor in the custody,
possession or control of the Bank (other than property held by the
Bank solely in a fiduciary capacity);
2. All property or securities declared or acknowledged to constitute
security for any past, present or future liability, direct or
indirect, of the Guarantor to the Bank;
3. All balances of deposit accounts of the Guarantor with the Bank.
The Bank shall have the right at any time to apply its own debt or liability
to the Guarantor in whole or partial payment of this Guaranty or other
present or future liabilities, direct or indirect, without any requirement
for mutual maturity.
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If the Guarantor fails to pay any amount owing under this Guaranty, the
Bank shall have all of the rights and remedies provided by law or under any
other agreement to liquidate or foreclose on and sell any collateral,
including but not limited to the rights and remedies of a secured party under
the Uniform Commercial Code. These rights and remedies shall be cumulative
and not exclusive. If the Guarantor is entitled to notice, that requirement
will be met if the Bank sends notice at least seven (7) days prior to the
date of sale, disposition or other event which requires notice. The proceeds
of any sale shall be applied first to costs, then toward payment of the
amount owing under this Guaranty. The Bank is authorized to cause all or any
part of any collateral to be transferred to or registered in its name or in
the name of any other person, firm or corporation, with or without
designation of the capacity of such nominee. For purposes of the following
paragraphs, "any collateral" shall include any collateral securing the
Liabilities.
ACTION REGARDING BORROWER: If any monies become available that the Bank
can apply to the Liabilities (other than monies made available to the Bank by
the Guarantor pursuant to this Guaranty), the Bank may apply them in any
manner it chooses, including but not limited to applying them against
liabilities which are not covered by this Guaranty. The Bank can take any
action against the Borrower, any collateral, or any other person liable for
any of the Liabilities. The Bank can release the Borrower or anyone else from
the Liabilities, either in whole or in part, or release any collateral, and
need not perfect a security interest in any collateral. The Bank does not
have to exercise any rights that it has against the Borrower or anyone else,
or make any effort to realize on any collateral or right of set-off. If the
Borrower requests more credit or any other benefit, the Bank may grant it and
the Bank may grant renewals, extensions, modifications and amendments of the
Liabilities and otherwise deal with the Borrower or any other person as the
Bank sees fit and as if this Guaranty were not in effect. The Guarantor's
obligations under this Guaranty shall not be released or affected by (a) any
act or omission of the Bank, (b) the voluntary or involuntary liquidation,
sale or other disposition of all or substantially all of the assets of the
Borrower, or any receivership, insolvency, bankruptcy, reorganization, or
other similar proceedings affecting the Borrower or any of its assets, or (c)
any change in the composition or structure of the Borrower or the Guarantor,
including a merger or consolidation with any other person or entity.
NATURE OF GUARANTY: This Guaranty is a guaranty of payment and not of
collection. Therefore, the Bank can insist that the Guarantor pay
immediately, and the Bank is not required to attempt to collect first from
the Borrower, any collateral, or any other person liable for the Liabilities.
The obligation of the Guarantor shall be unconditional and absolute,
regardless of the unenforceability of any provision of any agreement between
the Borrower and the Bank, or the existence of any defense, setoff or
counterclaim which the Borrower may assert.
OTHER GUARANTORS: If there is more than one Guarantor, their obligations
under this Guaranty shall be joint and several. In addition, each Guarantor
shall be jointly and severally liable with any other guarantor of the
Liabilities. If the Bank elects to enforce its rights against less than all
guarantors of the Liabilities, that election shall not release Guarantor from
its obligations under this Guaranty. The compromise or release of any of the
obligations of any of the other guarantors or the Borrower shall not serve to
waive, alter or release the Guarantor's obligations. This Guaranty is not
conditioned on anyone else executing this or any other guaranty.
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RIGHTS OF SUBROGATION: The Guarantor agrees not to enforce any rights of
subrogation, contribution or indemnification that it has against the
Borrower, any entity liable for the Liabilities, or any collateral, until the
Liabilities are fully paid, even if all Liabilities are not covered by this
Guaranty. The Guarantor further agrees that if any payments to the Bank on
the Liabilities are in whole or in part invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to a trustee,
receiver or any other party under any bankruptcy act or code, state or
federal law, common law or equitable doctrine, this Guaranty and the Bank's
interest in any collateral remain in full force and effect (or are reinstated
as the case may be) until payment in full of those amounts, which payment is
due on demand.
WAIVERS: The Guarantor waives any right it may have to receive notice of
the following matters before the Bank enforces any of its rights: (a) the
Bank's acceptance of this Guaranty, (b) any credit that the Bank extends to
the Borrower, (c) the Borrower's default, (d) any demand, and/or (e) any
action that the Bank takes regarding the Borrower, anyone else, any
collateral, or any Liability, which it might be entitled to by law or under
any other agreement. Any waiver shall affect only the specific terms and time
period stated in the waiver. The Bank may waive or delay enforcing any of its
rights without losing them. No modification or waiver of this Guaranty shall
be effective unless it is in writing and signed by the party against whom it
is being enforced.
REPRESENTATIONS BY GUARANTOR: Each Guarantor represents: (a) that the
execution and delivery of this Guaranty and the performance of the
obligations it imposes do not violate any law, conflict with any agreement by
which it is bound, or require the consent or approval of any governmental
authority or any third party; (b) that this Guaranty is a valid and binding
agreement, enforceable according to its terms; and (c) that all balance
sheets, profit and loss statements, and other financial statements furnished
to the Bank are accurate and fairly reflect the financial condition of the
organizations and persons to which they apply on their effective dates,
including contingent liabilities of every type, which financial condition has
not changed materially and adversely since those dates. Each Guarantor, other
than a natural person, further represents: (a) that it is duly organized,
existing and in good standing pursuant to the laws under which it is
organized; and (b) that the execution and delivery of this Guaranty and the
performance of the obligations it imposes (i) are within its powers and have
been duly authorized by all necessary action of its governing body, and (ii)
do not contravene the terms of its articles of incorporation or organization,
its by-laws, or any partnership, operating or other agreement governing its
affairs.
NOTICES: Notice from one party to another relating to this Guaranty
shall be deemed effective if made in writing (including telecommunications)
and delivered to the recipient's address, telex number or facsimile number
set forth under its name by any of the following means: (a) hand delivery,
(b) registered or certified mail, postage prepaid, with return receipt
requested, (c) first class or express mail, postage prepaid, (d) Federal
Express, Purolator Courier or like overnight courier service or (e)
facsimile, telex or other wire transmission with request for assurance of
receipt in a manner typical with respect to communications of that type.
Notice made in accordance with this section shall be deemed delivered on
receipt if delivered by hand or wire transmission, on the third business day
after mailing if mailed by first class, registered or certified mail, or on
the next business day after mailing or deposit with an overnight courier
service if delivered by express mail or overnight courier. Notwithstanding
the foregoing, notice of termination of this Guaranty shall be deemed
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received only upon the receipt of actual written notice by the Bank in
accordance with the paragraph above labeled "Continued Reliance."
LAW AND JUDICIAL FORUM THAT APPLY: This agreement is governed by
Tennessee law. The Guarantor agrees that any legal action or proceeding
against it with respect to any of its obligations under this Guaranty may be
brought in any court of the State of Tennessee or of the United States of
America for the Eastern or Western District of Tennessee, as the Bank in its
sole discretion may elect. By the execution and delivery of this Guaranty,
the Guarantor submits to and accepts, with regard to any such action or
proceeding, for itself and in respect of its property, generally and
unconditionally, the jurisdiction of those courts. The Guarantor waives any
claim that the State of Tennessee is not a convenient forum or the proper
venue for any suit, action or proceeding.
MISCELLANEOUS: Subject to the express provisions of any subsequent
guaranty, Guarantor's liability under this Guaranty is independent of its
liability under any other guaranty previously or subsequently executed by the
Guarantor as to all or any part of the Liabilities, and may be enforced for
the full amount of this Guaranty regardless of the Guarantor's liability
under any other guaranty. This Guaranty is binding on the Guarantor's heirs,
successors and assigns, and will operate to the benefit of the Bank and its
successors and assigns. The use of headings shall not limit the provisions of
this Guaranty.
WAIVER OF JURY TRIAL: The Bank and the Guarantor, after consulting or
having had the opportunity to consult with counsel, knowingly, voluntarily
and intentionally waive any right either of them may have to a trial by jury
in any litigation based upon or arising out of this Guaranty or any related
instrument or agreement, or any of the transactions contemplated by this
Guaranty, or any course of conduct, dealing, statements (whether oral or
written), or actions of either of them. Neither the Bank nor the Guarantor
shall seek to consolidate, by counterclaim or otherwise, any action in which
a jury trial has been waived with any other action in which a jury trial
cannot be or has not been waived. These provisions shall not be deemed to
have been modified in any respect or relinquished by either the Bank or the
Guarantor except by a written instrument executed by both of them.
Dated: November 9, 1998
GUARANTOR:
ADDRESS:
By:
Title:
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